How Can You Create an Innovative Business Model?
Do you dream big about entering a huge market and overthrow the incumbents with an innovative business model, like Uber or AirBnB? Or, as innovation professional or manager, are you well aware of the threats of new start-ups entering your market? Do you want to be an active innovator or a reactive one? That’s the question.
As active innovator, the innovation challenge is to overturn the conventions of your own market before others do. The awareness to rethink your business models is often there, but the main question is: “How do I come up with a new business model that disrupts my own market?” I was very pleased that McKinsey recently published a new approach to business-model innovation that will help you how to come up with new business models[i]. It's practical 5 step method to turn your present beliefs upside down.
Let's take a closer look at their five steps:
1. Outline the dominant business model in your industry. As a start you answer the essential question: "What are the long-held core beliefs about how to create value?".
2. Dissect the most important long-held belief into its supporting notions. How do notions about customer needs and interactions, technology, regulation, business economics, and ways of operating underpin the core belief?
3. Turn an underlying belief on its head. Formulate a radical new hypothesis, one that no one wants to believe—at least no one currently in your industry. Ask yourself outside-the-box 'What-if' questions. :
4. Sanity-test your reframe. Many reframed beliefs will just be nonsense. Applying a reframe tha