Business Model Transformation:Succeeding in new growth and renewal

Mark W. JohnsonCo-Founder and Senior PartnerInnosight

The evolution of the MP3 player

1998Rio Diamond

2000Best DataCabo64

2002Rio Riot

2005iPod Shuffle

2007iPod Touch

2003iPod 3G

2006iPod Nano

iTunes/iPod and Apple’s growth

Steve Jobs announcing Apple’s Digital Hub Strategy January 2001

Core vs. New Growth Innovation

AND not OR!

Established Business (Model)

Strengthening and extending the core Creating the new

NewBusiness (Model)

Profit Formulaand Core Mission

Customer Value Proposition

Key Processes

Key Resources

The business model defined

Hilti: transforming an existing market

Power tools and accessories Fleet management to improve on‐site productivity

Low margin,high inventory turnover

Subscription model covering asset‐heavy balance sheet

Retail distribution Direct Sales, Contract management, IT Systems

Tool Fleet Management ServicesTradt’l Power Tool Company

Customer Value 

Proposition

Profit Formula

KeyResources

KeyProcesses

vs.

Godrej: creating a new market

Addressing Awareness, Access, and Affordability

The new growth innovation process

IdentifyThe Jobs-to-be-Done

1

Blueprint business model

2

Test and Learn

3

Addressing the “job-to-be-done”

Key to a powerful CVP:Start with understanding the important, unsatisfied jobs-to-be-done

The new growth innovation process

IdentifyThe Jobs-to-be-Done

Blueprint business model Test and Learn

1 2 3

Profit Formulaand Core Mission

Customer Value Proposition

Key Processes

Key Resources

The business model defined

CVP (Importance)(Satisfaction)

Maximizing the value proposition

OfferingPrice

= Job

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Blueprinting a Business Model

Profit Formula

Rules, Norms & Metrics

Rules, Norms, and

Metrics (e.g. margin)

Rules, Norms, and

MetricsRevenue model

Job to be done

Cost structure (direct and overhead) & Resource velocity

Offering:• Product / Service

• Access/Channel

• Payment scheme / Price

Key Resources

Key Processes

Customer Value

Proposition

(e.g. brand, people, technology, channel)

(e.g. R&D, manufacturing, HR, marketing, IT)

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Partnerships, collaboration,

shared services

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The new growth innovation process

IdentifyThe Jobs-to-be-Done

Blueprint business model Test and Learn

1 2 3

The need for testing and learning

Amazon.com: Built to transform

“If you want to continuously revitalize the service that you offer to your customers, youcannot stop at what you are goodat. You have to ask what yourcustomers need and want, andthen, no matter how hard it is, youbetter get good at those things.”

–Jeff Bezos, CEO, Amazon

Business Model Innovation:Design around the job

Thank YouThank You

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