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BUSINESS MODEL EXPEDITION
The concept of Business Model Innovation refers to the pursuit of an entirely new business model that unlocks new ways of delivering and monetizing value in a specific market. The goal is to find a breakthrough that connects the business and the market in an entirely new way and at a completely new level of value. If the pursuit is successful, it will result in a major win for both the market (new or existing customers) and the business.
Companies can use Business Model Innovation either to completely reinvent themselves or to launch a new business separate from their core business. In many cases the existing business will have too much inertia and structure to be easily remade, in which case it is often easier to use this tool to simply create an entirely new business, typically held as an autonomous self–managing subsidiary. Historically speaking, this is how a number of companies have survived periods of major disruption… by launching independent, self–managing new businesses with radically different business models and value propositions. Over the long run, the new business model grew while the old business model waned, but the overall business was sustained and remained resilient.
THE GENERAL BMI PROCESS AND OUTCOME
The process of hunting for and finding a breakthrough new business model involves three critical steps:
- Peeling back the layers of the market's activity in order to get down to its most fundamental needs (its "jobs to be done", or JTBD).
- Deconstructing and critically examining the currently prevailing business model in the context of these new or emerging JTBD.
- Reconstructing a completely new business model that substantially delivers on the new or emerging JTBD and converts that into a substantial revenue source for the business, while also adding equity to its brands.
Step 1 requires a certain amount of observational discovery work in order to unearth and understand the new or emerging unmet needs in a particular market. This forms the basis for Discovery–Driven Innovation.
Step 2 involves a highly critical examination of the many facets of a business in order to understand which aspects of that business are suboptimal or out of alignment with the market and its new or emerging JTBD. This insight does not come through incremental thinking. It only comes by being willing to completely discard as many aspects of the business, its frameworks and ecosystems, and even its fundamental value proposition, as are needed in order to find the right alignment to the market. At stake must be every last square inch of the "what", the "where", the "how", and the "to whom" offerings are created, delivered, and monetized. Uncovering the new JTBD lies at the core of Outcome–Driven Innovation.
Step 3 is about business artistry… designing an entirely new business model that will resonate in harmony with new market realities. This often involves tapping into evolving societal sentiments and cultural norms (e.g. leveraging the sharing economy). The key activity here is Business Model Design.
The end result will be a substantial step change in the business. In fact, it probably will not even look like the same business; it will look like a completely different business. Perhaps not surprisingly, this often results in market disruption.
THE BUSINESS MODEL EXPEDITION
Business Model Expedition is a focused workshop in which we lead participants through the above 3–stage BMI process. We designed it to share our expertise and experience in leading the process. This is important because when it comes to working through this process, companies will always benefit from the outside perspectives of an independent facilitator. It helps them in every step of the process, including bringing clarity around the new or emerging market needs, ensuring the critical examination happens in an unbiased manner, and coaching business designers in the final redesign process.
In order to prepare participants for this workshop, they are asked to come having already made observations of the outside world, its pertinent trends, and the ways in which that might be relevant to their market. Once in the workshop, we discuss these observations together and then we use this as context for guiding them though a hands–on dissection of the particular market situation we've set out to address. We do this until we get down to its most fundamental JTBD. After we've established that, we then guide them through a critical examination and deconstruction of the current prevailing business model, as we strive to identify all of the ways in which it has dissonance with new or emerging market realities and these JTBD. Finally, we guide them through the reconstruction process to design an entirely new business model that leverages potential new modes of engagement, new ecosystems, and new value propositions so as to better resonate with the JTBD and better profit the business. We call this the BMI Design.
We also make certain participants understand that when working to conceive a new business model, they must completely disregard whatever competitors might be doing and instead focus only on the customer involved. The new value and experiences they have to deliver are to this customer alone. Thinking at the same time about competitors would only cloud the customer need and create confusion in the process.
Aside from the BMI process, the real reason these workshops are so effective and impactful is that in the workshop we challenge our clients to use 10X Thinking for the new business innovation they are pursuing. That is… breakthrough innovations tend to happen when one strives to improve something by a factor of 10X, as opposed to 10%. A 10X goal forces them to rethink the entire concept, pushing them beyond existing paradigms, viewpoints, business models, ecosystems, and regulatory constraints. It forces them to completely reimagine how to approach a business concept.
These workshops are typically staged as 3 – 4 day events involving any number of participants from every level and every function of the organization. Cross–functional participation is essential for producing effective new BI Designs.
In order to facilitate the Business Model Expedition, we use our own Breakthrough Business Innovation Model as the key working model for deconstructing and reconstructing the business. Using this as their framework for thinking allows participants to undertake precisely the sort of thoughtful and resourceful deconstruction / reconstruction that can in fact yield 10X outcomes. This is because the Breakthrough BMI Model shows them exactly what rocks they can overturn and look under for answers. Additionally, we use the oblique examination process (Step 3) of our Flight Board Innovation Method to facilitate the critical examination work. We also use the Legacy Innovation Value Proposition Canvas and the Legacy Innovation Business Model Canvas as working tools. We developed all of these to facilitate the BMI Expedition and make it as effective as possible.
Business Model Expeditions are a part of the Front End of Innovation. All three of its steps are equally critical if a breakthrough new business model is to be achieved.
The Business Model Expedition Engagement typically follows these steps:
- We begin by listening to you so as to understand your business innovation goals, including the particular market need or situation you would like the expedition to focus on (necessary to create the focus required to produce a good result).
- We then tailor the Business Model Expedition to that particular objective and facilitate the event with the assigned staff.
These expeditions can be custom–tailored to work at the executive, management, or staff levels, as desired.
- We follow up by offering post–expedition support for subsequent questions and needs that may arise.
To learn more about engaging us for facilitation of a Business Model Expedition, refer to our Training & Workshop Engagement page.
We also provide private consulting in Business Model Innovation as part of our Growth Strategy work. See our Growth Strategy page for more detail, or to learn about engaging us for Business Model Innovation consulting, refer to our Management Engagement page.