Mark Johnson, Chairman and Co-Founder of Innosight, is author of Seizing the White Space: Business Model Innovation for Growth and Renewal (Harvard Business Press: February 2010). He talked with Strategy & Innovation editor Renee Hopkins about why business model innovation is important and how companies can master it.
In your book, you say "disruptive innovation and business model innovation are opposite sides of the same coin." How did you get started thinking this way, and why is it important?
We start with the work of disruptive innovation, which says that when you go into a new market that offers an opportunity for new growth, you should come in with a simpler, low-cost approach. This way you can offer products or services the incumbent's not going to be motivated to match, because it's either too small a market, the margins aren't interesting, or it doesn't further the company goals.
Now, why doesn't the incumbent go after the entrant who does something disruptive? Clay Christensen noticed this phenomenon in the disk drive industry—that those who succeeded were not the incumbents, but a new set of companies, the disruptors. That's also what happened with Digital Equipment (DEC), in the minicomputer world. Strangely, DEC didn't go after the personal computer when it came to the consumer market and schools. Why?
To read the full, original article click on this link: Stuck? Take A Look At Your Business Model - BusinessWeek
Author: Renee Hopkins
