4 Inspiring Ideas to Overcome Challenges when Testing Innovative Business Models
Following our recent article about the most common challenges faced by companies when testing innovative business models, we decided to highlight 4 inspiring initiatives that seem to be effective practices to overcome these challenges.
Train-the-trainer program
A company’s success is defined by its culture. Peter Drucker’s famous, “culture eats strategy for breakfast” is no less true for business model innovation. To overcome the challenge of developing the necessary mindset to drive business model innovation projects, several European companies developed an approach consisting of building an internal team of coaches resp. facilitators, specialized in business model innovation. These internal specialists usually work within the corporate innovation unit and act as multipliers for the new mindset, ultimately leading to cultural change.
Two different channels are used to find the coaches: external recruiting or training available employees based on a specifically designed train-the-trainer program. The latter is the approach that works best, as recruiting an external facilitator brings the same kind of challenges as when building an internal team. The description of the needed qualifications and the specific profile requirements poses a challenge to most.
Here are some of the key advantages of this idea:
- New expertise built internally increases the probability of success in the long term
- Internal coaches as multiplicators spread the mindset and change the culture incrementally
- Higher acceptance of internal coaches within the business units
Intrapreneurship program
To overcome the challenge of defining and building the right skill set, we have analyzed three corporations that have designed an internal entrepreneurship program: Aiming at teaching employees the new required skills for business innovation projects in practice.
This type of program impacts a company in different ways. Firstly, the participants experience the entire process of developing an innovative business model in a real environment yet in a short period of time. This speeds up the learning as the work is very intensive. Then, the program managers resp. coordinators can observe in-situ and learn about the tools and skills needed, the ups and downs as well as the current state of the culture.
The main advantages of an intrapreneurship program therefore are:
- Each participating team works on real customer needs and problems, which leads to a higher identification
- Action-based learning proves to be the most efficient way to develop skills
- The innovation pipeline gets filled with new ideas
Business model incubator
Changing existing processes is a complex and costly mission. Therefore, the following initiative is one of the best practices to initiate this type of change. After generating new business model ideas, a separate track has been created for the development and validation of the selected ideas. Idea managers have been recruited internally to drive each project within a given time frame and budget. These idea managers are supported by a corporate innovation team and present their results directly to the company board.
The goal of this incubator approach is to enable the idea managers to assess the maturity of their idea without boundaries and slow processes. Incubating ideas exist for quite some time already, however, typical incubators are incubating entire teams. A business model incubator is incubating an idea, the team being composed by an idea manager and supported by an internal and external network of specialists that are involved depending on the needs and the stage. A business model incubator is a process relying on a living and dynamic ecosystem.
The key advantages of an incubator are:
- Own processes designed to work faster
- Learn new ways of working without impacting the core business
- Higher identification for “invented here” business model ideas
- Dynamic competency hubs within the company acting as a whole ecosystem
Testing as a service
The most inspiring practice implemented to overcome the explorative mindset challenge is called “internal testing team”. Each project leader can rely on and be integrated to a dedicated internal validation expert team for the duration of the experiment.
After creating a new business model concept, identifying hypotheses and choosing tests to validate them, the project team relies on the testing team to execute the validation experiments. This execution team, similar to a “Dev Ops” team, creates the selected experiments, runs them and analyzes/reports on the results. The idea is then handed back to the project team to decide the next steps: pivot, continue, kill.
Testing as a service has the following advantages:
- Increased validation success through expertise
- Immersive learning within a short period of time
- Incremental qualification of multiplicators
Outlook
Most companies we have been collaborating in the past 5 years have become great at generating innovative business model ideas. With the help of tools such as the St. Gallen Business Model Navigator, Design Thinking, or the Blue Ocean Approach corporates have been able to gain highly useful insights into the perspective and needs of their customers. They have also been able to form compelling value propositions and business model concepts. Now, the time has come to show tangible results and prove that such approaches can successfully impact the business.
This is the reason why implementing business model ideas is the latest challenge for companies. While they are already dealing with high uncertainty in their global environment due to the current pandemic, companies will also have to deal with the underlying uncertainties of their new business model ideas. In addition to the struggles of finding the right team, building the right skills, implementing the right processes as well as developing the explorative way of working.
As seen in this article, there are already lots of great inspiring practices to overcome the common challenges. Combined with BMI Lab’s Testing Cycle, companies are able to always understand where they stand and what the next step is. The Testing Cards are a useful tool to brainstorm on different options in order to validate the underlying assumptions of new ideas. The goal is to find less resource-intensive solutions for showing the offering to customers.
However, none of these tools and best practices will work if innovation leaders don’t make sure that the entire organization, and more specifically the team, commit to do so and support the testing approach. Always keep in mind, that even the best plan fails if it is not executed!
Originally published at https://bmilab.com on July 3, 2020.
