the discussion about business model innovation
within an organization is to organize a workshop or
brainstorming session in which participants are
asked to radically reconfigure your current business
model. The workshop should bring together both
senior leaders in your organization and external
experts from organizations such as research institutions, universities, consultancies, and startups.
Several teams should be given the task of developing
a new business model that could challenge your
company’s existing model — using an imaginary
$10 million in seed capital. Without access to your
talent, resources, or existing brands, the teams will
have to completely rethink some of the assumptions
that underlie your business in order to organize a
new business model. After compiling ideas, workshop participants should discuss which new model
has the highest potential — and how the new models
could be further tested and developed.
An alternative approach is to launch an internal
accelerator program or innovation lab. Through
this approach, the core business gains exposure to
alternative ways of addressing the specific challenges the leadership team is grappling with.
Singapore-based DBS Bank Ltd. has launched a
“pre-accelerator” program aimed at promoting an
entrepreneurial ecosystem in the region. Through a
competitive selection process, the bank works with
startups to gain early customer validation of their
business models and provides mentorship from a
diverse network of experts. The startups ultimately
selected for funding get a chance to pitch to DBS
executives. Likewise, New York-based MetLife Inc.,
one of the world’s largest life insurance companies,
has launched an innovation center in Singapore
called LumenLab, whose mandate is to create new
businesses that are related to health, wealth, and retirement and that are targeted to Asian consumers.
Once you’ve hit upon how you could reconfigure
your business model, you must test and refine your
ideas in a rigorous, structured way. Testing the as-
sumptions around a new business model is the most
important capability that successful business model
innovators possess. And that makes a great deal of
sense, given that new business models typically pivot
several times before finding a formula that gains
traction. The companies that can test new business
models with focus and discipline are the ones that
are most likely to develop successful new models.
The future belongs to those who learn quickly.
Asher Devang is an associate, Christian Kruse an
associate, Andy Parker a principal, and Pontus Siren a
partner in the Singapore office of the growth strategy
consulting firm Innosight LLC. Comment on this article
at http://sloanreview.mit.edu/58217, or contact the
authors at email@example.com.
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