How to refresh your business model

Teresa Macchia, PhD

Teresa Macchia, PhD

To be innovative companies need to see their world from a different perspective and they must be ready to look for new stimulus. Else, they will fade out in the digital transformation that is taking place. How do you refresh your business model?

Refreshing a business model is about opening the eyes and search inputs elsewhere. Inclusive and open approaches to business expand the opportunity to identify hidden issues and find unexpected answers.

Digital transformation is about adopting digital technologies to reveal a new value proposition and inviting to look at the context through a different lens to rethink the existing business model. For instance, LEGO refreshed its business model after experiencing a profit drop. Long story short: to face the issues that led the company to the profit drop, Lego moved from an action plan to a strategic plan by opening the doors to the outside world welcoming questions and ideas from the user community and by digitising several activities and products. Additionally, to perceive unpredicted and sudden requirement, the Danish company introduced roles to enable multiple voices to become a melodic choir instead of a noisy clutter.

In nutshells, what LEGO realised is that digital transformation goes beyond the introduction of a fancy techy bit in the production line.

As the LEGO example shows, amplifying the quality of products and services and being aware of new opportunities, diversity, and openness are the core ingredients to trigger a successful transformation. There are models and methods that allow blending these ingredients and that disclose new value propositions, such as open innovation models and experience design methods.

Open Innovation Models

Social, political, and economic changes led to the decline of established and conservative innovation models and the growth of fresher model. Open innovation models suggest exploring opportunities and generate new ideas with external contributions. Outside views and competencies encourage novelty and business reconfiguration, since new voices may inspire new rhymes. On the contrary, a close and protective model decrease the opportunity to align the business model with new values.

Ideas and creativity can come from outside of a company to inspire new products and services, to bring new skills to learn and to accelerate innovation. A range of open-things such as open-source and open-data and a collaborative mindset ease the flow of knowledge and increase the cost/efficiency strategy. There is a number of methods that facilitate collaboration, interactions, and knowledge transfer. Experience Design gives a big hand for orchestrating openness and collaboration.

Experience Design Methods

By refining design thinking principles, experience design is about stimulating team collaboration and experience investigation by focusing on emotional, cognitive, and corporal features of interactions. Experience design is a method to set up occasions for practitioners to identify the direction to take, the challenges to face, the objectives to have, and the voices to listen. By encouraging diversity, interactions, debates, and arguments, Experience design allows productive and entrepreneurial upshot.

Digital technologies and Open Innovation

The inclusion of multiple voices in the production flow can be a real challenge for established organisations. However, openness is a step that organisations should embrace to cope with new commercial and market threats. Digital technologies can play a central role to synchronise collaboration, to create communities, and to translate practitioners’ inputs into actions. Hence, digital technologies provide organisations with the opportunity to ease the transformation of their business model.

The introduction of digital processes in the business needs to embrace another way to see the reality and needs to engage with competencies and expertise that might be found elsewhere. Accepting suggestions and ideas from the parties outside the organisation alleviates the pressure of in-house resources and allow companies to focus on core skills while running at a faster speed to answer to growing and changing requirements. To be innovative companies need to see their world from a different perspective and they must be ready to look for new stimulus.

Author - Teresa Macchia

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