Adapting quickly has never been more important in the business world. Thanks to the changes brought about by globalization, digitalization and social justice guidelines – such as the struggles for racial and gender equity – for our routines, traditional models have gradually given way to more dynamic proposals, aligned with a decentralized mindset in the scope of business.
To get an idea, currently, companies do not even see longevity as an indicator of success. In the United States, for example, to obtain capital from investors, the candidate corporations already need to point out, in their business plans, ways out, which can range from going public to incorporating by another company.
To reflect on this process and the importance of brands rethinking their business proposals, we gathered some insights from the publicist, entrepreneur and partner at Pande, Gian Franco Rocchiccioli, who recently published the book “Descentralizada – Uma nova mentalidade”. Come with us!
What is a decentralized mindset in the business world?
Gian Franco describes this concept as the modus operandi of brands that, from the understanding of a need, are able to create an ecosystem for different agents to solve the identified demand, generate value and prosper: “These companies will radically transform our current logic of business, placing the value to be delivered, the purpose, the transparency, the opportunities, the experience and the fluidity in the interaction between its users ahead of all the main corporate dogmas.”.
In this new business mindset, companies cease to be organizations “closed within four walls” to become autonomous systems, internally and externally integrated, to allow all participants in this ecosystem to create and receive value. In other words, companies are no longer responsible for controlling resources, but for organizing them in a multi-directional way.
A good example of this was the revolution brought by the launch of the first iPhone, in 2007, and the App Store, almost a year later. At that time, the top five mobile phone manufacturers – Nokia, Samsung, Motorola, Sony Ericsson and LG – controlled 90% of the global profit in the sector. In 2015, the iPhone was already responsible for approximately 92% of that profit according to the data analysis company International Data Corporation (IDC).
But what explains this change? When launching the iPhone and a virtual application store for its operating system, the brand with the apple logo went beyond the product and devised a platform where developers and users generated value. “As the number of participants on each side increased, that value also increased. A phenomenon called the network effect, considered by many economists today as fundamental to the smooth functioning of a platform strategy”, says Gian.
How can decentralized models redefine value generation?
For Gian Franco, platform models like the one proposed by Apple and, more recently, by Magalu – which, since 2018, has been rethinking its operations to contribute to the digitalization of retail through the creation of a digital ecosystem that connects sellers and buyers – generate interesting results, but are a transition stage.
As he explains in an excerpt from the book, “conceiving themselves as dynamic platforms, decentralized organizations promise to radically change the environment and business models in the future. These organizations will be dynamic organisms, much better able to quickly adapt their structures, processes, teams, and business models to the ongoing changes, thus addressing the question of evolution, no longer as a disruption, risk or breach of their model, but rather, as something fully incorporated into it; something natural, part of the culture of these organizations.”.
Purpose, decentralization and technology: Magalu’s success case
The example of Magalu is great to understand the brands that are guiding this new market movement guided by decentralization. After all, the company’s digitalization was intrinsically linked to the company’s purpose.
At the beginning of the Magalu’s transition, Brazil faced difficulties in boosting e-commerce. According to the Brazilian Electronic Commerce Association (ABComm), until 2019, the country’s participation in digital commerce in the retail sector was almost stagnant at approximately 5%. It was because of the efforts of brands like Magalu and the massive adherence to electronic commerce in the pandemic that this index doubled in 2020.
Putting purpose at the center of business did not take Magalu’s revenue out of that equation. The company’s leaders studied successful models, such as those practiced by Amazon and Alibaba, and adapted strategies to dialogues with the socioeconomic peculiarities of our country. Result: in 2020, Magalu became the 6th most valuable company on the Brazilian Stock Exchange, surpassing Bradesco!
It is true that the changes that brands and professionals are facing require new training and financial investments. But it is also necessary that they develop a new business mindset, aligned with the agility, fluidity, empathy and plurality that the new generations have been demanding so much. As Gian Franco says: “Think free, leave the old binary ideas behind and commit yourself to a new model of thinking: humble, dual, bold and guided by an expanded idea of value.”
If you liked this article and want to understand more about it, download the free book “Descentralizada – Uma nova mentalidade” here. Tell us what you think and let’s talk about it! And for more market insights, follow Pande also on Instagram, Facebook and Linkedin.