The current COVID-19 crisis clearly reveals that business model innovation is of paramount importance. Activities we took for granted, like traveling around the world for business or vacation are put on hold. Getting together in large groups is not allowed anymore, and gatherings with small groups are now bound to strict rules as well.
This crisis has a deep and wide impact on our lives and businesses. Whole countries do not go on international vacations, people spend their time and money locally, or hold a staycation. Unfortunately, some businesses see demand for their existing products and services disappear almost entirely, like in the travel, tourism, and event sectors. Other businesses have to figure out how to meet a spike in demand, while keeping customer satisfaction high.
Organizations and companies are forced to reconsider and redesign how it creates, delivers, and captures value. Your offering might be (temporarily) irrelevant for people, your physical channels might be inaccessible or too expensive to operate, and your digital infrastructure might be lagging behind in supporting your people to effectively engage with customers. Every company that is now reinventing itself, is redesigning one or more building blocks of their business model or even developing entirely new business models.
Business as usual does not exist anymore. That much is clear by now. Yet, it is unfortunate that many organizations held on to a business as usual mindset for so long. So much missed opportunities to create more, better, and more relevant value for customers, on an ongoing basis.
The current crisis is now accelerating business model innovation within companies and across industries. We see more and more companies sticking their neck out for a more sustainable and righteous world. Crises put the world in a downward spiral with all its negative socio-economic and/or environmental effects. Business can and should be a force to bring people together and do good and lift all of humanity up.
We also see a big shift in people’s behaviour, either enforced by rules or by voluntary lifestyle changes. We currently see digitization everywhere to keep connected to family, friends, customers, employees, and partners. We see the importance of high-quality, plant-based food and personal healthcare and well-being increasing. We see a rally-cry and collective action from large corporates like IKEA, Unilever, Nike, Lego, and many others to reset the economic system and move towards a circular and inclusive economy. Although we have our hands full with COVID-19 now, all other crises, such as the climate crisis, did not go away. They need to be addressed head-on as well.
Sticking to business as usual has never been a recipe for growth, yet today no business can afford to not understand how customer behavior and other contextual factors are changing. Today has never been a better time to ask yourselves “What value should we create for customers?”, “How could we be truly relevant for existing and new customers?”, and “Where are we going to shift our business and value creation?”
Even before today’s crisis, we saw businesses that are evolving in interesting ways. Some die trying, by being stuck in a survival mindset. Others thrive on change, because the bigger part of the organization adopts a renewal mindset. COVID-19 and past crises clearly reveal where real value is created, or not. Innovative companies don’t need a crisis to remind them of this. Leaders, like you, commit to creating awareness of the relevant changes in their context and ask themselves and their teams these questions:
What drives these changes in our context? What is important and what not?
What real options do we have to respond to these changes?
How do we actually make the change?
Basically, these leaders have a clear situational awareness and sharp entrepreneurial mindset that makes them see they need to deliberately close the growth gap. The growth gap is the difference between current overall revenue and future revenues. But, it is not about the pursuit of just any revenue. It is about driving new value creation, i.e. solving bigger and more important customer problems and satisfying important needs in much better ways.
Let’s say your organization’s overall growth ambition is to double revenue within a decade. Obviously, you want to generate new revenue streams that can be sustained in the long-term. The only way to create such sustainable, long-term revenue streams is to make sure that you align with what customers really need and want in the years to come and deliver value in a way convenient for them. Large organizations can hardly ever achieve long-term growth ambitions by only optimizing their existing and matured businesses. New business models are needed to realize a grand vision and ambition.
At BMI• we are fanatic about decoding the evolution of business, zooming in on business models, being the units of value creation or destruction in an economy. We have been doing this since 2009 by producing Business Model Generation, providing a visual and common language to understand and innovate your business (model). In 2016, we published Design a Better Business, which provided a clear and structured strategy design and innovation process so that everybody could contribute to creating new value for customers.
With our newest book, we address the question “Where is value now and next?” showing how leading companies develop new, exciting business models. We invite you to become such a leading company as well, bringing your people together to create new value for customers.
Customers and their evolving needs are your anchor, i.e. the only certainty you have. How you create, deliver, and capture value today is hopefully amazing for your customers. But, no business model lives forever. Sooner or later, your business model loses its relevance.
If you truly commit to innovation, you are increasing the odds significantly of having one or more future business models that are also amazing for customers. You do need to have a bold vision of the future value you want to create for your customers and other key stakeholders. And, you cannot do this in a vacuum. Your innovation efforts need to be tightly linked to the relevant contextual trends and developments.
In between today and the future is where innovation has to happen. The best time to start innovating your business model was a few years ago when you were highly successful. The second-best time is right now. You make the leap from today to the future by fully committing to making one or more business model shifts. A shift is a deliberate and systematic move towards more relevance and value for customers. Such business model innovation is hard work, yet very rewarding. You will address the needs of new customer segments, with new unique value propositions and business models, generating new revenue streams, and even a positive socio-economic and environmental impact.
Business models are changing faster than ever. Our new book Business Model Shifts provides a deep understanding of why and how value creation is changing and where value is next. After you read this book you will know how well-known and lesser known companies in b2b and b2c are working on new ways to create, deliver and capture value. The book delivers practical insights to learn from and more importantly apply to your business model so that you and your team can make a bigger difference for your customers.
Our new book provides 6 business model shifts, 6 concrete ways to create new value for customers. These shifts don’t come from thin air. They were discovered by looking at the business models of over 100 companies. The shifts of about 40 companies are illustrated through stories. We offer 6 Large, 12 Medium, and 21 Short case studies to learn about how value is created, delivered, and captured next. The good thing is that you don’t have to start innovating out of the blue. You can pick one of the 6 shifts to clearly frame and kickstart your innovation effort.
From products to services
The move from a product-oriented business model to a service-oriented business model focused on getting some job done for the customer.
From shareholder to stakeholder
The move from a shareholder orientation to creating value for all stakeholders in the greater ecosystem and business model context.
From physical to digital
The move from fragmented online and offline business operations to an always-on business model that is connected to customers and their needs.
From pipeline to platform
The move from a disintegrated ecosystem of businesses and uneven value exchange to directly connecting people and businesses facilitating value exchange in an orderly way.
From incremental to exponential
The move from improving businesses and revenue streams in terms of single- or double-digit percentage growth to exponential thinking and 10x growth and impact.
From linear to circular
The move from take-make-dispose to restorative, regenerative, and circular value creation.
For each shift, our book provides key insights and specific bold steps that you can take within your own organization.
As you can see and read in the separate post on these shifts, each shift is addressing a structural flaw in the economic system. So, what are you waiting for? Commit to your own shift and join the (r)evolution of fixing the economic system and creating more value for customers.
Where are you going to shift? Now is the time!
