Here your last chance to get some visibility in the book. It is the last participatory double-page section dedicated to knowledge and experience from members on the Hub. The best contributions will feature in the print version!
Share your experience on what the biggest obstacles to business model innovation are! We prefer experience over opinion ;-)
speak about something you experienced
address relevant issues
if you want you can give a hint how you overcame that obstacle (but it has to fit the below "limited space rules")
provide a bit of context (e.g. was it in a start-up, in a multinational or a SME)
Your answer should be maximum 50 words and 300 characters (including spaces). Longer answers will not be considered. We want to fit a maximum of contributors and their experience on this double page.
2001: 5 nations and $4m to create Web 3.0
1 problem: human brains.
We feared uncertainty; drew big conclusions from small data; made overconfident forecasts and overlooked slow change.
We had no business model canvas.
2009: mental models we learned now prepare others’ minds for successful innovation.
In my experience with a large Archive, the biggest hurdle was to make them understand that even an archive has a business model. We overcame this by starting a small project and showed them this would affect their current model. They are now uploading most of their collections on Flickr.
Healthcare tends to move to sustainable eHealth services but faces problems in embedding technological resources and IP, lacks an understanding of stakeholder needs, cannot re-allocate costs and is inexperienced in sharing co-created revenues. So an affiliated business model should be the option!
The management of an SME (wood manufacturing industry-WMI) did not begin changing its business model until the bank no longer wanted to give them credit. The biggest obstacle to business model innovation (in the WMI case and likely every case) is the people who resist any changes until problems appear and need corrective actions.
The companies that are the most successful in continuously improving the efficiency of their current business model often get blinded by 'this is the way thing are done in our business' and fail to see the emergence of innovative business models.
I have seen the biggest impediment for business value innovation is the mental models of executives and the Board. The lack of candor and fear of deviating from the status-quo sets in group think. Executives are comfortable with 'exploit' phase and not 'explore' phase which is unknown and hence risky.
"When do you not know where your going, any road will take you there"
Many of my clients do not have a holistic view of their business model and tend to focus on trying to address the immediate problem. The business model canvas provides a framework that helps clarify the why, who, what, when, where and how.
I designed and taught a course this summer on business innovation targeted at teaching designers fundamental business skills leveraging their design thinking methodologies. The course was crafted in four interlocking modules: value (business models), customer (marketing + management), decisions (statistics + operations) and evaluation (finance + economics). The first module, value, was framed around the business model canvas and I found this tool perfect for teaching designers in a holistic manner that linked their propensity for integrated thinking while giving them a context and overview from which to learn the fundamentals of business. I also utilized the canvas and concepts to take one of my professional clients through analysis of their evolving business model- in this case, a software tool and training program to help companies cost effectively manage their green house gas emissions. For those unfamiliar with business, as these scientists were, it was an excellent tool to apply their thinking to business. I find the business model is often confused with the business plan, and the financial model and I explain it as follows: the business model is the engine, the financial model is the fuel, and the business plan is the roadmap.
My biggest obstacle to business model innovation from corporates is their perception that it is equivalent to diversification, the riskiest possible strategy. Innovation in the business model involves improvements in each of the nine business model building blocks invariably leading to creativity and profitability improvement or entirely new ways of doing business.
In my experience, the biggest obstacle is failure to change the thinking process from the traditional linear way to holistic and systemic. Entreprenurs need to make a concerted effort to develop the capability to envision the model as a system whose parts interact with each other and affect each other in a holistic and non-linear manner.