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Strategic and business model innovation 101510
1. Strategic and Business Model Innovation
Howard Rasheed, Ph.D.
University of North Carolina Wilmington, Business Strategy and Innovation
Institute for Innovation, Founder
Idea Accelerator Technologies, LLC: 1
Licensing agent for Institute for Innovation, Inc.®
2. “Creative Disruption” is a metaphor
for strategic renewal that is analogous
to life cycles in nature. The Strategic Ecosystem for Sustainable Innovation
In this ecosystem metaphor the
energy of an innovative organization is
knowledge. The creation of new Innovative Stakeholders
knowledge serves as the energy
source for recognizing and exploiting
opportunities. Knowledge energy
passes through the semi-permeable
organizational boundaries.
The Sustainable Innovation Ecosystem
(SIE) perpetually uses new knowledge
to stimulate innovative minds, in a
nurturing environment, with a Collective
productive system and efficient tools, Intelligence Collaborative
to produce ideas that can be
harvested for value-creating activities. Technology
A dynamic view of knowledge is
focused on relevant future issues from
your value network of energize
stakeholders, both internal and
external. We identify the roles of the
innovation actors and how to Value Networks
empower them for innovation, which
parallels the mutual interaction,
known as the co-evolution of eco-
system organisms.
3. Strategic Transformation Paradigm
In Strategic Transform their business
organizations engage in Opportunity macro
Recognition and Exploitation.
Strategic
Opportunity recognition activities
represented in the top half of the Foresight
diagram is commonly defined as the
perception of a potential to create a issues
profitable new venture, or to improve the Product Strategic
strategic position of an existing business. Development Planning
Opportunity recognition includes technology strategy
strategic foresight related to the macro
environment and new product
development and strategic planning at Opportunity
the organizational level. Recognition
In Opportunity Exploitation managers Business
focus on problem solving by engaging in Model
new market development, process
improvement, and productivity Innovation
enhancement. external internal
Opportunity
Opportunity Exploitation includes Business
Exploitation Organizational
venture development, organizational Development Change
change and business process activities.
performance
venture alignment
Strategic innovation focuses on
evaluating opportunities using Business Business
Model Innovation process before Process
engaging in exploitation activities.
micro
4. In Strategic Transform their business
organizations engage in Opportunity
Recognition and Exploitation.
Strategic and Business Model Innovation
Opportunity recognition activities Strategic
represented in the top half of the Foresight
diagram is commonly defined as the Technology Scenario
perception of a potential to create a Roadmaps Models
profitable new venture, or to improve the
strategic position of an existing business.
New Product Strategic
Opportunity recognition includes Development Planning
strategic foresight related to the macro
environment and new product new ideas
development and strategic planning at
the organizational level. Value Business Model Innovation Strategic
network Plan
In Opportunity Exploitation managers
focus on problem solving by engaging in value proposition
new market development, process
improvement, and productivity
enhancement.
New Venture infrastructure market Market
Opportunity Exploitation includes
venture development, organizational Plan plan
change and business process activities.
cost revenue
To better evaluate opportunities we use efficiencies sources
the Business Model Innovation process
before engaging in exploitation activities. Business Process Innovation Balanced
Improvement value—profit—growth Scorecard
5
Institute for Innovation, copyrighted material, 2010
5. A business model is the way an
organization conducts business in order
to sustain itself. Business Model Innovation
A business model is the logic of how an
organization creates value, whether
economic or social.
During the past decade (1997-2007), 14
of the 19 entrants into the Fortune 500
have achieved significant success because
their business model innovations have value proposition
transformed existing industries or created
new ones.
A business model is the conceptual and
Infrastructure Market
architectural implementation of a
business strategy and as the foundation strategic partners target customers
for the implementation of business
processes. The business model is core capabilities customer relationships
composed of four main pillars, which are
Product Innovation, Infrastructure key activities distribution channels
Management, Customer Relationship and
Financial Aspects.
Business modeling addresses a broad
cost revenue
range of core aspects of a efficiencies sources
business, including
purpose, offerings, strategies, infrastructu
re, organizational structures, trading
practices, and operational processes and
policies. sustainable value
9
Institute for Innovation, copyrighted material, 2010
6. Business Model Innovation Trends
• In a 2005 survey by the Economist Intelligence
Unit more than 50% of executives predicted that
by 2010, business model innovation will be even
more important for success than product or
service innovation.
• In a 2008 IBM survey of nearly all corporate
CEOs polled reported the need to adapt their
business models, while more than two-thirds
said that extensive changes were needed.
• According to a recent American Management
Association study no more than 10% of
innovation investment at global companies is
focused on developing new business models.
6
Institute for Innovation, copyrighted material, 2010
7. 7 Steps to Strategic Innovation
• Step 1: Assess your innovation stakeholders
• Step 2: Visualize your environment
• Step 3: Explore dynamic knowledge
• Step 4: Discover Future Possibilities
• Step 5: Innovate New Ideas
• Step 6: Envision Scenarios
• Step 7: Actualize: Measure Effectiveness
7
Institute for Innovation, copyrighted material, 2010
8. One of the activities used in
Step 1: Assess Innovation Stakeholders engagements using this
methodology is the Innovation
Style Assessment tool.
Innovation Stakeholder Profiles
•Radiator: Visionary Leader There are four dimensions of
Visioning
envision and idealize innovation styles: visioning,
Radiator experimenting, exploring and
Visionary leader
•Rainmaker: Innovation Champ modifying.
Visioning/Exploring Rain Maker
intuition, insights, and images Innovation Champ
Harvester It measures your typical
•Harvester: Intrapreneur Intrapraneur approach to problem solving and
Exploring/experimenting idea creation.
broad, perceptive, learning-oriented Cultivator Landscaper
Analyst Project leader
•Cultivator: Analyst The 4 dimensions results in eight
Modifying innovation profiles.
Pollinator
refine and optimize Thought leader
•Landscaper: Project Leader Six of the profiles are reflected
Experimenting as roles in the strategic
combine and test ecosystem metaphor.
•Pollinator: Thought leader
Experimenting/Modifying
facts, details, and analysis
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Institute for Innovation, copyrighted material, 2010
9. Innovation Style Assessment
•Participants complete an online
assessment.
•Participant receive a 28 page
report on their innovation style.
•Administrators/Facilitators get an
online administration tool for
group formation.
•Groups get a report of
innovation styles of the group.
•Assessment facilitates group
formation process for maximum
diversity and effectiveness.
10. Step 2: Visualize Strategic Environment
technology Macro Environment economic
environment Value Network economic
development
stockholders investors
labs auditors
R&D Administration
finance
engineering IT
infrastructure workforce
HR
procurement
Value Chain
customers
suppliers
customer
inbound process outbound marketing
service
education
health care
outsourcing intermediaries complimentaries
social regulatory
12. Value Proposition Template
First Sentence: Value of the Offering
For…
target Customer
who…
need or opportunity
our product/service…
Product/service
that…
statement of benefit
Second Sentence: Positioning Value
Unlike…
primary competitors
our product…
primary beneficiary
because of our…
proof of benefit
13. Step 3: Value Proposition Future Scan
• Are customer needs changing? • Is the current competitive strategy
effective?
• Are consumer tastes and perceptions
changing? • Is the economic climate changing?
• Are customer demographics • Are the economies of scale changing
changing?
• Are the barriers to market entry
• Are social customs changing? changing?
• Are the core technologies in the • Are the supplier cost structures
industry changing? changing?
• Are you developing new products? • Is the availability of supplies
changing?
• Are your competitors developing new
products? • Are there new substitutes in the
market place?
14. Look for Trends in your environment
•Prevailing trends: historical data that
has a pattern of change and current
impact. (there has been an x% increase in
y over z time)
•Emerging issues: information that
may not have historical pattern but has
recently become a factor of change in the
environment. (there has been a recent
increase in…)
•Expert predictions: expected
change that has some validity but no
historical pattern. (Dr. Jones predicts…)
•Probable scenarios: anticipated
future events based on trends, issues, and
predictions. (What if x happens based on y
and z?)
Institute for Innovation, copyrighted
14
material, 2010
15. Step 4: Bisociation Brainstorming®
The interaction of seeming unrelated concepts—aha moment
Technology trend Social trend
Inspirational
spark
More Home Internet travel More
computers booking travel
Orbitz
Expedia
$6 billion
15
Institute for Innovation, copyrighted material, 2010
16. Step 5: Generate New Ideas
Innovations Applications
• Products • Strategic Foresight Study
– Incremental • Intelligence Think Tanks
– Breakthrough • Economic Development
• Strategy • New Ventures
• Markets • Technology Commercialization
• Business Models • Product Development
• Policy initiatives • Strategic Plans
• Programs • Social Ventures
• Public-Private Business Models
Institute for Innovation, copyrighted material, 2010 16
18. Step 6: Envision Future Scenarios
Scenario Methodology:
Descriptions of alternative plausible futures
Significantly different views of the future
“Movies” of the evolving dynamics of the future
Specific decision-focused views of the future
Results of management insight and perceptions
Institute for Innovation, copyrighted material, 2010 18
19. Step 7 Actualize: Measure Effectiveness
Innovation Balanced Scorecard
innovation
value proposition
Learning and growth
perspectives
infrastructure market
Internal processes Customers and external
perspectives perspectives
financial model
Financial stakeholder
expectations
19
Institute for Innovation, copyrighted material, 2010
Hinweis der Redaktion
What is a business model?A business model is the conceptual and architectural implementation of a business strategy and as the foundation for the implementation of business processes. In the most basic sense a business model is the way an organization conducts business in order to sustain itself.A business model describes the rationale of how an organization creates, delivers, and captures value- economic, social, or other forms of value. From an organizational perspective a business model is the business logic of value creation that a company offers to one or several segments of customers. It is also the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams. It describes the logic of a “business system” for creating value that lies behind the actual processes. A business model is the conceptual and architectural implementation of a business strategy and as the foundation for the implementation of business processes. In general, a business model describes the rationale of how an organization creates, delivers, and captures value- economic, social, or other forms of value. From an organizational perspective a business model is the business logic of value creation that a company offers to one or several segments of customers. It is also the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams. It describes the logic of a “business system” for creating value that lies behind the actual processes. In general, a business model describes the rationale of how an organization creates, delivers, and captures value- economic, social, or other forms of value. From an organizational perspective a business model is the business logic of value creation that a company offers to one or several segments of customers. It is also the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams. It describes the logic of a “business system” for creating value that lies behind the actual processes. What is Business model innovation?Business Model Innovation (BMI) refers to the creation, or reinvention, of a business itself. Whereas innovation is more typically seen in the form of a new product or service offering, a business model innovation results in an entirely different type of company that competes not only on the value proposition of its offerings, but aligns its profit formula, resources and processes to enhance that value proposition, capture new market segments and withstand competitor encroachment. Innovation can occur in one or more of these areas simultaneously:[2][3]Business models have become the new frontier of value creation. According to some research during the past decade (1997-2007), 14 of the 19 entrants into the Fortune 500 have achieved significant success because their business model innovations have transformed existing industries or created new ones. Is your business model sustainable?The question is not if your business model is sustainable, but how do you continuously reinvent it, because it will break eventually.The answer is that it requires continuous business model innovation.
What is a business model?A business model is the conceptual and architectural implementation of a business strategy and as the foundation for the implementation of business processes. In the most basic sense a business model is the way an organization conducts business in order to sustain itself.A business model describes the rationale of how an organization creates, delivers, and captures value- economic, social, or other forms of value. From an organizational perspective a business model is the business logic of value creation that a company offers to one or several segments of customers. It is also the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams. It describes the logic of a “business system” for creating value that lies behind the actual processes. A business model is the conceptual and architectural implementation of a business strategy and as the foundation for the implementation of business processes. In general, a business model describes the rationale of how an organization creates, delivers, and captures value- economic, social, or other forms of value. From an organizational perspective a business model is the business logic of value creation that a company offers to one or several segments of customers. It is also the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams. It describes the logic of a “business system” for creating value that lies behind the actual processes. In general, a business model describes the rationale of how an organization creates, delivers, and captures value- economic, social, or other forms of value. From an organizational perspective a business model is the business logic of value creation that a company offers to one or several segments of customers. It is also the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams. It describes the logic of a “business system” for creating value that lies behind the actual processes. What is Business model innovation?Business Model Innovation (BMI) refers to the creation, or reinvention, of a business itself. Whereas innovation is more typically seen in the form of a new product or service offering, a business model innovation results in an entirely different type of company that competes not only on the value proposition of its offerings, but aligns its profit formula, resources and processes to enhance that value proposition, capture new market segments and withstand competitor encroachment. Innovation can occur in one or more of these areas simultaneously:[2][3]Business models have become the new frontier of value creation. According to some research during the past decade (1997-2007), 14 of the 19 entrants into the Fortune 500 have achieved significant success because their business model innovations have transformed existing industries or created new ones. Is your business model sustainable?The question is not if your business model is sustainable, but how do you continuously reinvent it, because it will break eventually.The answer is that it requires continuous business model innovation.