This is indeed important stuff. And I think you illustrate well, especially the SMH example. But, based on your workshop experience, would leaving this chapter out of this particular book decrease the value of it?
I ask because I am a bit worried that this chapter is outside the Model Generation realm and inside the Strategic Management realm. Maybe it would sit a bit more comfortable in a Business Model Management Handbook of its own?
Just a gut feel after glancing through chunks 15 through to 18 in one go.
Gert, I do partially agree with your point. It is the dichotomy between the start-up entrepreneur and the (senior or middle) manager. If we'd follow a purist approach we should separate BM creation (entrepreneur) and BM management (manager). However, it would be great if this "basic" business model book could reach an audience of entrepreneurs AND managers and promote/introduce the ideas. I do agree there is a trade-off!
In my workshops people really enjoy the crafting part, but particularly experienced business people ask about how to position old BMs versus new ones. There is a real need for that. Hence, we thought it would be good to already integrate the idea of "ambidextrous" (which is more related to managing BMs). I believe it will help reach a larger audience, though conceptually it might be slightly less clean.
In fact, I think it will help bring managers into the business model generation ;-)
Aside from my earlier comment, I was thinking that in talking about the opportunities of multiple semi-integrated biz models (SMH) maybe we should add something about the risks as well. I think that it should be pointed out to readers that one should always design a full canvas, not just the innovative cells, in order to make explicit the links to other business models within the group. Is everybody in related businesses happy with or at least aware of the links?
I was thinking about ING, the Dutch bank/insurance conglomerate. (I am not a financials specialist, and surely someone else on the hub would be better at explaining what happened). From its stable (European) insurance base, with a decent bit of local banking, it grew aggressively in online savings. ING Direct is the largest online savings bank in the world, dominating the space in the US.The online model borrowed the financial position and risk management of the group as well as the Dutch savings guarantee system originally meant to protect Dutch family savings. But group management forgot to match the system side of the canvas with the customer side, in effect treating the new business as a marketing effort rather than as a separate biz model. The mortgage crisis threw the local US asset/liability balance out of quilter, and the Dutch state had to throw billions in to prevent a total implosion of the group as a whole.
Gert, great point! I fully buy into the argument of a) having to sketch the full canvas and align it with the old, and b) to point out risks (not just conflicts like cannibalization) between old and new. Love the ING example!
Great examples. I liked the Nespresso example the most as it can be inspirational for leaders who are not risk adverse. It says "try something new, imagine and execute."
Paragraph 2 Has a very strong opening which grabs the readers attention. Regarding the following sentence, ‘Experts call organizations that are successful at this ambidextrous.’ Consider referencing at least two of the experts as they are your authorizative sources of reference.
Regarding this statement ‘it might require a completely different organizational culture or it might target customers formerly despised by the established organizations..’consider using a different word other than ‘despised’ as typically, businesses do not despise any potential revenue stream unless the customer revenue stream belongs to a high-objectionable community (e.g. criminal elements)
Reviewing ambidexrous models is a real coup as it shows the reader that they need not scrape their existing to gain new revenue streams. Not to generalize, but often time, some leaders take the 'if it ain't broke don't fix it' attitude. This can lead to stagnation and inefficiency. The ambidextrous model gives a business the opportunity to 'test-drive' and idea on a small segment before committing it to a wider segment.
Thanks for the feedback and edits, Ravila! The "if it ain't broke don't fix it" attitude is currently an important topic in management. Writers like Kotter (changement management) stress the need for creating a sense of urgency to get people. Else, we will end up with cases like the music, car and media industry that realize too late that they are broken. I am impressed by examples like car2go that are extremely pro-active!
We are closing comments to this chunk earlier than usual in order to advance quickly (deadline of the book is near), to review the chunk based on your inputs and to send it to Tim who edits the content and turns it into real English.