Five Reasons Companies Fail at Business Model Innovation – HBR
Wednesday, 26 October, 2011 4 Comments
Several years ago when I first read these words from Clay Shirky they really resonated as far as my own industry [insurance] was concerned.
“It is easier to understand that you face competition than obsolescence”
In the intervening period a great deal has changed…not necessarily for the better. But too much has remained the same. As I read recently “Nowadays, competition is mainly taking place between business models rather than just between products and services…”. It is true.
Business models that are unsustainable but still function in the current environment, are now showing the outward signs of frailty. Fragile businesses lack the agility to adapt for survival in a post-critical financial landscape.
Bankers were better equipped than dinosaurs to detect the “tipping point” of a paradigm shift….but still failed. Don’t be a dinosaur and be wary of getting too close to those who are, because their demise will, most likely, be sudden and all in the immediate vicinity will be crushed.
The following is only one point but PLEASE read the the article in full because “too big to fail” is a well-crafted myth.
CEOs don’t really want a new business model.
The most obvious reason companies fail at business model innovation is because CEOs and their senior leadership teams don’t want to explore new business models. They are content with the current one and want everyone in the organization focused on how to improve its performance. The clearest indication that a company and its leaders aren’t interested in business model innovation is when any discussion about emerging business models and disruptive technology is viewed and treated solely as a competitive threat.