In an existing organization, culture is created by current leaders’ values, but also by the legacy of what worked well in the past. So there is usually a cultural norm in an organization that contributed to success in the past for the company, but now mitigates success as the marketplace or talent pool or basis of trying to win has changed. Getting leaders to identify the one (or two) necessary shift opens the door to culture change.

Do you work side by side with your org. psych. partner on projects or do you each take different parts of the project on?

With the other points I agree. Disruption is not what the incumbents wants since they will lose the most. On the other hand, sometime if the future is dire and you have new management that can only gain from the changes a disruptive innovation is possible from inside. Happens seldom, but it happens. I have researched the Bosch Ixo Case and it is a great example. http://blog.business-model-innovation.com/tag/bosch-ixo/ The Ixo was not developed in a systematic way. It was the combination of luck, skills and the right people at the right place.

Your last questions are the tough ones for us consultants. Luckily, I have customers who understand that cultural changes are slow and that you have to start with the first step of understanding and later with the unlearning and mobilize step. I probably not American enough like the guys from Ideo that say “if you hire me, you will be successful”. I am more humble and I think that is important since otherwise we just create a hype and later we have a big hang-over from our overselling and overpromissing. The interesting thing is that with this “slow” approach you give the managers time to rethink their business and quite amazing, some start rebuilding their business after the unlearning phase since they were mobilized through this process.

_BMI in incumbents_
While the incumbents might have a desire for creating the disruptive BM, they don’t. An exception can sometimes be found in businesses that are doing very badly, like IBM.
Yet even in most of the large organizations that are facing steep decline in their traditional business are very reluctant to change.

You mention the cash of the current costumers as a big factor. I think this is an exaggeration. Many companies spend huge amounts on R&D for products that the costumers don’t know that they want, they ought to be able to do the same with new business models.

_Newcomers_
I agree that the entrepreneur offend knows the market and the business, and it could be interesting to have some statistics.
Yet if we assume that the executives in the incumbents are also highly skilled people, then the only difference between them is the size and rigor of their organization.

Based on this the argument can be that disruptive business model innovation is close to impossible for incumbents that are not facing hard times.

-Is it possible to change this using known methods for large scale organizational change ?

-Are there other ways of moving incumbents towards business model innovation ?

-If not, should we then focus only on BM optimization for the incumbents ?

Second, why can the incumbents not move. I think one of the issues they face is that their core competencies are quite often core liability in the face of an innovation. And that favors outsiders again.

Third, I don’t believe that the newcomers are total outsiders. Quite often, the entrepreneur understands very well the traditional business model and the industry. And due to his deep knowledge, he/she can start the new venture. Checking the statistics, would be a good job for the academics in the field of business model innovation.

Fourth, I believe that business model innovation is possible in incumbents but it happens seldom, slowly and most ventures will fail. The key lies in the unlearning phase of the incumbents. Most of the time, his unlearning happens only when the traditional business is already in steep decline.

Besides few instances like Zappos where the culture is differentiation factor in the market. I believe that there is a big need for approaching business model innovation as organizational change.

I have experience with change processes and know quite a few people working in the area. Even small organizational changes can be really hard to implement. A new business model offend carries with it big changes and thus making it something that is really hard to implement.

Great business model innovations like Skype, Spotify and netflix did not happen i in the big companies of the respective industries.
This is not because they did not get the idea, rather it is because it would mean a wild change to their worldview and organization.

Personally I tried pitching a model very similar to Spotify in a music industry contest in 2005. The idea was not even considered. Similar cases take place all the time, the ideas are there but the organization are not ready for them or the change they carry.

This is why most great business models are brought to the word by newcomers.
Do you think it is possible to change this and how should it be done ?

The second step is to identify what assumptions are behind today’s business. The problem is that most assumptions are tacit and hidden so uncovering takes time and an outside look. And then starts phase two, we call the unlearning and mobilize phase. Here it is important that the top management is involved since here the mental models and the dominate logic has to be uncovered. Here we try to get top managements view of the world a little bit out of balance by conducting interviews with customers and non-customers to gain customer insights. These feedbacks usually starts a process where most things are questioned by the management. Particularly, they see that their value proposition is not as strong as they believe. And when we have been successful in disturbing their view of the world the idea phase of new solutions can start.

What is your approach?

On the other side, conscious, intentional cultural change is not an easy task and requires possibly different skills on the part of the consultant than some of the other elements of the business model, at least in the implementation process. But fortunately there are experts available if necessary.

The new canvas has the advantage to bring this important element to attention right upfront.