The missing part for business model innovation: The process

Recently, I had an intensive discussion with David Siegel who just moved to Zurich. His big idea is business agility and he is so right since the missing part in business model innovation is the process moving from your current business model to a better future. He calls it business agility. We at fluidminds use Rethinking business and Entrepreneurial Design for the process.

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Innovation is about being different

What is innovation?

Innovation is a strange beast. Most people say innovation is about new technology or bringing new things to the market. Some might think of better processes.

Schumpeter went further and defined it as “The introduction of new goods (…), new methods of production (…), the opening of new markets (…), the conquest of new sources of supply  (…) and the carrying out of a new organization of any industry”. (Source: Innovation Zen)

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It’s not the price, stupid. It is the value (proposition)

We always hear that the customer is not buying because the price is too high. Is the price important?

Of course, most clients will say yes in any survey or in sales negotiation. Actually, there are departments at your clients that know only two words: Too expensive!! Give me rebates! That is the purchasing department and it is their job to negotiate the price of a purchase. However, is this true, that even for B2B customers only the price is important?

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What business are you in? Business models as social constructs

“What business are you in?” sounds like a simple question. But it’s not. How you define your business determines which direction your firm can go. Based on your answer, you define and limit your strategic options.

In a company, the business model is defined by a dominant group of people. They have a common understanding of what business they are in and how they create value. However, the business model is not an absolute reality. It’s a social construct of dominant opinion makers, e.g. your top management. This is important to understand.

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Open Innovation: Does it work?

Open innovation is a big trend today in innovation management. Where are its strengths and limitations? A discussion with Atizo.

Today, I had a long chat with Isabel Steiner and Sabine Hofer from Atizo, an entrepreneurial platform for open innovation. Atizo is a platform where companies can post a question to a crowd to get more and better solutions. This is called open innovation since you are not looking inside your own firm for ideas but to a broader spectrum of people. Some call it crowd sourcing for ideas.

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Design thinking, Ideo and disruptive business model innovation

To be honest, I get a bit bored about the mantra that design thinking will solve the problems of large corporation. Well, when I go through the case studies at Ideo I am extremely impressed by their client list but not about the output. I have seen several design thinking sessions and I am not impressed at all with the output. The results are very often: More-of-the-Same but with fancier design.

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Let’s commit a thoughtcrime

In formulated strategy we use a lot of words like innovative, based on core competencies, market driven, customer centric, operational excellence, best-in-class, top quality, leveraging existing brand, etc…. You named it and of course business model and business model innovation are now part of these buzz words. Are they still meaningful or did we forget the deeper concepts behind the words? Do we use the technocratic jargon to signal others that we are the experts?

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Slides: Growth by business model innovation (2 part)

These are the slides of the second part of my lecture I gave at Leuphana University in Lüneburg in May. The first set of slides you find here.

TiVo: Failed Expectation

Business model innovations sound great as a strategy and if successful you can create a new market and escape the traditional competitors in your ex-industry. But the most important point in any innovation is not to have an idea, is not great execution, but the adoption of the innovation by  customers. And that is the crux of business model innovation: The diffusion of the innovation. The TiVo is a perfect example.

TiVo Box

Ten years ago the TiVo digital video recorder was presented at a broadcasters’s convention in Las Vegas. People expected that the TiVo as an easy time-shift machine would change the TV industry for ever. The great opportunity for TiVo’s users was to watch a show whenever they wanted and without commercials since they could skip that annoying part. The latter was seen as the death of the TV industry as we know it today since their revenue model is based on these commercials that nobody needed to see anymore with a TiVo.  As predicted the TiVo sold well particularly as the price fell. But since 2007 the user base has fallen and the the TV industry is still existing as we know it.

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Great Innovation: Renovate, don’t replace

Werner Näf had a very simple idea. If your water pipes at home need to be replaced why not renovate them from within? So he invented the LSE-System. It can clean the pipes from the inside using special equipment, dry and then recoat them and by the way save up to 75% in costs and hassle.

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