Blog - Entrepreneurs with Denis Oakley

Entrepreneurs with Denis Oakley

I HELP BOLD LEADERS TRANSFORM THEIR BUSINESSES AND THE INDUSTRIES THEY COMPETE IN

You are here: Home / Blog

Blog

My dad had it easy. The IRA almost blew up his factory, the economy tanked, Globalisation killed most of his competitors (and then customers), the silver market was cornered, there were three day weeks, power cuts and he couldn’t get the employees he needed.

Throughout it all, his business model remained the same. Find customers who needed electrical contacts made out of precious metals, manufacture the product to specification, manage costs so that the business was profitable.

The Golden Age of Business Model Stability

He ran that business from 1980 to 2010. My grandfather ran it the same way from 1960 to 1980. My great grandfather ran it the same way from 1930 to 1960. (I’ve rounded the years a bit). For the whole time, the business model remained the same even as products evolved.

Along the way, they built new factories, invested in Japanese machine tools, adopted ISO 9001 early and suffered just in time. Three generations of my family worked incredibly hard to create a small industrial enterprise.

The business now is long gone. Sold and amalgamated into an FTSE100 company. If it still existed, for all the love and sweat that was put into it, it would be doomed.

The period from 1950 through to 2000 saw remarkable business model stability in many industries. What managers needed to do to succeed was to maximise the effectiveness and efficiency of existing business models. The world changed hugely, but that change helped business models mature. They didn’t need to be replaced because new technology came along.

1950 to 2000 was an era of business model stability where the role of managers was to maximise the outputs of business models
1950 to 2000 was an era of business model stability where the role of managers was to maximise the outputs of business models

As part of this golden age of business model stability, most industries condensed into using very few business models. Business model diversity decreased. Milk was sold from floats. Books were sold from bookshops and libraries.

The Business Model Revolution

About 2000 (and I am painting in very broad strokes here) that all changed. We started a new business model revolution.

A business model revolution when you take away all the fancy words means.

If you keep doing what you did before you will die or become a relict

(in Loughborough we have the world’s largest bellmaker. A relict. there’s no money in bells so no one else makes them)

That industrial revolution runs on technology. It runs on creating and using data in very different ways. In just the same way that the electrical and internal combustion revolutions of the early 20th century changed everything, this revolution is killing off all the old companies and creating new ones.

In the period from 2000 (to perhaps 2050) the role of managers is to find business models that are a fit for rapidly changing environments.
In the period from 2000 (to perhaps 2050) the role of managers is to find business models that are a fit for rapidly changing environments.

I’m stuck in the middle. I’ve spent a lifetime working with startups that have been at the forefront of creating this new business model revolution. I’ve helped them chop down, break and disrupt old business models and old ways of doing things.

In almost all cases what we have created is a better way of doing things, when it worked. Along the way, there have been a huge number of failures.

Trying to figure out something new is a lot harder than making something better.

Can existing businesses survive?

At the same time, I come back to businesses like my Dad’s. Are they dinosaurs doomed to die? Should they be abandoned and left behind?

And this is where I am unhappy.

In these old businesses, far behind the cutting edge of technology, there are millions of jobs. Hundreds of thousands of families, even more futures that will be bleaker if they don’t survive.

Survival, as they are, is not an option.

Who wants to be a fish in a desert artificially kept alive by flown in Evian showers.

That’s good for no one.

What’s needed instead is a pathway that all the managers, leaders and owners, like my Dad, can take. A bit like the migration in the movie Ice Age. The animals tried to move to a better land away from the approaching glaciers.

Of course, they can

Traditional businesses face two choices faced with the business model revolution.

  • Keep doing what they are doing, but better
  • Change what they do.
Managers of businesses with established business models have a choice of changing to fit the new uncertain world or preparing for a siege with no hope of relief
Managers of businesses with established business models have a choice of changing to fit the new uncertain world or preparing for a siege with no hope of relief

The evidence is that most businesses can’t compete in their core strengths. In huge areas of business, competitors can now offer faster, better and cheaper. Traditional business knowledge has spread – for example, the Toyota Production System – so that it conveys no advantage.

This increasingly limits sales, profits and the ability of companies to survive. Niching down into a small defensible market, bell making, is possible for some. For most, the choice will be when to exit.

But they have to change business models

The alternative is to change.

But how do we do that? There has been so much stability, for so long, that Managers are not agile. Their training wasn’t in agile or creative strategy – but in operational efficiency and effectiveness

When I did my MBA 15 years ago almost every module, at one of the world’s top 10 business schools, focused on efficiency and effectiveness. Managers and leaders have not been trained on how to change companies, on how to conceive new types of companies to move forward.

This is the goal of this blog, and indeed all my thought. How can we build a framework that enables millions of SMEs, smaller businesses, who cannot afford the big consultancies or dedicated strategy teams, to see new futures and then transform their companies to exploit them?

Digital Transformation is a Mirage

A quick aside on digital transformation. Many larger companies talk about digital transformation but in most cases, this seems to be a similar efficiency and effectiveness play to implementing ISO9001 30 years ago, lean 20 years ago and digital marketing 10 years ago. It is a way of making the company ‘better’, not fitter.

Business Models Must Fit the Environment

Everything that I write, is designed to do one thing.

  • How can companies make good conscious decisions about what business model(s) will make them fitter?
  • How can they change their business models to become fitter?
  • How can they use that fitness to become market leaders in their industry?

Because I straddle the fence, much of what I write applies equally to new ventures as to existing ones that want to change. That’s ok. We need both to change the world.

Read More

Business model innovation in entrepreneurship is designed to kill other startups and help you unlock value from incumbents

Do you need business model innovation as an entrepreneur? Do you need to come up with a shiny new business model? Is all the extra effort required to think about business models even worth it? I’m biased, but even with that bias, the answer is still yes. If entrepreneurs don’t do business model innovation they are probably doomed.

There are two reasons why entrepreneurs need to spend a lot of time on business model innovation. One is defensive. one is offensive

Cull the herd

First the defensive one.

Business model innovation in entrepreneurship: Part 1 - Use BMI to fight off the startup swarm and get a larger share of TAM
Business model innovation in entrepreneurship: Part 1 – Use BMI to fight off the startup swarm and get a larger share of TAM

Entrepreneurs swarm to an opportunity like flies to a rotting corpse. You never just see one fly on a dead animal. Entrepreneurs who only see their business and no other competition are normally delusional. They can’t see the other flies or the corpse isn’t there to start with. That’s a rule of thumb, if it doesn’t seem true to you get an advisor to ask you tough questions and listen to hir’s advice.

Don’t rely on luck

In almost every opportunity there will be a lot of new entrants going after the same opportunity as you. With similar resources, skills and market access there are normally two differentiators. Luck and business model.

Luck is by far the most important thing for entrepreneurs. It probably accounts for as much as 90% of individual success. Did you meet the right VC at the right time? Did you enter the market at the goldilocks point? Did the right technical tools exist? Had someone else done much of the hard work of educating the market?

What you can control though is the business model. Whilst most startups focus obsessively on the product (and somewhat fewer on the customer) few think that much about business models. From 10,000 feet this means most startups are pretty identical in a market. A horde of lemmings.

In the market shakeout

Markets shake out and of a thousand startups chasing an opportunity, 5-10 will have substantial market share after a decade or so. the rest will be dead, eaten, rotten, or desiccated corpses by the roadside.

In 1900 there were about 1300 manufacturers of cars in the US alone. two decades later there were only three of any note – Ford, GM and Chrysler.

You need a business model that helps you win

So for a startup to survive that long they need a business model that helps them fend off and eat the other startups. It’s that simple. If you don’t have any competitive advantage over them, then you are relying on luck and the odds don’t favour you.

You need to design your, business model, to be cutting down and thinning out the horde of competitors. Yes, you need to grow bigger and fatter. At the same time, you need to be killing them off quickly. That’s the job of your business model to enable that.

Take down incumbents

The offensive play is equally aggressive.

Business model innovation in entrepreneurship: Part 2 - Unlock value by using BMI to disrupt and kill incumbents
Business model innovation in entrepreneurship: Part 2 – Unlock value by using BMI to disrupt and kill incumbents

Entrepreneurial swarms happen in two closely related areas of the business cycle. When a new technology opens up a new market – for example, blockchain, crypto, self-driving cars, or even automobiles to use an example from earlier.

Incumbents own value that belongs to you

A second swarming happens when an existing successful business model starts to fail. Good examples from the last few years are publishing, music, banking, law. The incumbents are deeply entrenched and have a great deal of cash and resources. They are also troubled. They can’t give up on the existing franchise which still generates lots of cash, but they see the problems facing them.

There is a huge amount of market share here to be taken.

Product design only gets you so far

Now you can design an awesome product or service and go head to head and slowly win market share. You might even get bought in a lucrative private sale that sets you up for life. To make real money you have designed your business model to exploit the weaknesses of the incumbents.

Going back to the nature analogy a bunny rabbit isn’t going to take down a mammoth. A sabre tooth tiger with long fangs will.

Use business models to change the game

A good example here is how Apple systematically designed features into its business model(s) that enabled it to take down the camera film industry, the digital camera industry and the music industry in the 2007-2013 period. That’s 4-5 fortune 100 companies that it gutted and captured the value from.

Competing at a product level works in favour of incumbents. Competing at a business model level works in favour of the disruptors. Salesforce in the period 2000-2015 competed at a business model level against the big software providers – Oracle and SAP with its no software – SaaS model. By 2015 or so the incumbents had caught up and Salesforce was forced to then compete on the product level going into a very different competitive environment.

Read More

Sustainable business model innovation is the process of designing or creating new business models that increase sustainability.

Many traditional business models have negative impacts on the world and our environment and the creation of sustainable business models helps to reduce or improve the impact that they make.

When we look at sustainable business model innovation the process is much the same as for more traditional business model innovation.

Differences between BMI and Sustainable BMI

Sustainable business model innovation creates business models that disrupt markets, fertilise value propositions (rocket-powered acceleration is unsustainable) and create positive change
Sustainable business model innovation creates business models that disrupt markets, fertilise value propositions (rocket-powered acceleration is unsustainable) and create positive change

The substantial differences are that:

  • The why changes. We are no longer purely concerned with economic outputs.
  • The goals of business model innovation change from accelerating the the value proposition and disrupting competition to include having a positive sustainable impact.
  • In the revenue box in the business model canvas, we also capture the sustainable impact that we are making.
  • As we go through the process of business model design we are constrained in the sets of choices that we can make

What doesn’t change is

  • Analysis and understanding of competitors business models – though this can be usefully broadened to include more stakeholders, especially when complex supply chains are involved.
  • Consideration of the balance point within the model. Where are the key feedback loops in the business model going to be centred.
  • The process of drafting multiple business models to identify and capture insights.,
  • The need for a perceptual shift – seeing the world differently so that you don’t replicate what competitors are doing.
  • The test and validation process where new business models are repeatedely trested at greater scale to reduce the risk profile as quickly as possible.

Need to Disrupt Not to Replace

As I think about it more a sustainable business model has to disrupt existing non-sustainable business models. It has to provide a better alternative to existing business models and the products and services they make. It has to make it a lot harder to sell or manufacture those products.

If it doesn’t it’s not creating the change that we need.

So for example, if you are looking at creating a business model in the packaging industry it is relatively easy to come up with a product that is more sustainable than competitors selling single-use plastic solutions.

The sustainable business model innovation process needs to explore how non-sustainable competitors can be disrupted and single-use plastics taken out of the supply chain.

Greenwashing

When we are creating sustainable business models the goal is to create substantial positive environmental or social change. We are not creating the impression of change. Put another way – laying out green plastic grass on your patio is not a real change. Ripping up the patio and replacing it with a mix of grass to create a mini wildflower meadow is.

This comes back to the heart of business model innovation. If you aren’t making substantial changes that disrupt your industry then the changes you are making are part of normal business. A standard, limited, response to competitive pressures. Thinking small without creating impact doesn’t change anything.

Economic vs Sustainable Business Models

Many people will say that a sustainable business model is less profitable than an economic business model. This relies on several false assumptions.

It doesn’t accurately capture the future costs and risks of non-sustainable models

The value created by the business model is not measured by profits alone – wrong frame of reference

It doesn’t reflect the changing nature of the competitive marketplace – it’s not profits OR sustainability. It is profits AND sustainability.

Read More

Business model innovation is the process of changing or designing a business to significantly increase its ability to create and capture value and disrupt the markets that it competes in.

Companies that have identical or very similar business models to their competitors are highly vulnerable to market shocks and disruption. This is because they are all vulnerable in the same way, and often respond in similar ways. BMI gives companies the ability to diversify business models and find better paths to growth and increased profitability

Let’s break down this definition of business model innovation into its parts.

What is business model innovation?

business model innovation is changing your business model
BMI is a change process that transforms your business and the market it plays in

Business model innovation is a change process. In it, you change how the business or organisation works, usually substantially. This requires significant cultural and organisational change for existing companies. For new ventures, it often means that your business model is substantially different from existing ones.

BMI is an intentional process
BMI is an intentional process that takes you to where you want/need to be, and avoids false paths

Business model innovation is an intentional process where you are trying to find the best business model for a particular environment or context. It can be emergent. As you solve business challenges in a novel way or use new technology, you can develop entirely new business models.

business model innovation increases value creation substantially
BMI is value creation, significant amounts of new values for consumers and users

Business model innovation significantly increases the amount of value created. All business creates value, or should. With business model innovation the intention is to create a significant amount of new value. In many industries, the value of the new products or services is 50 to 100 times greater than the previous best solutions. Google, Facebook, Wikipedia all do this.

business model innovation ensures you capture the value you create
BMI is value capture, making sure that your shareholders capture some of the value that you create

Business model innovation significantly increases the amount of value captured. The amount of value that you capture drives the profitability of the business model. Successful business model innovation enables companies to generate significant amounts of profit. Uber significantly increase passenger and driver value but failed to capture value itself. WeWork and Wikipedia also fail to capture value well (though that was never Wikipedia’s intention)

business model innovation disrupts the markets you play in
BMI disrupts markets. If you don’t then value creation is harder and you capture less value…

Business model innovation disrupts the markets the business competes in. The scale of value creation created by the new business model is often a shock to the market that you compete in. The best business models make it difficult for competitors to respond, to compete or survive. This can be through product innovation, but more often it is through disruption of manufacturing or distribution processes.

What is not business model innovation?

BMI is not a small change to the business. In the normal course of business, small changes are constantly being made to a business, or groups of businesses as they engage in evolutionary competition. Small changes to operations that do not disrupt the market aren’t business model innovation.

Business model innovation is not incremental growth. A business model innovation process that increases revenues by 5% is a failure. There is no point in putting so much work and emotional labour into the project for such small returns. Business model innovation is creating a step-change in growth.

BMI is not being the same business at the end as when you started. Business model innovation transforms your business making it look quite different.

Business model innovation is not looking at a business model from another industry, superficially adopting it and then claiming that your business model is the ‘Airbnb of X’ or the ‘Uber of Y’

What else is important about BMI?

Business model innovation requires you to see the world differently. If you look at the competitive landscape in the same way as everyone else you won’t be able to find the insights that drive successful business model innovation.

Business model innovation is a creative process that draws on technical domain knowledge, a deep understanding of business strategy and the ability to find insights that competitors cannot.

BMI in Human Speech

Putting aside all the corporate strategy gumph. What you need to know is this.

If your business model is the same as everyone else and your industry or market is starting to be affected by change then you are really vulnerable. You need to change how you do what you do so that you are able to take advantage of all this change.

You can just use your intuition to make changes to your business. The trouble is most of your competitors have the same knowledge and nights as you, so you all make the same mistakes together.

If you want to make better choices and unlock the opportunities that come with change – and not just get screwed – then applying a BMI process is a good idea. It helps you to get from A to B (screwed up to fat cat) quickly and safely without too much stress. Unless you are really conservative, in which case get some valium because a great deal of what you believe to be true is going to have to change.

Read More

If you have the same business model as everybody else it is very difficult to find sources of sustainable competitive advantage. In this post, I’ll explain why business model innovation is important for competitive advantage and what you can do about it.

Every business has its business model. In mature industries, these business models tend to be the same. This means that the business is working the same way as all the other businesses.

Why traditional business models get stuck in competition

For example, compare electricity-generating companies. They buy coal or oil from the same mining companies. Then they burn it in power stations made by the same group of civil engineering companies, using boilers and steam turbines designed and built to the same design, using similar control software and then pushing the electricity out onto the grid.

Their ability to generate better returns than anybody else is limited to how well they manage their staff and maximise their productivity, and how they finance, maintain and replace their assets.

All other things being equal outperformance in staff, IP, financial resources or assets will tend to revert to the mean over time.

Here’s another example. Car manufacturers have business models that design cars to very similar aerodynamic performance and regulatory standards. These are then built as a platform using components and supply chains that are shared across the car industry. Sources of competitive advantage, for example, IP like the Toyota Production system give an advantage for a while. As the knowledge spreads the manufacturers tend to revert to a challenging competitive environment.

It’s like playing football again and again with the same few teams. You win some, you lose some, but there’s nothing that you can do so that you will win the next 10 or 100 games in a row.

The promise of business model innovation

That’s the promise of business model innovation. It’s a way of breaking the deadlock, the stalemate. Instead of playing games where you are happy to grind out a draw, or being focused on getting 1 point ahead in the league tables, you start thinking. How do I change the game?

Let’s stick with the football game analogy.

If I wanted to win lots of games what can I do?

In normal operations, I can get more cash, hire better players, hire a better coach, and perhaps find better ways to train my players. In normal business terms, these are all standard operational plays. They are the ones that everyone learns at business school. A million MBA’s using the same tools on similar problems means that you get similar strategies and results. So no matter how clever the strategies or the operational plays are – you end up in the same grind. You play for draws and hoping to grab a point here or there.

Why business model innovation enables competitive advantage

Business model innovation changes the rules of the game.

It asks, are we here to play football or are we here to win games. Are we here to make cars or delight customers and make money?

There is a presumption that the old way of doing things is so mired in competitive difficulties that you have to take a different path.

Using the football analogy we have to think about the game in different ways.

why is buiness model innovation important for competitive advantage
Business model innovation moves us away from the familiar business models that we are co portable with, looking for new ways of playing that may seem weird to strange. In all cases they should enable you to create and capture more value AND disrupt the competition

What happens if we change the pitch shape – have a circular field?

What happens if we change the inclination – make it tilted, or humpy, or add bunkers in like they do in golf?

if we change the numbers of the team, the rules, the number of teams or the length of the game what will the impact be?

Industry insiders will argue that whatever you are doing,

it is not football

Business model innovation answers –

So what. We are here to win, we are not here to play football.

Why is business model innovation important for competitive advantage?

Business model innovation is important for competitive advantage because it changes the rules of the game. When you are playing a different game, dancing to a different tune, then it is difficult for competitors to respond. You are acting weirdly according to the normal competitive rules, and so most tactics don’t work nearly as well.

It’s harder for them to predict what you are doing, and why, and then come up with effective counters.

Because you have decided to see the world differently, resources and assets are valued differently. This means that you can find additional resources cheaply because others don’t value them the same way as you do, and sell existing assets off, prize assets even because they don’t offer you the value that they once did.

Above all business model innovation gives you a competitive advantage because it lets you out into an open space where, for a time, you are the only player. This gives you a chance to grow rapidly and establish a market share that gives you economies of scale and scope that restrict future competitive attempts by other players.

Why is business model innovation important for competitive advantage?

It gets you out of stagnant competition into a growth landscape

Why are companies stuck in competition?

Their business models are similar or identical making any source of competitive advantage transitory

What do companies need to do to get a sustainable competitive advantage?

They need to change their business models through a process of business model innovation. This may mean a big change in the business model or incubating new ones.

What is a sustainable competitive advantage?

It’s the ability of the company to be generating and capturing more value than its peers for a sustained length of time.

Read More

What’s the difference between life and existence? Is it different for all of us or are there patterns that flow through our souls?

Earlier this week I was on a call with one of my closest friends. She does great things leading a global health charity changing the lives of millions. A few months ago she was diagnosed with cancer. On Friday she left the hospital having had three close shaves with death.

She’s one of my best friends partly because of how much life energy flows through her. Another friend would call it a powerful aura. Whatever it is, like a green earth mother, things that she touches grow, change and make a difference.

So it was a shock when she told me that she wouldn’t go through it again. The surgeon told her she’s got a life expectancy of 15 years if she gets cut open from sternum to pubis every 5 years. That means 3 months in hospital hell and then 3 months getting moving and another year of intense work to get her muscle mass and physical function up to spec.

Burn Out or Fade Away
Do you choose life of existence?

Fuck. How could someone with so much passion for life just say ‘when the bus comes I’m going to be on it, heading for the great tea party in the sky’.

Then my other best friend (the 3 of us are all strategists and we have a weekly chat) piped up and she said “Right on. It’s not worth it”

There is so much more to do. If I look at all the things I want to do, books I want to read, skills that I want to learn, people that I want to meet, I have centuries of life ahead of me. Except that I don’t. How much more of that can I do on a bed in a morphine haze.

I watched the last James Bond film yesterday. I’d had a lie-in and got up at 06:30. I’d spent the day writing and I was drained. None of the family wanted to go to the cinema and so I went by myself. it wasn’t suitable for young kids, I think my youngest two would have been disturbed by it. For me, it was good fun, wrapped up in a love story and a story of emotional awakening.

Let’s call it cathartic because of the intellectual exhaustion that I was feeling. In the end, Ranulph Fiennes read

Jack London Chose to live, not exist. Existence without life is pointless
Jack London

The proper function of man is to live, not to exist. I shall not waste my days in trying to prolong them. I shall use my time.

Jack London

It hit me quite hard. I had tears running down my cheeks and getting lost in the forest of my beard. Bond lived. The last film took him from an emotionless psychotic killer to someone who was almost a person (limitations of the genre).

He stepped out of the black and white movie and became fully coloured. Now in my life, in your life, how much of it is lived in full colour? How much of it are you cruising along for existence’s sake?

When you look back on your life and determine whether it was a good life what will you say. Will you say

I endured

or will you say

I grew.

I flourished

I lived.

To take the full quote of Jack London

„I would rather be ashes than dust! I would rather that my spark should burn out in a brilliant blaze than it should be stifled by dry-rot. I would rather be a superb meteor, every atom of me in magnificent glow, than a sleepy and permanent planet. The proper function of man is to live, not to exist. I shall not waste my days in trying to prolong them. I shall use my time.“

Jack London

That does not say go out and be Jimi Hendrix and or Jim Morrison. We’re not about living a short life full of brightness and energy. I am talking about filling all of my life with that brightness.

Each and every day

Filling it with sixty seconds worth of distance run

Rudyard Kipling, If

What is the point otherwise? Some of us are great. We hit the newspapers, change world events and have books written about us. Bright? Probably. Does that exclude everyone else?

No!

Life and existence is not about who we are or what we achieve. It’s what we do each and every single day. It’s typing as I type now, full of passion and vim, trying with every sinew to cajole and persuade through the words I type.

It’s about committing to the early morning run and climbing the hill in the dawn with lungs slowly growing redder with pain. A thin line of pain in calf and thigh getting thicker and more intense with every step.

It’s picking up a small child and being totally engaged with them, being present. It’s chopping vegetables as you create a moment of taste with love.

I’m not Christian enough to be entirely convinced that there is salvation. Bede’s story of the sparrow resonates stronger.

It seems to me thus, dearest king, that this present life of men on earth, in comparison to the time that is unknown to us, [is] as if you were sitting at your dinner tables with your noblemen, warmed in the hall, and it rained and it snowed and it hailed and one sparrow came from outside and quickly flew through the hall and it came in through one door and went out through the other.

Lo! During the time that he was inside, he was not touched by the storm of the winter. But that is the blink of an eye and the least amount of time, but he immediately comes from winter into winter again.

So then this life of men appears for a short amount of time; what came before or what follows after, we do not know. Therefore, if this new lore brings anything more certain and more wise, it is worthy of that that we follow it.’

I am the sparrow. I am in the mead hall. I know that sooner or later I shall go into the darkness. I’m really not sure if that is ok, but for now, I am going to make the most of where I am. When I go into the darkness it is surely worse. I may be lucky. I play Pascal’s wager and believe that it won’t be.

Until then I want to live. not exist.

This brings us back to my friend. When you are gutted by the surgeon, embalmed with radioactive fluids, corrupted with septicaemia and wracked with pneumonia is that life? Or is it mere existence?

Ultimately, man should not ask what the meaning of his life is, but rather must recognize that it is he who is asked. In a word, each man is questioned by life; and he can only answer to life by answering for his own life; to life he can only respond by being responsible

Viktor Fankl, MAns Search for MEaning

I think it can be life. I so much want to agree with my friend, and say no. Life has ended. This is a dreary existence. I cannot cope, there is no more value. That everything shall get worse. It is all downhill.

I haven’t suffered the same way that Vicktor Frankl did. Humans, whether Primo Levi or Guy Sajer go through much (how inadequate is that) and come out transformed or broken

A day came when I should have died, and after that nothing seemed very important.
So I have stayed as I am, without regret, separated from the normal human condition.”

Guy Sajer, The forgotten Soldier

And yet however bad it has been, freezing on a Yugoslav battlefield, fleeing a volcanic eruption, holding on in a Turkish earthquake, bleeding and lost in the Malaysian jungle, running endlessly through the night in delirium, lost and cleft when struggling with separation, there is always light.

I run not because I enjoy it, but because the suffering makes me stronger, more human, closer to who I want to be.

Arbeit macht frei

Auschwitz Camp sign

That which does not kill us makes us stronger

Friedrich Nietzsche, TWighlight of the Idols

It’s because we suffer because it is hard that we become.

Yes, I can see the dread of going under the knife again. Yes, I can see the fear of losing your body and mind once again, clawing back up to the surface of consciousness and trying to rebuild body and mind so that you can do it again. I fear it. I fear it so much.

And yet is that a reason not to plunge into the icy water? Just because it is cold?

Can we exist without life? For my part, and possibly for my part alone, I cannot see that any part of my existence will be so bereft of life that I will say time to let go.

There will be moments for sure, far out at sea, exhausted it is easy to just lie back, let your arms hang down and gaze into the bright sun. Say ‘I can’t do this. I know.

But I also know that that spark, the life within always rolls us back onto our belly and gets tired arms to start pulling us forward through the sea, towards the shore.

I may not agree with my friend about how the fight should be fought. A valiant clump of slowly dwindling housecarls about a banner, or a flag dipped in submission earlier in the day.

We do agree that until the flag lowers for the last time that we shall live. We shall be meteors to our friends, we shall be a brilliant blaze to our colleagues, we shall bring a warm glow to the world. We have lived.

That is probably enough.

Read More

Explorers are usually bearded dudes who head off into the jungle or polar ice to find a new place, climb a mountain or do some stupid feat of physical endurance. The truth is that most of the people that we really admire are explorers. This post is about why we need to explore and how you can become a business explorer

Estimated reading time: 14 minutes

Einstein’s mind explored the boundaries of physics and saw something entirely new. Jane Austen explored writing and came up with a way of exploring human emotions and empathy that no one had ever done before. Steve Jobs explored design and technology, Banksy explores street art and impact and I explore the jungle and what business models are.

Why do we need to explore?

A lot of people get bored. If stuff is the same the whole time they don’t like it. Some people explore clothes and fashion. Others explore books for new ideas. We as a species have a desire for novelty that seems to be insatiable.

Forget all the other stuff that people say about humans – big brain, opposable thumbs, playing with fire – the thing that defines us most is

What happens if….

closely followed by

Whoops

What’s the difference between physical and mental exploration

I spent a few years mapping several hundred square kilometres of the Malaysian jungle. I’d head off every afternoon after work and go down the first path that I came to that I hadn’t been down before.

being a business explorer means heading out into the unknnown - take the failures - and enjoying the unexpected - and wanted successes
You start somewhere and then set out, exploring the different trails and possibilities. You know that gold is out there, but which path, which trail or even which treasure is all uncertain.

To start with a lot of people had been down the paths. As I got deeper in the paths got smaller and smaller. Eventually, I often ended up wandering through the jungle following gaps between the trees, clearings and the occasional stream bed.

It was always hot. My legs were always covered with scratches and often running with blood from leech bites, swollen from ant bikes, shaking because a viper had dropped out of a tree on top of me. I chopped my fingers off once, stabbed myself with a bamboo spear, ran from a tiger that didn’t exist and ended up in hospital with heatstroke and dehydration.

Often I was off the edge of the map, with a phone that had no signal, a few ampules of morphine and a fear that I was only one small mistake away from dying, unfindable, in the wilderness.

The payback was amazing.

“I’ve seen things, you people wouldn’t believe, hmmm.
… attack ships on fire off the shoulder of Orion.
I’ve watched see Beams glitter in the dark near the Tannhauser Gate.
All those moments, will be lost in time like tears in rain…”

Bladerunner

Waterfalls deep in the jungle where you swam with shoals of huge fish, dawn rising over huge cliffs, columns of ants marching, deer caught for a moment in the evening sun

I’ve spent years now doing something similar with my passion for business model innovation. I’ve read what people have written, and take that as the starting point not the endpoint of my journey. I’ve looked out over great vistas of ideas that no one has touched, new thoughts at the end of a tenous path. Ideas that glimmer in the darkness that if brought out would change everything.

Because they are new, different, often unique it’s hard to convey what they are or their importance. I can see it, touch it, feel it, and others standing by see me with muddied hands and a ragged beard.

It is the same experience, going out and finding something precious and new that you can share. I think that we all like this in different ways

Why do we need to explore?

I don’t think that there is a certain personality type that is an explorer. We are all explorers. A friend of mine loves exploring other peoples bodies – most people would call him a serial cheater. Something drives him though. Another friend, who is creating an amazing clothes company is fascinated by the way that clothes, fashion and personality interact. She’s also an explorer.

It seems to be an innate drive in most of us. In some parts of our personality, it is large. In other’s not so large – I explore ideas and jungles but I am happy wearing the same style of clothes every day and eating the same food day after day.

There is that part in each of us that is driven

To sail beyond the sunset, and the baths
Of all the western stars, until I die.

Tennyson, Ulysses

When we activate that part of us and follow our curiosity and desire to learn more, to make a change, to discover and to know, then we are often the happiest that we can be.

What does a business explorer do?

Business explorers are just the same as other explorers. They, We are always looking for the wonders of business. Because business likes its jargon – wonder is often hidden by ugly words like sales, profit, value proposition. What we are doing is just the same as when I went out into the jungle to find an amazing waterfall.

Business explorers are often entrepreneurs. Entrepreneurs are looking for a better way to change the world.

What if this technology changed our lives?

A lot of business explorers focus on the products and services that they create. This has been the focus of their exploration over the last century or so. Before that business explorers had different focuses. They were focused on finding new sources of products, or new markets. Think Christopher Colombus, Marco Polo, Vasco De Gama and more.

Increasingly though products and services aren’t distinct or novel. So much is new, that nothing seems to be new. Business exploration is starting to go in a new direction. Over the last few decades, we have seen business explorers start to create entirely different types of companies

I do not know what I may appear to the world; but to myself I seem to have been only like a boy playing on the sea-shore, and diverting myself in now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me.”

ISaac Newton

As Isaac Newton said, it seems that we are on the verge of something incredibly exciting. A change in how we see the company and what it can be. That ocean of truth needs explorers to head out into it, to try and find what wonders it contains.

What are the benefits of exploration?

For most explorers, most of the time the benefits are that they have taken a path less trodden. They have followed their passion, desires, curiosity, to go where no one or few people have ever gone before.

I’m not going to dress this up. It’s a deeply personal experiential motivation. It’s not done for the hope of an explicit reward. The costs and risks when you face them are so much larger than any positive outcome that your internal daemon is the only thing that can push you into the storm.

The physical, material, reputational benefits are wonderful baubles that you collect as you return home.

These baubles are great. Let’s start with the psychological ones

Confidence and courage. When you leave civilisation behind you leave the cosy comfort that it gives you. You don’t have a safety net any longer. So as you head down the explorer’s path you have to make a choice. Do I go forward knowing I may die, or do I turn back,

Gandalf: I am looking for someone to share in an adventure that I am arranging, and it’s very difficult to find anyone.

Bilbo: I should think so—in these parts! We are plain quiet folk and have no use for adventures. Nasty disturbing uncomfortable things! Make you late for dinner! I can’t think what anybody sees in them …

Gandalf: You’ll have a tale or two to tell when you come back

Bilbo: You can promise that I’ll come back?”

Gandalf: No. And if you do, you will not be the same

The Hobbit, JRR Tolkein

Bilbo came back with gold and some minor pieces of jewellery. Most of his companions died. His journey changed the world.

Focus on the Change not the Baubles

When we look at business explorers we don’t admire the ones who became rich and came back with lots of baubles. We admire the ones that changed the world – Steve Jobs, Andrew Carnegie, Jakob Fugger. And if you can find the right business model then pretty much everything material in the world that can be bought can be yours.

That’s the promise of being a business explorer. Find a new business model that creates more sales or profits than any other business model and much of the world’s wealth can become yours.

The other benefit is that your name will be recorded for generations – history book stuff.

Look at it this way. If you decided not to be a business explorer and spent your life climbing to the top of a Fortune 100 or FTSE 100 company then you will make some money. More than most people can imagine. In the greater scheme of things, you will be quickly insignificant and soon forgotten.

How many CEO’s of the 10 largest companies in your country do you know? What about their predecessors? The ones that you care about and want to emulate are the explorers, not the ones who managed the supply base that you set out from.

What are the costs of being an explorer?

Most paths go nowhere. In earlier times most explorers died early, riddled with disease and crippled by injury. They died in the desert-like Burke and Wills, frozen in Alpine passes like Otzi the iceman, or lost in the jungle like Jim Thompson.

Business explorers can fail spectacularly – losing reputation, money and freedom even if they aren’t total fraudsters.

Most explorers when they find a path or trail that is worth following take 10-12 years to find something valuable and bring it back safely. It is a work of a decade or more. Partly because so much time is taken up by discovering what it is that you don’t know that you don’t know.

Most entrepreneurs fail. That’s ok. The toughest lesson is to learn how to get going again when you have fallen once again. The best thing is that it starts off easy and so you normally have time to learn – and if you fail and move on then you can recover your life and live with more confidence and poise than you did before.

How do you start exploring?

Many years ago I walked out of Bristol to the start of the motorway. I had a small sign that said Jerusalem.

I didn’t get there that trip, I accidentally ended up in a war zone and almost froze to death in the German winter. One of my mistakes was that I used the motorways to hitchhike. Each time I was picked up I travelled hundreds of kilometres. It was easy but I didn’t learn much.

The smaller the road, the more interesting the journey and the more I learned, when people picked me up.

This is definitely true when you want to start exploring. If there are lots of people on that path don’t use it. You can assume that if there was anything valuable to find it will have already been picked up. Anything left over is probably an illusion.

Take Different Routes

Start simply. Take a different route to work every single day. When I have done this it is an exceptionally uncomfortable feeling.

There are lots of routes to work (actually taking my kids to school) that I don’t want to take because they aren’t efficient. they are going to take longer. Because I have a map in my head of Loughborough I KNOW this. So I stick to the safe roads that deliver good results.

This is what a business manager does. The goal is to get from A to B in the shortest possible time. Always. That’s good for normal business. But when you want to change, when you can’t actually drive from a to B any faster because of the traffic and roadworks, then you need to play a different game.

When you explore you aren’t trying to get from A to B. To are trying to see what happens after you leave A. the more different paths you take the more diversity of experience you have. The more diversity you have the more chance you have of discovering something new.

So the practical test of trying to drive to work a different way each day forces you to embrace that tension between efficiency and exploration. Don’t try and be efficient. Live with that discomfort and let it go. Efficiency is a habit (often a useful one) but it’s not a hammer that you can use everywhere.

Once you have the different routes to work method nailed – list out all the good things that you discovered doing it. If you want, list out all the times that you were late, took wrong turns, got stuck in traffic etc. But focus on the surprising discoveries. Then start applying the same technique to other areas in your life.

How can I take a different path?

What different paths exist?

What will happen if I go down them?

What are the best tools for explorers?

As I was typing this I looked out at what my son was doing on his iPad he’d been drawing a map of Europe by hand so that he could play an imaginary war across it.

I started this post by talking about how I had mapped 500km2 of the jungle in Malaysia. I’d made a map and discovered the territory.

When you are exploring there is so much sensory information coming at you. Even years on I still have a sense of how paths turned, where the trees were, how steep and rutted a hill was. These though, are mental impressions. Fragmented, useless for any practical purpose. We need to find ways of bringing them into a coherent image that lets us show others what we have explored.

Physical explorers use maps. Business explorers use a whole variety of management tools. The best, so far, seems to be the business model canvas. This allows you to map out new types of business quickly, and then to explorer the ideas that your map has captured ever more deeply.

Crystallise and condense your insights into a map. How you do it doesn’t matter. What matters is that you extract the essence of your exploration and are able to explain it to others.

The other key tool is putting a question mark as often as can into almost everything that you do.

Curiosity.

  • Why is this like this?
  • What can be different?
  • How does this work?

And always the stupid question that moves the rock of dogma and unearths the diamond of insight.

What does it mean to be an explorer?

To be an explorer is in larger part to choose your own path and leave the crowd behind. It is to be comfortable being different. It is being confident that even if this trail doesn’t give an answer, one that you soon take will give you AN answer, if not the answer.

It’s knowing that there are more answers out there than you imagine, possibly even more answers than you can imagine. It’s having the courage to walk off the edge of the map, to stand at the edge of the universe and put your arm out – and make it bigger, that makes you an explorer.

And above all, it’s the desire to come back and tell others what you have found.

I work with explorers who are pushing the limits of business knowledge. They are seeking to change the world by going out into the far edges of technology, culture and environment to find new business models that, when all is said and done, change everything.

And the final world from George Bernard Shaw

You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”

George Bernard Shaw – Back to Methuselah

Say why not, and start exploring

Why do we need to explore?

We need to explore because novelty is important to almost everyone, and you don’t find novelty where there are lots of people

What’s the difference between a physical and a mental explorer?

A physical explorer heads out into the wilderness or the unknown – braving physical and mental discomfort. A mental explorer heads out into the world of ideas looking for new ones or challenging old truths to find new possibilities

What does a business explorer do?

A business explorer is looking for new ways of creating customer value, that is better than existing approaches. Sie is not concerned about what has gone before, about business dogma or established truth. Sie wants to find a better type of business that disrupts the competition

What are the benefits of exploring?

The benefits of exploration are often serendipitous. You rarely find out what you intend to discover, but the stuff you discover along the way is often more valuable. Think about Christopher Colombus

What are the costs of exploring?

Exploring is uncomfortable. You are the first, so you are often having to make decisions on no or inadequate information. A lot of them are going to be wrong. That hurts – mentally and physically.

How should I start exploring?

The easiest way – take a different route to work every single day. Even if it is less efficient. Try all the different paths you can take and see what you discover

What are the best tools for exploring?

Curiosity. Ask why. Always ‘Why is it like this? “, “What happens if I change this?” “What happens if I do that?”

What does it mean to be an explorer?

Explorers live on the edge of the known world. They are always going out to map the unknown and to discover new wonders. They have an amazing sense of awe and wonder.

Read More

Why do you need a business model? Every business has a business model. Just like every piece of ground can be mapped. It doesn’t matter if you’ve ever looked at the map.

I’ve worked with well over 1,000 entrepreneurs and business owners now. There’s one group of them who are super smart and focused. However, when I ask them a single question it all starts to unravel.

What does your business do?

The question is

What does your business do?

There are several variations on that question – “How do you make money?” is another favourite. When the entrepreneur is still talking after 5 minutes I begin to worry. When he (or she) is still talking after half an hour I know that they have no idea of their business model

Why do you need a business model? So you can simplify everything in your head and make your business mode effective
Why do you need a business model? So you can simplify everything in your head and make your business mode effective

You can sketch out the business model onto a piece of paper, you can condense it down into an elevator pitch. The business model is the essence of your business. It is how it works at a high level. Easy to explain, easy to understand. Easy to act on.

Why do you need to understand this? All business models aren’t equal.

When I first started out as an entrepreneur I almost started a kebab shop. I can’t remember why I didn’t now. My business model, there was the same as every other kebab shop. The crucial difference was that I didn’t have a young immigrant family to provide cheap or slave labour to run it.

I had no idea about that, and so it was fortuitous that I didn’t open the shop. My business model was going to be crap and I’d have underperformed compared to all the other kebab shops out there.

Why do you need a business model?

Most entrepreneurs and SME owners are like me then. They don’t look at the business model and so they end up being significantly less competitive than they should be.

If you don’t know your business model you are driving a second-hand car without an MOT.

If you don’t know your business model you can’t improve it

What do you need to do?

The first aid step is to quickly sketch out on a napkin what you do.

  • Who are your customers? Choose your best 3 types
  • How do you change their lives? What you are selling isn’t what they are buying?
  • What do they give you in exchange for changing their lives?
  • How do you reach them?
  • How do you make them feel when you are helping them?
  • What are you doing to create the change in their lives?
  • What do you need to make that change? A factor? A chip fryer? a big heart?
  • Do you need other people to help you? outsourced workers or factories, government licences
  • Where is your money going to go?

Nine simple questions. Most can be answered in a word or two. Don’t worry about making a full sentence.

That’s your basic business model. If it’s still fluffy or unclear spend some time on it. If there are big holes, spend time on the business model now! and if what you wrote is the same as all your competitors start thinking about how you can change it.

FAQ

Do I need a business model?

Yes. You have one even if you don’t know it. Knowing what it gives you another tool to become more competitive?

What’s my business model?

Use the 9 questions above to find the skeleton of your business model – then write the answers onto the business model canvas

Why do I need a business model?

Because having a good product or service and delivering it well is no longer enough. The business model is your business system. If that system works better than your competitors you will face far less competition

What happens if my business model is the same as everyone else?

Then you can only get the same results as anyone else. And if the industry gets hit by a technological, environmental or economic crisis then you will die alongside them. Just like the dinosaurs did

I’ve never done a business model before…

Don’t sweat it. You can’t get it wrong. Draw the first map of your business. Then keep thinking about it. After a while, you’ll realise that you could have done it better. So spend a few minutes making it better.

What’s the business model canvas?

It’s a sheet of A4 with some nice guidelines that help you write down your business model. There’s more stuff on the business model canvas here.

What happens when I draw out my business model?

Stuff that is complex and messy in your head becomes clearer. That makes it easier to create strategies, brief staff, sell to customers and raise money from investors

Read More

Some people look at a wall and see a wall. Other people look at the wall and see something totally different. A frame for a Banksy mural for example. Seeing things differently like this is a step into wonder, and that is often the start of innovation and lots of other delicious things. The post is about perceptual shift and why its important to business model innovation

We’re not all Banksy though. What’s really interesting is why does someone who has always looked at a wall and seen a wall, change. Change and start to see something different.

When a wall creates a perceptual shift
Banksy seeing a wall as a canvas, a classic perceptual shift

A good friend of mine, the structural consultant Kira Higgs introduced me to a Swedish artist Hilma Klint through a show called Beyond the Visible

My passion isn’t art or art history. What I saw there was striking.

Hilma AF Klint and Beyond the Visible

This woman in the 1890s was painting pretty boring stuff. It was the sort of thing that my Great Grandmother was painting a couple of decades later. Nice pastoral scenes that would fit nicely on anybody’s wall

Hilma Klint before her perceptual shift
Hilma af Klint, Spring Landscape – Scene from the Bay of Lomma,

Then something changed. Hilma started to see the world differently. She had a perceptual shift Her painting style changed to reflect this.

Hilm Klint creates a perceptual shift with modernist abstract artwork
‘Staggering’: The Ten Largest, Youth, 1907. Photograph: Albin Dahlström/Courtesy of Stiftelsen Hilma af Klints Verk

This was the first abstract modernist painting in the western canon. Hilma had no one to copy. No one to inspire her. She was highly spiritual and apparently decided to paint what she ‘saw.’ It was so different that she refused to allow anyone to see it until 20 years after her death.

Today modernism is everywhere and her work doesn’t seem that startling or original any longer. That’s not the point. We are not here to be art critics or historians.

Using Perceptual Shift to Create New Business Models

What I want you to do is to look at the first painting and imagine that you painted it. Then try and imagine how you got to the point where you painted the second. How is your perception of the world changed? What have you let go of? What have you found?

This is what I call perceptual shift. The perceptual shift is the experience of the creator to shift from seeing reality in one way to see it in another way.

What is this doing in a business strategy blog?

Most of the time most businessmen and entrepreneurs are busy painting pictures of cows. The world is drowning in pictures of cows. It’s incredibly tough to sell pictures of cows there are so many of them. Every so often someone sees something different, and then Bezos, Branson, Jobs et al are selling highly-priced unique artwork.

Perceptual shift is a key part of what seems to happen in a lot of business model innovations. This is important for two reasons.

Firstly business people are all taught the same things, so they tend to see the world in the same way. That means that two similar companies with similar staff will tend to come up with similar plans. This shared worldview leads to an inability to stand out, and you get trapped in competition.

If you see the world the same way that your competitor does how can you do anything differently?

Secondly, in a lot of cases, it’s the perceptual shift that creates the secret sauce that takes a boring or a stupid idea and makes it great. Sell advertising to small businesses? Not worth the time or effort Sir Martin Sorrel would probably have said in 1990. Now his business WPP is worth $20 billion, and Google is worth $2 trillion.

What is perceptual shift?

It’s the ability, or accident, that allows you to see the world in a different way, and in business, to create disruptive business models as a result

How do I do perceptual shift?

This is the first in a series of posts on perceptual shift and how to create it in your entrepreneurial journey. Right now my hypothesis is that you look for lots of patterns in the industry and then let your subconscious mind work on the patterns to create new ones.

What’s the benefit of perceptual shift?

If you can see an opportunity (that exists) that others can’t then you can use it to create new business models Larry Page $2 trillion vs Sir Martin Sorrell $20 billion. We aren’t just talking about products or services here – we’re seeing industry landscapes in entirely new ways.

Blog