The Missing Piece in the Puzzle

The Missing Part for Business Model Innovation: The Process

“The Business Model Canvas is a tool many managers and innovators are familiar with. It has been used as a starting and endpoint in many business model innovation projects around the world. The question many have is what process can be used to make this transformation come to live. I’m thrilled that Dr. Patrick Staehler’s first visit to Australia was to share his ideas and thoughts with our Hargraves community.” – Allan Ryan, Executive Director, Hargraves Institute.

Business Agility, Rethinking business, Entrepreneurial Design, Design Thinking, Discovery-driven planning…

Regardless of what wording we use, what we need is a process that helps companies to develop innovative business models that customers, employees and the owners love.

Today, two processes exit in companies that could be used: the innovation process and the strategic planning process. The names of the processes suggest that they could be useful, however, in reality, the opposite is the case.

Why? They lack agility and experiments. Both processes have the hidden assumption that with more and better planning you can anticipate the future. Both are focused on existing products and markets. These tacit assumptions might be right for a world of sustaining innovations, in a world of more-of-the-same.

But, and that is a BIG BUT, not in a world which is radically changing. Business model innovations have a disruptive character and focus on the whole business model. There is a need for business model innovations in any industry due to the Internet, the demand for clean energy, globalization, and due to the rise of Asia.

Therefore, almost every firm needs a different approach to innovation and strategy.

The future is not about prediction but about shaping the future with agile experimentation on what works and what does not work

Regardless of how much you plan, you will not predict the future because neither customers nor companies can anticipate what is possible. The only way to push for radical innovation is to accept the uncertainty and thereby accepting that with more traditional planning we can not predict the future.

By saying so, I do not mean that we need no planning or management anymore. We even need it more than ever, but with a different aim. The aim should not be to predict the future but to plan a creative process how to shape the future.

Creativity let alone is a messy process. A well-structured process can turn creativity into a powerful force. The process forces companies into a getting-things-done mode. With the agile process you push for fast experiments and thereby faster learning. You try not to fail big but small. Small failures are not failures but fast learnings.

What do you need in the process?

  1. Agility: Agility is not velocity (speed in a given direction) but finding fast the right way to go.
  2. Business Model Thinking:  The building blocks of a business model are your new boxes to think in. So you circumvent the problem to always start with the classical points of innovation like products or processes.
  3. Jobs-to-be-done:  Thinking in jobs-to-be-done instead of products. Thereby dissecting your current business model in the jobs you solve for your customer. The products are just means to solve the jobs. Customers hire the products to get a job done.
  4. Open and Focus: Your process has to force you to open your mind at the beginning, to let you  see things differently, but the process also needs to force you to take decisions on what you want to focus on and how you can test your assumptions.
  5. The process is not linear: There are pivots where you have to jump back when a core assumption has proved to be wrong.
  6. Beware that we are humans: A business is not Lego blocks that you can rearrange according to your will. We are humans and humans make the difference between a good and a great business. So focus on the human side of business. Humans are the biggest source of creative solutions but also the biggest impediment for new solutions.
  7. Unlearning As we all know, unlearning is not possible for humans, since we have no delete button in our head. But with the jobs-to-be-done approach and the business model canvas you can unhide your tacit assumptions about your business. Once, we have unveiled the hidden assumptions we can try to overcome them.
  8. Give meaning: Focus in the process on giving meaning to your customers and employees.
  9. Diversity: You need a group of people with different backgrounds, sexes and education. Otherwise, you will not unlearn. Diversity helps.
  10. Customer Insights: Taken the jobs-to-be-done approach, you have to develop insights into your customers and their badly or unsolved jobs.
  11. Technology Insights: Understand technology, very deeply but not the technological features but what its business idiosyncrasies are and what are repercussions your business but also for your customers are. Together with your customer insights you can come up with solutions you have never dreamed of.
  12. Testing & Prototyping since a business is a set of assumptions: By accepting that all you know about your business is an assumption but not reality until you have tested your assumption. But even then, most factual know-how in business are human believes and not scientifically proven natural laws that never change.

The business model canvas gives you the right boxes for new and fresh ideas, the process helps you to fill the boxes.

Original Post was published by Dr Patrick Staehler on http://blog.business-model-innovation.com.

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