The road just got rockier and the atmosphere foggier. Stock market turmoil, coupled with continued uncertainty about federal fiscal policy and the Euro, creates additional challenges for every business owner and leadership team. The risk of a double dip recession just increased. At the same time, significant liquidity resting in investor and company balance sheets stands ready to fuel attractive economic and asset value growth when the right signals appear. While I usually hate “Top 10” lists, we’re all in need of some jump-start ideas to turn feeling blocked into forward movement. Here’s some ideas to find pockets of light as you plot your course through a suddenly thicker forest. You’re not the only company, leadership team and family feeling upset right now. What would you learn (as a B2B company) if you interviewed a range of people in your top customers or…
Business model innovation lesson in HP exiting PCs
What should we make of HP CEO Leo Apotheker’s recent announcement that HP is spinning off its PC business for a future sale, despite holding worldwide market share leadership? Here are three potential answers. HP understands portfolio management. The PC industry as traditionally defined is maturing, with growth mostly in the developing world. HP has higher growth businesses in which to invest. Apotheker’s copying another company’s winning strategy. In 2005, IBM sold its PC business to Lenovo to focus on its Smarter Planet B2B solutions business. HP’s recent announcement that it is buying British enterprise software maker Autonomy Corporation at a 60-80% premium (depending on the analyst) suggests a copycat strategy. Autonomy provides unstructured data analytics and data management software, positioning HP for the $20 billion enterprise information management market and $55 billion business analytics software and services market. HP can’t compete. Computing…
5 principles for 21st century business models
I’m on vacation, reading a fascinating book by Umair Haque entitled “The New Capitalist Manifesto.” Its gist is that too many businesses are creating profits based on what Haque calls “thin value,” value created by stealing benefits from and imposing unmeasured costs onto current and future generations. These businesses will fail in the 21st century when their “deep debt” comes due. Haque argues that our business models, formed in the industrial age of the 20th century, are based on a hunting mentality that assumes no end to the riches in the forest. As a result, businesses create thin value that is: Artificial, as the business creates gains for some (e.g., shareholders) at the cost of harm to others (the environment and future generations); Unsustainable, as the business abuses environmental and labor resources to extract profits; and, False, as the business fails to make…
Stronger airline and healthcare systems demand business model innovation
What does the US health care crisis have in common with Delta Airline’s recent decision to stop serving 24 small cities? Both speak to the need for new business models to improve an overall system’s ability to meet diverse customer needs. Consider Delta Airlines. With rising fuel prices, Delta is cutting service to focus on routes with the highest revenue per plane. Small communities unable to fill seats and meet profit requirements will end up on the chopping block, a situation facing Pierre, South Dakota. With federal subsidies for serving small markets likely to fall as government deficits worsen, who can blame Delta? The business model for serving customers accessing 29 major US airline hubs (Delta’s core market) should be different than those serving other travelers. Delta’s announcement communicates, “We don’t have a good business model for Pierre and its peers. Let a…