Archive for April, 2012

Put Your New Business Model to the Test

April 23rd, 2012

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

harvard_business_review_logoWhen 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 inĀ 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

Experiment All The Time

April 19th, 2012

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

images-32Learn 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