A High-Level POV on Innovation

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January 1, 2014

Briefly this is how we think of Innovation, a Point-of-View that informs our work.

  1. The enterprise is a system embedded in a context whose purpose is to sustainably create value and a positive surplus for its stakeholders.

  2. The enterprise system comprises of the following key elements:

– Value-Creating and Capturing entities (aka Business Model/s).
– Offerings that co-produce value with other stakeholders.
– A Value Platform (aka Enterprise), that supports the business models and creates shared resources.
– Business Models also consist of various processes.

  1. The objectives driving the innovation initiatives are often diverse – A business and competitive necessity, desire for distinction, growth or performance improvement.

  2. All the above elements of the system – Business Models, Offerings, Processes and Platforms provide opportunities for innovation.

– While any one of these might be the subject of an innovation project – all efforts maintain the integrity of the whole system, which is why we prefer to start there.

  1. Innovation is as much a discipline as it is an art.

– The Whole Enterprise must participate – It is essentially a collaborative effort.
– The Enterprise must manage the effort with a disciplined approach – ‘Total Innovation Management’ ( this is similar to the notion of TQM, an idea we have come up with).

  1. We focus on the TIM discipline to ensure impact and outcomes.

– The Dynamic capabilities of Innovation are complemented by Strategic and Operational capabilities, all of which an enterprise must excel at.
– It takes time to develop these capabilities and we recommend a progressive focus on growing the maturity of capabilities to take on more ambitious innovation efforts. Disruption does not happen overnight.
– The discipline of TIM is codified in our Methodologies.

  1. The basic approach to Innovating any of the dimensions of the enterprise relies on:

– Developing a deep understanding of the ideas underlying the design of particular object of focus through Modeling (Business Model, Offering, Enterprise, Process etc.) and Validating its viability in a desired context.
– Expanding and Reframing these underlying ideas and principles provide the sources for innovation.

  1. Innovations are interventions in systems (Value Receiving Systems) by systems (Value Creating systems).

– We understand how change and the introduction of something new impacts the creators and receivers of value.
– This sensitivity informs the design, innovation management and execution processes of our methodology, ensuring successful adoption and impact.

  1. We use techniques from the following to expand, design and innovation spaces, to find new and interesting intersections and confluences.

– Foresight,
– Insights (new developments and understanding of his things works),
– Needs (detailed understanding of the needs of those served),
– Drivers (New Developments, Drivers of Change), and,
– Looking ‘Sideways’ to other systems, in order to expand our Design and Innovation Space-Time as appropriate.

The Science of Disruption – A suggested Roadmap to Enterprise Capability

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November 7, 2013

All enterprises naturally desire and intend to be masters of their destiny, which implies not only survival but having an enduring and positive impact within their ecosystem of operation. In addition to delivering value to their targeted constituents, while that certainly constitutes making a positive impact, enterprises also want to grow, generating surpluses for their stakeholders and as insurance against being displaced by competition.

Disruptive innovation is a popular idea in business, and to me it connotes the ability to reconstruct a system anchored around one’s preferred value architecture.

While true disruption is a matter of fundamental reconfiguration around a new paradigm, for the sake of this discussion, we can also think in terms of relative impact – a significant reconfiguration of the ecosystem, even if partial could be considered disruptive.

Disrupters may or may not be incumbents, but to obtain that degree of power or influence is clearly an indicator of being in control of one’s destiny. In that sense, an enterprise would want to achieve a strategic innovation capability that would allow it to master its ecosystem and disrupt it for proactive leadership.

How one acquires such a capability is what this post is about.

Taking on a system and radically shifting its center-of-gravity or reconfiguring it around a new paradigm is non-trivial and therefore building such a capability is not something one can expect to accomplish overnight. However, in order to be a master of one’s destiny, one has to develop such a capability to the extent possible.

The roadmap I propose takes an enterprise through five stages, not necessarily to be interpreted as sequential, but as indicators of a progressive increase in capability and maturity.

Built into the idea of this road map is the notion of three horizons – a short and immediate horizon, a medium term horizon and a longer-term one. The length of the horizons depend on industry and context, but about 3-5 years for Horizon One, 5-10 years for Horizon Two and anything longer than ten years for Horizon Three would be good rules of thumb.

The stages I describe below follow the convenient acronym – BUILD which stands for:

Baseline – Uncover and Understand – Increment – Leapfrog – Disrupt

Increment, Leapfrog and Disrupt correspond respectively to Horizons One, Two and Three above. I do not think of them as sequential, but as together constituting a portfolio of interlinked initiatives, simultaneously undertaken, almost on a rolling basis. As the enterprise matures in its ability to enact significant systemic changes, what constitutes incremental innovation or leapfrog might also change.

Implied also is an overall framework that undergirds the roadmap, a framework for building an innovation ecosystem that learns throughout the process.

Baseline:

One of the first steps in this journey is to develop a very sound and detailed understanding of one’s system. The purpose of this step is to develop a wide and shared understanding of the extended system that is the enterprise. As I have discussed in other posts, the overall system at a high-level comprises of many entities such as:

– The Value Creating System, which includes the Enterprise as a co-producer of value. Baseline models would include business models in their extended form.

– The Value Receiving System, of which the enterprise is also a part, in its role as a co-producer but is primarily constituted of the clients or the receivers of direct value ,

– The internal context in which the enterprise operates, including its governance, its strategic architecture that describes it mission, vision, and key stakeholders

– The external context including its industry, the competition, regulatory bodies etc. and,

– Any other external entities that might have a bearing on its ability to realize its purpose.

Uncover and Understand:

The roadmap to developing the ability to disrupt substantially relies on a deep understanding of the underlying assumptions and beliefs that inform the design of the enterprise. What the baseline describes is one realization or manifestation of these assumptions.

The continual questioning of these assumptions at their deepest levels are the true source for expanding and broadening the potential spaces for innovation, some of which could lead to disruption.

This therefore is a crucial stage in the evolution of the enterprise. The purpose is to build shared models and expose the under-structure of the enterprise, so that it can serve as a reference for analyzing impact of changing contexts and emerging opportunities.

All the subsequent stages described here below, are first attempts to broaden this space and identify in it locations for creating innovative value. Every dimension of this space is a possible vector for exploring innovation.

While, I refer to it here as a stage in the road map, in reality, an enterprise constantly endeavors to expand this space adding new dimensions to its definition and by stretching its boundaries.

Increment:

This stage also corresponds to what I termed earlier as Horizon One. While the enterprise certainly must keep an eye on the long-term, exploiting opportunities on hand in the short-term provide a foundation on which more complex capabilities are built.

These short-term opportunities provide valuable learning experiences and returns. However, they may not necessarily contribute directly to a future disruption.

Leapfrog:

The idea of Horizons implies the ability to look towards the future. While Horizon Three opportunities are not completely certain, there are many opportunities that can be considered emerging at any point of time. These are opportunities that show early promise and the enterprise must develop the ability to identify such avenues and exploit them to early advantage.

While such innovations might not be considered disruptive, they can become a source of distinctive competitive advantage and allow an enterprise to leapfrog the competition.

Disrupt:

Some of the literature on disruptive innovation illustrates how under certain conditions, new ideas can penetrate an ecosystem, ‘under the radar’ in a manner of speaking, and eventually lead to disruption.

While that is certainly true and possible, the approach I describe is based on developing the ability to disrupt by design. Intentional disruption is founded in a mastery of the dynamics of the system, a deep understanding of its mechanics and leverage points. Systems of our interest are often socio-technical, and fundamentally human. It is that multi-textured insight and knowledge that allows an enterprise to expand its innovation space and shape the configuration of value.

In Closing:

There are many systems in our world that are dysfunctional and good candidates for systemic innovation and disruption. In a separate post, I will review recommendations on how one might successfully undertake such innovation.

It suffices for now to understand that the capabilities that an enterprise has deliberately built through this road map will position it to take on such a challenge.

We need a new perspective alright.. but..

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October, 30, 2013

I came across a nice blog post by Peter Vander Auwera about disruptive change and how it points to a new humanism in Banking.

Disruption is on everyone’s mind and in this case the reference is to the accelerating change in the industry along many dimensions. Clearly people are challenged to figure out how to respond and not just in the Banking industry.

The question is, how does one respond to such complex and multi-dimensional change? In the post I refer to, the author argues for a response based in humanism, which as he describes towards the end of the post is about ‘relationships, intimacy, depth and human connection’.

That sounds quite similar to the argument many in the Social Business world are making, and a recent discussion seems to suggest there is some disillusionment creeping up there. I will discuss that issue in another post, but some of that disappointment expresses frustration in that – the argument has not found much traction. Does that just mean that enterprise leaders do not care?

I want to reflect on the notion of responding to complex external change that I have an acronym for – VACUUM! Volatility, Ambiguity, Complexity and Uncertainty we are familiar with – I added Unmitigated Mess to those four, for that is the intractability we often find ourselves dealing with.

I think it is indeed important to think in human-centered terms – in fact, a post I wrote earlier today, talks about Value Receiving Systems and these are indeed social systems as much as they also have technological and other dimensions.

But the idea of value that is solely defined in human terms does not quite convince me.

The architecture of value is complex and has many dimensions. Some of these dimensions indeed are social and correspondingly human, but they only form a part of the total narrative. Nothing in this complex world today points to solutions in any one dimension.

We must learn to see things systemically and create systemic value solutions with enterprises that are in themselves complex Value Creating Systems, if we intend to be able to master this complexity and obtain successful outcomes.

Beyond the Surface – Pointers to the need for Business Reinvention

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October 30, 2013

Often when we think of advertising, we think of it in terms of the conventional purpose it serves – to inform and influence a target audience. In the context of branding the discussion does become broader and starts looking at the whole business model, the value proposition, the reputation of the enterprise and its ability to deliver among other things – a more holistic and systemic view. However, we do not often hear of that discussion leading to the topic of business invention.

With the radical and disruptive revolutions all aorund us in the digital world that touch all aspects of how consumers relate to information and thereby a company’s value proposition, it is hardly surprising that the world of advertising is undergoing rapid change too. The Fast Company article – ‘The End of Advertising…’, describes some of the key elements of advertising that will be different in future:

  1. From Integrated to Connected

  2. From Brand Story to People Story.

  3. From 360 to 365

  4. From Media disruption to Business Invention.

Each of the first three bullets points to interesting insights into how things have changed in our understanding of how people behave and relate and particularly phenomena that have become significant in the digital universe.

Each understanding when taken in isolation, such as the need for deep connections, the importance of touching people through stories, ubiquity of connections in space and time, creates creative advertising options such as are described under each of those bullets separately.

It is the last bullet about business invention that particularly caught my attention.

“Creativity and innovation are about finding unexpected solutions to obvious problems or finding obvious solutions to unexpected problems. We should use our creativity to provide better businesses and solutions rather than constantly trying to disrupt what people are doing.

Campaigns or products, if they are not worthy of people’s time, will end up polluting the world–literally and metaphorically. As we forge ahead into the post-digital, all-mobile era, 360 Degrees of Integrated Campaigns to tell Brand Stories via Media Disruption may no longer be as effective–and quite frankly, as necessary – as we thought.

Brands should aim to solve real problems by providing Connected Services over 365 Days and by Inventing new Businesses that benefit People, not just the Brand.”

The insights described in the first three bullets become one of the sources for expanding the space for innovative business designs. In the ‘FINDS’ framework for where to look for opportunities, it is the ‘I’ for Insight.

Business Reinvention

There are many sources of potential disruption to business models today. If we only pay attention to one of those in isolation, we might indeed enjoy temporary advantage.

However, the ability to create enduring advantage requires a systemic approach – a need to synthesize the various insights gained from trends, foresight, internal assets, and looking ‘sideways’, to create disruptive business models.

Crowdfunding Platforms – Foresight for Business Model Innovation

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2014

As we continuously seek to make sense of the world around us, seeking patterns that might indicate something, the one most frequent source we rely on is trends. In the world of technology, not a day goes by without some article or post on trends.

I came across this interesting post on the trends to follow in the coming year. The post suggests that funding patterns for successful projects on Kickstarter provide guidance on trends to follow.

The chart below shows the 100 most successful projects – The analysts (at SimplyZesty) used various measures such as total value of pledges, average pledge size, number of pledges received and so on (see original post for more details).

Categories of 100 most successful technology projects

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Fig 1: 100 most successful technology projects on Kisckstarter

The following chart shows the projects with the highest number of individual backers.

Most backed projects

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Fig 2: Top five projects with the highest number of individual backers

People who fund projects on Kickstarter are a combination of entrepreneurs and consumers. They like a product idea, understand the risk that even though they have seen some evidence, the idea might eventually not make it or work.

Some of the projects on Kickstarter are there because conventional methods of raising money did not work, and others because they consciously chose this crowdsourced funding channel.

In any case, the people that fund these projects are pioneers or early adopters in marketing parlance. If we trust their judgment, and we have to look at this information somewhat differently from the situation than if these graphs had showed projects that had received funding through formal financing channels such as VCs.

The questions this analysis raises are: who then benefits from looking at this information and following these trends? What sort of action should one take as a result of this analysis? Is this a test for the formal financiers to step in? As an individual, does this give me some confidence in investing in upcoming firms? Should these trends be triggers for examining how something might impact a business model that you are invested in?

The answer is of course yes, depending on what your interests are. The key insight is that indirect sources such as Kickstarter and other similar crowdfunding platforms are crucibles for emerging interests and an important new resource for developing foresight, understanding implications for business models and anticipating opportunities for disruptive innovation.

Is the Corporation at odds with the Future?

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2014

It is common knowledge that the horizon beyond which the fundamentals of the context in which any entity, business or otherwise, operates is shrinking in an accelerated manner. The Future, the one that you did not design the organization for, comes closer every day. Note how I define the future here – it is just past the boundary of what you know with certainty.

To a large extent the pieces and fragments of what will be the future are public knowledge. The contextualization of those pieces to one’s own situation and filling in the few gaps that remain, is what corporations do not do well enough. The surprises are mostly always context-specific; such as the invalidation of a business model. The business model in fact is an excellent framework with which to understand and evaluate implication of developments.

The challenge then is firstly one of cognition, the well-known reluctance to override or get around the filters that define prevalent business models and prevent one from seeing the implications of an emerging future.

Secondly, there is the reluctance to take the specific steps required to contextualize the knowledge in one’s own domain of interest.

Finally, the real challenge is the lack of motivation to mobilize action that requires stepping into a reality of ongoing paradox.

I came across this article by Grant McCracken that exhorts organizations to become future-sensitive being as he says, at odds with the future. (The language quite borders on the poetic.)

In a nutshell, I recommend that organizations develop a systematic foresight practice. But that alone is not enough.

The enterprise must also develop a number of other capabilities that form the platform for living with accelerated change. Without some competence in that space, the enterprise is paralyzed into inaction. It tends to procrastinate and delays action till a point when the only course has to be drastic and radical.

There are a lot of developments happening today that would enable the increasingly fluid and liquid enterprise architectures that the future demands. These designs are on the horizon today.

With the focus on developing the required capabilities and competencies required the enterprise will give itself a better shot at longevity.

The Innovation Cosmos and Total Innovation Management

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2014

The urgency and necessity of Innovation is now common knowledge. We are hearing the term on many fronts – even President Obama finally mentioned it in his speech on election night.

Just as Total Quality Management (TQM), several years ago, managed to create a pervasive awareness and discipline, that enterprises now practice as a matter of routine, so I believe, there is a need for a Total Innovation Management (TIM) movement, with its unique Bodies of Knowledge (BoK) and a commitment to the systematic effort required to achieve desired outcomes.

Just as the previous initiative understood that it would need to be a system-wide transformational effort, the TIM movement will promise rewards to those who take on the challenge of making deep rooted transformational changes in the entire innovation cosmos.

The Innovation Cosmos! I use the word ‘cosmos’ carefully and deliberately here, distinguishing it from ‘ecosystem’. A cosmos is encompassing and includes many ecosystems. We need this distinction since there are ecosystems associated with the Value offering and its architecture, and most large enterprises have many value offerings with distinct architectures, each with their own constellations or ecosystems.

The word ‘cosmos’ is tempting too – for it leads me to the trinity idea, the three pillars of a comprehensive Total Innovation System: The Value System, The Renewal System (Creative Destruction – detached from the Value System), and the Strategic System.

The Value System is the totality that creates value in a given context. It includes the constellation or ecosystem of entities that together produce value on an ongoing basis. Embedded in this complexity are many nested levels of entities, all of which are involved in bettering themselves, innovating, exploring and exploiting. In an ideal situation, the Value System is self-renewing. However, creative while it is, it is also committed to the Value it delivers, and in that commitment, does not stray far from its original design.

The Renewal System is however an idea that is detached from the operational concerns of the value system. It has its eye on the dynamics of the context, and understands the constant shifts in the need spaces (Value fulfills Needs! The need space is a broad idea into which many value systems coexist). Should the need arise to create a distinctly different value, a “Blue Ocean” moment, it dispassionately deconstructs the existing Value Systems and creates a radically different one, serving in the process the interests of the superordinate Strategic System.

The Strategic System establishes the purpose for the Innovation Cosmos. It establishes the parameters within which the multiplicity of Value and Renewal systems must harmoniously operate. It decides which ones may or may not exist that align with its intents and values. The strategic system has a higher cognitive complexity, it has a sense for the whole, it has insight and foresight and makes available the oceans of resources and assets that the rest can draw upon.

While it seems as if these three systems are distinct entities, they are only conceptually so.

It would be an indicator of the maturity of an Innovative Enterprise, where these functions are indistinguishable, where there would be a pervasive awareness of the whole and the capacity to evolve and transform well-developed at all levels.

However, while that would be a desirable end-state, organizations must develop each of these systems individually and in tandem, mastering each consciously before they eventually become routine practice.

Are there short-term low-hanging fruits to be picked? Of course there are, and no one should ignore those opportunities. But also realize that to create a sustainable edge, a true competitive advantage over the long-term, you will need to a Total Innovation Management initiative.

10 Rules for Strategic Innovators – 2

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2014

This is the second part of my reflection on the 10 Rules for Strategic Innovators book.

The fundamental argument of the book as I had said earlier was that the complexity of strategic innovation, the fact that there is no experience to draw upon, makes it necessary to use an experimentation-oriented approach.

This would lead me to think of a couple of things:

Experiments are risky, there being no guarantees of success
There are no well defined viable paths to specific goal, in fact, it might not even be possible to foresee the exact outcome or end-state of the experiment
The old organizational designs and business models cannot be relied upon, and one must architect new designs appropriate to the context
Being that it is an experiment, and that the risk is high, one would need to learn and react quickly when the outcomes are not aligned with the business objectives.
Rallying a team to a somewhat fuzzy and risky cause might not be easy
A new set of management skills are called upon to handle the fuzzy and complex initiative

This understanding of the nature of the challenge at hand would then lead us to the approaches we need to take to mitigate the risks and ensure success. In fact, the definition of success would need to be flexible and iterated as well.

The experiment however is being executed within the larger confines of an existing enterprise, with its own ways of doing things. Strategic decision-making, approaches to risk, rewards and recognition and the implications of failure are all aligned to existing and perhaps successful business models. Applying the same lenses and frameworks to a strategic experiment would naturally run counter to what we have listed as the distinguishing characteristics of the effort. These aspects of the potential obstructive influence of old practices on the strategic experiment are not recognized and might get carried into and applied to the new venture, thereby creating a risk.

In a nutshell, the strategic experiment is a nascent enterprise in a radically different context as far as the existing enterprise is concerned. In order for it to succeed it must be designed so that all aspects of the enterprise system are aligned to its purpose, and if they are to be shared with the parent, must be modified or flexible enough to meet the new requirements.

The authors identify three challenges in this regard; forgetting, borrowing and learning.

Forgetting refers to the need for the organization and the new venture to forget what it might have learned from experience in other contexts. The new effort calls for a new context including customers, business model and competencies – and most importantly the assumptions and mental models of the old business would not apply.
Borrowing refers to the fact that the new venture would need to use some of the resources and assets of the existing enterprise, but should do so thoughtfully. These assets include customer relationships, partnerships, systems, shared services etc
The Learning challenge refers to the fact that being an experiment, it is crucial to learn and incorporate learning rapidly. The authors suggest that the way to know if learning is happening is through the improved accuracy of predictions. This is a way to reduce performance and business uncertainty, a key strategic metric from the perspective of assessing the investment. Till the new venture is properly established, the systems must value learning over accountability.
Doing these three things well, and creating a new DNA of Staff, Structure, Systems and Culture will ensure that the new venture will be nurtured with the mindset appropriate for a strategic experiment.

10 Rules for Strategic Innovators – 1

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2014 I am in the midst of reading “10 Rules for Strategic Innovators” by Vijay Govindarajan and Chris Trimble. As I reflect on what I am reading I will write a series of posts – not so much as a review of the book, but the thoughts it triggers.

Before I picked up this book, I was revisiting “Blue Ocean Strategy”, “Business Model Regeneration” and a number of other well-known texts on Strategic Innovation. ‘Blue Ocean’ certainly is about Strategic Innovation, in that it looks at the architecture of value as a starting point before it gets into business models.

Accordingly, once you have understood the dimensions of value you can play around with them in different ways to create unique uncontested configurations, which then become the basis for one or more business models. I will reflect on Blue Ocean Strategy shortly, so will leave this topic for now. My intent of bringing that reference and other books was that there are a number of other sources that discuss “Strategic Innovation”.

The subtitle, which you see on the inside cover flap (should you have a physical old-fashioned object), gives you an accurate gist of what this book is about – “How to build a breakthrough business within a profitable old one”. This book is focused specifically on those businesses that are currently profitable, and for various reasons are pursuing a new strategic opportunity that is distinctly different from the existing business. It therefore does not discuss ways of identifying breakthrough ideas, but focuses rather on execution.

The term ‘Strategic Innovation’ is mentioned often in the context of innovation, though as one can expect, interpretations vary. I have been thinking of it more in terms of the nature of impact innovation has on the enterprise. Strategic Innovation is not just about the degree of impact, or about business models, but rather that which is radically distinct from anything the enterprise is currently doing or done before, and therefore transformational. Strategic Innovation would certainly involve new business models, but the reverse, in my opinion, is not true. One could innovate an existing business model with a significant impact, but it may not necessarily take the enterprise on a radically different strategic path.

Similarly, management researchers seek an organizational code—a set of rules that can reduce dysfunctions, sustain growth, and lengthen the average corporate life span beyond that of a human being. The code will have to enable strategic innovation: a process of exploring experimental strategies.

Strategic innovation involves testing new unproven, and significantly different answers to at least one of the three fundamental question strategy: who is your customer? What is the value you offer to the customer? How do you deliver that value?

I like the notion of organizational DNA. I have been thinking of business architectures as “value design systems” – design systems that once put in place can create a range of value within a range of contexts. The second line in the quote above puts the emphasis on experimentation and testing. I think experimentation is very much a part of the whole innovation process. However, I do not think you can exclude the critical activity of identifying significant opportunities to pursue from the overall umbrella of strategic innovation. ‘Strategic Experimentation’ though is what the authors emphasize on as critical to making strategic innovation real.

Underlying this emphasis on experimentation is the thinking that strategic innovation requires dealing with a significant amount of ambiguity and uncertainty. It is therefore not possible to make concrete plans to execute an idea in the conventional sense, and experimentation therefore is integral to the execution approach, at least in the beginning.

The approaches discussed describe ways to work through this uncertainty, a process termed ‘strategic experimentation’. Correspondingly, if the uncertainty does not exist or has been reduced due to for example another competitor having already tried the approach, then it does not qualify to be termed “strategic innovation” according a list of several criteria in the introduction. Distinguishing strategic innovation from other forms such as process or service innovation, the authors specify that such innovation always involves unproven business models. I wonder if this is necessarily true. Is it possible to come up with a strategic innovation, but you are able to replicate or borrow from a business model from some other domain.

Strategic Innovation is critical in the increasingly challenging business context in order for enterprises to stay ahead and be able to influence their own destiny. With the shift in emphasis in strategy from planning to innovation and change it is a competence business must develop, and this book proposes to show you how.

Value Architecture – Building an Innovative Enterprise

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2014

As I think more about Enterprise Innovation, I am of the opinion that the place to start is the Architecture of Value. I was researching what others might have said about the topic, when I came across this post – Value Architecture – Building an Innovative Organization.

The article gets close to my thinking but still has some significant differences. Here are some highlights from the article:

Even though the context of business has changed, strategic thinking, creativity and innovation remain on the minds of executives. In particular innovation needs to be incorporated at the highest levels and executive education programs have started reflecting that emphasis. It goes on to say that it is not enough to focus on product and service innovation, and focus on business models. It then brings up the concept of “value architecture”.

“Every company has ‘value architecture,’” says Williams whose research focuses on business model innovation. According to Williams, this value architecture defines how a company manages its resources and the unique ways it adapts and changes according to the external environment. Today’s leading companies are redefining their value architecture and building new business models, now becoming predators not the protectors of the traditional models that made them.”

I have a different notion of what that term means. Perhaps drawing from “Designing Interactive Strategy – Normann and Ramirez“, I would like to consider the ‘Architecture of Value’ in terms of its dimensions, the attributes that matter, the end-users and other stakeholders that form the extended constellation, and the distribution of activities among the various players. It is the understanding of what is important, the extended ecosystem that value touches, and therefore who participates and how in the lifecycle of value creation, that begins the process of strategic innovation.

Clearly the enterprise is one player in this ecosystem and must understand this relationship. The allocation of activities in the constellation is the first step in the design of the value creating system. Once we understand the role that the enterprise will play, only then can be begin to design an enterprise that manages its resources effectively while it flexes and adapts in response to its environment.

Often the opportunities for innovation begin with the re-architecture of the value constellation. Business models only relate to your specific role in the redesigned constellation.

I do agree with the fact that innovation is a pervasive practice. It applies to everything an enterprise does, and certainly therefore to business models. What differs though is the extent of impact that you can expect. Business Model Innovation is strategic and therefore it has the potential of creating significant impact. It is therefore also the most challenging and non-trivial. Without executive sponsorship, such innovation would be impossible to execute. The focus on business model innovation in executive education therefore makes perfect sense.