For a start, Alex Osterwalder has published two more Arvetica podcasts of note (mp3), here he’s talking with Scott Anthony of Innosight, and here he’s talking with John Hagel. How cool is that.

Some notes from the talk with Scott:

a first simple recipe to avoid falling victim to disruptive innovation:
- we must keep looking a the world through our customer’s eyes not by the way our companies are organized internally
- we shouldn’t just focus on our best customers. We must keep looking at the fringes, because it is there that disruptive innovation occurs.
- we have to create the organizational space for innovation. Else, the importance of running the core business will crowed out any innovative activity

And here’s the gist from the talk with John:

The podcast is about three distinct topics John has worked on: first, his approach to strategy, second, a concept he developed called “unbundling the corporation”, and third, “IT as a tool for strategic differentiation”. [...]
IT as a differentiator: John points out that IT is today becoming even more strategically important as a foundation for rapid incremental business innovation than previously. He explains this through new and flexible architectures which allow companies to continuously achieve IT innovation and keep a constant head start. This contrasts with the past, when companies made heavy punctual investments in IT innovations every few years, but were then copied. Finally, John also refers to the innovation potential of newer technologies that help people come together, collaborate and create value rather than just create savings through automation.

Pretty much what I am recommending all the time, especially when consulting.

The same topic is dealt with here (mp3), in a new favourite podcast of mine called Spark, which is published by CBC. It’s an interview with Nicholas Carr who speaks about his new book (“The Big Switch: Rewiring the World, From Edison to Google”):

[...] The Big Switch is about the massive changes this move to what’s called ‘cloud computing’ may have. For Carr, its effects go beyond the business of technology. Just as electrification changed North American life profoundly, the ‘big switch’ will change economics, culture, and society, raising questions about security, privacy and more.

Knowledge@ Wharton has excellent stuff too, see e.g. this podcast with Larry Huston, formerly of Procter & Gamble on their Connect + Develop program, and the challenges of making a company into a connected innovation company, i.e. building up the strategic capability to cooperate (here’s themp3). In the same direction here’s a short BBC In Business podcast called “Men In White”, asking if giant corporate research laboratories have outlived their usefulness (mp3):

Peter Day visits Xerox’s Palo Alto Research Centre in California, where the scientists hope their inventions will lead the next wave of technological innovation.

Then there’s an older interview (mp3) in the Knowledge@Wharton series on business model innovation that’s fueled by communities and social networks (“trying to harness communities to reshape their businesses”). John Spector of the Wharton School talks with Craig Newmark of Craigslist, more here.

I like Craigs approach to business, he disrupts and redesigns this media industry, while valuing corporate ethics and keeping “serving the community” at the center of business. More on him here.

This is an interesting case of applied business model innovation (perfectly fitted for a coming consulting and coaching assignment I am currently preparing for), that shows many traits of disruptiveness (for the banking incumbents, that is):

Wal-Mart is pushing new banking offerings, starting with the under-served, offering basic services, etc. But you can bet that they won’t stop there, and why should they. Commodity banking is an industry ripe for disruption.

Wal-Mart’s announcement this week that it is forging ahead with banking services [...] The company’s move is firmly in line with how it approaches new markets, but the approach is quite distinct from how US financial services firms have traditionally functioned.

Wal-Mart is circumventing its recent lobbying defeat by partnering with an array of third party firms, such as GE, to provide a wide array of services such as debit cards, low-cost check cashing, and money transfers. It will use its brick-and-mortar infrastructure to great effect, but will also leverage the convenience of banking while you shop and its reputation for offering excellent value (in a market where pricing can be more than a little opaque). The focus of its effort — for now — will be on the unbanked, including immigrants.

The firm is laying the foundation of a highly disruptive business. It will offer simple banking services, without the frills of branches, nicely-dressed staff, and drive-through tellers. While consumers may give up these now-standard features of the banking experience, they will gain convenience, value, and access (including the ability to set up basic accounts without all the Know Your Customer paperwork that hinders many who are currently unbanked). Wal-Mart is attacking a market that most banks don’t value very highly, and on turf where the firm’s asset and brand advantages give it a clear Right to Win. These are all harbingers of success.

While I like this analysis very much I prefer to differ with Steves proposed approach to business model innovation. For me, business model innovation and design offers many more levers than merely “working backwards from the value proposition”:

Business model innovation has become a fashionable term of late, but it is harder to execute than many firms perceive. It must start with the customer value proposition, and then work its way through to the profit system and the firm’s resources and processes. Unfortunately, many firms get this backward, fixing the profit system, resources, and processes in place, and thereby severely constraining the type of business model innovation that can occur. They would be well-served to chart their current model in a disciplined fashion, recognizing the divergences that must happen for the company to thrive in the new competitive environment. Then, they can systematically liberate the constraints that remove degrees of freedom from their desired response. It is not easy, but if it were then it wouldn’t be so profitable.

But this is only a minor disagreement, as the other elements are right on (oh yes, “it is harder to execute than many firms perceive”). This calls for professional business model consulting help … doesn’t it?

to help you learn how your organization’s innovation efforts compare in terms of:
- product and service innovation,
- operational innovation,
- business model innovation, and
- enablers of innovation

Found via this article by Clayton Christensen in Forbes. This is also interesting, e.g. when explaining why for every successful disruptor dozens of others have tried and failed:

But for every successful disrupter, dozens have tried and failed. Every executive knows that a strategy that looks great on paper can crumble upon execution. Companies moving in a disruptive direction need to manage a delicate balance: they need to constantly change their strategy while constantly pushing forward.

This calls for adaptive strategy making and over-making, and on and on.

For example, search king Google didn’t have it right from the beginning. It had to fundamentally rethink its business three times before it built the auction model that now powers its success.

and

To successfully fumble forward, companies should seek early wins while planning for their second and third acts. By pushing for early wins, firms can gather feedback to adjust inevitably flawed strategies. Planning for follow-on acts ensures that companies don’t get “stuck” in a foothold market.

On the role of knowledge management, related systems and the importance of knowledge brokering and gardening in the innovation process:

Q: Is there a formal process for tapping into the knowledge of your workforce?

Mark Johnson: We have formal processes for doing this but they’re not mechanistic. That said, we tap into the knowledge of our professional staff by having bi-weekly “brown bag” lunch meetings. We also transfer people around, working in different team compositions to transfer ideas and insights to new groups. We also have formal training events where we expect each person of our professional organization to have a teaching role at some point throughout the year. Finally, we leverage knowledge through an on-line management system, enhanced by an individual at our company who works half her time “pushing” the system out to our employees.

This is interesting stuff, basicallly because they have done a number of interviews to shed light on the issue, and because they got it right: business model innovation is not easy, and it’s even trickier to transform a company’s business model.

My dissertation research builds on case studies, which are used as exploratory means, to gain insight. One of ‘my’ case study companies is mentioned as well: Apple iTunes. This is no hard guess – they are extremely good at business model innovation.

By the way, my dissertation is well under way now, hold on it’s coming …