Young women and teens are ruthless customers, shifting from one on-trend store to another as quickly as they shift love interests. The retail clothing industry is therefore a great place to learn this vital leadership lesson: In today’s information-age economy, business model innovators emerge as winners, while those delaying business model innovation steadily lose market share. Business Week’s Benetton: A Must-Have Becomes a Has-Been tells a sad story of a retail chain I first encountered and fell in love with in the late 1980s. Founded in 1985, this Italian clothing maker brought consumers the look and feel of European clothing at an affordable price, accompanied by its bold United Colors of Benetton advertising that paralleled the bold colors of its clothing lines. By 1993 the company was 7,000 stores strong, with locations in high-end shopping malls in major US and European cities.While Benetton…
Leading Business Model Innovation
Craig Schiefelbein, CEO/owner of Wisconsin-headquartered Paragon Development Systems, Inc. (PDS) exemplifies strategic leadership. Is it any wonder then that his Information Technology Solutions (IT) company has grown in twenty-two of the last twenty-four years and strategically partners with healthcare IT departments across the Midwest? Schiefelbein’s strategic leadership rests first and foremost in his willingness to change his company’s business model. “We’ve changed our business model seven times. Every time I’d think we had it all figured out only to discover we’d be out of business if we didn’t change. The challenge is in running the business while also rerouting it, and doing it before the changes become mandatory.” PDS started humbly in 1986 as the computer component wholesaler, Memory and More. Today PDS architects, supplies, implements and manages entire IT hardware infrastructures. Its business model involves aligning PDS’s unique blend of leadership, services,…
Leading Business Model Innovation
My CEO client sent the following e-mail to his leadership team last week to prepare for this week’s retreat that I’ll lead. His e-mail is an example of terrific business model innovation leadership. We will make mistakes as we go through this planning –this week and beyond. I’m more concerned about not making mistakes. If we don’t make mistakes, it means we are taking no risks, we are content with the status quo and are defaulting to making a few minor changes here and there. We can’t do that. The way I see it, that’s far riskier than making decisions and finding out that our best plans need to be adapted. Not making mistakes means choosing film over digital, slide rules over calculators, Northern Lights [bet you never heard of that] over Google. As we think about what we plan this week and…