The Business Model Innovation Factory (BMIF) is the book we often use to explain and show why innovation does not work. Why this book and what can you learn from it?
First of all, it takes a fundamental approach to innovation, using the business model at its core. The premise of the book is that every business model can and will be “Netflixed”. Blockbuster, HMV, Sony, Kodak have all seen their business model destroyed. All business models are vulnerable. Your business model will be destroyed too.
Tweaking is not enough. Incremental change is not enough. Innovation in the context of your current business model is not enough. You have to go radical.
BMIF gives a few reasons why innovation does not work. Starting with the word “innovation” itself. The word is polluted and means too many things to too may people.
So why doesn’t innovation work?:
The book uses the analogy of builders refurbishing your house. People who have done that and decided to stay in the house with the builders, know it is near impossible. You are camping in the kitchen, the heat does not work, the internet is down, and it is full disruption. The same goes for innovation.
Real innovation needs full and unequivocal support from the senior management team. It needs to be kept independent from line managers. It needs to be a separate business unit (the Amazon Kindle is a shining example of how that can work), reporting directly to the CEO. The unit will need to ignore the current business model, ignore the legacy systems and hang out and collaborate on the edges.
Staffed by external people as well as internal staff who are willing to experiment and learn and operate as a lean start up.
In between this very solid advice the book also investigates the way that just as business life cycles are speeding up, so are career life cycles. During your career, you will need to reinvent yourself regularly.
It’s holiday season in the UK, the time of the year every company dreads, but every employee looks forward to. For business owners it’s a bitter sweet time of the year. I am no exception having just returned from an excellent weekend break to watch the F1 in Budapest.
In between the trips to the race track I did what tourists the world-over do, which is to explore. During one trip with friends we discovered a fantastic bar called Szimpla (http://www.szimpla.hu/). The Szimpla ethos is brilliant. When a building is deemed unfit for purpose, instead of knocking it down they take it over and set up a bar. Szimpla, by my reckoning, is an excellent example of how to turn something old and unloved into a business that is both exciting and profitable.
In business there can be a huge temptation to simply consider everything that appears past its sell-by-date as completely irrelevant. I know I have done this many times in my career, sometimes to my cost. This is especially important in the tech market, which a colleague of mine often refers to as nothing more than a fashion show!
We can really learn from this. I am a massive advocate for innovation, always looking for the next big thing to invent or focus on. However innovation should be twinned with a focus on reusing and recycling what you already have. Especially in this economic climate, it just makes complete sense.
This year's Small Business Week kicked off with the results of the latest Business Pulse Survey conducted by BT and their associated partners. Over 7,000 small businesses took part and the findings indicate a level of optimism to the tune of 75 per cent expecting to see an end to the recession by the close of 2010. The remaining 35 per cent are even more upbeat and state we will be clear of it at the start of next year.
One of the reasons for such optimism is the availability and vast improvements in technology for business. The bigger technology picture that we can draw from the survey findings detail that 61 per cent said that faster broadband speeds had had a positive impact on their business. 40 per cent said that better websites and ecommerce were benefiting them.
But for me, that isn't the best bit, oh no.
As a keen advocate of social media, it is encouraging to see this relatively recent addition to the marketing toolbox appear in the survey results as something which has registered on the radar of small businesses and is seen to be having a positive effect on their performance.
The stat that vindicates the banging of the social media drum reads as follows: '19 per cent of those questioned for the Business Pulse Survey said that social media, forums, Twitter, Facebook, etc, were having a positive effect.' The significance of this is that the need for such a statistic did not exist 12 months previously. Social media as a means of small business practice is on the up.
Having recently attended the Like Minds conference in Exeter, which examined the return on investment from social media, the support and need for social media business practices to be part of the small business agenda is ever increasing and it will be the innovative small firms which will capitalise on making the most of available technologies and be the wealth creators of the country.