You are looking for somewhere or something to innovate. Many organizations immediately assemble teams to create new offerings. But have you also considered business model innovation? It’s what allowed Apple to grow through its iPhone, iTunes and iPod introductions and Samsung to grow through its access to inexpensive, high-quality labor (via the Russian Academy of Science), creation of repeatable innovation processes, an in-house design school and innovation training.
Business model innovation is about identifying new opportunities in your model to create new value. The ultimate outcome is to develop:
Game changing or improved offerings for the market (i.e. your customers grow)
Employees, to help them grow
Communities and Partners, so they’ll benefit and last
However, even though 59% of managers say innovation is critical to business success, only about one-third of organizations are focused on creating an innovative culture, according to ORC’s Global Perspectives survey. But the truth is… by uncovering opportunities from within- from existing processes, products, strategies and employees- organizations can better harness innovation, quickly adjust to market dynamics and customer needs, and effectively create value for its company and brand.
Key Considerations When Getting Started
Let’s set the record straight- business model innovation isn’t just for large organizations like Apple and Samsung- it can be applied to any organization. But like anything, it’s the application of fundamental lessons and strategies that can be the key to success. A number of articles and reports have been written on the topic with key lessons to apply and consider:
Who is your target segment and what are you offering to them? Before you can construct your model, you need a vision for what it’s supposed to deliver – to whom and what. It can be derived from employees, a view of the competitive landscape, buyers, non-buyers and experts.
How will you deliver operationally? Will you use technology? Automation? Outsource? New processes? What kinds of skills do your people need? Years ago, I was on a round table with C level executives and they speculated that more of their supply chains would include freelancers as they looked to reduce costs and “lease” expertise when needed. In another example, we used technology to automate arduous manual processes, providing little value to our employees or our customers. The time savings allowed our teams to create new experience and offerings of new value to our customers, and allowed our teams to thrive.
What and how will you price the offering? Are you considering shifting the way your customers interact and buy from you? You’ll need to know how to create your revenue model to support your business model changes.
I’ll borrow a sentence from a 2009 BCG paper on business model innovation that rings true today,” Business model innovation is especially valuable in times of instability.” I agree though I would add a bit more to the sentence. While it’s prudent to invest in it in times of uncertainty, I also suggest if you are feeling comfortable or satisfied in the way that you have always done it, it’s probably time to consider what’s next.
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