New Business Model Generation for a disrupted world

You Need a Better Business Model

One of my clients turned red and burst out “They are eating our Lunch!”. He was belatedly aware that it wasn’t just the downturn or an industry recession that was causing his sales decline. Instead a new competitor was stealing his market share. The recent start-up was using web direct ordering with a mobile distribution channel. This cut him out of the traditional supply chain – a classic disintermediation play.

Technology and turbulent times are creating alternative business models in almost all industries. The impact of the web is also changing communication channels and streamlining distribution. This creates new business opportunities that are threatening traditional models and incumbent businesses that prefer the status quo.

Volatile, Uncertain, Complex and Ambiguous (VUCA) World

Kevin Roberts, the CEO of advertising giant Saatchi and Saatchi pitches to multinational CEOs around the world. He said recently that most are wondering how to plan and grow in a volatile, uncertain, complex and ambiguous (VUCA) world full of ‘black swan’ events. These include the Libyan turmoil, tsunamis and earthquakes. Kevin also announced that strategy was dead and that “surfing opportunities” is the new order.

I call it the ‘Serengeti desert’ scenario – there are many opportunities lying out there like fresh carcasses in the desert. The first few to find them get a profitable feed and the last to arrive pick on bare bones. Having a sense of urgency and being nimble pays. Get in quick, know when to get out and keep searching for the next opportunity.

So how do organisations innovate and keep up with the rapid pace of change in a VUCA environment? Clients don’t want old-school management consulting and “sold by weight” hefty strategic documents– they want miracle workers with powerful tools!

Perhaps you’ve noticed that people don’t read much anymore – they are too busy. I was with a CEO last week who pointed to a two foot high stack of strategic reports that he had not yet read – let alone absorbed, ratified or heaven forbid – had time to implement!

In order to get a CEO’s attention, advice has to be short, quick and to the point. To be implemented by the whole team it has to engage hearts and minds. Teams have limited resources – time, energy, attention, money and staff. If you want your strategy to get implemented, it’s time to try some new techniques that appeal to busy people of all ages – it’s time to think Visual!

business model

New Business Model Generation

A new book called Business Model Generation by Alexander Osterwalder et al and is based on a website of the same name and is a terrific place to start your visual learning journey. There is even an iPad application coming soon too to make these models even easier use!

The book provides a set of useful tools for developing strategy, opportunities and new business models including ideas for canvas, patterns, design, strategy and process.

It covers the nine building blocks in detail – customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure.

A chapter of the book also gives examples of new BM patterns including Unbundling, The long tail (for example – Amazon), Multi-sided platforms including models like Free! (like Google) and Freemium (like Skype) Even the popular – Bait & hook model (like Gillette, HP Printers and Nespresso), Outside in or inside Out models, Open Business Models, Crowd sourcing and others

Further, the book covers a range of hot design techniques including customer insights, ideation, visual thinking, prototyping, storytelling and developing better scenarios.

For more information about running a great Business Strategy retreat – contact David Staughton

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