This post appeared on the Fortune Magazine Site here and was adapted from my new book, The Business Model Innovation Factory.

Collaborators are everywhere. You will find them in the gray areas between silos. Just look up from your current business model. Seek out difference and gather often across boundaries, disciplines, and sectors. Be open and be curious. Beware of random collisions with unusual suspects. Unless, of course, if you want to learn something new. In that case seek out innovators from across every imaginable silo and listen, really listen, to their stories. New ideas, perspectives, and the value creating opportunities are in the gray areas between the unusual suspects. And yet we spend most of our time with the usual suspects in our respective silos. We need to get out of our silos more.

It is human nature to surround ourselves with people who are exactly like us. We connect and spend time with people who share a common world-view, look the same, enjoy the same activities, and speak the same language. We join clubs to be with others like us. The club most worth belonging to is the non-club club. The most valuable tribe is a tribe of unusual suspects who can challenge your world-view, expose you to new ideas, and teach you something new. A tribe of unusual suspects can change the world if it is connected in purposeful ways.

It is easy to see the potential from enabling random collisions of unusual suspects. Just check out any social media platform. Read more

This post appeared on the Fortune Magazine site here and was adapted from my new book, The Business Model Innovation Factory.

Believe in the power of design. Through it, we will chart the landscape of possibility - designing, testing and prototyping new terrain. Be a market maker rather than a share taker.

Business model innovators are always seeking out places and events with a strong design vibe. They love to hang around really smart design thinkers and the places they hang out in hopes that some of it will rub off. I am convinced that design thinking and process is a key enabler of business model innovation so I have been hanging out with lots of design types. If you hang around enough designers you immediately get pulled into their active conversation about design’s place in the innovation narrative. After participating in many of these conversations I am left with a strong sense that the design community needs to move on from the incessant argument over the importance of design thinking and process. It is time to claim victory. Get over it. The argument is boring. Design is important. We stipulate that design is about more than sexy products. We get that design is about delivering a compelling customer experience. We know that business model innovation is fundamentally about designing new ways to create, deliver and capture value. Now, can we get on with putting design thinking and process to work to enable business model innovation?

No more books are needed to convince us that design thinking and process are a priority. They are important tools. If you want to convince us, stop talking about design thinking, and start putting it to work to mobilize new business models, transform customer experiences and enable real systems change. Business model innovation requires a strong design vibe that leads to trying more stuff and putting the tools to work rather than the navel gazing of today’s design thinking debate. It is time to move the design conversation to a new, actionable, place. Read more

This post appeared on the HBR site here and was adapted from my new book, The Business Model Innovation Factory.

When a consumer product company wants to know how a new product or new marketing campaign will perform, it doesn’t rely solely on traditional market research surveys. It goes to test markets. It’s the right way to discover how the innovation will go over in real market conditions, without the risk of a national or global rollout. It also provides the test bed for optimizing the marketing mix to support the full-scale launch. Actual market experience, veteran marketers will tell you, never quite matches the results of quantitative and qualitative market research reports and what consumers say they will do behind the two-way glass of a focus group facility.

So here’s my question: Why don’t more firms employ the same approach to explore and test newbusiness models?

Anyone can map out new business model ideas on paper. It’s easy to do pro-forma analyses of how a new business model might work. And it’s not much more work to write up a fancy report embellishing on the potential of a hypothetical new business model. But until a business model idea sees the light of day in the real world, it is impossible to know if it will really work. Read more

This post appeared on the Fortune site here and was adapted from my new book The Business Model Innovation Factory.

Learn by doing. Constantly test new ideas. Learn, share and repeat. The world is ever changing — stay ahead of the curve. Embrace the art of discovery.

We need to try more stuff. Innovation is never about silver bullets. It’s about experimentation and doing whatever it takes, even if it means trying 1,000 things, to deliver value. Business model innovation requires a lot more experimentation than we are comfortable with today. Tweaking existing business models won’t work. Technology as a sustaining innovation may improve the efficiency of current business models but will not result in the transformation that we all want and need. We need to learn how to leverage technology for disruptive innovation and to experiment with new business models.

Geoffrey Canada, the inspiring founder of the Harlem Children’s Zone in NYC, reminds us of the importance of constant experimentation. Everyone wants to know the one thing that makes a program like Harlem Children’s Zone successful. What is the silver bullet that will allow the program to be replicated with ease across the country? We are always looking for an easy answer. There is no silver bullet and it is not easy to transform any business model or social system. According to Canada, at Harlem Children’s Zone it is doing 1,000 things with passion to help those children succeed. It is about focusing on the customer, in this case, the children within 100 city blocks in Harlem and doing what ever it takes to help them secure a bright future. There is no one thing. Read more

Woohoo! The Business Model Innovation Factory is off to the printer and will be published on April 24^th.  You can learn more about the book and even download the intro for free at www.bmifbook.com. I am so glad that the writing part is done and the fun part of putting the ideas out in traffic, improving on them through active conversation and applying them in the real world can soon begin.  I can’t wait.  The writing part took the better part of a year and gave me newfound respect for those who have authored several books and make a living by writing them.  Not me.  One and done. I did it because writing a book was on my bucket list and I wanted to share my point of view that R&D for new business models is the new strategic imperative for all leaders.  I never actually thought I would do it and probably still wouldn’t have if Richard Narramore, Senior Editor at John Wiley & Sons, hadn’t called and asked me to.  Of course Richard offering an advance and a contract complete with publication dates didn’t hurt.  I had no idea what I was getting myself into when I agreed.

65,000 words and 200 pages may not sound like a lot but believe me it is!  Especially when you have become accustomed to writing 140 character tweets and 700 word blog posts and columns.  Writing a book has totally screwed up my writing habits.  I love to write and before taking on this book project I was in the groove of writing regular blog posts and columns.  I managed to continue to write a steady stream of snarky tweets but had to devote all of my blog and column writing time to the book if I was going to meet my deadlines.  The only posts I could muster this past year were all earmarked directly to be included in the book.  In fact blogging proved to be a great test market for ideas.  I am so glad the book manuscript is now finished so I can get back to blogging and writing columns on whatever topics interest, humor and inspire this innovation junkie.  It is probably presumptuous to think any of you who subscribe to my blog or like reading my columns even noticed that I was in book-writing prison.  I appreciate your patience if you noticed! Read more

This post initially appeared here on the Harvard Business Review site.

Do you remember being stuck at the kids’ table for Thanksgiving dinner growing up? I do. There were always too many of us to all sit around one dinner table, so we had a secondary table off to the side, sometimes even in a separate room, to which the younger generation was relegated. I remember asking every year if I would be able to sit with the grownups. The conversation at their table ranged from sports to politics to family gossip, and whatever the topic it was always more animated and intense. I know why now: it’s because adults love to talk about the state of their world and how it should get better. But what an irony: those of us with the biggest stake in the future-the kids-were not even hearing the conversation. Back then, all I understood was that the main table was where the action seemed to be, and I wanted in.

These days, I do get to sit at some main tables, but I try to stay mindful of whose voices aren’t being heard there-particularly when they are young and presumed not to have anything to add. I feel this most acutely in the debates around education reform. We keep kids off to the side while the adults talk and talk and talk about how to improve student experience and outcomes. And there’s another similarity to Thanksgiving meals: a lot of loud conversation and not much action! The talk at the grownup table never stops, yet year after year the education system in the US continues to atrophy and our students fall further behind the global curve. Every 29 seconds in America another student gives up on school, adding up to nearly a million high school dropouts a year. Read more

My latest column appeared here on the Harvard Business Review site.  

Business model innovation is the new strategic imperative-by now, this is becoming more generally acknowledged. But companies routinely fail at self-reinvention because they are so busy pedaling the bicycle of their current business models they leave no time, attention, or resources to design, prototype, and test new ones. Even where investments are made in innovation, those efforts are focused on new products and services delivered through today’s business models and on making the current models operate more efficiently. These are important to do, without doubt. But they are hardly sufficient in the highly networked 21st century, when business models don’t last as long as they used to and incumbents increasingly face the risk of disruption.

Having watched many companies over the years as they recognize the imperative to change, yet somehow stay stuck in their old grooves, I’ve noted some patterns in their experience. Here, I think, are five important reasons that companies fail at business model innovation:

CEOs don’t really want a new business model.
The most obvious reason companies fail at business model innovation is because CEOs and their senior leadership teams don’t want to explore new business models. They are content with the current one and want everyone in the organization focused on how to improve its performance. The clearest indication that a company and its leaders aren’t interested in business model innovation is when any discussion about emerging business models and disruptive technology is viewed and treated solely as a competitive threat. Read more

My first Fortune column

The nuclear industry measures how long a radioactive material will retain its potency by its half-life — the time it takes for the material to lose half of its radioactivity. The half-life of Uranium-235 is 700 million years, for example. During the industrial era the half-life of a business model was typically measured in generations. Once the basic rules for how a company creates, delivers, and captures value were established, they became etched in stone, fortified by functional silos and sustained by reinforcing company cultures.Those days are over. The industrial era is not coming back. The half-life of a business model is declining. Today’s leaders are either going to learn how to change their business models while pedaling the bicycle of the current one or they are going to be “netflixed.”

If netflix isn’t a verb it should be.

net-flix
1. to cause disruption or turmoil to an existing business model
2. to destroy a previously successful business model
3. to displace the way value is currently created, delivered, and captured Read more

This post originally appeared here on the Harvard Business Review site.

Need to turn around your company? Trying to start a movement? Want to change the world? Easy Peasy! Just turn it in to a game. Everywhere we turn, it seems there are experts claiming that the best path forward is to engage people with elements of competitive play. The business world in particular has gone gaga for gamification.

I thought games were mainly for kids, and the occasional ice-breaker or temporary escape from reality. Why encourage more of them? As adults, aren’t we supposed to set aside childish things and get down to work on the problems of the real world?

Truth be told, I have always loved games. Stratego was a mainstay among my school buddies. We spent hour upon hour lining up red and blue soldiers to protect our flags. My family’s Monopoly  games were epic battles, beginning with the fight over game pieces. (No, I get the Scottish Terrier!) The side deals we struck and the arguments that ensued still liven up family gatherings. In college I became a professional Risk player. Tell me you didn’t learn about the challenges of fighting a multi-front war from playing Risk. Who among us hasn’t attempted to conquer the world by way of Kamchatka? Read more

This post originally appeared here on the Harvard Business Review site.

During my six years as an accidental bureaucrat, after spending twenty-five years in the private sector, my friends often wondered how I could do it. They routinely asked versions of the question: doesn’t government move too slowly for you? My standard reply was that, yes, the public sector moves slowly - but then, big companies don’t move so quickly either. And come to think of it, I teased my friends in higher education, colleges and universities move more slowly than either business or government! The point is, all institutions move slowly.

What surprised me wasn’t how slowly the different institutions moved, but the different language, behavior, secret handshakes, and views of each other I found across sectors. Xenophobia runs rampant within public, private, non-profit, and for-profit silos. Each silo has created its own world completely foreign to inhabitants from other sectors. Visiting emissaries are always viewed with skepticism. (”I’m from the government and I’m here to help …”)

One epiphany from my immersion into the non-private sector is how strenuously social sector organizations resist the notion they have a “business model”. Non-profits, government agencies, social enterprises, schools, and NGOs consistently proclaim that they aren’t businesses, and therefore business rules don’t apply. Read more