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THE BREAKTHROUGH BUSINESS INNOVATION MODEL ™
The Breakthrough Business Innovation Model (Breakthrough BI) is Legacy Innovation Group's proprietary framework for innovative business design.
We developed this framework to enable the design of new business models that connect businesses and markets at entirely new levels. Breakthrough BI is singularly focused on this one aim.
Pursuing innovation in business design involves a process in which one closely examines the many facets of their business in order to uncover those areas that can be changed to yield new innovation. At stake are the what, where, how, and to whom offerings will be created, delivered, and monetized. The aim is to design a new business model that will yield a meaningful step change in the business, particularly in terms of market engagement and new growth.
These "facets" of the business are known as its domains–of–potential. Each such domain has to be examined in detail when searching for new business innovation opportunities. Breakthrough BI provides the framework for doing precisely that.
Breakthrough BI is structured as a collection of twenty two points–of–differentiation, with select points clustered into these broader domains. The domains are then clustered into either of the two sides of the model — Value Proposition or Value Delivery. By framing out the two key dimensions of Value Proposition ("who" and "what") and Value Delivery ("where" and "how"), we are able to illustrate how all of the domains fit together to create a broad canvas for innovation. This enables us to lead clients through a structured examination of their business in search of key new opportunities to innovate.
The most impactful innovations arise from combinations of differentiators in several of these domains, allowing a business to deliver truly differentiated value to a market. We call these BI designs. As a tool of examination, Breakthrough BI can help evaluate all of the possible designs that might be considered to deliver a particular value or experience. Points–of–differentiation can be considered in any arrangement or combination (designs) until the one best design is found to deliver the type of value required to resonate with a particular market need.
STRUCTURE AND DETAILS — THE BREAKTHROUGH BUSINESS INNOVATION MODEL
Breakthrough BI is structured into two primary halves — Value Proposition and Value Delivery. To create further definition, each of these captures a particular spectrum with anchor points at either end. Value Proposition captures the spectrum of WHO and WHAT, while Value Delivery captures the spectrum of WHERE and HOW. Centered right in between these is the question of WHY, which — in keeping with good Design Thinking practice — places the matter of customer needs and motivations front and center. This makes for a fifth anchor point, and a very distinguishing attribute of our innovation model (the only such model that inherently incorporates a Design Thinking foundation). These five anchor points reflect the five fundamental questions that any business model must answer.
Generally speaking, each side — Value Proposition and Value Delivery — will have what might be thought of as a Commercial End and a Technical End. The WHO and WHERE represent the "Commercial End" of the business model, in that they deal with monetizing value in the marketplace, while the WHAT and HOW represent the "Technical End" of the business model, in that they deal with creating value from within the organization. The Value Delivery side of the model can be further divided into Value Conception and Go–To–Market Strategy.
Within this conceptualization of the business model, we overlay twenty two distinct points–of–differentiation. These points identify those places where your business has the potential to differentiate the value it brings to market, either by executing them differently than how is done by others or from how has been done in the past (by anyone). It is these twenty two points–of–differentiation that provide the clues to unlocking new value opportunities, particularly when multiple points are designed into an entirely new business model that either breaks through existing market barriers or entirely disrupts the current working model of a particular market. In either case, point–of–differentiation meta–sets are the makings of massively impactful innovation, particularly when used to unlock nascent trends, inflections, and discontinuities.
One will also notice that the very last point–of–differentiation introduces the question of WHEN. This becomes a sixth anchor point the business model must answer, and is a question that is sometimes best left to be pondered closer to the end of the exercise. It is a question that has to be considered in light of timing around particular trends in the marketplace, and in the world at large.
The 22 points–of–differentiation are explained in greater detail below.
TARGET MARKET CLUSTER (pts 1 – 4)
1. New Markets (new segments) — This addresses the question of WHO, and dictates that you deliver value to entirely new markets (new to the world or new to your company – which inherently means new market segments). This requires new Market Development (and potentially Brand Development) work.
2. Adjacent Markets (new segments) — This addresses the question of WHO, and dictates that you deliver value to markets that are adjacent to your current markets… customers that are foreign to you (also representing new market segments for your company). This requires new Market Development (and potentially Brand Development) work, but less so than with New Markets.
3. Existing Markets / Adjacent or New Market Segments — This addresses the question of WHO, and dictates that you deliver value to new or adjacent segments of your current markets… customers who may or may not be foreign to you. This requires new Market Development (and potentially Brand Development) work, but less so than with New or Adjacent Markets.
4. Existing Markets / Market Segments — This addresses the question of WHO, and dictates that you deliver value to your current, existing customers, markets, and market segments. This requires only routine Business Development work.
BRAND DELIVERY CLUSTER (pts 5 – 6)
5. Customer Experience — This addresses the intersection space between the WHO and the WHAT and seeks to find entirely new ways of delivering and managing the Customer Experience so as to create the most impactful possible Moments of Truth that will leave the customer with a top–of–mind, "go–to–source" impression far above those of other options. Often the intention is to leave customers with a good feeling about using your offering. This requires Customer Experience Design work.
6. Brand Promise — This addresses the intersection space between the WHO and the WHAT and seeks to find entirely new ways of communicating and delivering a particular brand promise / essence so as to create resonance with the WHO at a completely new level. This requires Brand Development work.
OFFERING SPACE CLUSTER (pts 7 – 11)
7. New Category — This addresses the question of WHAT, and dictates that you develop and commercialize an entirely new product / service category, which would be aimed at creating an entirely new market. It is typically aimed at the Horizon II or III timeframe (mid to long term). This will require Category Development work, an amalgamation of Product Development, Brand Development, Market Development, and Business Development.
8. Platform / Product Ecosystem — This addresses the question of WHAT, and dictates that you create (define, develop, and commercialize) a new Platform offering. Platforms entail a mixed array of products, services, and experiences that complement one another in a way that creates a comprehensive offering that is compelling because of the holistic value it delivers, rather than the limited value that any one piece alone could deliver. Platforms often involve an ecosystem of different business partners working together synchronously to deliver the overall platform. They are typically aimed at the Horizon II or III timeframe (mid to long term). This requires Platform Development work, which is similar to Category Development but with a flavor that feels more like a new business, and is more complex because of the partnerships that have to be forged. Sometimes formal Joint Ventures or other types of business partnerships are formed to deliver Platform offerings.
9. Technology — This addresses the question of WHAT, and dictates that you develop a new technology (for products) or a new method (for services) and subsequently deliver it inside of new products and/or services. This is typically aimed at Horizon II (mid–term) and core or adjacent markets. It will likely obsolete prior generation products and services because of the improved functionality and design it delivers. In those cases where the technology advance is so great that it yields offerings that deliver substantially better value at substantially lower prices, the new technology can prove disruptive to certain aspects of an industry and can cannibalize sales of other offerings. This requires Technology Development work, the domain of traditional R&D.
10. Product / Service Design — This addresses the question of WHAT, and dictates that you develop and commercialize a new product or service that is generally an extension or evolution of an existing product or service. It freshens and perpetuates the current portfolio of offerings, and is typically aimed at the short–term (Horizon I) and core markets. The incremental changes involved may be focused on design, function, or both. This requires Product Development work.
11. Customer Support — This is the "rest of the offering", and to some degree bridges the space between the WHAT and the HOW. It dictates that you find entirely new ways of delivering Customer Support. Similar to Customer Experience, the intent is to make Customer Support a particularly unique Moment of Truth that clearly distinguishes it from anything else on the market, leaving the customer with a top–of–mind, "go–to–source" impression far above those of other options. This will likely require Customer Experience Design work.
VALUE CREATION CLUSTER (pts 12 – 15)
12. Organization Culture, Structure, & Processes — This addresses the question of HOW, and dictates that you make fundamental changes in the culture, structures, and processes of your business that result in the ability to deliver new, uniquely distinguishing customer value.
13. Growth Engine — This addresses the question of HOW, and dictates that you leverage new vehicles of growth in order to deliver new types of value (sometimes in new places, e.g. adjacent non–core markets). Many of these new growth vehicles will move you away from a purely organic approach, which tends to focus on the short to medium term (for current market conditions), and toward an extended organic and/or inorganic approach, which tend to focus on delivering more long term value for emerging market conditions.
14. Value Network — This addresses the question of HOW, and dictates that you find proprietary new ways of leveraging your business ecosystem – up and down its value chains – to deliver uniquely distinguishing customer value – without necessarily changing other aspects of your business model. As such, the value you are able to extract from your business ecosystem becomes an inherent part of your offering. There are numerous examples of companies who have achieved market leadership through innovations in platform partnerships, logistics, supply chains, and other aspects of their ecosystem. This can also include abandoning existing ecosystems and establishing new ecosystems so as to enable a new value proposition, but does not involve changing the approach to engagement and delivery for the proposition.
15. Production (products) / Delivery (services) — This addresses the question of HOW, and dictates that you establish proprietary new ways of producing your products or delivering your services – ways that enable you to provide uniquely distinguishing customer value. There are numerous examples of companies who offer unique product or service attributes because of proprietary manufacturing technologies and/or delivery methods they possess or have access to. This requires Production System Development or Delivery System Development work.
VALUE CAPTURE CLUSTER (pts 16 – 17)
16. Value Capture — This addresses the intersection space between the HOW and the WHERE, and dictates that you use an entirely different approach to, and means for, generating revenue (monetizing the value). This new means for generating revenue may or may not involve a redefinition of the fundamental value proposition, but it does involve using a completely different approach to engagement and delivery of the proposition and sometimes a completely different business ecosystem for doing so. In some cases it will get around certain government regulations on account of its approach being regulated under different sets of laws. This requires Business Model Design work.
17. Asset Utilization — This bridges the intersection space between the HOW and the WHERE, and addresses the question of where assets are held, who holds them, how the business gains access to them, and how the business ultimately leverages them (via their access) to deliver new value. It was traditionally believed that the deliverer of value had to hold most or all of the assets required in doing so, but newer socioeconomic trends such as the "sharing economy" have proven that to not always be the case. There are in fact ways to access and use assets that are not held directly by the business. Somewhat related to this is the Value Network point–of–differentiation (pt 14), which calls upon a broad network of partners to help fill out the value proposition.
CUSTOMER ACQUISITION CLUSTER (pts 18 – 21)
18. Service Channels — This addresses the WHERE, and dictates that you establish new forms of service presence that allow you to deliver new, distinguishing types of customer value, or expand your service presence so that you can capture new customers. This requires Channel Development work.
19. Sales & Distribution Channels — This addresses the WHERE, and dictates that you establish new sales & distribution channels so as to reach new sets of customers. This is often focused on pursuing a new market, a new segment of your existing market, or a geographic expansion. This requires Channel Development work.
20. Marketing Channels — This addresses the WHERE, and dictates that you establish new marketing channels so as to reach new sets of customers. This is often focused on pursuing a new market, a new segment of your existing market, or a geographic expansion. This requires Channel Development work.
21. Geographic Markets — This bridges the space between the WHERE and the WHO, and dictates that you establish a new geographic presence in one or more new places, so as to reach new markets and new customers that previously had no access to your offerings. In some cases, pursuing geographic expansion will also require using other tools of Customer Acquisition, such as new sales and/or marketing channels. This may require new Channel Development work.
TIME (pt 22)
22. Time — Time is the 21st point–of–differentiation in Breakthrough BI, and is introduced because of its importance in terms of trend timing. When conceiving and delivering a new business innovation design, it is important that it be designed with a particular introduction point in mind for a particular trend–curve. This point of introduction will differ depending on whether one is a first–mover or a fast–follower.
SERVICES ASSOCIATED WITH THE BREAKTHROUGH BUSINESS INNOVATION MODEL
The Breakthrough Business Innovation Model serves as a key tool within a number of our innovation workshops and events. To learn more, please see our Workshops, Events, & Fieldwork page, or to engage us in this capacity, refer to our Discovery Practice Engagement page.
The Breakthrough Business Innovation Model and the Flight Board Innovation Method (together) provide the basis for our Business Innovation training course. To learn more, please see our Business Innovation Training page, or to engage us in this capacity, refer to our Management Practice Engagement page.
The Breakthrough Business Innovation Model ™ and Breakthrough BI ™ are trademarks of Legacy Innovation Group.