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.
Let’s put this differently.
My daughter is just into her teens. As a result, she’s started to make her room a reflection of her personality. One way that she’s doing this is by having lots of thick wax candles in the room. The room has a wonderful warm glow – it feels safe and secure. She also reads a lot. When I go in to remind her to blow the candles out, (actually I love the smell of the candles being snuffed out), I find her face close up to the book, squinting to make out the black wiggles on the page. The candles are lovely, they let her read. It’s hard though.
If I’m feeling cruel, I’ll switch the light on. As we are living in a temporary rented house in Sharjah at the moment, the light is bright, harsh, and actinic. It kills the mood. It’s more suitable for an interrogation cell where you aren’t going to be allowed to sleep for 36 hours. Those letters pop off the page in crisp-type blocks. Reading becomes easier and faster. Comprehension, recall, and insight all bloom as this happens.
Customer Value
A normally incremental approach to innovation would tinker with the number of candles in the room. Their placement. It would tweak with the way composition and that of the wick. How do we maximise the lux and the flux density on the book pages? As long as we are making it a bit brighter then the reader is happier with the product.
How though? Can we step out of this approach to hill climbing – finding local suboptimal peaks – and find a point where the lighting in the room transcends the reading experience.
This may seem a metaphor – but this was a very real business model innovation at the end of the 19th and beginning of the 20th century – as electricity transformed homes after darkness.
When we are looking for ways of creating customer value, this is the measure that we want to set ourselves. If we measure the increase of performance in percentage terms, even in double-digit percentage terms, then we are not having the impact that is going to create the disruption that our customer desires and needs. Instead, the goal is to look for ways to increase the customer value that they get by orders of magnitude. One order of magnitude is 10 times larger. Two orders of magnitude are 100 times larger.
One final example before we move on.
Wikipedia versus Encyclopedia Britannica. The Future will Always Win
I was always curious as a small boy. One of the most bitter memories of my childhood is my English teacher at primary school, Mrs. King, accusing me of lying about how many books I’d read. I claimed that I’d read every book in the school library. She held me up for shame in front of the entire class. The fact that I was able to give her a synopsis of every book that she pointed out only seemed to deepen my guilt in her eyes. Decades later, that still hurt. My parents recognizing my thirst for knowledge bought me the Encyclopedia Britannica.
I never read it as much as the dictionary, but it was a joyful browsing compansion. As a tool for answering questions, it was good, but the questions I asked had to be important. First, I had to decide whether to look at the Micro or macro part of the encyclopedia, (the little articles or the big ones).
Then I had to practice my spelling and figure out which of 10 volumes the search term was in. Then I had to leaf through 1000+ pages of thin paper, trying to find the right entry. I think that I probably used it once a week or so.
Move on a few decades, and when I am reading a book on my kindle, I press and hold my finger down on a word, and Wikipedia opens up. I then have a reasonably good article telling me what I need to know instantly. I used Wikipedia 5-20 times a day.
Wikipedia, just on those metrics created 35- 140 times more value than my old paper encyclopedia. This is the challenge. This is the goal to work towards for the customer.
If You Want to Read More
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