The Business Model Innovation Factory - Chat 2 of Joint Chat Hosted with #smchat

DrewCM's picture
Chat Date: 
Thu, May 31, 2012

This is the second chat of two back-to-back chats being jointly hosted by #smchat and #innochat featuring Saul Kaplan, author of, The Business Model Innovation Factory, and Founder and Chief Catalyst, BIF.

Here's a link to the #smchat framing post. The chat transcript is attached below. (it's only 60 pages; I guess we weren't trying hard enough.)

Here's what Saul has to share in advance of round #2 in our joint chat.

How do we stay relevant when the world is changing? How do we reinvent our selves, our organizations, and our communities? How do we do R&D for new business models and social systems? How do we go from tweaks to transformation?  I wrote The Business Model Innovation Factory and founded BIF to share what I have learned over 30 years as a diehard change agent and to continue up this important learning curve together with a growing community of like-minded innovation junkies.

It is the innovator’s day. During difficult economic times people want fresh new ideas and approaches. But we have turned innovation into a buzzword. Everything is an innovation and everyone is an innovator. Of course when that happens, nothing is and no one is. We have to get below the buzzwords. In plain English: Innovation is a better way to deliver value. A business model is a story of how an organization creates, delivers and captures value.

Business model innovation is the new strategic imperative. Yet organizations routinely fail at business model innovation because they are so busy pedaling the bicycle of their current business models they leave no time, attention, or resources to design, prototype, and test new ones. Even where investments are made in innovation, they are typically focused on new products and services delivered through today’s business models and on making the current models operate more efficiently. These incremental efforts are necessary but not sufficient. Not in the highly networked 21st century, when business models don’t last as long as they used to and incumbents increasingly face the risk of disruption.

Having watched many organizations over the years as they recognize the imperative to change, yet somehow stay stuck in their old grooves, I’ve noted some patterns. Here are five important reasons that companies fail at business model innovation:

  • CEOs don’t really want a new business model
  • Product companies are blind to service model opportunities
  • Cannibalization is off the table 

  • No capacity to experiment with new models
  • Organizations shoot their business model innovators


We are all eager to stop admiring the problems and start exploring ways around them. Learning how to do R&D for new business models and social systems is the path to going from tweaks to transformation and to stay relevant in a changing world.  I look forward our upcoming innochat on Thursday May 31st.  Here are a few questions to help guide our conversation:

  1. Can we get away with small incremental changes or do we need bolder transformational change? 
  2. How vulnerable are organizations to being disrupted today?
  3. Can incremental changes in products and services prevent an organization from being disrupted?
  4. How can organizations transform their business models rather than tweak the current ones?
  5. How do organizations become market makers versus share takers?

A big thanks to Sharon Mostyn and Chris Jones from #smchat for reaching out to us to get this joint chat going. As well as thanks to Eli Stefanski, Katherine Hypolite, and Tori Drew from BIF for their great support.

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Business Model Innovation Factory
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