Presentation held for the Hafslund Alliander workshop in Amsterdam

1. UNKNOWN A1 / open seating
BUSINESS MODEL INNOVATION

2. Innovation common understanding
”A nearly universal obstacle for innovation
success is that people have pervasive
misunderstandings about what innovation
is, where it comes from, and even how to
define, measure, foster, or reward it.
With fundamentals like these all up for
grabs, it's amazing that innovation ever
occurs.”
Jay Doblin (1920-89)
2

3. ”Innovation is the process of creating
and delivering new customer value in
the marketplace.”
Carlson & Wilmot
”The ability of individuals, companies,
and entire nations to continously create
their desired future.”
John Kao
3

5. e Art of Implementing Ideas

6. Why are so few companies innovative?
96%
fail

7. They all dream about hot new products….

8. A palette of opportunities
Business Model
Offerings
Mark
et seg
ment
s
Solutions
ling
Chan
/ Enab nels
Organizing
Process
Delivery

9. Innovation dimensions
Volume of innovation activities last decade
Products/ Strategic Customer Core Sourcing/ Organizing/ Market Network/ Revenue
Solutions Channels Brand/Design
services concepts Experience process Distribution Eanbling segments Alliances streams
OFFERINGS DELIVERY PROCESS BUSINESS MODEL

10. Innovation dimensions
Less than 2% of the innovation activities creates 90% of the value.
Products/ Strategic Customer Core Sourcing/ Organizing/ Market Network/ Revenue
Solutions Channels Brand/Design
services concepts Experience process Distribution Eanbling segments Alliances streams
OFFERINGS DELIVERY PROCESS BUSINESS MODEL

11. A sole focus on traditional strategy works:
Todays market and competitors determine our future focus…
RED OCEAN
The Battle of decreasing margins

12. By also focusing on the strategic innovation works:
New opportunities based on future needs – outside todays red ocean –
centered around the core competence.
BLUE OCEAN
Create new markets without a challenge from competitors

13. STRATEGIC INNOVATION
Innovation driven by the company´s core competence,
throughout dimensions, where competitors are doing little
or nothing at all
(Høy 2006)

14. A classic smart grid roll out
3. Business models
Experimenting with new
VALUE CREATION
products and services based
upon customer insights and
2. Operating model technology innovations
Efficiency and stabilize
processes
1. Technology
Validate and test.
Risk management
TIME

15. t is a l
Wha ode
ess m it
busin hy is
a nd w ant?
im port
Business models Hafslund / Alliander

16. A business model describes
the rationale of how an organization
creates, delivers and captures value

17. A couple of well known models…

21. http://www.businessmodelgeneration.com
http://www.businessmodelalchemist.com
http://alexosterwalder.com
http://ch.linkedin.com/in/osterwalder

22. BUSINESS MODEL CANVAS
CUSTOMER
RELATIONSHIP
KEY
ACTIVITIES
KEY VALUE CUSTOMER
PARTNERS PROPOSITION SEGMENTS
KEY
RESOURCES
CHANNELS
COST STRUCTURE REVENUE
STREAMS
Business model generation (2010) – Alex Osterwalder

23. 1. CUSTOMER SEGMENTS
For whom are we creating value?
Who are our most important customers?
CUSTOMER
SEGMENTS
Customer groups represent separate segments if:
• Their needs require and justify a distinct offer
• They are reached through different Distribution Channels
• They require different types of relationships
• They have substantially different profitabilities
• They are willing to pay for different aspects of the offer

24. Products/ Customer Market
services Experience segments
OFFERINGS DELIVERY BUSINESS MODEL

25. Where is the great market segment
– not being served today?
(who are NOT our customers? And why?)

26. 2. VALUE PROPOSITION
What value do we deliver to the customer?
Which one of our customer’s problems are we
helping to solve?
Which customer needs are we satisfying?
VALUE
PROPOSITION
What bundles of products and services are we
offering to each Customer Segment?

27. Social lending
Customer Sourcing/ Network/ Revenue
Solutions Channels
Experience Distribution Alliances streams
OFFERINGS DELIVERY PROCESS BUSINESS MODEL

28. How could a utility company get
20% of a normal household budget?
(what related services could we take responsibility for?)

29. 3. CHANNELS
CHANNELS
Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated? Which ones work
best?
Which ones are most cost-efficient? How are we
integrating them with customer routines?

30. News bulletin15 Dec 2011
– Amazon has sold at least three million
Kindles in the past three weeks.
Every forth sold book is an eBook…

31. 8 ways of selling a book
1. Publisher (old school)
2. Free book (as a market tool for other services)
3. Co-written book (sold through social networks)
4. On demand (printed whenever someone wants it)
5. Online book (a book as a website)
6. Do it yourself (amazon advantage)
7. Sponsored book (advertising)
8. Tailored book (commissioned work)

33. 4. CUSTOMER RELATIONSHIP
CUSTOMER
What type of relationship does each of our Customer
RELATIONSHIP
Segments expect us to establish and maintain with them?
Which ones have we established?
How costly are they?
How are they integrated with the rest of our business model?

34. is is your usual LEGO user…right?

35. Well…

36. 11 page cover story in
Wired Magazine
Customer Organizing/
Solutions
Experience Eanbling
OFFERINGS DELIVERY PROCESS

37. 5. REVENUE STREAMS
REVENUE
STREAMS
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?

38. All the music – all the time
Spotify@Spotify
Freemium business model
We’re excited to announce that we’ve now welcomed
2.5 million paying subscribers. Thanks everyone!
Products/ Customer Sourcing/ Market Revenue
Channels
services Experience Distribution segments streams
OFFERINGS DELIVERY PROCESS BUSINESS MODEL

39. 6. KEY RESOURCES
What Key Resources do our Value Propositions require?
KEY
RESOURCES
Our Distribution Channels?
Customer Relationships?
Revenue Streams?

40. Strategic Organizing/ Network/
concepts Eanbling Alliances
OFFERINGS PROCESS BUSINESS MODEL

41. 7. KEY ACTIVITIES
What Key Activities do our Value Propositions require?
Our Distribution Channels?
KEY
Customer Relationships?
ACTIVITIES
Revenue streams?

42. Products/ Customer Core Sourcing/ Market Revenue
Channels
services Experience process Distribution segments streams
OFFERINGS DELIVERY PROCESS BUSINESS MODEL

43. 8. KEY PARTNERSHIPS
Who are our Key Partners?
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
KEY
PARTNERS
Which Key Activities do partners perform?

44. Ryanair
Customer Organizing/ Network/
Solutions
Experience Eanbling Alliances
OFFERINGS DELIVERY PROCESS BUSINESS MODEL

45. 9. COST STRUCTURE
COST
STRUCTURE
What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?

46. Rolls Royce was known for
manufacturing and selling
high quality products with
marginal earnings
(ROI was usually 17 years)
They came up with a new
business model that sells
hours of flight instead of
engines and parts
Today this is 50% of sales
and 80% of earnings
Sourcing/ Market Revenue
Solutions
Distribution segments streams
OFFERINGS PROCESS BUSINESS MODEL

47. Unlock future SMART GRID business models
Our common challenge
Explore key insights to
unlock new business
opportunities and future
business models for
Hafslund and Alliander.
CO-LAB
WORKSHOP

48. WHAT IF?
Best practise
Next practise

49. What if we challenged the dominant logic?
What if we compare our business model with other players in our
business… what makes us unique/different?
What if we think different on who our customers are? And what we´re
offering them?
What if we think different about our sales channels? Are there
alternatives? And what about the customer relationships? Could we do it
differently?
What if there are other ways of generating revenue streams?
And so on….
Best practise
Next practise

50. anks for listening!
Mads Bruun Høy
Mads.bruun.hoy@devoteam.com
92823204