2016 will be a big year for business model innovation as leaders and organizations recognize the importance of systematic and intentional reinvention of a company as a whole. It’s a sentiment Strategyzer co-founder Alex Osterwalder shared in our final webinar of 2015.
Let’s take a look at the four major facts Renee outlines in her post, and why they’re important for companies. We’ve also added links to our perspective on each fact for further reading.
Fact: Business model innovation is strategy development
Renee Hopkins and Strategyzer agree: business model innovation is a persistent and iterative exploration of entirely new ways to create, capture, and deliver value. And as Hopkins points out in her post, companies mistake business model innovation for a change management initiative; when in reality, it’s a way to rethink strategy.
Listen: Great strategy is really great portfolio management
Fact: It's too risky for established business to hide from potential disruptive competition
As BIF founder Saul Kaplan has said repeatedly in his work and in our webinar, “companies have to peddle the bicycle of today’s business model while simultaneously exploring a portfolio of new [business] models for tomorrow.” It’s especially important for companies to explore new growth engines while they are successful. Reinvention shouldn’t take place only when a business crisis hits your organization.
Listen: Why corporate leadership needs to get comfortable with frequent business model innovation
Fact: Business models make technologies transformative, not the other way around
Companies love to solve tech problems before understanding if the market even wants the technology in the first place. It’s something we’ve been talking about a lot on the blog lately. But as we’ve pointed out before (and so does Renee): business model innovation doesn’t have to be tied directly to a new product or service. Companies can look at strengths in an existing business model to uncover new ways to create value for customers.
Read: Why R&D is not business model innovation
Fact: Business models must be designed, prototypes, and tested in the real world, using metrics that make sense for innovation
Business model innovation is a constant back and forth of cheap experiments, quick failure, and continued learning. As Renee points out (and we agree): it starts by adopting the customer’s point of view to understand what matters to them. It’s not enough to gather market research and develop your idea. Your team has to listen and analyze customer behaviors; iterate rough prototypes for testing; and continue to gather evidence to iterate the idea based on how your customers react.
Read: How design thinking will reshape business model innovation
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