Seize the white space, or you’re doing it all wrong
10 main takeaways from Mark W. Johnson’s book “Seizing the white space: Business Model Innovation for growth and renewal”.
Written by Claudia del Prado, analyst at IGENERIS
What is this white space where the magic happens? A company’s white space encompasses all potential activities not addressed by its current business model. That is, the opportunities outside its core business that require a different business model to exploit.
Yes! You got it: Business Model Innovation means seizing a new opportunity in the white space.
Mark W. Johnson teaches us precisely how to find this white space and therefore achieve a full business model innovation. His book “Seizing the white space: Business Model Innovation for growth and renewal”, published in 2010 is considered one of the references in business model innovation methodologies.
IGENERIS’ methodology is inspired by the concepts explained in books like this one and we think it is interesting to revisit the key learnings from time to time. So continue reading to find out the 10 main takeaways no one should miss from Johnson’s book!
What can we learn from the book?
1.- The white space lies where your customers decide
What revolutionizes industries are not powerful ways to make money per se but powerful customer value propositions(CVP) that require money to be made in revolutionary ways.
2.- When is the right moment to venture into the white space?
A company needs a new business model aka venturing into the white space when it finds that to fulfill a new CVP it must adapt the 3 key elements of the 4 box business model: profit formula; key resources & processes; and core metrics, rules and norms.
3.- What does our new 4 box business model need to answer?
- How will we satisfy the customer’s job-to-be-done?
- How will the company create value?
- Which resources (people, technology, products, equipment) will be required to deliver the value proposition to the customer? And how can we deliver it in a sustainable, repeatable, scalable and manageable way?
- Which rules are necessary to connect the elements of the BM and keep the system in proper balance? (Watch out: since their function is to perpetuate the existing operations, they tend to form last in the evolution of a business model)
4.- A clear framework for business model innovation is FUNDAMENTAL
The lack of this would be like a contractor trying to build a house with no blueprint to guide him. Without a clear plan, any house that is built will probably look like the last house the crew worked on, because that’s all they have to go on.
5.- A company’s white space lies within, beyond and between.
- The white space WITHIN are opportunities to fulfill important but unsatisfied JTBD for already existing customers in existing markets
- The white space BEYOND are opportunities in new markets, new CVPs aimed at potential customers who are currently non-consumers
- The white space BETWEEN are opportunities in the new terrain that emerges when some combination of transformative market shifts, innovative technology or government policy creates massive industry upheaval
6.- Business Model Innovation is a repeatable process.
This process consists of 3 steps:
- Identifying an important JTBD that is poorly satisfied (Example: Fashion market before Zara). The clearer the JTBD is defined, better the CVP will be developed.
- Constructing a blueprint that lays out how the company aims to fulfill that JTBD at a profit. This phase is the definition of the Business Model framework mentioned before.
- Implementing the business model. This phase is conducted by testing and validating hypotheses while integrating the key resources and processes required to deliver on the customer value proposition and the profit formula.
7.- And yes, implementing the new business model is also a 3-stage repeatable process.
- Incubation stage. The process of identifying the assumptions that are most critical to the success of the business proposition and then testing them to prove or disprove their viability and by extension the viability of the new initiative itself.
- Acceleration. Refining and standardizing processes, establishing the business rules that govern them, and defining metrics that chart continuing success.
- Transition. Can the new business be integrated into the core or must it remain a separate unit in order to thrive?
8.- Watch out for “invisible guardians” of the prevailing business model
If the core business is successful, it should not be surprising that everyone in the organization is loyal to the model underpinning its success
9.- Don’t fall into the non-dog dilemma
Avoiding the “non-dog” (new business opportunity) to the limit could make you end up missing out. (Kodak example: left behind in the digital camera market although they launched one of the first models)
10.- Yes, Business Model Innovation means seizing a new opportunity in the white space
But in order to succeed, you need to seize it correctly. Listen to Johnson! If you got to this point, you already did.
Many companies think they’re innovating and actually they are not or they’re doing it wrong (which ends up being the same). Johnson teaches us the key steps any company should follow to seize this White Space and succeed when innovating. Business Model Innovation becomes a simple and methodical process after reading his book.
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