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.
There are lots of mistakes to be made when it comes to business model innovation.
The majority of those mistakes are brilliant. They are the consequence of you going off the beaten trail and exploring, finding new challenges, and having to come up with new solutions. Most of the stuff you try won’t work, and that is ok.
Think back to Edison in his lab with his group of research assistants trying to find the perfect filament for the incandescent light bulb, the holy grail of home lighting in the 1890s.
As I remember, they tried thousands of different substances with different specifications – finally settling on slivers of bamboo. You can claim that every single failure was a mistake of some kind. True, but that is part of the journey that we need to go on.
The bigger mistakes are the ones where the journey never starts.
I was working with an engineering company in Malaysia. They had grown substantially over the last 30 years, indeed in a previous life, I had even sold steel to them, and so I knew and liked them. I could also see the challenges that they faced as oil production in the South China sea and around Borneo started to reach maturity.
We went through a business model innovation workshop, looking for new business models that they could grow into.
Towards the end of the session, the Managing Director said to me. “This is very interesting Denis, but we want to keep doing what we are doing we’re good at that.”
It’s not business model innovation if you keep doing the same thing as you did before. If you decide to have a makeover, and you wear the same clothes, your hair is cut in the same way, are the same colour and you still use the same accessories. It might feel good that you have smartened up – but it’s not a makeover or transformation.
If You Fail to Innovate You Fail as a Business
There is this very real fear of loss among some leaders and businesses. I know this company, I know this business model. I feel safe, comfortable, and in control here. If I don’t change then, it’s not my fault if we are overwhelmed by market forces. I will not be a failure.
If instead we strike out and do something new, I am going to be the one selling it to the board. I will be the one who will be remembered for sinking the company ship, for staving in its sides below the waterline. I will have to deal with the snide jokes and mockery of my peers.
Better to
“Keep doing what we are good at.”
Can Business Innovate Itself?
The irony is that in most cases of business model innovation, the company gets the opportunity to really double down on what it is very good at – core competencies – leading to a flowing of tactical innovation and improvement as it works hard to make the new business model work.
A good example is in the early years of Eastman Kodak. They had a business model that delivered photography to the masses. To do this, they became excellent in cameras, film, developing photos, chemicals, paper technology, and more. And it was this knowledge and the IP and patents that sustained them as they made their hesitant transition into digital.
The rule then, if you are going to do business model innovation, you have to accept that there will be some losses. In just the same way that when you get married, you have to give up the other girl and boyfriends. Or when you move to a new house, you have to leave behind the old house and let it live on only in memories.
There is a loss. That loss needs to be acknowledged and change accepted.
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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