Renee Hopkins, Director of Engagement at Business Innovation Factory (BIF), wrote an impactful post on the myths and facts of business model innovation. In this post, we highlight the 4 facts from Renee’s post to remind leaders and teams about the importance of business model innovation.
2016 will be a big year for business model innovation as leaders and organizations recognize the importance of systematic and intentional reinvention of a company as a whole. It’s a sentiment Strategyzer co-founder Alex Osterwalder shared in our final StratChat of 2015.
Let’s take a look at the four major facts Renee outlines in her post, and why they’re important for companies. We’ve also added links to our perspective on each fact for further reading.
Renee Hopkins and Strategyzer agree: business model innovation is a persistent and iterative exploration of entirely new ways to create, capture, and deliver value. And as Hopkins points out in her post, companies mistake business model innovation for a change management initiative; when in reality, it’s a way to rethink strategy.
As BIF founder Saul Kaplan has said repeatedly in his work and in our StratChat, “companies have to peddle the bicycle of today’s business model while simultaneously exploring a portfolio of new [business] models for tomorrow.” It’s especially important for companies to explore new growth engines while they are successful. Reinvention shouldn’t take place only when a business crisis hits your organization.
Companies love to solve tech problems before understanding if the market even wants the technology in the first place. It’s something we’ve been talking about a lot on the blog lately. But as we’ve pointed out before (and so does Renee): business model innovation doesn’t have to be tied directly to a new product or service. Companies can look at strengths in an existing business model to uncover new ways to create value for customers.
Business model innovation is a constant back and forth of cheap experiments, quick failure, and continued learning. As Renee points out (and we agree): it starts by adopting the customer’s point of view to understand what matters to them. It’s not enough to gather market research and develop your idea. Your team has to listen and analyze customer behaviors; iterate rough prototypes for testing; and continue to gather evidence to iterate the idea based on how your customers react.