This post is an extract of my forthcoming book on business model innovation. The innovation book looks at why business model innovation is needed and how it works. You can read more about it here. These posts are early drafts of planned content and I’m putting them out to get feedback. Please do comment below, or subscribe to these pages to get each new section as it is published. In today’s post, we will be looking at finding opportunities in this new world.
Business model innovation can sometimes exist in the eye of a believer. What can seem to one company to be a radical breakthrough, seems to another to be a small piece of incremental innovation.
How do you tell?
The simplest way is to look at the outputs and see if there is a step-change in them.
Let’s give an example. I was talking with author and coach Andrew Sillitoe recently about his book, the Four Keys. As it says on the tin, the book explores the foundations of what makes a solid foundation for a good life. As we talked, Andrew said bluntly, “It doesn’t pop does it?” “No”, I answered, “It has everything that the book should have, but it doesn’t transcend the genre and get people to be recommending it, buying their friends copies, or devoting entire blog posts to the minutiae of a single paragraph.
A step change goes well beyond the god or a workmanlike improvement in a product or service. It makes it so much better.
Step change
I’ve been running consistently for 15 years. 35 years if you include the decades of on and off again running from when I first learned to run across the muddy fields of the North Shropshire Plain. My marathon training has always been poor. I’ve done too much too soon, gone too far too often, go too hard with not enough recovery. So my running has been a triumph of will ever training. Training should be the foundation upon which will launches you into a new sphere.
Then I signed up to peloton outdoor. I don’t have the tread or the cycling machine. Yet, with a coach in my ear, telling me what to do, coaxing me through the dark moments of my marathon training, I have got faster than ever before. It has enabled me to soar. My performance has transformed.
Why am I talking about it from the customer’s perspective? Shouldn’t we think about the impact of strategy on a company’s bottom line? In EPS, share price, or market capitalisation?
Want to Innovate? Follow the Customers
Almost certainly not. Shareholder value follows customer value. When there is a steep increase in the value that the corporation offers to the customer, then that value is reflected in the shareholder value at some delay.
When we work the other way round, then what we see are stagnant companies that cannot drag themselves out of the competitive morass.
Think then about the step change that you can create – check in-less flying, automated cars, refilling fridges, supermarkets that give you offers based on your health objectives – so that you get healthier through indulgence. Think about some of the steps changes that we’ve had already. Seamless sharing of intimate moments with those we care about, instant answers to any question that we ask, always knowing where our loved ones are, sex with a willing (and unpaid) partner at a few hours’ notice.
These are huge changes in people’s lives and satisfaction, and these are the true outputs. The question is not, “how do we do this a little better?” Instead, the question is “How do we do this so much better, that it seems first magical and then life becomes unliveable without it”
These are the steps changes that we look for.
Make no mistake – it is tough – but as a scrambler knows – once you get your hands on the rock, you can gain height far faster than plodding slowly up a path that slowly zig-zags across the mountain.
If You Want to Read More
I keep everything structured on my niftily titled business model innovation book page. Head there to browse, binge, read straight through, or cherry pick. Please do take a moment to comment below or upvote comments that you agree with
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