Business model innovation thinks of new ways to do business with the aim to provide new and/or increased value to customers, the company, and its stakeholders.
To compete in today’s competitive markets it is important for all businesses to consider innovation in their business model. So, how does a business start the business model innovation loop?
This article is based upon this post by Incrementa, which details seven steps in the business model innovation loop that any business can, and should, take.
Define your goals
- What are your objectives?
- Why are you embarking on this journey?
- What is the problem you are trying to solve?
- Assess your current growth initiatives
- Create awareness of the need for business model innovation
- Establish a project team if needed
- Develop a common understanding of the purpose and the concepts used
Discovery – find facts and inspiration
- Who are your customers?
- Why are they buying?
- Who are your non – customers?
- Why are they not buying?
- Who are your competitors?
- What is their current offering?
- What are the dominant business models?
- What is your current business model?
- What trends are impacting on your industry?
- What is your company good at?
- What assets could you use?
Interpretation – seek understanding
- Gather and make sense of the data
- Find opportunities for new growth and business model innovation
- What are the customers required gains – really?
- What are the customers required pains – really?
- Develop assumptions on what is really going on
- Which opportunities do you see?
Ideation – generate and refine ideas
- How do you want to seize the opportunities?
- How can you overcome the customer’s pains?
- Concept development
- Document your assumptions on why you think an idea is a good solution
Experimentation – test your ideas
- Test your assumptions by discussing them with your customers
- Get feedback
- Create knowledge about the potential for your ideas
- Learn what works and what does not
Evolution – learn and adapt
- What are the insights gained from your experimentation?
- Which of your assumptions are correct? Which are not?
- How do you need to adapt your business model?
Launch – go large scale
- Plan for action
- Prepare the organisation and the market for launch
- Put all the necessary organisational elements in place. Consider training, marketing and finance.
- Create a feedback loop to inform any potential new cycle of the business model innovation loop.