Idea in Brief
The Problem
Business model innovation is typically an ad hoc process, lacking any framework for exploring opportunities. As a result, many companies miss out on inexpensive ways to radically improve their profitability and productivity.
The Solution
Drawing on the idea that a business model reflects a set of decisions, the authors frame innovation in terms of deciding what products or services to offer, when to make decisions, who should make them, and why the decision makers choose as they do.
An Example
Traditional call centers hire a staff to supply services as needed from a place of work, incurring significant up-front costs and risks. LiveOps created a new model by revising the order of decisions: It employs agents as calls come in by routing the calls to home-based freelancers who have signaled their availability.
Business model innovation is a wonderful thing. At its simplest, it demands neither new technologies nor the creation of brand-new markets: It’s about delivering existing products that are produced by existing technologies to existing markets. And because it often involves changes invisible to the outside world, it can bring advantages that are hard to copy.
