How to Challenge Your Business Model?
Business models matter. Whether yours is clearly articulated or not, they matter. Business model describes how you create value and how you capture value. What do you do and how it brings you money.
When you figure out how to do something worthwhile that people are willing to pay for, great. Do more the same and get more money, right? Works perfectly until competition steps in and you find yourself in a downward spiral of never ending pricing competition.
Companies that compete only on price and availability, have an undifferentiated business model and fall fairly easily victims of commodity trap. But even those companies that have well segmented, clearly differentiated business models or have managed to integrate innovation into their models are not safe from change. That’s why from time to time, it is refreshing at least to take your management team out and jump-start their innovation engines.
Taking steps towards business model innovation can be painstaking. Running business as usual is familiar and reassuring to us as we know the strong points of our current model and how to exploit those strengths to maximum benefit. Taking steps changing your business model is not easy because there rarely exists a person with a mandate to do so and the most imminent one, that there are absolutely no guarantees that your business model experimentation will generate any tangible results. The usual standard response you get when suggesting something new to customers or for your own management is this: “Outside of our core-business” or “Not in our industry”.
And there you are, mumbling something like “Uh, oh – that is exactly the point..”
What if you stopped selling your #1 product or service?
We tend to be our own worst enemies when it comes to thinking outside our existing environment and how we should evolve or expand our business model. Sometimes we need to rattle the cage a little bit to get the design process going.
That is when you need something designers call trigger questions. Here are some great examples of questions that will challenge your thinking. The point is not to answer to these “No way, not gonna happen” but really answer the question.
What would your business do if you stopped doing what you are best known for? How would you survive? What other assets, resources and means do you have that you could sell instead of your core product?
I hope you find these questions useful and that they will trigger some interesting conversations within your team or in your organization. The purpose for this is to open your mind towards innovative ideas so next time, when we meet you will be attuned to making bolder steps towards the future.
The whole point of innovation is to think something big – or go home.