The Age of Large Business Model Reinvention

Most of our existing organizations are searching for the mechanisms to reinvent their business models, through identifying, designing and executing differently from the existing ones, where they tend to simply be ‘locking themselves into’ repeating patterns, possibly opening themselves up to new forces of disruption.

There is a sense of urgency that is growing at the corporate level, to master this ability to design different business models and then set about executing them, to combat the multiple ‘disruptive forces’ swirling around in the present and near term business environment.

Reinventing the Business model is such a big ask in the complexities to overcome, the legacies, the vested interests, the distribution of created wealth (dividends, bonuses, performance) are all ‘locked into’ the existing business. Many of those necessary bolder decisions get caught up in horrible compromise.  Parallel managing is both an art and a science but it always needs clarity.

Addressing the current dilemma within business models

So we have a classic dilemma, we need to manage and extract as much as we can from the existing business but simultaneously begin to reinvent, to design something different.

Caught up in this dilemma, increasingly the large organization is questioning how it can use the Business model canvas in more effective ways. I believe there are many exciting options available.

Business models need a common language, they need to be easily described and here is the fundamental value of the BMC – it can set about supporting a common understanding, it can be used to describe in multiple ways.

Here is my view  

Move the thinking. Move the emphasis. Today the BMC is discussed more as the blank canvas to start new ideas and concepts and its present focus has been in its use for start-ups and entrepreneurs. From these opening sketches the canvas does a great initial job to describe these ‘emerging’ concepts. We need to change this emphasis point.

The possible new dimensional values of the Business model canvas.

Make the Business model canvas as a multiple describing and communicating tool. We should shift our thinking and open our minds up to its (BMC) greater value within the larger organizations

These are clearly:

  • To simply explore new business models as the book, the Business model generation, originally sets out, in the how, what and where of doing this through the business model canvas approach. To experiment with all the advice, tools and experiences that have been built up since this book first appeared.

The richer and perhaps broader dimensions that large organizations should explore:

  • To ‘map’ changes to existing business models as they evolve or need to pivot differently. Steve Blank has explained this in significant detail and terms as the BM dashboard that ‘indicates’ the important changes and these become the focal point of necessary discussion, knowing what is changing, to focus the thinking and see what changes need supporting differently.
  • Then why not to sketch out competitors positions to explore possible opportunity gaps. This should become one of those consistent ‘habits’ that so many large organizations often have a real blind spot to undertake, they just keep assuming nothing has ‘visibly’ changed. Then they get caught out and surprised when they see their share slipping away as the competitor has made a directional change and this was not spotted and communicated to all parties who ‘need’ to know. The BM Canvas can spot and track competitors.
  • Use it as a designing dashboard for innovations that have or could have an impact on existing business models. Whenever you have any major BM change you capture it on your BM Canvas so all above and below in the organization can picture this to see the possible risks this change might bring.
  • Use it to compare business model components across each of the countries within the organization, where more often than not different models are being applied to build businesses in multiple ways. This enables all involved to quickly focus on the differences on these operating models and how the market formation is occurring to get quickly into the strategic discussions, implications and requirements this ‘specific’ approach takes.
  • When you are pitching for internal funds having a clear BMC as the visual focal point provides the top picture that others can quickly see and appreciate the why and how – they ‘see’ the value and the $$ potential, . This can offer ‘intelligent enquiry’ not getting bogged down in detail and getting involved in the running of the business but supporting owners or business managers with different experiences and knowledge to compliment theirs, so as to conduct the type of ‘intelligent’ and strategic conversation needed, instead of many that needlessly occur today.
  • To have ready alternative scenario’s for volatile business conditions as ‘early warning scenarios’ that have mapped out potential changing conditions showing where, why and how the business model might be adjusted or radically changed. The earlier ‘warning system’ pays in volatile times that we are all facing at present to be more aware and ready of rapidly changing conditions, possibly already ‘worked up’.
  • Managing multiple portfolios of business is a complex challenge to spot ‘commonality,’ to detect change, different opportunities or simply recognizing there is a growing ‘drift’ of direction that needs addressing. You can use the BMC as the detection kit, the reoccurring adopted format practice to capture these different portfolios.
  • Rapid concept brainstorming to move into prototyping evaluation and market testing. Testing many different variations in small bite sized bets is rapid prototyping, do this through the effective use of the business model canvas. Testing fast in the actual market place new business models and then learning from them to improve the approach is absolutely critical. Get the customer involved and engaged, get your potential partners grouped around the BMC to build and extend out, the internal thinking.

The business model needs to be constantly tested for its potential in its recurring value, and it needs a canvas to constantly challenge its present position and worth.

There are multiple ways the business model canvas can be explored in exciting new visual ways so as to describe effectively in a common format and capture the wealth of different opportunities.  To invent, to communicate and explore the ‘richness’ within the potential value that is simply laying underneath the different components that make up a business model.

Let’s keep moving the conversation forward on where the business model can work in creative ways within large organizations. Do you have any further ideas?

Advertisements

16 thoughts on “The Age of Large Business Model Reinvention

  1. Pingback: The Age of Large Business Model Reinvention | Rewarding

  2. Pingback: The Age of Large Business Model Reinvention | D...

  3. Pingback: The Age of Large Business Model Reinvention | fred zimny's serve4impact

  4. Hi Paul, this is a great article capturing the benefits of using the BMC for dynamic strategic decision making. While I don’t use the BMC for this purpose (yet), I do use it as a tool in developing product propositions and it seems logical that the BMC could be a red thread in roadmapping future propositions. My concern is that the BMC is too detailed and not visual enough for the purpose of roadmapping, a ‘dashboard’, and for envisioning ‘alternative scenarios’ as you describe. This is because of three things: the permutations change too rapidly, take too long to define fully for the benefits achieved in doing so, and a person cannot keep track of the differenced is the 9 sections without substantial visual cues to play ‘spot the difference’. But perhaps you have experience doing this and find the BMC successful?

    Possible solution:
    As an innovation (design) consultant, using the BMC requires educating the client first and this may take valuable brain power. However, with a ‘BMC lite’ that captures the essentials (revenue model, customer need, proposition (benefit), + visualizations of the proposition in concept form, I could imagine that this could form a strong enough basis for making strategic decisions. We have done this in the past and find it a strong way to communicate and compare product propositions. I haven’t tried it yet with dashboarding and alternative scenarios.

    What are your thoughts?

    Like

  5. Paul,

    Early in the post you said that without re-examining their business model firms may be “opening themselves up to new forces of disruption”.

    The group I’ve co-founded (see below) would strongly agree. But we would also highlight that the Business Model Canvas may not adequately enable a firm to avoid some significant forces of disruption.

    This is because there is a major and increasing source of disruption that is not directly related to creating monetarily profitable firms (which is arguably the sole focus of BMC).

    What is this source of disruption that the BMC might not help a firm avoid?

    A recent KPMG report refers to them as “mega forces” shaping our world today (everything from climate change to eco-system decline and population growth) (see figure 49, p133 of the KPMG report). (The KPMG report and books, such as Bob Willard’s “The New Sustainability Advantage”, highlight the opportunities for business to innovate take advantage of these changing circumstances *AND* reduce their risks).

    Warm regards
    Antony Upward

    co-founder Strongly Sustainable Business Model Group
    http://www.SSBMG.com

    de Boer, Y., van Bergen, B., McKenzie, M., Averchenkova, A., Gladwin, T. N., Lyon, T., & Bunch, R. (2012). Expect the Unexpected: Building Business Value in a Changing World.KPMG International.

    Willard, B. (2012). In Willard B. (Ed.), The new sustainability advantage: seven business case benefits of a triple bottom line (Completely rev. 10th anniversary ed.). Gabriola Island, British Columbia, Canada: New Society Publishers.

    Like

  6. Pingback: Here is Why Business Model Innovation is Powerful - Innovation for Growth

  7. Pingback: Innovation Excellence | Here is Why Business Model Innovation is Powerful

  8. Pingback: The Age of Large Business Model Reinvention | W...

  9. Pingback: Balanced Portfolios and Business Model Innovation Distinguish Outperformers | Integrative Innovation

  10. Pingback: The need for Continuous Business Model Innovation | Thinking Out Loud...

  11. Pingback: Business is a Roller Coaster (Part 1) | Thinking Out Loud...

  12. Pingback: Business is a Roller Coaster (Part 2) | Thinking Out Loud...

  13. Pingback: How are you evolving the function and design for innovation? | Paul4innovating's Blog

  14. Pingback: The need for Continuous Business Model Innovation | Heart-Way

  15. Pingback: Business is a Roller Coaster (Part 1) | Heart-Way

  16. Pingback: Business is a Roller Coaster (Part 2) | Heart-Way

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s