Sustainable Value Creation: Securing success and exploiting growth opportunities by turning business model innovation into a process
The capability for successful and repeatable business model innovation is set to become the most prominent source of competitive advantage and of sustained, profitable growth and success and, consequently, of shareholder and stakeholder value. A systematic, standardized and comprehensive process of business model innovation that fits into the complete management system seamlessly is the precondition for it. Developing this process will become one of the most important management tasks in the coming years. The European Business Model Innovation Forum (EBMIF) has made it its task to develop a best practice guideline.
Business Model Innovation Framework of the EBMIF
Can a successful business model turn into a strategic risk for a company’s continuing success? It may sound like a paradox, but: Yes, it can, because the proven concept for success often has the effect of blinders that systematically prevent looking at developments and at what lies beyond the actual, existing business model. In most cases, these developments and their possible effects are discovered far too late. The consequence: the company is forced into the defensive against its competitors, its risks increase, prices fall, losses are made, and soon the survival of the company itself is at stake.
And this happens far more often than one would like to assume. One of the main reasons for this is that the diversity, scope and pace of change outside and within a company that can quickly turn into strategic risks have increased significantly in almost all industries. Consequently, the foundations of a previously successful business model can come into conflict with the competitive and market environment quickly and, initially, unnoticed.
The danger of such "systematic failure" of established success models can only be evaded by working with a system: Business model innovation has to be established in the enterprise as an institutionalized, systematic process. This is the only way a company can be successful in the long term and create new growth.
The real challenge, however, is to make sure that the new business model configuration is implemented successfully while at the same time ensuring that the whole process of business innovation is repeatable. The latter aspect is important because the company’s environment will keep changing in the future; the business model will then need to be adapted to these changes or be replaced by a new business model again.
The way companies today are used to act in a systematic manner in product development, i.e. based on a defined process, will equally apply to the field of business model innovation in future. To achieve this, all competencies relevant to business model innovation and that are usually distributed among a great number of individuals and departments, must be bundled and integrated by means of a systematic business model innovation process and secured in the form of explicit procedural knowledge.
Developing this process and institutionalizing it in enterprises will become one of the most important management tasks in the coming years. For most companies, this is unchartered territory. There are no generally accepted best practices in this area yet. The European Business Model Innovation Forum (EBMIF – see: www.iioe.eu/ebmif.html), a network that brings together professionals from companies from various industries, various business functions, and various European countries, has made it its task to develop these ...
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