How to Do Business Model Innovation for the Established Firm

This article provides a systematic framework for helping executives of large, established organizations identify opportunities for business model innovation and organize themselves to pursue these opportunities. While also applicable to start-ups, this article focuses primarily on how to define, challenge, and revamp the business model of an existing business or organization.

 

In nearly every industry tried and tested business models are coming under attack at an unprecedented rate:Pharmaceutical companies are searching for alternatives to the blockbuster model. Banks are looking for innovative ideas to make up for lost fees and revenues due to new regulations. A drop in advertising revenues and circulation pushes newspapers towards new sources of income. Traditional brick and mortar bookstores are losing out to online competitors that are not encumbered by pricey real estate. Software providers are being threatened by cloud computing. The common root cause at the heart of the problem:a once successful business models.

“Changing a business model of an established organization is difficult – the gravitational pull of the existing business is hard to overcome.”

What is a business model, anyway?

A business model describes the logic behind how an organization communicates, creates, and captures value. Henry Chesbrough in his book “Open Innovation” suggests that a business model has six functions:

  • Articulate the value proposition – the value created for users by the offering based on the technology.
  • Identify a market segment – the users to whom the technology is useful and the purpose for which it will be used.

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How To Become A Business Model Architect

Our first article in this series, titled “Include Business Model Review as a New Year Resolution”, described a method to reveal weaknesses in your business model. So, what do you do next after you complete your business model assessment and find weaknesses in one or more of its cornerstones? You find Value Accelerators (VA)™! VA’s are specific and market-proven ideas, assets or strategies that directly accelerate revenue and profit growth. This article discusses how to develop, assess and prioritize the best VAs to strengthen weaknesses in your business model. It also gives you a link to download an example of a scorecard to help prioritize the VAs.

People, like companies, have problems they cannot solve alone. Frequently, the sufferer feels the pain and recognizes the onset of symptoms, but cannot find practical solutions. The sad part is that there are likely to be proven solutions for their specific condition – the sufferer just does not know how to find them. This describes the struggle a company faces with business model weaknesses. Diagnosing such problems is difficult (symptoms are frequently misread) and a reliable cure is hard to find.

A quick history of our experience with Accelerators (VA)™

From 1989 to 1995, I worked with a team involved in researching how companies in different industries use variations of the same process innovations in new product development, customer acquisition, production, distribution, and other major processes.  In other words, we were hunters – looking for solutions proven by others to improve our own processes

These gems were easy to find – the popular business press covered them, and we visited top companies to speak with executives who were happy to discuss the smart things they had done. Our team developed a series of analytical “lenses” to clarify the value and portability of these gems that helped us curate them. We started building a catalog of valuable, highly adaptable, portable innovations.

Here is not the end….To view the full Article about How To Become A Business Model Architect visit Innovation Management. Also visit our various programs of Online Learning Innovation Programs and also get updated with our latest Articles.

 

Getting Innovation to Scale – Emergence (part 1 of 3)

Flock-of-Starlings

Through scaling, smart movers can quickly build substantial market shares – or define entirely new markets. To help understand scaling we have divided it into three main areas: Emergence, Networks and Waves. This article is on Emergence, the first in a series of three.

We operate in business and societal environments that are complex, dynamic, and uncertain. This environment provides new challenges and at the same time great opportunities through scaling – which we have defined as the successful introduction of innovations that spread rapidly in non-linear fashion, seemingly self-propelled and with relatively little effort, resulting in an outsized impact.

 

Our research draws on scientific approaches such as Complexity Theory, Behavioral Economicsand Systems Theory.  We have divided the topic into three main areas: Emergence, Networks, and Waves. Within these three areas, we have identified different tactics for leaders to benefit from scaling. We call these scaling frames.

  • Emergence. As collective behavior, this frame refers to the phenomenon of patterns becoming apparent in complex systems of interacting agents. Innovation leadership can look to make use of emergent collective behavior by designing openness into a system and designing rules for interaction, which allow successful behavior to surface and spread. We have distinguished 13 separate tactics -or scaling frames- that we have clustered under Emergence.
  • Networks. Innovation leadership can take advantage of the properties of networks, the structures and technology supporting networks, and the social conditioning that exists with network members to scale their innovations. We have identified six distinct network frames.

Here is not the end….To view the full Article about Getting Innovation to Scale – Emergence (part 1 of 3) visit Innovation Management. Also visit our various programs of Online Learning Innovation Programs and also get updated with our latest Articles.

 

An Innovation Portal…I Can Do That Myself

do-it-yourself-innovation-portal

Innovation portals have taken an important place in the open innovation landscape. Expectations are great in portal performance but often, for purely budgetary reasons, these portals are launched and managed internally by corporates themselves, to discover that they generate a number of community management issues that they are not used to coping with. Prior to launching a corporate portal it is a good idea to ask a few specific questions on whether to do this internally or through experienced third party innovation providers.

 

Open innovation is entering into a new phase. The way corporates are viewing open innovation has shifted radically and today there is a tendency for companies to ask themselves “why should I hire a third party service provider to do open innovation when I can do this myself?”

 

Anyone can build furniture as long as they buy it from Ikea but that does not make them a cabinet-maker.

 

The apparent simplicity of setting up an innovation portal is perhaps at the heart of the do-it-yourself portal mythology as it is so easy to download WordPress, code a few pages and then “build it and they will come”

 

Here is not the end…. To view the full blog about An Innovation Portal…I Can Do That Myself visit Innovation Management.

 

You can also explore its new Online Learning Innovation Programs and get updated with its Latest Articles.

 

Innovation Through Clean Sheet Redesign

Clean sheet redesign is the method of rethinking existing businesses from the ground up. For established companies, this is a way to innovate processes by asking the right questions about current practices. For start-ups working on a clean sheet, they can apply similar techniques to disrupt existing models, while taking inspiration from existing success stories from other industries.

The advantages of a clean sheet

Things change, both gradually and inexorably. When you want to change the world, you will have to take advantage of entrenched infrastructures and institutions.

 

The new breed of low-cost airlines work with a different business model: using one type of airplane and second-tier airports, flying only to profitable segments, and offering slashed prices and no-frills service.

How does clean sheet redesign work in practice?

The team found that they could replace large movers with smaller, niftier ones. Large movers were believed to move more at a time in a batch system.

Examine assumptions: keep asking “why?”

What does clean sheet redesign mean for innovation and innovative start-ups, and how can it play a role in their plans?

 

Innovation is often best done with pen and paper, by making a tree diagram of the reasons why things are as they are.

 

To view the full blog about Innovation Through Clean Sheet Redesign visit Innovation Management.

 

Also explore its new Online Learning Innovation Programs and get updated with its Latest Articles.

 

Innovation Challenge Design and Management for the Crowd

In this Roundtable Discussion we explore the leading benefits, challenges and techniques for engaging public crowds. Using key success stories we examine the extent to which we can overcome key pain points and harness the general public to support innovation.

 

Truly reaching out to the public can prove an intimidating moment for any organization. Brand protection, possibility of negative press and time commitment of managing the crowd all provide significant points of fear for organization when contemplating undertaking a broad, public crowdsourcing project. These projects differ significantly from employee or partner-focused initiatives in the extent to which these fears can outweigh the perceived benefits.

 

Case studies

The presenters draw on direct experience with the following programs:

US Department of Energy – In 2014 The Department of Energy began running its Sunshot Catalyst Initiative to contribute to its goal of making solar energy cost-competitive with other forms of electricity.

Ushahidi – The Making All Voices Count initiative aims to engage the public in the creation of technology that is conceived and designed for the developing world.

 

Here is not the end.. To read the full blog about Innovation Challenge Design and Management for the Crowd please visit Innovation Management. Also have a look on our latest articles and our various programs of Online Learning Innovation Programs and Innovation Process.