A Process to Continually Improve Your Business Model

A Process to Continually Improve Your Business Model
Continuing business model innovation is the most valuable
activity that any enterprise an engage in. But it's a
problem for most leaders to take on this task. Why? They've
never see anyone do it, and they have no personal
experience.

To help overcome that problem, this article describes the
key elements that such a process requires. With this
template in mind, some leaders will be able to design and
engage in the appropriate activities.

Here are the four elements in continuing business model
innovation:

1. Understand and follow the current business model well.
-- Employ the optimum way that goods and services should be
supplied now, by informing all stakeholders about what
needs to be done to deliver the most benefits.

2. Understand and install the next business model. --
Specify the next innovation to provide more stakeholder
benefits through goods and services and how the transition
will occur.

3. Understand and use a business model innovation vision.
-- The ideal benefits to deliver to stakeholders in your
industry, which is used to test the appropriateness of
developing future generations of potential business model
innovations.

4. Ongoing design and testing of business model
innovations. -- Vision-defined probes and tests to elicit
reactions to providing new benefits and various ways of
supplying them.

A more valuable approach to continuing business model
innovation also describes more than one future generation
of innovations in terms of the second element.

For each of the first three elements of continuing business
model innovations, you need to identify seven key elements
-- the who, what, when, where, why, how, and how much --
viewed from the perspective of all direct and indirect
stakeholders. Their combination defines either a business
model or a business model innovation vision:

1. "Who?" defines all the stakeholders you are serving or
affecting.

2. "What?" describes the offerings and their benefits and
negative influences that affect each stakeholder.

3. "When?" captures the timing of offerings' effects on
stakeholders.

4. "Where?" identifies the location for delivering the
benefits and other impacts.

5. "Why?" gives the rationale for providing the stakeholder
benefits you deliver.

6. "How?" explains your method of providing your offerings
and being compensated for them.

7. "How much?" states the price customers and users pay and
incur.

Why is it important to know what these seven elements are?
By examining these areas, organizations will be able to
focus on places where important benefits may be added.

Copyright 2008 Donald W. Mitchell, All Rights Reserved

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Donald Mitchell is chairman of Mitchell and Company, a
strategy and financial consulting firm in Weston, MA. He is
coauthor of seven books including Adventures of an
Optimist, The Irresistible Growth Enterprise, and The
Ultimate Competitive Advantage. You can find free tips for
accomplishing 20 times more by registering at:
====> http://www.2000percentsolution.com .