Business Model Innovation – are you building organisational resilience?

Given the last few years have shaken most companies to the absolute core – let’s start with building a Resilient Company

Steve Blank’s brilliant quote perfectly illustrates the importance of why every company needs to build capabilities and drive efforts in the areas of both ‘Explore & Exploit’.

Unsurprisingly, most companies focus on the Exploit side, namely driving efficiencies in and optimising their core business model, after all it drives revenue (and ultimately pays the salaries!). However, great, and resilient, companies ensure that they also invest effectively in exploration of business model innovation for the future.    Yes, I hear you say – we do lots of innovation, we have a pipeline / funnel full of projects. I would hope so too, but are they transformative in nature or aimed more at efficiency and sustaining existing business models? The team at Strategyzer often start their C-suite awareness sessions with a simple, but highly effective, exercise of reviewing all the key innovation projects and get the execs to plot their projects across the 3 key aspects, as shown below:

In most cases, it appears that the teams consider that they have a good weighting across all three areas and that they are focused on driving innovation in transformative business developments. Yet, during insight discussions, in most cases we see a significant shift of post-its move to the right-hand side. Many times this is because innovation is still viewed in relation to ‘product or service line’ rather than on the business model itself. One telling aspect to review is how often innovation is discussed at the c-suite level. Is it weighted in the same way as the ESG agenda which has certainly garnered a justified mandated status?

It may be a good time to relook at your innovation portfolio and review it through the lens of these categories in mind. Are you innovating to exploit your core business models or are you really exploring transformational opportunities, and in doing so building resilience for future ‘headwinds’? In Steve Blank’s words, your pension may rely on it! 😉