April 14

How to achieve breakthrough with innovative business models (1/4)

At this year's PODIM Conference we are offering managers a package of experiences and tools that will help them design or improve their breakthrough entrepreneurial activities. For this purpose, we are also starting a series of four short articles about breakthrough innovation of business models. In the first one, we're revealing why you can only achieve breakthrough with innovative business models, and not with products or services.
 
The bright future depends on speed
The bright future of companies is directly dependent on how fast changes are introduced into business operations, of course considering the speed with which the competition implements changes. The speed is exciting for new players on the market but worrying for existing ones, because they can never know for sure where the next competitor will come from and what they will bring.
 
Disruptions come from everywhere
Innovations used to happen exclusively within a parent industry, but now disruptions come from everywhere. They don't only come in the form of cheaper and higher quality products or better versions of existing products, but more and more often in the form of new breakthrough business models that can completely change the conditions on the market.
 
Achieving breakthrough with a business model, not with products or services
Everyone is looking for breakthrough innovations, especially startup companies. We can only fight against it by tackling breakthrough innovation in the field of business models ourselves.
 
Why are we the ones doing this and not someone else?
Business models are defined with short and concise answers to questions such as:

• who are the customers,
• which problem are we solving for them,
• what value are we offering them,
• through what channel are we accessing them,
• what costs emerge in this process,
• how do we measure our effectiveness and
• why are we the ones doing this and not someone else. 

What’s the secret?
The basis of a good business model is that it effectively solves a problem worth solving, from the aspect of the market as well as the organization. Companies most often fail because of a bad business model, not bad business plans. A bad business model can't be fixed with a business plan, no matter how good it is.
 
Achieving breakthrough innovation with focused, not mass innovation!
Numerous organizations already have experience with collecting, assessing and upgrading useful suggestions. Ideas from mailboxes usually solve the simplest, cost-oriented measures. Only rarely does the mailbox contain a suggestion from which something so big would develop that it would significantly change the conditions on the market.
 
Primary decision and responsibility of the management
An alternative to innovation are lay-offs. Innovation can hardly be ordered, the only thing we can do is to enable and ensure conditions for it to happen. Future success of the company thus strongly depends on interpersonal communication and trust between managers and innovators.

 
Lojze Bertoncelj, MSc, 30Lean, and dr. Alexis Zrimec, Abelium, prof. dr. Miroslav Rebernik and Matej Rus, MSc (Faculty of Business and Economics, University of Maribor, and Venture Factory, Initiative Start:up Slovenia).