Business Model Innovation is A Key to Surviving in Shaky Economic Climate
“Companies should devote R&D to new business models just as they do to new products. A new CEO today will need to preside over a changed business model three or four times in his career, but no one really knows how to do it. It’s not taught in business schools, and there is much to learn about how to manage a workforce that is no longer just within the four walls of an organization”.
AMEN!…and AMEN! This quote by Saul Kaplan, executive director of the Rhode Island Economic Development Corporation, from CFO magazine’s “Gaming the System” article, is fascinating because of the dearth of information in the media about innovation of business models. Almost always, innovation refers to products. My last post dealt with how TopCoder uses freelance competition to code software for it’s clients. Kaplan’s quote was raised in the context of applying the “competitive freelance” concept to other services- in this case freelance “C-level” types who have been through a few business cycles and business model changes.
I see it already in my own work. The idea of going from project to project for seasoned people is nothing new. But it is growing largely because more jobs are becoming information based because of technology that enables them. The question that the article raises is how other services, besides software development, can become competition-based, meaning you complete the assignment before knowing if you “win” the project.
I don’t think the kind of consulting provided by former C-level executives could fit the competitive model used by TopCoder. But I do think that business model innovation can be drastically increased by use of an outsourcing model- in fact, I think that the value of business model innovation is far higher than the value of product innovation. The key is unlocking the ability of the company to look outside of itself and it’s industry for the innovations. A PMO-like organization can facilitate this (refer to my “Choosing the Right PMO Vision Series“), and tapping into the multi-business cycle experience in the marketplace can further enhance it.
How do you manage business model innovation? Do you have a PMO and/or outsourced C-level expertise to assist? What is an example of where your company either increased it’s competitiveness through business model innovation or lost out to a competitor’s innovation?
Don’t miss a post! Subscribe via EMAIL and RSS.
Tags: Bob-Turek, business-model, CFO-magazine, competition, economy, economy-tightens, innovation, leadership, mentoring, PMO, project, projectmanagement411, software-development, strategyRelated Stories
POSTED IN: Best of the Best Practices, Solutions and Trends Requiring Projects
2 opinions for Business Model Innovation is A Key to Surviving in Shaky Economic Climate
saul Kaplan
Jan 26, 2008 at 2:19 pm
Thanks Bob We created a non profit called the Business Innovation Factory (BIF) to enable collaborative innovation. We are providing a platform for innovators from around the country that want to explore and test new business models. We make it easier to move new business model ideas from the white board to the real world. You can check out what our community of innovators have been up to at http://www.businessinnovationfactory.com . Saul Kaplan
Bob
Jan 26, 2008 at 2:42 pm
Saul- thanks for commenting. I hope you continue- we need your viewpoint among several that are regular commentors: an agile software development project expert, a leadership expert, and IT experts to name a few. I’m curious whether your definition of “innovation” includes new business processes for established companies and the standardized business processes that can enable it. As you probably can see, I write a lot about PMOs and PMO-like organizations that play an innovation role in companies mainly through research of innovation outside their company and industry, followed by supportive communications to top execs or governance boards. Hopefully you will join the give and take- like I said, your perceptions will assist many.
Have an opinion? Leave a comment: