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Reinventing Your Business
 

Reinventing Your Business

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Slides from a 1/2 workshop at the paperJam Business Club in Luxembourg on Business Model Innovation.

Slides from a 1/2 workshop at the paperJam Business Club in Luxembourg on Business Model Innovation.

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    Reinventing Your Business Reinventing Your Business Presentation Transcript

    • ReinventingYourBusiness
    • Why What How
    • Why
    • is itimportantto you
    • Source: Christoph Zott, Raphael Amit and Lorenzo Massa: The Business Model: Recent Developments and Future Research Journal of Management 2011 37:
    • “Get the business model wrong,and there is almost no chance ofsuccess...” Prof. David Teece University of California, Berkley.
    • “Business model innovation mattersand it is a top priority of CEOs.”
    • Source: IBM Global CEO Study 2006
    • Source: IBM Global CEO Study 2006
    • Source: IBM Global CEO Study 2006
    • „Innovation is front and center on thecorporate agenda, according to aglobal survey. Executives are addingmore breakthrough innovations andbusiness model changes to theirportfolio to fuel the growth engine.“ Business Week, November 16, 2009
    • Source: Businessweek / BCG Innovation Survey 2008
    • Stagnating or declining revenuesSource: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82
    • Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82
    • ̲ Increase profit̲ Find new growth areas̲ Create new markets̲ Commercializing a new ̲ Increased competition product or technology Why ̲ Adapt to changing environments ̲ Adapt to new / emerging markets ̲ Seize emerging trends
    • What
    • $ 1.600.000,- © Marc Sniukas - Doujak Corporate Development
    • FreeDownload © Marc Sniukas - Doujak Corporate Development
    • Business ModelInnovation
    • „There‘s no good just being better, ...you got to be different.“ Charles Handy
    • ̲ “A business model is simply the ‘way of doing business’ that a firm has chosen: its entire system for creating and providing consistent value to customers and earning a profit from that activity, as well as benefit for its broader stakeholders. It refers to the core architecture or configuration of the firm, specifically how it deploys all relevant resources (not just those within the company boundaries), to create differentiated value for customers at a profit…” (Davenport, T. H., M. Leibold and S. Voelpel (2006). Strategic Management in the Innovation Economy. Publicis Wiley.)̲ The business model is a company’s answer to the question of how to make money in its chosen business. It describes, “…as a system, how the pieces of a business fit together.” (Magretta, J. (2002). "Why Business Models Matter." Harvard Business Review 80(5) May: 86-92.)
    • Source: Accenture Source: The Boston Consulting Group Source: InnosightSource: businessmodelgeneration.com Source: IDEO
    • WHO is your customer? HOW WHATdo you do this? do you offer your customers?
    • WHO Markets Customer Segments Individual Needs HOW WHATCreate Value Products & ServicesDeliver Value SolutionsCapture Value Experiences
    • Traditional Approach Business Model InnovationWho • Everybody • EverybodyWhat • Usually full treatment • Focus on basic treatments • Services covered by health • Quick insurance • Convenient • Special treatment for additional cost • AffordableHow • A range of specialists • Generalists • Special facilities • Located in shopping malls / inside • One central location CVS pharmacies • “Solution shops” • Multiple locations • “Retail model”
    • Traditional Approach Business Model InnovationWho • (Rich and middle class) people who • “Low income clients” are reliable to pay back the credits or • Poor people who would not get any have enough assets as security. loans from traditional banks (especially women)What • Classic loans, usually for larger sums • Small loans to “unbanked people” to buy assets.How • Strong risk management • About 97% make their payments. • The returns from the interests belong • The borrowers are the owners of to the bank/ shareholders the bank. • Profit focus • The profit of the bank goes back to the owners. • There is no collateral. No lawyers. • Social business focus
    • Traditional Approach Business Model InnovationWho • People who want a quick bite to eat • People who want to sit down and • Get in, order, get served quickly, get remain seated for a while out quickly again • Create a “3rd place” à la StarbucksWhat • Pre-made food prepared constantly • Coffee and cake according to demand • Made to order (coffee) • Standard menus • Pre-produced (cakes) • Some variations allowed • No menusHow • 1 counter • 2 counters • Standardized processes • Separate seating area • Central locations with high • Key is to increase share of wallet of frequencies the customer and keep him for a • The key is to serve a maximum longer period of time in the number of people during a given restaurant time • Innovative use of existing assets, new capabilities needed
    • Traditional Approach Business Model InnovationWho • Kids • Everybody from 4-99 • Hard Core Gamers • The whole family • Casual GamersWhat • High Tech – High Performance • Family Console Console • Low tech, lower power processors, • High tech, high end processors for no additional features speed and graphics, connect over the • Focus on fun rather than technical internet, additional features (DVD, performance internet,...) • New movement technology  high cost  lower cost  high sales price (250-300.- €)  lower sales price (190.- €)How • n/a • n/a
    • New Markets New Customers What New Ways of New ValueDoing Business Propositions
    • How
    • Division Division Division Division 1 2 3 4© Marc Sniukas - Doujak Corporate
    • The Future Space
    • May 6-7 April 15 Group Mgmt March 10 Meeting BU Workshop MgmtDivision MgmtMeetings • Presentation of Business Division• Introduction to Models Mgmt Business Model • Preparation of Innovation GMM Group• Introduction Research on Final version 2010 Future Space innovative Business until April 29 to• Process Models and Trends. SIO• Preparation Group• Handbook 2011 + Business Draft until March 29 to SIO Model Description Coaching Sessions with SIO by Division Mgmt Final Version until April 7 to SIO and their teams.
    • March 10 BU MgmtDivision MgmtMeetings Division• Introduction to Mgmt Business Model Innovation Group• Introduction 2010 Future Space• Process• Preparation Group• Handbook 2011 +
    • March 10 BU MgmtDivision MgmtMeetings Division• Introduction to Mgmt Business Model Innovation Group• Introduction 2010 Future Space• Process• Preparation Group• Handbook 2011 +
    • March 10 BU MgmtDivision MgmtMeetings Division• Introduction to Mgmt Business Model Innovation Group• Introduction 2010 Future Space• Process• Preparation Group• Handbook 2011 + Business Draft until March 29 to SIO Model Description Coaching Sessions with SIO by Division Mgmt Final Version until April 7 to SIO and their teams.
    • April 15 March 10 BU Workshop MgmtDivision MgmtMeetings • Presentation of Business Division• Introduction to Models Mgmt Business Model • Preparation of Innovation GMM Group• Introduction 2010 Future Space• Process• Preparation Group• Handbook 2011 + Business Draft until March 29 to SIO Model Description Coaching Sessions with SIO by Division Mgmt Final Version until April 7 to SIO and their teams.
    • April 15 March 10 BU Workshop MgmtDivision MgmtMeetings • Presentation of Business Division• Introduction to Models Mgmt Business Model • Preparation of Innovation GMM Group• Introduction Research on Final version 2010 Future Space innovative Business until April 29 to• Process Models and Trends. SIO• Preparation Group• Handbook 2011 + Business Draft until March 29 to SIO Model Description Coaching Sessions with SIO by Division Mgmt Final Version until April 7 to SIO and their teams.
    • May 6-7 April 15 Group Mgmt March 10 Meeting BU Workshop MgmtDivision MgmtMeetings • Presentation of Business Division• Introduction to Models Mgmt Business Model • Preparation of Innovation GMM Group• Introduction Research on Final version 2010 Future Space innovative Business until April 29 to• Process Models and Trends. SIO• Preparation Group• Handbook 2011 + Business Draft until March 29 to SIO Model Description Coaching Sessions with SIO by Division Mgmt Final Version until April 7 to SIO and their teams.
    • The Future Space 3 steps
    • 1. Description2. Inspiration3. Creation © Marc Sniukas - Doujak Corporate
    • Source: businessmodelgeneration.com© Marc Sniukas - Doujak Corporate
    • WHO#1 Challenge industry assumptions #11 Target non-customers #12 Target less profitable customersWHAT #13 Target the least satisfied customers#2 Offer complementary products and services #14 Target the chain of buyers#3 Offer solutions and experiences #15 Segment according to commonalities#4 Offer bundles #16 Segment according to circumstances#5 Switch your appeal: functional versus #17 Desegment the customer based emotional HOW#6 Focus on the job to be done #18 Reinvent the customer interface (channels)#7 Selectively eliminate, reduce, raise and create #19 Reinvent your customer relationships#8 Look at subsitutes #20 Invent new revenue streams#9 Expand the use of your assets and capabilities #21 Price differently#10 Look at the customer experience #22 Reinvent you cost base #23 Re-assess your key activities #24 Collaborate with suppliers, partners, the network and ecosystem #25 Look at completely different industries
    • So what...?
    • Setting the StageA Discovery-Driven Approach
    • Setting the stage Discovery Development Conversion CommercializationDescription Project set up. Define and Discovery of Development of business Conversion of concepts Implementation and describe project. Formal opportunities model concepts into real-life launch GO. Gain insights Develop business model Testing concepts and Launch new business idea portfolio and receiving market model evaluate ideas feedbackInput BMI Idea Project Brief Insights from discovery Business concepts Finished and tested phase approved for test Business Model First ideasTasks 1. Define and build team 1. Company Assessment 1. Develop BM portfolio 1. Strategy & Business 1. Implementation 2. Define purpose, scope 2. Market Assessment 2. Evaluate BM portfolio Planning 2. Start-Up / Incubation and focus 3. Industry Assessment 2. Customer tests 3. Acceleration 3. Define goals and 4. Future Trends 3. Technical feasibility 4. Transition metrics 4. Implementation 4. Define process and Strategy project plan 5. Organisational gap analysisOutput • Project Brief • Description AS IS • BM idea / option • Final Business Model • Project plan • Description of portfolio Evaluation • Team is established opportunities • Evaluation of ideas • Strategy is developed • Common • Description of first • List of assumptions to • Organisational understanding about ideas be tested structure is defined the project has been • Update project • Business case for each • Partners/Network are created planning business model defined • Tested Business Model is profitableGates • Team established • Idea Screening • Go to testing • Launch decision Launch review (12 • Resources have been • Stop/Go Decision • Stop/Go Decision • Budget approval months) committed • Is the idea still • Justified to start • Business model is Business model review interesting? conversion/testing/ex profitable Business model • Is it worth spending perimentation phase? optimization the resources for the • Budget decision Integration into holding next phase? © Marc Sniukas - Doujak Corporate Development
    • Steering Committee Strategic Innovation OfficeCross Division Strategic Innovation Within Division Cross DivisionProject Teams Core Team Within Division Project Teams Cross Division Project Teams Within Division Project Teams Cross Division Project Teams Within Division Project Teams Cross Division Project Teams Within Division Project Teams Project Teams Project Teams
    • Nov Dez Q1 Q2 Q3 Q4 2012 2010 2011 Core Team Core Team Core Team Core Team Core Team Core TeamCore Team Meeting Meeting Meeting Meeting Meeting Meeting Kick OffBoard Division 1 Division 3 Division 1 Division 3Update Division 2 Division 4 Division 2 Division 4 Setting theProject 1 stage Discovery Development Conversion Setting the Commer-Project 2 Team Kick Off stage Discovery Development Conversion cialization Hire Project Project Setting theProject 3 Manager Manager stage Discovery Development Conversion Hire Project Project Setting theProject 4 Manager Manager stage Discovery Development Conversion Hire Project Project Setting theProject 5 Manager Manager stage Discovery Development Conversion
    • Process Overview Preparation 1 Workshop I Preparation 2 Workshop II Home Work Workshop III Workshop IV Strategic Experiments © Doujak Corporate Development
    • Goal ActivateSetting the Stage participants Tools Phone Call Information Package Chapters 1-4 • Participants are well prepared. • They have a good theoretical background. • The know the process and its objectives. © Doujak Corporate Development
    • GoalWhere are we now? Define target. Describe AS IS.Where are we heading towards? Approach aspiration current path • Target is defined. (Strategic Intent) • Need for action is clear / common understanding. • Current business, including markets, value proposition and business model is described. © Doujak Corporate Development
    • GoalWhere are we now? Define target. Describe AS IS.Where are we heading towards? Tools Value Curve Business Model “Strategic Experiments” Portfolio Strategic Intent Customer Profile Path of Life • Target is defined. (Strategic Intent) • Need for action is clear / common understanding. • Current business, including markets, value proposition and business model is described. © Doujak Corporate Development
    • Goal Activate (new)Inspiration. participants. Be inspired. Tools Phone call Examples of Innovators Toolbox Information Package • Keeping the energy high. • First ideas are developed (even before workshop) © Doujak Corporate Development
    • Goal Discovering andSensing Opportunities. describing opportunities. Tools New business models New value propositions New customers Toolbox • Opportunities have been identified. • First ideas on how to seize them have been developed. © Doujak Corporate Development
    • Goal Organize inputs. GetIf necessary feedback. Further develop first ideas. Tools …everything necessary… Customer talks Data analysis Desk Research • Information for workshop III is organized. • Ideas have further been described. © Doujak Corporate Development
    • GoalSeizing Opportunities Developing options. Tools WHO Customers HOW WHAT Business Models Value Propositions • Strategic options have been developed. • Ideas for new customer segments, value propositions and business models have been described. © Doujak Corporate Development
    • Goal Evaluating options.Decision making Making decisions. Tools Area Rating Description What we What we assume... know... Strategy How well does the idea fit with our current 0 5 10 strategy?  expanding or defending a What is the strategic current business purpose of the idea?  building a new one that has already been identified  laying the foundations for potential new businesses Organization Resources & Competencies Which do we need? Which do exist already? Which need to be build? Change need Change readiness Finance Revenue potential Financial (Qty x Price) Implications Cost (fix + variable) Unit Margin Target “Strategic Experiments” Strategic Innovation Strategic Innovation Portfolio Scorecard Profile • Strategic options have been evaluated. • Strategic experiments have been defined and can be implemented. • High engagement of senior management leads to high motivation for the implementation. © Marc Sniukas - Doujak Corporate Development
    • How
    • Formal Focused Open NewCo Inside InnovationEvolutionary tensions Revolutionary Outside CoreCo Closed Holistic Informal
    • WHO is your customer? HOW WHATdo you do this? do you offer your customers?
    • Who is yourcustomer?What is your valueproposition?How are youcreating anddelivering youroffer?
    • Source: Accenture Source: The Boston Consulting Group Source: InnosightSource: businessmodelgeneration.com Source: IDEO
    • existing ↔ noncustomers (2nd and 3rd tier) most profitable ↔ less profitable most satisfied ↔ less satisfied (1st tier) specific buyer ↔ chain of buyers focus on differences ↔ focus on commonalitiesfocus on finer segmentation ↔ focus on de-segmentation focus on attributes(of customers and products) ↔ focus on circumstances (needs and the job done)
    • focus on existing assets ↔ start anew, or use existing assets in a new waysingle product or service ↔ total solution, bundling functional appeal ↔ emotional appeal and experiences focus on product ↔ focus on function fulfilled and the job-to-be-done build new features ↔ raise, reduced, create, eliminate selectively
    • conventional customer interface ↔ (co-creating) experiences easy to do business with ↔ conventional pricing strategic pricing of the masses (either to cover cost or benchmarked against (benchmarked against substitutes and alternative competitors) industries) cost-plus thinking ↔ price-minus thinking; target costs integrate activities ↔ network (with customers, suppliers, partners, alliances) low fit of activities (internally and externally) ↔ high fit of activities (internally and externally)
    • WHOHOW WHAT
    • • Set the context • Guide the process in a participative and fair way • Clearly communicate reasons, and expectations• Questioning attitude • Educate employees• Rewards success and failure, punishes inaction • Variety (internal and external) • Shield creative teams from distractions and pressure• Tolerates mistakes • Collaboration • Appreciate distinctiveness in people and their thinking• Slack is welcomed • Educated in regard to the strategy and • Welcome change skills needed• Supports risk taking and change • Ask itself what it does to promote or inhibit innovation• Supports teamwork and collaboration and how to get rid of these obstacles. People Culture Leadership Are you ready for Business Model Innovation? Systems Structure • Support the process of strategic • Fast and flat innovation Processes • Small units • Enable collaboration • Encourages collaboration • Enable the use and creation of • Fast and unbureaucratic • Autonomous teams at the knowledge • Decentralized decision making front line • Reward risk taking and action • Support idea generation, • Used to create relationships with experimentation and execution customers • Metrics & rewards support innovation
    • Who„s got aquestion?
    • Want more?
    • www.doujak.euwww.sniukas.com
    • ̲ Dynamic Capabilities (i.e. activities, processes and routines) leading to Business Model Innovation.̲ Managerial capabilities for creating, developing and leading these capabilities.
    • “The difficulty lies notin the new ideas,...…but in escaping from the old ones.” John Maynard Keynes
    • Thanks for your attention!
    • Get in touch! Marc SniukasDoujak Corporate Development Lainzer Strasse 80 A-1130 Vienna Mobile: +43 699 122 333 marc.sniukas@doujak.eu