Leaders make a mistake when they assume industry dynamics are unchangeable in their model innovation work. Industry collaborations that change dynamics can be very smart strategy in both mature and emerging markets. Industry cooperative marketing efforts can advance an industry’s products. Remember the successful “Got Milk?” campaign creatively placing milk mustaches on famous faces? Cranberries would merely remain a Thanksgiving staple without farm cooperative Ocean Spray’s efforts that landed cranberries in juice, cereals, salads toppings and snack foods. Setting standards also shapes industry dynamics. During my tenure at Datex-Ohmeda, global leader in anesthesia systems that’s now owned by GE, we worked closely with competitors and the American Society for Testing and Measuring to establish basic monitoring standards for anesthesia equipment. Yes, the standards advanced patient safety, but they also blocked low-cost competitors from entering the market, accelerated machine replacements and reduced our product…
Reflections on business model innovation from a company strategy retreat
“Select a once rapidly growing company whose growth stalled. Then, contemplate the root cause for its decline and be prepared to share your reflections at the retreat.” This assignment was one of many I asked leaders of a rapidly growing, omni-channel apparel retailer to complete in preparation for our two-day strategy retreat. (Omni-channel refers to the fact that people increasingly engage with companies across multiple channels, using each channel for different tasks.) The chosen once-celebrated examples of stalled growth included company names that used to fill articles on “best practices” to secure revenue growth. If nothing else the following names serve as a testimony to why leaders should never assume their existing business models will remain vibrant over the long haul. Kodak Too slow (or quarterly profit focused) to change from film to digitally-based business models Never fully immersed itself in digital photography…
Segment markets on situation to unearth winning new business models
“Situation” is a powerful lens for identifying business model innovation opportunities and protecting whatever market space you now command. “Situational segmentation” recognizes that any one customer’s needs – for a restaurant for example – depend on the circumstances giving rise to the need – entertaining, date-night, shopping with a friend. You can disrupt a leader or protect your position by finding situations where existing offerings fail to address situational needs. Zipcar, founded in 2000, did just that. Errands and other short trips lead auto nonowners, like college students and young urban dwellers, to need a car for hours instead of days or weeks. Auto rental companies, designed for travel and longer-term rentals, are often too far away, too expensive and take too much time to transact with to meet short-hop situational needs. Zipcar’s car sharing subscription service addressed the unmet need, allowing its…
Blueprint Health inaugural class of start-ups reinforce business model lessons
I had the pleasure of being one of about 400 people attending Blueprint Health’s “Demonstration Day.” Angel, venture capital and corporate investors from across the US listened to investment pitches from the nine start-up companies that Blueprint Health selected (out of 300 applicants) for its inaugural accelerator class. I am an advisor to NEEDL, one of the nine. Blueprint Health’s out-of-the box success deserves a shout-out. It serves as the hub of healthcare technology innovation in NYC by bringing together a collaborative community of entrepreneurs who build businesses and learn from each other in a co-work space that offers a broad array of educational classes. Companies that want accelerated help can apply for a 3-month program of support (in exchange for an equity share) from Blueprint’s network of healthcare entrepreneurs, investors and industry mentors, the largest in the country according to Blueprint. These…