I’m loving all the logical thinking in this excerpt from The Business Model Innovation Factory by Saul Kaplan. Lots of gems here; he does a great job of clearly identifying and explaining concepts and principles that are plainly true, including “Transformation is hard” and “We need to try more stuff.”
Sometimes tweaks aren’t enough. Sometimes nothing short of reinventing yourself, your organization, or your community is called for. The start of the 21st century is one of those times. If anything is certain about the new millennium it’s the pace of change. New technology relentlessly hurdles into our lives. Ideas and practices travel around the world at Internet speed.
Incremental change may have been enough at the end of an industrial era marked by me-too products and services, process re-engineering, best practices, benchmarks, and continuous improvement. We have built institutions that are far better at share taking than at market making. We have become really good at tweaks.
Most industrial era leaders never had to change their business model. One model worked throughout their entire careers. They could focus on improving their market position and competitiveness by making incremental improvements to the existing model. …Most leaders do what they are comfortable with and know how to do, they strengthen and become even more entrenched in their current business models. They add new products and services to the current model. They deploy technology to strengthen current capabilities. They extend the current business model into new markets. And they try to create favorable laws and go to court to block new business models. These strategies may create value in the short-term but none of these efforts to strengthen existing business models are effective for long in the face of a disruptive competitor that is changing the way value is created, delivered, and captured through an entirely new business model. Disruption is now the norm instead of the exception.