10.1 Business model innovation
An important consequence of Markides’ approach is a need to innovate the business model. As Amit and Zott suggest, ‘more companies now are turning toward business model innovation as an alternative or complement to product or process innovation’ (2012, p. 41). In the future, this might include digital transformation and the integration of new and as yet un-thought of technologies which will radically change the way the way that organisations of types deliver their products and services. Importantly, this applies just as much to businesses as it does to public sector bodies, charities or any other type of organisation.
While this can be a positive, the process requires active management. One way to manage the process effectively is to apply models such as the Business Model Canvas (Osterwalder and Pigneur, 2010), which provides a clear and structured way for managers to analyse and rethink their entire business model by breaking it down into nine key building blocks each of which can analysed and understood.
Activity 11 Applying strategic innovation
How might your organisation or one you know well apply the strategic innovation framework in order to enhance creativity and innovation?
Innovation does not just happen by itself – it requires a coherent approach and a concerted effort to make it work. By applying the strategic innovation framework you can take a more structured approach and ensure that all aspects of innovation are considered.
For example, by analysing things from a strategic innovation perspective an organisation might ‘pivot’ to a new business model based on new opportunities they have discovered, or perhaps change from a B2C (‘business-to-consumer’) model to a B2B (‘business-to-business’) model. Equally they might change the products or services they offer, or change the direction of their organisation altogether. Adopting a strategic innovation approach can facilitate these informed decisions.
The way that organisations approach their innovation strategy can impact the way that they innovate. You will look at a number of more common approaches to innovation next.