The Challenges of an Innovation Journey (an Author's Perspective)

Our upcoming book Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers (10% pre-purchase discount) is literally on the way to the printing press – time to summarize the experience.

The past 14 months have been an exciting, but also very exhausting innovation journey. From all my experiences with innovation (I have helped build two and sell one organization) this has been by far the most challenging one. It is only thanks to a great team that this project has produced a powerful book (Yves Pigneur: Co-Author, Alan Smith: Design, Tim Clark: Editing, Patrick van der Pijl: Production). So how did the journey look like: Starting Point

Goal:

  • Produce a book on the topic of business model innovation that stands out in a market where countless strategy and management books are published every year

Assets:

  • a “willing” and enthusiastic co-author with the best analytical and structuring skills I can imagine: My former PhD supervisor Prof Yves Pigneur
  • a reasonably well frequented blog on business models with a global audience
  • a business model innovation approach increasingly practiced around the world, notably in companies such as 3M, Ericsson, Deloitte, and Telenor (based on my PhD dissertation and blog)
  • a variable income stream from keynote talks and workshops that almost covers the living costs for my little family (invitations for gigs solely through my blog) and allows for writing

Handicaps:

  • “Competing” in a field of big name gurus from Harvard, Insead, Wharton & Co., while I am mainly known through my blog

Initial Ideas:

  • Publish the book based on an innovative business model to underline the importance of the concept
  • Finance the book through corporate sponsors who would have their logo on the cover
  • Bypass publishers
  • Sell mainly through Amazon.com

Of course things turned out differently than I initially imagined. It was actually much more exciting, though I hadn’t foreseen most of the obstacles. But let’s first look at the end result of the journey.

Outcome:

  • a highly visual, full color, beautifully designed, and practical book with 280 pages on business model innovation
  • strong differentiation from traditional strategy & management books
  • 470 co-authors who have contributed to making this a better product and who have partially financed the endeavor through their access fees to the Business Model Hub where the co-creation has take place
  • Pre-sales through our own website www.businessmodelgeneration.com that have contributed to financing the first print run
  • Successfully bypassed publishers (I even got an invitation by the German publishing industry to show how we’ve done it)

What I realized during the project was that Business Model Generation is spearheading an entirely new generation of management books: designed, visual, co-created, approachable and applicable. We had to create entirely new systems and processes to actually produce such a book.

During the work with our creative director and designer, Alan Smith from The Movement, I realized how powerful design is to create a good management book. It’s not “just” about the content, but also about the form. Management concepts are inherently visual, because they deal with simplifying the complexity of today’s business environment in order to make it manageable. Not using visuals to convey these concepts seems silly.

Good design can make management books much clearer and more functional – and as a side effect also more beautiful. As a result of our project I have become intolerant for old-style text-heavy management and strategy books.

So what are the key lessons learned that I could share with writers of future management books?

Lessons learned:

Pros:

  • Co-creating the book in a completely transparent way on an Internet platform has been a wonderful experience. We regularly shared content chunks in a very raw and unedited format with 470 co-authors. In addition we gave insights into our challenges and the design process. The feedback and comments led to a greater product - though responding to every one of the 1’300+ comments and integrating them into the book was extremely time consuming. The positive aspect was to see how enthusiastic the crowd was and how some people started to feel ownership of the product. Rightly so, since they contributed and will have their names printed in the book.
  • Designing the book under the creative direction of Alan Smith has been an eye-opening experience. I couldn’t imagine writing a text-only business book anymore. Impossible. It just wouldn’t make sense. Design and visualization is – in my opinion - indispensable to convey business concepts. More importantly even, discussing the design of content with Alan helped crystallize key concepts of the book. Thus, design thinking has become core to producing content rather than just an afterthought to make the book look good.
  • Differentiation has been “easier” than expected. What we have done in terms of co-creation and book design is truly unique and has attracted many, many curious people. I think it was the only possible path for us “underdogs” in this field of mostly North American gurus (sometimes with Indian roots ;-). Sales will tell.

Cons:

  • Playing underdog is tough. The players who we hoped could sponsor the book project didn’t see the potential and didn’t understand. Now that it’s done they are showing up. Too late – we covered the risk of the project ourselves and succeeded. The premium to join now is high!
  • Resources were extremely limited. It is only thanks to the “sacrifices” of the entire core book team that we could bring this project to fruition. More money would have made the process much easier, yet it probably wouldn’t have led to a better end product.
  • Lacking the infrastructure to do what we wanted to do was a challenge. There is no off-the-shelf platform on the Web where an author can co-create with readers and ask them for a participation fee. We tinkered with Ning and Paypal and my blog to put something workable together.
  • Amazon.com is a must-have distribution channel. However, to sell on Amazon we must give them 55% of our sales price. This leaves us with 45% to cover production costs and shipping to their warehouses. We will probably have to charge a much higher price than we want to simply to cover our costs. However, solely selling at a reasonable price through our own website www.businessmodelgeneration.com based on a Dutch fulfillment center is not an option. Amazon has a de-facto monopoly…

Those were some initial thoughts… There is certainly more and I will write more when we have started to deliver books end of September.

Have a look at the “making of” pages coming directly from Business Model Generation to learn more about what we’ve done.

Making of...

The Silly Business Model Innovation Cow Exercise

A couple of posts back I wrote about a simple, fun, but silly exercise to think out of the box when it comes to business model innovation: the silly cow exercise. I asked people to submit their own sketches of business models using a cow..

The echo was very weak (no creativity out there, or fear of sketching?). Hence, in addition to the set of sketches I got from Fréderic Sidler, I photographed some of the sketches coming out of a workshop I did last week in Belfast. The silly cow exercise is a always a success, probably because it looks at business model innovation from a very light angle. It even works with very senior and serious business people. My favorite business model came from a participant in Belfast. However, she didn't have the courage to present her sketch during the workshop: "The Condom Tester"...

Here some of the sketches. You can find the full set on Flickr. I will certainly add more over time...

Business Model Innovation Exercise Series: nr.1 - ideation

The cow exercise is something I regularly do at my keynote speeches and workshops to trigger business model innovation thinking. It so far away from the audience's daily business concerns that it easily stimulates creativity.

Have a look at the slides and make sure you send me your own sketches:

Have fun, send me your sketches and give me feedback...

Google Book Search - first issue of my new business model innovation example series

During my d"aily lecture of the Financial Times I usually put on my "business model glasses" when it comes to the business section. Every week there are some very exciting examples of business model innovation. I decided to not only share these examples in my workshops, but also on my blog - hence the new "business model innovation example series"...

Enjoy the first issue on a deal that Google struck last week:

Business Models with an Impact beyond $

We are living in exciting times. Some entrepreneurs involved in business model innovation are not only seeking for financial returns, but are also aiming at achieving social, development and environmental returns. In other words, money and fame are not their only motivators. They want to have an impact. What is interesting is that they are aiming at combining financial AND social success. These entrepreneurs try to prove that these two are not necessarily contradictory.

There are are a couple of interesting business models out there that I follow with quite some fascination. Grameen Phone is a telecom company founded by Iqbal Quadir, that has brought connectivity to rural areas in Bangladesh. What is interesting about their business model is that they partnered with the world famous micro finance institution Grameen Bank to exploit synergies.

I also very much like the business model of MyC4, which allows you and me to make loans to small businesses in developing countries. This means that I can diversify my investments away from the unstable global equity markets towards uncorrelated small businesses in developing economies. I make a return on my investment, while helping boost development. Really exciting.

I am very much a believer in the fact that you can do good while doing well. This is not about "giving back", but about creating value while making a difference. Since this is an area that I'm interested in I decided to help run a workshop on the topic in London this coming Thursday. Check out "Disruptive models: The art and science of VISUAL BUSINESS MODEL DESIGN for breakthrough social innovation" if you are curious (or sign-up if you are in London).

See you there!

Private Banking Innovation Blog (draft mode)

We've done it!!! With Arvetica we have finally launched a preliminary version of our new blog "private banking innovation".

There are still some things in the right menu bar and some details that will change... But the blog is now online and will become home to my writing on private banking business models etc. We have also launched a series of video interviews with leading personalities in banking and beyond.

Don't hesitate to give me feedback ;-)

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Visual Thinking in Strategy Design & Communication

The last few days I have been thinking of the value of visual tools in strategy quite intensly. When I was standing in front of our business strategy library I realized how few of these books use visual techniques to make things clearer. Often there is not much more than charts and quite a number of strategy books are text only. The topic of visual techniques and communication has been on my mind because we are currently in close contact with XPLANE, a company whose tagline is "the visual thinking company". They help businesses communicate complex business issues with simple images. One thing I realized was how XPLANE and Arvetica each create value through visual techniques in different areas with different tools.


Arvetica
: Our main strength is to synthesise the essence of business issues, such as strategies and business models in simple diagrams. These are based on concepts (e.g. strategy maps) and are mainly composed of boxes and arrows. The value lies in creating a rapid understanding and the highlighting of how issues are related to each other. Images communicate relationships between objects than text documents. How can you quickly and clearly describe an interdependant multi-channel market approach with words?

XPLANE: Their main strength is their ability to illustrate complex business issues (e.g. change management) with drawn scenarios. They create a quick understanding with their comic-like pictures, because humans easily relate to stories. In many cases it is not sufficient to illustrate business issues through boxes and arrows only. Human scenarios that describe business issues in an illustrative manner help people relate to a the topic much easier. For example, the above image illustrates how to deal with difficult clients.

I'm quite exited that I will be able to learn more about visual techniques in business from XPLANE. I firmly believe that this will be one of the hot topics in strategic management in the coming years. In business strategy we still poorly communicate when it comes to visuals...

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Space as an Instrument for Business Model Innovation

At Arvetica we find that space is very important to foster creativity. This is the reason why we have brainstorming rooms with whiteboards and flipcharts, but also a "living room" area to get inspired. I rarely find such spaces in other places, which is sometimes limiting when working at our clients' premises.

Last Friday, however, I found such a space, which was perfectly designed for creativity. After a morning meeting at the college of management at the Swiss Federal Institute of Technology, Lausanne (EPFL), I decided to stay on the campus. At the architectural school I found a beautiful working spot, which you can see on the above photo.

It's an open space in the middle of the hallway of a relatively frequented building. There's a set of colorfull sofas and a large whiteboard (!). It feels like an open invitation to any person or group to sit down and get creative. The whiteboard is the perfect support to explain things visually and illustrate ideas on the wall. The electricity plug and WiFi allows you to pump information from the Internet. I realized how rarely I see such places at the companies I visit and wonder how many ideas get lost as a consequence...

This is probably particularly crucial when it comes to more strategic themes and ideas that are relegated to closed meeting rooms. Hasn't everybody of us experienced that the most interesting ideas come in a relaxed atmosphere. So maybe space is an instrument to help design the most innovative and effective business models...

Worth a thought?

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XPLANE founder and CEO Dave Gray

At the LIFT'07 conference I had the great pleasure to talk to XPLANE founder and CEO Dave Gray. He has built a wonderful company over the years and he follows the same mantra as we do at Arvetica: visual language can help communicate complex issues such as, for example, business strategy or change management.

I very much admire Dave for being able to write a blog, educate interested people on visualization (here, here and here) and still stay an artist... I very much look forward to doing some joint work with Dave and his company.

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Nicolas Nova: Lessons on Innovation from the Video Game Industry

Check out this webcast/interview I've done for arvetica (the company I work for) on how (traditional) companies can learn about innovation from the computer & video game industry.

Nicolas highlights three major practices/processes which are common in the game industry and lead to innovation:

  • user centered design approach
  • expand beyond traditional (industry) boundaries
  • user generated content

Check out the webcast/video on arvetica's blog!

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