Ep. 29: Thriving Amidst Change: Reinventing ​Business Models for Resilience​

Full transcript

David Stainback: Hello everyone, and thanks so much for joining us today for this episode of Emerge Stronger Through Disruption. I'm Dave Stainback, co-leader of PwC’s Global Centre for Crisis and Resilience, and I'm coming to you today from my office in Atlanta, Georgia.

In our podcast series, my GCCR co-leader, Bobbie Ramsden-Knowles and I aim to tackle the challenges facing businesses in this environment of constant crisis and change, and really discuss how successful business leaders emerge stronger through disruption.

I'm very excited to be joined by Matt Duffey today, who's our Global Leader for Business Model Reinvention, or BMR at PwC, to explore how businesses can adapt and thrive in today's rapidly changing environment by successfully reinventing their business model and becoming resilient. Matt, welcome to the show.

Can you please give our listeners just a quick introduction of yourself and your role?

Matthew Duffey: Yeah, thanks Dave. Great to be here with you. I'm coming at you live from Dallas, Texas, but as you mentioned, I'm the lead for PwC’s Business Model Reinvention globally and with that, I've got the responsibility for helping to kinda roll this out across the network across all 135 of our territories, beginning to frame up our go-to-market strategy, working with our partners that have deep industry expertise to, you know, help pull together kind of what the next vision of industries is going to be, and just responsible for making sure that we operate as one network as we take this out to our clients.

David Stainback: That's great. Thanks Matt. I feel strongly that there's a direct tie in between your world of, of Business Model Reinvention and then, um, really our world of, of Crisis and Resilience.

And so I'm very excited that we get to do this together. To set the stage, can you first start off by explaining to our listeners what the concept of Business Model Reinvention or BMR really is?

Matthew Duffey: Absolutely. So Business Model Reinvention as we look at it, is about staying ahead of the curve. It's taking a look at your business model and going through a systematic process of understanding and designing new business models within it that can help unlock new revenue streams and help you expand upon your company's core business.

We like to talk about continuously reinventing a business model, because as you look at it in terms of the disruption and all the Megatrends that are hitting, our customers, there's a lot of changes that are gonna happen. There's a lot of changes in terms of customer preferences, changes in market dynamics, and if you're not always looking at reinventing yourself, it's very hard to maintain your relevance and stay competitive in this market.

Just to double click a little bit in terms of what we think of a business model and ultimately those aspects of it that you need to reinvent, we look at a business model, as you know, four very unique elements that interact with each other. And so it's the four of these that come together to create, deliver, and sustain value for your customers.

And the framework, essentially, it starts always with the value proposition for the customer. What is that unmet need that a customer has that your company needs to, meet them where they want to be met in order to create a value prop for that customer. Then it goes into the resources that you have as a company.

What are your assets, whether they're physical or just generally Intellectual Property (IP) and kind of what's your operating model? Then it gets into the capabilities and processes. You know, what are you inherently good at? As a company, whether that's M&A integration or supply chain excellence. And then finally we rounded out with the profit formula, or how are you gonna charge customers in a way in which it's commensurate with the value that they're expecting.

So our framework allows organisations to kind of understand their current state, but then also begin to take a look at, you know, where are they exposed, like what kind of potential threats are looming out there that they need to make sure that they tighten up and shore up every aspect of their business model or potentially face disruption.

David Stainback: Thanks, Matt. Yeah, no, that resonates a lot with my conversations with organisations frankly, around building resilience. As a resilience guy, two main themes I'm hearing from you are understanding your business models and the value propositions in a lot of detail, and then secondly, really recognising that you must constantly be reinventing and transforming as market conditions around you change, and from a resilience perspective, it's really key for companies to do just that, to understand exactly how your critical services and processes operate. Then be constantly assessing and preparing for what could potentially disrupt them.

Matthew Duffey: Yeah, absolutely. And one of the things that helps support us in this effort, right, is taking a look at the data and we have the pleasure, as you know, PwC, we have access to lots of CEOs. We are able to interview almost 4,000 of them and do a survey recently, the 28th CEO Survey. And our clients are coming out and saying that if they don't significantly change their business model in the next five to ten years, right, they're gonna be out of business and the data supports it.

Over 42% of the CEOs have indicated that they need to take a really hard look at their current business model and look to adapt it for the future trends that are coming at them. And so that's where we are looking to help our clients along this journey.

David Stainback: And really if you add to that, our findings from our most recent PwC Global Crisis and Resilience Survey, it really reinforces that with all of that going on and the way CEOs are thinking about it, but the fact that disruption is on the rise as well. So just the trends that we've seen back in 2019. Our survey indicated that about 69% of companies had suffered a major disruption at some point over a prior five-year period, but our most recent survey showed that that number's risen to 91%, have sustained a major disruption within just the last two years, and that data really even excludes the pandemic.

So just the fact that disruption is on the rise, I think there's justified reasoning as to why we're seeing some of these results in our CEO Survey as well, and frankly, the broader concern about disruption and trying to remain relevant. And I really think that's a nice segue into our next topic. So just for you, the way that we frame up PwC’s Enterprise Resilience model, it emphasises three main areas of resilience.

We talk about Operational Resilience, Financial Resilience. Strategic Resilience, and I'll talk about the last one first. We really define Strategic Resilience as that ability to evolve and to build agility into the organisation, really at that macro level like you're talking about. And to me, this is the area that's probably the most closely aligned to Business Model Reinvention.

Matthew Duffey: Yeah, a hundred percent. You know, I look at Strategic Resilience as kind of getting on your front foot, right? It's being more proactive, rather than reactive in business strategy, and that is exactly what we're trying to drive within BMR, right? It's how do you take a look at your business and begin to, you know, anticipate, adapt, and respond to some of these changes that are coming fast and furious at many of our C-Suite clients.

So it's taking a different look at it though, but beginning to see like, okay, what are the current risks that are in my business model that I need to shore up? Or if I don't, a competitor is going to take advantage of that, and come and disrupt me and begin to take market share from the market that I currently operate in with my current business model.

When you take a look at Strategic Resilience, I think it's definitely a great way to kind of systematically look at your business and begin to think about what changes do you need to make in order to get ahead of the market. Just try to bring this to life in terms of just some examples that we've been helping our clients with.

I mentioned earlier, you know, the CEO Survey. There's lots of examples in the market where our C-Suite executives are seeing the potential disruption come in their way, and they're being proactive about getting ahead of things and responding to things like Gen AI or climate change, or some of these regulatory changes that are coming our way and beginning to adapt their business models to meet the shifting needs of their customers.

A couple examples where we've helped some of our clients, you know, there's a large supermarket chain who took a look back at their business and through the impacts of climate change and sustainability where they operate, there's a large concern around, you know, the future energy demands on the grid within their country.

And so they looked at that as an opportunity. They have, you know, an asset base of large stores, right, with large rooftops where they said, how do we get into the energy game, right? We can go ahead and put solar panels on our roofs, begin to capture energy and sell that back into the grid. And so that's an example of a client taking a, you know, Megatrend shift in terms of what's going on with regards to climate change, and being able to optimise that and make money in a different way in the future.

Some other examples that we have where we're helping companies, you know, there's pharmaceutical companies where the prior business model has always been a B2B type model, and the companies looked at that and they said, well, how do we get closer to what the customer wants?

How can we get direct access to our customers? And yes, it's been tied up in regulatory requirements and things that we thought that prior companies felt like, you know, you just couldn't operate in a direct to consumer operating model. And we've been helping several of our pharma companies break down some of those silos and begin to operate more in a direct to consumer basis.

Then lastly, you know, another example where we've been helping guide some of our companies through Business Model Reinvention is with a construction company who had a very unique piece of software that they leveraged for their business, but then they realised that this was something that they could potentially sell in the market, and we helped them, one, not only become a software company, but then we help them move that piece of software into an as a service and consumption based business model.

David Stainback: I think those are great examples, Matt, and to your point, the survey also highlights that importance of, of really customer-centric innovation and just being alert to those types of external triggers for what your potential customer needs are. And I think all these examples clearly underscore that need for continuous innovation and adaptation and really trying to look at what risks or opportunities are in front of you that can give you a competitive advantage.

And clearly the focus of BMR is just that. To really understand what are those strategic opportunities in front of you, which aligns perfectly with the way that we begin to think about Strategic Resilience as well. So as a next step, I think it would also be interesting to focus on Operational Resilience.

It's a core part of our framework. It's probably at PwC, the part of the resilience framework that we spend the most time helping organisations with. And just for our listeners who may not be too familiar with it, the main focus of Operational Resilience or OpRes for short is kind of twofold. It's first to understand and identify what are a company's most critical business services and processes that it provides to its stakeholders, whomever those stakeholders might be.

So what is really critical to us? And then the second piece is, okay, let's take those critical business services and map out all of the component parts of each one of them, as well as their underlying processes by meticulously breaking them down to really understand all their key dependencies that enable them to operate.

So who are the people that support them? What are the technologies and applications that support them? What third party or vendors do we use that allow this critical process or service to run? And by doing that, you can really create and just identify where you have gaps and risks that you need to focus on building resilience around, and you end up doing that in the places that it really matters because it's already been identified as critical from the top down.

So I really view alignment here with BMR because from what we talked about earlier, there's such an important point of really needing to understand how your business operates in order for you to even go and reinvent yourself. And so I see some alignment here where we're doing a lot of work in helping companies to really break down all the core components of their business.

That might be helpful as a company is really looking at its BMR journey as well.

Matthew Duffey: Absolutely. There's a very tight linkage. I mean, one of the things that I like to say is it's really hard to, you know, advise a company on how they should reinvent themselves or how they should make money in the future if you don't know how they make money today.

Right. And I look at what you're talking about in terms of op model transformation and OpRes as being a key component of an overall BMR journey. If you take a look at the things that you're talking about, it's getting in and kind of understanding how the company operates today and making sure that it's resilient for the future, and that you begin to one shore up any potential gaps that you have, but also look to optimise and transform it for the current business model.

And that's all part of the journey that our companies go on. It's tighten up what you have today and make sure that that is performing as well as possible in order to give you the runway or the investment capacity to change for the future.

So when we talk about Business Model Reinvention, it is a journey, right? It's a three to five year journey that clients need to go on, but they need to get started. And oftentimes the best way to do that is to begin to take a look at your current operating model and see if it's fit for purpose for what you're selling and delivering today.

And then take a look at where you need to go to again, meet that unmet customer need and take a hard look and say, is that op model gonna work for that future business model that we need to get into?

David Stainback: Yeah, no, that's great. I think that makes a ton of sense. And we have these types of conversations all the time with organisations as they're thinking about it from a resilience lens.

So I think that there's an opportunity to make sure that they're thinking not just in the immediate, to your point, of how do I shore up what I'm doing today, but also be thinking that three to five year journey of how is my business gonna be changing, or how should I be changing my business as a result of potential disruptions coming my way?

So with that, let's shift gears a little bit from, we've been talking very much historically about resilience and readiness and things like that and how that relates to Business Model Reinvention, but I'd like to shift to the other half of what Bobbie and I and the rest of the GCCR at PwC focus on, which is crisis.

So the old saying goes, never waste a good crisis. And that's really because crises often act as catalysts for transformation. And Bobbie and I often say that there's two types of transformation. There's the normal strategic transformation, which is a lot of what we've been talking about so far, but then there's event driven transformation.

That occurs as a result of a major crisis or disruption. It's more of an acute event that then causes an organisation to really have to shift what it does, how it does it, and rethink who it is, and whether that's a cyber attack or some sort of operational failure, or reputational or scandal, something like that.

When faced with a crisis, what sets apart successful companies from the rest is how they use it as an opportunity to really transform their business. So naturally, crisis is also an opportunity to rapidly accelerate that Business Model Reinvention. So for somebody that's sort of struggling through it, we've seen a lot of organisations over time that have had that acute incident and almost had to do it overnight.

Can you share a couple examples of maybe how you've seen this play out in the BMR world?

Matthew Duffey: Yeah. You know, one of the things that we try to do in BMR is take a look back at history. A lot of the things that we see, they don't happen overnight. And so it's helpful to go back and look at companies and see where they started and kind of where they are today and see like what really drove it, right?

Like what was that event as you called it that caused them to pivot, and you know, one of the companies that comes to mind, the large technology company, a gaming provider, and think about how they went through a massive cyber incident, right? Hackers breached and exposed lots of information, credit card information, very sensitive stuff that put the company in a very tough position, right?

And what it forced them to do is to take a hard look at, you know, we'll call it their digital infrastructure, and realising that as a result of this, you know, they needed to overhaul it, right? And. As we keep talking about being more on their front foot, right? They were caught, you know, frankly on their back foot, right?

And like, how do they begin to take this, you know, I won't call it an opportunity, but this event that happened and turn it into a positive, you know, as a way of looking at their business model and taking a look and saying, okay, like we need to become much more resilient from our cybersecurity standpoint, but we need to move our overall business more into the digital era.

It's a more secure environment. Our customers want that. And so it was like an instance where it was a very difficult situation. But if you take a look at that company today, they've been able to migrate their business to more of a subscription based model, get into the streaming world. And that's frankly where customers want them to be.

Right? And so it was a great example of how a very difficult situation could force a company to have to take a hard look at their business model, but as a result, they came out of it much stronger today.

David Stainback: Yeah, I think that's a really powerful example and it highlights that importance of being agile and responsive to whatever might hit you, right, and thinking through immediately, not only how do I immediately respond and try to get back to normal, but how can I use this as an opportunity to really change my business?

For the better. And in our framework when we're going in and helping organisations, right? Really in that first, call it 48 hours to one week of a crisis event, we actually try to shift the conversation that way, right? There's obviously so much that's going on to try to keep our heads above water and things like that as we're responding.

But one of the things that we try to do within the first week or two is to help the organisation come up with a set of really transformational pillars, right? Three or four things that you use as guiding principles or posts to kind of look towards the future of how we're gonna really transform ourselves coming out of this, because we're already taking the hit, right?

We're taking the reputational hit, we're taking the financial hit of this type of an incident. Let's use this as the opportunity to say, okay, while we're recovering from this, we're gonna be shifting our thinking going forward and then create the narrative to these different transformational pillars so that you can begin to tell your stakeholders, Hey, we had this issue.

We apologize for this issue. If it was our fault in any way, but here's what we're gonna do about it and here's how we're gonna be a better organisation for you going forward. And, and we've seen that work. Those are the successful companies. So I think that following a crisis, you really need to have that strategic lens and frankly, that can be BMR right there.

I want to thank you, Matt. I think this is a great place to wrap up. Really, really interesting hearing your thoughts on BMR. It's been a great conversation.

Matthew Duffey: Yeah. Thanks Dave. Really enjoyed it. Had a lot of fun, uh, and hopefully our listeners enjoyed it as well.

David Stainback: Yeah. And to our listeners, thank you guys for all tuning in. In upcoming episodes of Emerge Stronger through Disruption, we're gonna continue to tackle the topics that keep business leaders up at night. We'd love to hear ideas from you about topics that you would like us to address, so please feel free to get in touch with both Bobbie and me via LinkedIn.

And in the meantime, remember to subscribe to Emerge Stronger, wherever you get your podcasts, and until next time, stay resilient and keep reinventing.

VO: copyright 2025 PwC. All rights reserved. PwC refers to the PwC network and or one or more of its member firms, each of which is a separate legal entity.

Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advi

© 2025 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.