There is such unprecedented change occurring in global business that Business Model Innovation is becoming all-pervasive in its need to understand, its real value and use in business, and why it can provide that consistent evaluation ‘power’ for exploring existing business models and competing alternatives in a more dynamic way. Today the environment has become so much more forceful and we need tools to reflect that and capture breaking opportunities.
Intensity of Change
The incumbents’ already operating within the market need to be so much more proactive in seeking to extend and change what they offer. They can’t afford to sit still, to ‘freeze’ their business model, they need to keep moving, make the model more fluid and the organisation grouped around it increasingly alert and flexible to change. If they don’t today they seem to face an onslaught of disruption through existing competitors, redefined industries, and new technology paradigms. Let alone they need to simply not allow start ups and new entrants to capture those significant value points from underneath their very noses. They need to constantly be questioning their value to the customer, known ones and those undiscovered ones that are out there lurking to engage.
The race is intense especially when you are just climbing out of a recession with this recent downturn, unless you have taken this recent time for the opportunity to re-evaluate what you offer, as it is certainly the case that the final customer is getting even more restless and fickle than ever before.
Business model innovation meets one of today’s business needs
So Business model innovation seems to meet the ‘times need’. Many of the tools we have relied upon for decades just simply do not ‘articulate’ the job on hand. Models enshrined in business folk law of Porters 5 forces, Boston matrix and a host of others gave insight, were very analytical but gave declining comfort on foresight and this is what business today cries out for- foresight. We have seen the significant shift from internalizing to externalizing through open innovation, seeking differentiation, business has had to loosen up and lose some of its ‘control’. The world seems more dynamic and complex, it is a place where you have to find a unique position in the market, and one built on competitive advantage seen through the eyes of your customer not from within your four walls.
Additional experts thinking is further colliding
In my last blog “grounding innovation through the convergence on jobs-to-be-done” I spoke of intersections where ideas collide that give us insight. I was reading a report from IBM’s Institute for Business Value recently, called “Seizing the advantage” (part inspiration for my header on this blog) and they suggest there is growing agreement on what elements define a business model:
- What value is delivered to customers– the specific job-to-be-done, what is provided (sold) and how it is provided (sold)
- How revenue is generated– the form of monetization and the different models emerging
- How the company positions itself in the industry (or sector) and the role choices it undertakes and the relationships needed across the value chain
- How the value is delivered: through the type of internal resources mixed in with external partnerships.
These four dimensions are pointed out within the report as emphasised by Alexander Osterwalder, Clayton Christensen, Mark Johnson and have given me yet another converging point.
Finding the common language and tools to do the BMI job
Where I struggle at present is we have just not got enough meaty ‘aids’ to help us on working through Business Model Innovation. There are some good books on the subject, there are a growing number of articles but they have been so busy explaining the phenomena that we have an awful lot of gaps still to be filled from growing knowledge. As always when something new arrives we have this ‘rush’ to tweak different business model frameworks to claim them as our own when we have a perfectly good one emerging in the Business Model Canvas of Alexander Osterwalder. This dispersing of energy does not help the very business entities that would benifit from a common voice. I subscribe to Alexanders call, along with some others working in this area to “find a common language” and quickly so we can focus on the best, most exciting, leading edge exponents of working the Business model well and fill these gaps.
Needless dispersion of ‘creative’ energy
One example of this needless dispersion of energy or blurrification I recently saw was from IDEO. Anders Sundelin has a wonderful blog all around building the database and discussing the Business Models (http://tbmdb.blogspot.com) and has provided a video of Tom Hulme, the Design Director of IDEO working through THEIR version of the Business model. I found this so close to the Business Model Canvas (as pointed out by Anders) you just despair and feel disappointed that a company regarded by many as highly innovative seemingly re-inventing a perfectly good, well research and grounded model to make it IDEO’s version. I wish they would be part of a common language; their shared voice would be valued by many if all these alternatives models came together and settled on one.
The call is for foresight not dog fights
Business needs foresight. It does not welcome competing models, it confuses them, it stops them and makes them hesitant, worrying over the right model to adopt. In so doing, losing them precious time and energy to get on with incorporating Business model innovation expertise to meet their challenges of today and tomorrow as outlined above.
How can the community that is actively working on Business Model Innovation come together more? To examine, define and establish tools, accepted research approaches that resolve BMI issues, provide clearer, leading edge implementation methods and tools that will aid the corporate manager?
BMI provides an increasing value
- It can help discover new perspectives on challenges, also new perspectives on solutions
- These perspectives can be new insights, new customers, new resources, new channels
- Framing BMI in the canvas approach can underpin/ justify the business Case through different analysis
- It can define needs- needs in the market, needs required from solutions and their impact
- It can investigate value proposition (ranking, impact, capability, competition)
- It can help investigate higher impact propositions (value- based, enhanced economic, applications etc) to stimulate internal thinking and greater generation of potential BMI’s.
- It can form the basis of any model for showing where the money lies in potential profit, the possible costs and the resources needed.
- It can help in evaluating competition or watching for new entrants if ‘it’ understands the needs of the customer
- It can explore and explain consumer thinking (pre and post discovery and execution) in easy visual ways
- It can be used as a neutral observer, uncovering opportunities or validating them in other industries that today may not be relevant but need to have a ‘watch’ place on them.
This is where the Business Model innovation community should be placing its energy, in getting business to understand the power of BMI. The significant changing market environment is unrelenting that it demands response in new business tools that will help.
So my insight of convergence that seemingly is happening needs that extra push to focus the very talented energy out there, on where the real challenges lie: not on which business model methodology but in equipping the business of today with more foresight through providing those much deeper insights and more ‘beef’ in what BMI can do for them at these times. Otherwise we lose a real opportunity to equip business with a new business concept that helps address some of todays challenges and not stuck in yesterdays thinking.