| Business model innovation must be continuous and | | | | is very difficult. The difficulty is similar to answering |
| continually focused on the most important customer | | | | questions about what will be the most successful |
| needs, compared to what competitors are doing. | | | | new products of five years from now. But the |
| Do sports teams get better by practicing often, or | | | | question is critical to creating the ultimate competitive |
| by only practicing when they think they have been | | | | advantage through continuing business strategy |
| losing? Everyone who has played on a winning team | | | | innovation. |
| knows that regular practice is very critical for | | | | In such a highly conceptual area, organizational leaders |
| improving the group's performance. Working on | | | | often lose their way. What is the right direction for |
| improving business models is no exception. | | | | one time is often the worst for another time. That is |
| The idea is to be constantly reexamining, improving | | | | what happened to Polaroid when it measured |
| upon, and replacing your business models. As you do, | | | | business model innovation in terms of technology |
| be sure to also constantly reexamine the process | | | | rather than by a customer result. |
| you are using for this innovation. Most organizations | | | | Examining which measurements to use can help steer |
| find that they need to vary the process at least in | | | | you in the right direction. Linear Technology has |
| terms of the questions that are being asked in order | | | | benefited by trying to continually make power |
| to stimulate improved ideas, rather than further | | | | supplies of its customers products work longer and |
| development of old ideas down a overly worn track. | | | | better. At some point, however, improving the |
| After you have begun continually developing new | | | | power supply on portable electronic devices will no |
| strategic business models, you need to establish | | | | longer be the best use of Linear Technology's |
| measurements of your organization's effectiveness in | | | | attention in developing new analog semiconductors. |
| business model innovation and implementation | | | | The company could shift instead to establishing a |
| compared to key competitors and challenges. How | | | | measure of the value it is adding through solving that |
| are we doing? | | | | problem that could be compared to the value of |
| Many companies answer based on current profits. | | | | solving other important problems. Then, as other |
| That financial performance tends to be a function of | | | | problems rose to challenge power supply |
| the business environment and past actions. | | | | management as its primary focus, Linear Technology |
| Answering the question of how you you are | | | | would see the need to adjust its business model to |
| performing in business innovation compared to | | | | reflect these other areas. |
| competitors in gaining future competitive advantage | | | | Copyright 2008 Donald W. |