Business model innovation needs to be continually repeated. This article describes how this can be accomplished.
Continual business model innovation is the most valuable process that any enterprise an engage in. But establishing such a process is difficult for most leaders. Why? They've never see anyone do it, and they have no personal experience.
To help overcome that problem, this article describes the key elements that such a process requires. With this template in mind, some leaders will be able to design and engage in the appropriate activities.
Here are the four elements in continuing business model innovation:
1. Understand and follow the current business model well. -- Employ the optimal way that your goods and services should be supplied now, by informing all stakeholders about what needs to be done to deliver the most benefits.
2. Understand and implement the next business model improvement. -- Specify the next innovation to provide more stakeholder benefits through goods and services and how the transition will occur.
3. Understand and use a business model innovation vision. -- The ideal benefits to deliver to stakeholders in your industry, which is used to test the appropriateness of developing future generations of potential business model innovations.
4. Ongoing design and testing of potential business model innovations. -- Vision-defined probes and tests to elicit reactions to providing new benefits and various ways of supplying them.
A more valuable approach to continuing business model innovation also describes more than one future generation of innovations in terms of the second element.
For each of the first three elements of continuing business model innovations, you need to identify seven key elements -- the who, what, when, where, why, how, and how much -- viewed from the perspective of all direct and indirect stakeholders. Their combination of seven elements defines either a business model or a business model innovation vision:
1. "Who?" defines all the stakeholders you are serving or affecting.
2. "What?" describes the offerings and their benefits and negative influences that affect each stakeholder.
3. "When?" captures the timing of your offerings' effects on stakeholders.
4. "Where?" identifies the location for delivering the benefits and other impacts.
5. "Why?" gives the rationale for providing the stakeholder benefits you deliver.
6. "How?" explains your method of making your offerings available and being compensated for them.
7. "How much?" states the amount customers and users pay and incur.
Why is it important to know what the seven elements are? By examining these areas, organizations will be able to focus on places where important benefits may be added.
Copyright 2008 Donald W. Mitchell, All Rights Reserved
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