Leveraging your hidden assets through innovating your Business Model

We all want to strike that golden nugget of an idea - don’t we. But let’s not search for the fanciful and proverbial pot of gold at the end of the rainbow (I’m Irish - I was brought up on that stuff! 😉). Of course some will appear to ‘get lucky’ - but to develop effective and repeatable winning strategies for innovation I would always encourage you to head directly for Strategyzer’s Business Canvas Model.

Before we dive in, and to provide a quick reminder, the Business Model Canvas effectively describes the rationale of how an organisation creates, delivers and captures value. Rather than pages of textual based explanation, one of the superpowers of the BMC is it’s visual representation of the core business elements and their connectivity.  

You can loosely categorise the Model into three discrete areas:  

1. Desirability - Do your customers actually want it?

2. Feasibility - Can you build it?

3. Viability - Can you generate value?

4. …I know, I know, I said 3 areas - but, around the entire model is of course the operational climate, so Adaptability is a clear aspect to review and constantly monitor. Many organisations use a PESTLE style of analysis to provide the required insights for this.

So, using these aspects you can then reflect on each to understand how you could potentially innovate your existing business model(s):

1. Desirability converted to The Customer-Driven Epicentre (Customer Attractiveness)

2. Feasibility to Resource-Driven Epicentre (Business scalability)

3. Viability to Finance-Driven Epicentre (Value Differentiation)

So at the outset I discussed how ‘back office’ business levers could become incredible growth engines of the future, let’s now look at an example of one of these - Feasibility. So here companies review their existing key Activities, Resources & Partnerships to assess potential value propositions. Amazon is widely regarded as a highly innovative organisation with Jeff Bezos often discussing the many brilliant ‘failures’ which ultimately drive the successes. Operating a two-sided marketplace, providing a platform for buyers and sellers to easily interact and trade with each other, Amazon is the very epitome of addressing customer wants & needs…

Back in the early 2000s when Amazon was at the cusp of hyper growth, they struggled with scaling. Their internal core systems were simply not developed sufficiently to support their third party proposition to build on-line shopping sites on top of their own e-commerce engine. They addressed their internal issues by developing strong foundational systems which ultimately enabled them to achieve the scale and further take the market by storm. That foundational systems work was the beginning of AWS. Andy Jassy, AWS CEO, talks of an Executive team retreat where they completed an exercise to identify the company’s core competencies. After the expected identification of product selection, fulfilment and order shipment, they started digging deeper into what other skills they hadn’t considered. Jassy recalls that lightbulb moment when they realised that they had become highly effective at running infrastructure services. It was at this point that AWS became an actual value proposition rather than ‘just’ a back office feasibility element within their business model.  

AWS became the first to market with a modern cloud infrastructure when it launched Amazon Elastic Compute Cloud in 2006. Revenue Growth of AWS currently stands at $80Billion. With Gartner projecting an almost doubling of revenue growth over the next year, AWS will certainly continue to thrive. Not bad for a ‘back office’ capability!   

Are you adequately reviewing the potential nuggets within your business model?