Reinventing Your Business
Why What How
Why
is it important to you
Source: Christoph Zott, Raphael Amit and Lorenzo Massa: The Business Model: Recent Developments and Future Research Journal of Management 2011 37:
“Get the business model wrong, and there is almost no chance of success...”
Prof. David Teece
University of California, Berkley.
“Business model innovation matters and it is a top priority of CEOs.”
Source: IBM Global CEO Study 2006
Source: IBM Global CEO Study 2006
Source: IBM Global CEO Study 2006
„Innovation is front and center on the corporate agenda, according to a global survey. Executives are adding more breakthrough innovations and business model changes to their portfolio to fuel the growth engine.“
Business Week, November 16, 2009
Source: Businessweek / BCG Innovation Survey 2008
Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82
Stagnating or
declining
revenues
Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82
Why
Increase profit
Find new growth areas
Create new markets
Commercializing a new
product or technology Increased competition
Adapt to changing
environments
Adapt to new / emerging
markets
Seize emerging trends
What
$ 1.600.000,-
© Marc Sniukas - Doujak Corporate Development
Free Download
© Marc Sniukas - Doujak Corporate Development
Business Model
Innovation
„There‘s no good just being better,
...you got to be different.“
Charles Handy
“A business model is simply the ‘way of doing business’ that a firm has chosen: its entire system for creating and providing consistent value to customers and earning a profit from that activity, as well as benefit for its broader stakeholders. It refers to the core architecture or configuration of the firm, specifically how it deploys all relevant resources (not just those within the company boundaries), to create differentiated value for customers at a profit…” (Davenport, T. H., M. Leibold and S. Voelpel (2006). Strategic Management in the Innovation Economy. Publicis Wiley.)
The business model is a company’s answer to the question of how to make money in its chosen business. It describes, “…as a system, how the pieces of a business fit together.” (Magretta, J. (2002). "Why Business Models Matter." Harvard Business Review 80(5) May: 86-92.)
Source: The Boston Consulting Group
Source: Innosight
Source: businessmodelgeneration.com
Source: Accenture
Source: IDEO
is your customer?
do you offer your customers?
do you do this?
WHO
WHAT HOW
WHO
WHAT HOW
Products & Services
Solutions
Experiences
Create Value
Deliver Value
Capture Value
Markets
Customer Segments
Individual Needs
Traditional Approach Business Model Innovation
Who • Everybody • Everybody
What • Usually full treatment • Services covered by health
insurance • Special treatment for additional cost
• Focus on basic treatments • Quick • Convenient • Affordable
How • A range of specialists • Special facilities • One central location • “Solution shops”
• Generalists • Located in shopping malls / inside
CVS pharmacies • Multiple locations • “Retail model”
Traditional Approach Business Model Innovation
Who • (Rich and middle class) people who are reliable to pay back the credits or have enough assets as security.
• “Low income clients” • Poor people who would not get any
loans from traditional banks (especially women)
What • Classic loans, usually for larger sums to buy assets.
• Small loans to “unbanked people”
How • Strong risk management • The returns from the interests belong
to the bank/ shareholders • Profit focus
• About 97% make their payments. • The borrowers are the owners of
the bank. • The profit of the bank goes back to
the owners. • There is no collateral. No lawyers. • Social business focus
Traditional Approach Business Model Innovation
Who • People who want a quick bite to eat • Get in, order, get served quickly, get
out quickly again
• People who want to sit down and remain seated for a while
• Create a “3rd place” à la Starbucks
What • Pre-made food prepared constantly according to demand
• Standard menus • Some variations allowed
• Coffee and cake • Made to order (coffee) • Pre-produced (cakes) • No menus
How • 1 counter • Standardized processes • Central locations with high
frequencies • The key is to serve a maximum
number of people during a given time
• 2 counters • Separate seating area • Key is to increase share of wallet of
the customer and keep him for a longer period of time in the restaurant
• Innovative use of existing assets, new capabilities needed
Traditional Approach Business Model Innovation
Who • Kids • Hard Core Gamers
• Everybody from 4-99 • The whole family • Casual Gamers
What • High Tech – High Performance Console
• High tech, high end processors for speed and graphics, connect over the internet, additional features (DVD, internet,...) high cost high sales price (250-300.- €)
• Family Console • Low tech, lower power processors,
no additional features • Focus on fun rather than technical
performance • New movement technology lower cost lower sales price (190.- €)
How • n/a • n/a
What
New Markets
New Customers
New Value
Propositions
New Ways of
Doing Business
How
© Marc Sniukas - Doujak Corporate Development
Division 3
Division 2
Division 1
Division 4
The Future Space
Workshop
Group Mgmt Meeting
Division Mgmt Meetings
• Introduction to Business Model Innovation
• Introduction Future Space
•Process •Preparation •Handbook
•Presentation of Business Models
•Preparation of GMM
Business Model Description by Division Mgmt and their teams.
Research on innovative Business Models and Trends.
BU Mgmt
Division Mgmt
Group 2010
Group 2011 +
May 6-7
April 15 March 10
Draft until March 29 to SIO Coaching Sessions with SIO Final Version until April 7 to SIO
Final version until April 29 to SIO
Division Mgmt Meetings
• Introduction to Business Model Innovation
• Introduction Future Space
•Process •Preparation •Handbook
BU Mgmt
Division Mgmt
Group 2010
Group 2011 +
March 10
Division Mgmt Meetings
• Introduction to Business Model Innovation
• Introduction Future Space
•Process •Preparation •Handbook
BU Mgmt
Division Mgmt
Group 2010
Group 2011 +
March 10
Division Mgmt Meetings
• Introduction to Business Model Innovation
• Introduction Future Space
•Process •Preparation •Handbook
Business Model Description by Division Mgmt and their teams.
BU Mgmt
Division Mgmt
Group 2010
Group 2011 +
March 10
Draft until March 29 to SIO Coaching Sessions with SIO Final Version until April 7 to SIO
Workshop Division Mgmt Meetings
• Introduction to Business Model Innovation
• Introduction Future Space
•Process •Preparation •Handbook
•Presentation of Business Models
•Preparation of GMM
Business Model Description by Division Mgmt and their teams.
BU Mgmt
Division Mgmt
Group 2010
Group 2011 +
April 15 March 10
Draft until March 29 to SIO Coaching Sessions with SIO Final Version until April 7 to SIO
Workshop Division Mgmt Meetings
• Introduction to Business Model Innovation
• Introduction Future Space
•Process •Preparation •Handbook
•Presentation of Business Models
•Preparation of GMM
Business Model Description by Division Mgmt and their teams.
Research on innovative Business Models and Trends.
BU Mgmt
Division Mgmt
Group 2010
Group 2011 +
April 15 March 10
Draft until March 29 to SIO Coaching Sessions with SIO Final Version until April 7 to SIO
Final version until April 29 to SIO
Workshop
Group Mgmt Meeting
Division Mgmt Meetings
• Introduction to Business Model Innovation
• Introduction Future Space
•Process •Preparation •Handbook
•Presentation of Business Models
•Preparation of GMM
Business Model Description by Division Mgmt and their teams.
Research on innovative Business Models and Trends.
BU Mgmt
Division Mgmt
Group 2010
Group 2011 +
May 6-7
April 15 March 10
Draft until March 29 to SIO Coaching Sessions with SIO Final Version until April 7 to SIO
Final version until April 29 to SIO
The Future Space 3 steps
1. Description
2. Inspiration
3. Creation © Marc Sniukas - Doujak Corporate
Development
© Marc Sniukas - Doujak Corporate Development
Source: businessmodelgeneration.com
#1 Challenge industry assumptions
WHAT
#2 Offer complementary products and services
#3 Offer solutions and experiences
#4 Offer bundles
#5 Switch your appeal: functional versus emotional
#6 Focus on the job to be done
#7 Selectively eliminate, reduce, raise and create
#8 Look at subsitutes
#9 Expand the use of your assets and capabilities
#10 Look at the customer experience
HOW
#18 Reinvent the customer interface (channels)
#19 Reinvent your customer relationships
#20 Invent new revenue streams
#21 Price differently
#22 Reinvent you cost base
#23 Re-assess your key activities
#24 Collaborate with suppliers, partners, the network and ecosystem
#25 Look at completely different industries
WHO
#11 Target non-customers
#12 Target less profitable customers
#13 Target the least satisfied customers
#14 Target the chain of buyers
#15 Segment according to commonalities
#16 Segment according to circumstances
#17 Desegment the customer based
So what...?
Setting the Stage
A Discovery-Driven Approach
Setting the stage Discovery Development Conversion Commercialization
Description Project set up. Define and describe project. Formal GO.
Discovery of opportunities Gain insights
Development of business model concepts Develop business model idea portfolio and evaluate ideas
Conversion of concepts into real-life Testing concepts and receiving market feedback
Implementation and launch Launch new business model
Input BMI Idea Project Brief
Insights from discovery phase First ideas
Business concepts approved for test
Finished and tested Business Model
Tasks 1. Define and build team 2. Define purpose, scope
and focus 3. Define goals and
metrics 4. Define process and
project plan
1. Company Assessment 2. Market Assessment 3. Industry Assessment 4. Future Trends
1. Develop BM portfolio 2. Evaluate BM portfolio
1. Strategy & Business Planning
2. Customer tests 3. Technical feasibility 4. Implementation
Strategy 5. Organisational gap
analysis
1. Implementation 2. Start-Up / Incubation 3. Acceleration 4. Transition
Output • Project Brief • Project plan • Team is established • Common
understanding about the project has been created
• Description AS IS • Description of
opportunities • Description of first
ideas • Update project
planning
• BM idea / option portfolio
• Evaluation of ideas • List of assumptions to
be tested • Business case for each
business model
• Final Business Model Evaluation
• Strategy is developed • Organisational
structure is defined • Partners/Network are
defined • Tested Business Model
is profitable
Gates • Team established • Resources have been
committed
• Idea Screening • Stop/Go Decision • Is the idea still
interesting? • Is it worth spending
the resources for the next phase?
• Go to testing • Stop/Go Decision • Justified to start
conversion/testing/experimentation phase?
• Budget decision
• Launch decision • Budget approval • Business model is
profitable
Launch review (12 months) Business model review Business model optimization Integration into holding
© Marc Sniukas - Doujak Corporate Development
Strategic Innovation Office
Cross Division Project Teams
Strategic Innovation Core Team
Within Division Project Teams Cross Division
Project Teams Cross Division Project Teams Cross Division
Project Teams Cross Division Project Teams
Within Division Project Teams Within Division
Project Teams Within Division Project Teams Within Division
Project Teams
Steering Committee
Nov 2010
Dez Q1 2011
Q2 Q3 Q4 2012
Core Team Core Team
Meeting Kick Off
Core Team Meeting
Core Team Meeting
Core Team Meeting
Core Team Meeting
Core Team Meeting
Board Update
Division 1 Division 2
Division 3 Division 4
Division 1 Division 2
Division 3 Division 4
Project 1 Setting the
stage Discovery Development Conversion
Project 2 Team Kick Off Setting the
stage Discovery Development Conversion
Commer-cialization
Project 3 Hire Project
Manager Project
Manager Setting the
stage Discovery Development Conversion
Project 4 Hire Project
Manager Project
Manager Setting the
stage Discovery Development Conversion
Project 5 Hire Project
Manager Project
Manager Setting the
stage Discovery Development Conversion
Process Overview
© Doujak Corporate Development
Workshop I
Workshop II
Workshop III
Workshop IV
Preparation 1
Home Work
Strategic Experiments
Preparation 2
Setting the Stage
© Doujak Corporate Development
Activate participants
Phone Call
Information Package
Chapters 1-4
• Participants are well prepared. • They have a good theoretical background. • The know the process and its objectives.
Tools
Goal
Define target. Describe AS IS.
© Doujak Corporate Development
• Target is defined. (Strategic Intent) • Need for action is clear / common understanding. • Current business, including markets, value proposition and
business model is described.
Approach
Where are we now? Where are we heading towards?
current path
aspiration
Goal
Define target. Describe AS IS.
© Doujak Corporate Development
• Target is defined. (Strategic Intent) • Need for action is clear / common understanding. • Current business, including markets, value proposition and
business model is described.
Tools
Where are we now? Where are we heading towards?
Goal
Value Curve
“Strategic Experiments” Portfolio
Business Model
Customer Profile Strategic Intent Path of Life
Inspiration.
© Doujak Corporate Development
Activate (new) participants. Be inspired.
Phone call
Information Package
• Keeping the energy high. • First ideas are developed (even before workshop)
Tools
Toolbox
Examples of Innovators
Goal
Discovering and describing
opportunities.
© Doujak Corporate Development
New value propositions New business models
Tools
Sensing Opportunities.
New customers
• Opportunities have been identified. • First ideas on how to seize them have been developed.
Toolbox
Goal
Organize inputs. Get feedback. Further
develop first ideas.
© Doujak Corporate Development
Customer talks
…everything necessary…
Tools
If necessary
Data analysis
• Information for workshop III is organized. • Ideas have further been described.
Desk Research
Goal
Developing options.
© Doujak Corporate Development
Value Propositions Business Models
Tools
Seizing Opportunities
Customers
• Strategic options have been developed. • Ideas for new customer segments, value propositions and business models
have been described.
Goal
WHAT
WHO
HOW
Evaluating options. Making decisions.
© Marc Sniukas - Doujak Corporate Development
Tools
Decision making
• Strategic options have been evaluated. • Strategic experiments have been defined and can be implemented. • High engagement of senior management leads to high motivation for the
implementation.
“Strategic Experiments” Portfolio
Area Rating Description What we
know...
What we assume...
Strategy How well does the idea fit with our current strategy?
0 5 10
What is the strategic purpose of the idea?
expanding or defending a current business
building a new one that has already been identified
laying the foundations for potential new businesses
Organization Resources & Competencies
Which do we need?
Which do exist already?
Which need to be build?
Change need
Change readiness
Finance
Financial Implications
Revenue potential
(Qty x Price)
Cost (fix + variable)
Unit Margin Target
Strategic Innovation Profile
Strategic Innovation Scorecard
Goal
How
Formal
Informal
Revolutionary Evolutionary
Inside
Outside
NewCo
CoreCo
Focused
Holistic
Open
Closed
Innovation tensions
is your customer?
do you offer your customers?
do you do this?
WHO
WHAT HOW
Who is your
customer?
What is your value
proposition?
How are you
creating and delivering your offer?
Source: The Boston Consulting Group
Source: Innosight
Source: businessmodelgeneration.com
Source: Accenture
Source: IDEO
existing ↔ noncustomers (2nd and 3rd tier)
most profitable ↔ less profitable
most satisfied ↔ less satisfied (1st tier)
specific buyer ↔ chain of buyers
focus on differences ↔ focus on commonalities
focus on finer segmentation ↔ focus on de-segmentation
focus on attributes (of customers and products)
↔ focus on circumstances (needs and the job done)
focus on existing assets ↔ start anew, or use existing assets in a new way
single product or service ↔ total solution, bundling
functional appeal ↔ emotional appeal and experiences
focus on product ↔ focus on function fulfilled and the job-to-be-done
build new features ↔ raise, reduced, create, eliminate selectively
conventional customer interface ↔ (co-creating) experiences easy to do business with
conventional pricing (either to cover cost or benchmarked against
competitors)
↔ strategic pricing of the masses (benchmarked against substitutes and alternative industries)
cost-plus thinking ↔ price-minus thinking; target costs
integrate activities ↔ network (with customers, suppliers, partners, alliances)
low fit of activities (internally and externally)
↔ high fit of activities (internally and externally)
WHO
WHAT HOW
• Questioning attitude
• Rewards success and failure, punishes inaction
• Tolerates mistakes
• Slack is welcomed
• Supports risk taking and change
• Supports teamwork and collaboration
Are you ready for Business Model
Innovation?
Leadership
Structure
Culture
Systems
People
Processes
• Set the context
• Guide the process in a participative and fair way
• Clearly communicate reasons, and expectations
• Educate employees
• Shield creative teams from distractions and pressure
• Appreciate distinctiveness in people and their thinking
• Welcome change
• Ask itself what it does to promote or inhibit innovation and how to get rid of these obstacles.
• Fast and flat
• Small units
• Encourages collaboration
• Autonomous teams at the front line
• Fast and unbureaucratic
• Decentralized decision making
• Support idea generation, experimentation and execution
• Variety (internal and external)
• Collaboration
• Educated in regard to the strategy and skills needed
• Support the process of strategic innovation
• Enable collaboration
• Enable the use and creation of knowledge
• Reward risk taking and action
• Used to create relationships with customers
• Metrics & rewards support innovation
Who„s got a question?
Want more?
www.doujak.eu
www.sniukas.com
Dynamic Capabilities (i.e. activities, processes and routines) leading to Business Model Innovation.
Managerial capabilities for creating, developing and leading these capabilities.
“The difficulty lies not in the new ideas,... …but in escaping from
the old ones.”
John Maynard Keynes
Thanks for your attention!
Get in touch! Marc Sniukas
Doujak Corporate Development
Lainzer Strasse 80 A-1130 Vienna
Mobile: +43 699 122 333 [email protected]