An Essential First-Aid Kit for Fixing Your Broken Business Model Innovation Process
Business model innovation is task one for success in the 21st century. Yet most organizations have a broken process for doing such innovation. This article provides questions that can quickly fix your broken business model innovation process.
Almost every business keeps first-aid kits available to help injured people recover from accidents. It's only common sense.
Yet few of these businesses know how to treat a broken business (or strategy) model innovation process. With these questions, you'll have just the first aid you need to recover from broken processes. Then, you can return your business to health and prosperity.
These questions will help you discover better ways of improving and replacing your business strategy. By using these questions, you should begin to get a better sense of how well developed your business (strategy) model is now compared to the needs of having a large competitive advantage. Understanding those dimensions will give you another helpful perspective on what is good about and what needs to be improved concerning your business (strategy) model development process.
Where has your business (strategy) model created competitive advantages in serving customers?
If you are like most companies, you will find that the strategy model has helped you more with some customers than with others. In fact, a typical company will find that more than 80 percent of its customers get relatively few advantages versus what competitors provide from the company's strategic model. Thinking about your business model in this way will help you get a better feel for where you can use strategic model innovation to make greater progress.
Where has your strategy model created competitive disadvantages in serving customers?
Whenever a company focuses, one of the purposes of a strategy model, it also chooses to meet the needs of some current and potential customers less well. Sometimes these disadvantages for those customers are unavoidable, but many times they are the result of an oversight or limited thinking. Being aware of who is disfavored in what ways can often stimulate improved business models that enable a company to instead gain advantages with some of these potential and current customers.
What were the original reasons for creating these advantages and disadvantages?
Many times, a srategy model choice fit the current and expected business environment well. But permanently changed conditions can often make such choices inappropriate. A business model innovation process needs to be effective in creating business models that will work well in a broad range of business environments, as well as directing work on creating better strategy models when circumstances change in unanticipated ways that require a response.
Are those reasons for favoring this strategic business model still the most compelling ones?
If they are not, you should also think about when changes took place that required a response. The next question follows on to make sense of this observation.
If your company did not make innovations in a timely way to the strategic model, what were the most probable causes of the delay?
You should separate out the issue of not noticing the changed circumstances, from wishful thinking that the new conditions will go away, from not focusing on the strategy model, from not having the skills or resources to work on a new business model.
If you had adopted the ideal strategic model for the time when your current business model was set, what would you have done differently with the benefit of hindsight?
The idea here is to locate if there are any gaps in your strategy model that should have been filled in the past. In most cases, major gaps have been present for a long time. This will help stimulate the focus of your current innovation activities.
How would your business model development process have needed to change in order to have created a more ideal strategy model last time?
Generally, the problems will lie in the area of having too few people thinking about the strategic model, running too few business model improvement experiments, not involving enough people in identifying stakeholder issues, insufficient consideration of different business environments, not preparing those enough who worked on the new business model, and too infrequent business model reevaluations. However, please do feel free to add your own thoughts about weaknesses. This list is just here to help start your thinking.
Article Tags: Business Model Innovation, Model Innovation Process, Business Strategy Model, Broken Business, Business Model, Model Innovation, Innovation Process, Strategy Model, Business Strategy, Strategic Model
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ABOUT THE AUTHOR
Donald Mitchell is chairman of Mitchell and Company, a strategy and financial consulting firm in Weston, MA. He is coauthor of seven books including Adventures of an Optimist, The 2,000 Percent Solution, and The Ultimate Competitive Advantage. You can find free tips for accomplishing 20 times more by registering at: www.fastforward400.com