Don't wait for successful business model innovation tests to begin organizing your new business model's implementation.
Your initial round of business-model-improvement tests will show you a variety of ways that you can create a positive momentum in creating competitive advantage. Implementing the successful results of those tests will impel you forward like a rocket attached to a test sled.
The best business-model improvements similarly create and direct such unstoppable progress towards a stronger industry position. You will be so busy once you are applying these improvements that many important tasks may fall away from your attention.
How can you best use the relatively greater time and attention available to you while the tests are occurring? Take the potential results of the value, price structure, and cost improvement tests and begin to build a powerfully improved business model from those test ideas and other important sources of information.
By the time you are ready to apply this article, you will have finished deciding what added benefits, improved price structures, and ways of lowering costs to test. Some of the tests designed to provide increased benefits and a better price structure may already be in progress.
The natural tendency of most people at this time will be to want to wait until the tests are completed before starting to design your improved business model. That instinct, while understandable, is misguided. The sooner you begin to imagine ways that successful test elements could be combined, the better.
Consider the example of getting a group of people ready for an unusually long hike in a locale remote from where everyone lives that will involve camping out.
Each person needs to be in physical condition to do the hike. To prepare might mean having some people start an exercise program, after first testing their fitness.
Depending on what sort of hiking is involved, special equipment may need to be purchased. Those who don't have proper hiking boots will need to purchase them and break the boots in.
If the hike is to take place in an area where hiking is restricted, such as Yosemite, special permits may be needed.
If you want to stay overnight at a campground with limited capacity, like at the bottom of the Grand Canyon, you may have to make reservations months ahead of time.
If airline travel is required, you will want to buy tickets well in advance to secure low fares. You'll also need to look into the best ways to ship the hiking and camping gear to and from the hiking area. Airlines don't let you take very much baggage for free any more.
Many more steps have to be planned and executed well in advance if you want to have the best possible experience. Skip those steps or leave them to the last minute, and your hike will be impaired in easily foreseeable ways. As a result, investigation into such details should begin early.
By themselves, successful tests in the areas of benefits, price, and costs are usually not enough to create the vision to establish better business models. Here are some reasons why the tests are necessary, but not sufficient, to take you to a powerful, new vision.
First, you may not have the right resources to implement all of your successful tests at the same time. In that case, what is the right order in which to proceed with implementation?
Second, varying combinations of successful tests will have remarkably different meanings for what sort of new business models to create. You want to choose the most effective combination of features to create a powerful new vector that will have strong impetus for your organization for a long time to come.
Third, successful tests may suggest combinations of changes that contain seeds of cross-purposes and harmful effects. How can that be understood before it is experienced?
Fourth, some combinations of successful tests will stimulate new opportunities to locate still other business model improvements. In the long run, those combinations reflecting new opportunities will be the most valuable to your organization. How can these new opportunities improved combinations be identified?
Copyright 2008 Donald W. Mitchell, All Rights Reserved
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