business-innovation

Business Innovation To Extend, Renew or Reinvent Your Business Model

Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.

Business vs. technological innovation

The primary misunderstanding about business innovation, which leads to inaction is believing that reinventing or innovating your business starts from technical implementations.

Innovating in business means redefining value for your existing customers to understand how to enhance it. Or determining what new value can be delivered to new customers with similar needs. Or yet, defining a whole new set of values to be delivered to a new customer base.

We can start the process by mapping our business boundaries.

Define the value customers get and your business boundaries

In order for you to redefine and innovate, you need to understansd first the current value your provide.

For instance, if you have a barbershop, are people just coming to you to cut their beards? Not really, many of those people might come to you for several reasons:

  • They want to look good
  • The place is near to their home
  • The environment is good
  • They like to talk to you

Based on the reasons above you can develop a whole offering of services and products. For instance, if you’re just cutting hair, why not sell some of the products you select to your customer base?

Understanding the needs of your customers help you structure an offering:

  • Sell-related products
  • Add-on offerings for related services
  • Simple offering with a flat fee
  • Subscription-service kit with curated products

Within and beyond your business boundaries

By setting the boundaries of your business and existing customer base, you can also define those experiments that would provide further value and enable your business to transform.

This also means being able to experiment with:

  • Providing more value to existing customers with an expanded offering
  • Create a whole new product for an existing customer base
  • Tweak an existing product to serve new customers
  • Or build a whole new product for a new customer base

Let’s see now some case studies and examples from how companies are reinventing or surviving difficult times.

Redefining value: case studies

value-proposition
A value proposition is about how you create value for customers. While many entrepreneurial theories draw from customers’ problems and pain points, value can also be created via demand generation, which is about enabling people to identify with your brand, thus generating demand for your products and services.

Google content hub

google-covid-hub
When you type “COVID” on Google you will find a whole content hub, which gives local news about the virus. Official national news. And also official medical advice on symptoms. Google transformed the whole intent-based search around COVID in a separate platform to help people deal with this crisis.

In some cases, a tweak of an existing product or platform can provide much more value to the existing user base. In the case above, Google has built a temporary platform on top of its search capabilities.

Airbnb virtual experiences

airbnb-online-experiences
The new Online Host Experience by Airbnb

Airbnb is experimenting with a new form of experience on the platform. By leveraging on its existing base of hosts, the company is inviting existing and new hosts to structure their online, and virtual experiences on the platform.

Uber’s work hub

uber-work-hub
How Uber leveraged its platform trying to support or perhaps engage the community of drivers which is a core element of Uber’s platform success (source: uber.com/blog/work-hub/)

As highlighted on Uber’s website “Uber Works, connects people to shift work like food production, warehouse, and customer service in Chicago, Dallas, and Miami.

Uber is experimenting with this program to sustain its drivers’ user base.

Beachwear making masks

beachwear-making-facemasks
How several brands are converting their production of beachwear into fashion face masks (source: hedleyandbennett.com/pages/wakeupandfightmask)

In some cases, you don’t need to reconvert the whole business model to make it survive in difficult times. All you need is to levarage on the existing capabilities of the business to come up with a product that people need.

That is how many beachwear fashion brands are converting their products into fashionable face masks, which will help the conversion of the business, while incentivizing people to wear masks.

From cars to ventilators

Car companies, from Tesla, to GM and Ford are reconverting part of their facilities to manufacture ventilators.

Car companies or companies, in general, are converting existing facilities to produce something in high demand right now.

From restaurant parking lot to drive-in cinema

What used to be the most valuable area of the business (the eating area) is becoming less so for many restaurant businesses.

Indeed, many restaurants around the world are figuring that their parking lot, indeed, can be used as a new business unit.

And in some cases, restaurants are partnering up with Cinemas to create a new experience, where people can drive in with their cars and watch shows in the parking lot. Here an interesting case study.

From valet service to drive-in click and collect

Where the business cannot be run physically, why don’t you convert that digitally? That is what some valet services are doing by introducing drive-through click and collect services.

3D printing COVID equipment

Decentralized manufacturing might become among the most important commercial use cases in an era where travel is restricted. That is why 3D printing companies are pushing to produce equipment needed during these times.

From co-working to virtual co-working

Co-working spaces are among the most hit by this crisis, and it’s hard to understand at this stage how to convert a business heavily invested in real estate to virtual, or semi-virtual.

It’s fundamental to ask “what value can we provide?” and redefine the services they offer.

People, like Seth Godin, are already experimenting with this new format with the launch of the Akimbo Virtual Coworking.

Now a service that might be offered for free, it might be leveraged by co-working companies to redefine their businesses.

From stage to virtual concerts

The Group called Real Estate launched Quarantour, a way for people to experience a sort of virtual music tour from the band on their phones.

From hotel rooms to quarantine rooms

Many Hotels are utilizing their spaces to accomodate people for quarantine. With restrictions in place, and people not ready to travel, hotel businesses are reorganizing their spaces to support the crisis.

From WFH to hotel rooms as offices

As working from home for many is impossible due to several reasons (small home, crowded family, too many children around) hotel rooms might become a sort of productivity heaven. Thus, some hotels might reorganize to offer those rooms as an alternative to offices.

So we move from co-working to hotel rooms as offices.

From influencers to infludancers

As the Chinese app TikTok, owned by ByteDance, gains traction. More and more people join in. And in this era of forced isolation, people rather than spending time to rethink their lives, spend time crafting from basic to advanced dances, which are very popular memes on the platform.

As those “infludancers” gain more and more attention, they might make the past made of influencers look something of the past. And they are figuring how to monetize the attention gained on this highly contagious platform.

Macrotrends

What macrotrends is this scenario pusring forward? For sure, that is acceleraging the development of industries that otherwise would have taken still years to develop.

Some of these areas go from e-commerce to blockchain and crypto.

E-commerce and forced digitalization

Many businesses that resisted for years the digitalization process are now jumping online to survive.

A crypto-friendly platform like Shopify (it facilitates payments via crypto) is seeing a surge in traffic, which is comparable to the Black Friday traffic level.

With a difference, that this level of traffic is now on a daily basis.

Remote working

In a recent blog post Zoom explained the explosion of usage on the platform:

We also feel an immense responsibility. Usage of Zoom has ballooned overnight – far surpassing what we expected when we first announced our desire to help in late February. This includes over 90,000 schools across 20 countries that have taken us up on our offer to help children continue their education remotely. To put this growth in context, as of the end of December last year, the maximum number of daily meeting participants, both free and paid, conducted on Zoom was approximately 10 million. In March this year, we reached more than 200 million daily meeting participants, both free and paid. We have been working around the clock to ensure that all of our users – new and old, large and small – can stay in touch and operational.  

While we can expect this phenomenon to normalize, there is no doubt, that remote working will become a key mode of work in the coming years.

Where mostly engineering-driven, digital organizations had already embraced that model, now many companies have been forced to that. And we can expect this trend to continue as it will not be possible for companies to declutter their office spaces in the short term.

From global to local tourism

As travel restrictions might continue in the coming months, usually crowded tourism locations will need to redefine their mission, to add as much value as possible to local communities.

Tourism then can go back to becoming local.

Remixing

In the book, The Inevitable, Kevin Kelly highlighted how among the forces that might shape our future, there is “remixing.” Or how economic growth in the coming years might be driven by taking existing resources to “rearrange them to make them more valuable.”

Therefore, for many businesses out there the answer is already there, it just requires (as we saw above) cretivity and willingness to experiment to make a business viable in this time.

In other cases, the change needs to be radical instead. In those cases, it makes sense to wait and see, and in the meantime trying to get support for your business.

Forced robotics

Where humans can’t be in the loop, robots might become the providers of basic services (in delivery services or assistance in the healthcare industry) even faster then we thought.

Where the political debate moved to make sure people would not remain jobless, it might move toward making sure the economy doesn’t stop, and robotics can be an important solution.

Forced cryptonomics

If central systems will be incapable of tackling systemic issues, decentralized solutions, like cryptocurrencies will grow even quicker. And that might make banks, and central banks less relevant in the future.

Forced blockchain

Where central systems risk collapse during hard times, decentralized systems might prove more robust.

Blockchain commercial applications are also moving faster.

coronatracker
A decentralized web applications promising to track Corona cases (CoronaTracker)

Key takeaways

  • Trends that required years of consolidation gained traction during uncertain times. With that, the whole market structure changes rapidly, thus calling for a quick assessment of where and how your business sits in the marketplace
  • Business innovation is not (primarily) a technical problem. It starts instead by redefining value for existing or new customers
  • In many cases, business model reinvention starts by reorganizing resources around an expanded value offering for the existing customer base
  • In other cases, it requires a whole new definition of value, and with that an important reorganization of the overall company
  • In some circumstances, business innovation is a matter of survival
  • And for others a matter of opportunity
  • Whichever scenario you’re facing, you can evaluate whether it makes sense to wait (look for government support), reorganize, or reinvent!

Related Business Concepts

Innovation Theory

innovation-theory
The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Business Competition

business-competition
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.

Business Scaling

business-scaling
Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.

Disruptive Innovation

disruptive-innovation
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.

Innovation Funnel

innovation-funnel
An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Four-Step Innovation Process

four-step-innovation-process
A four-step innovation process is a simple tool that businesses can use to drive consistent innovation. The four-step innovation process was created by David Weiss and Claude Legrand as a means of encouraging sustainable innovation within an organization. The process helps businesses solve complex problems with creative ideas instead of relying on low-impact, quick-fix solutions.

History of Innovation

innovation
Innovation in the modern sense is about coming up with solutions to defined or not defined problems that can create a new world. Breakthrough innovations might try to solve in a whole new way, well-defined problems. Business innovation might start by finding solutions to well-defined problems by continuously improving on them.

Growth Matrix

growth-strategies
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

Open Innovation

open-innovation
Open innovation describes a situation where a business does not rely on its internal knowledge or resources for innovation. They instead source ideas from external sources through the sharing of knowledge and in some cases, collaboration with other businesses.

Read also: Business Strategy, Examples, Case Studies, And Tools

Read Next: Lean CanvasAgile Project ManagementScrum.

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