Five Reasons Companies Fail at Business Model Innovation - Re-post

Recent article from Harvard Business Review’s Saul Kaplan, ‘Five Reasons Companies Fail at Business Model Innovation’. Below is our summary and take on the article…

1- CEO & Senior Leadership are resistant to changes. They tend to see current system as positive and looking for enhanced effort from employees to improve system solely, rather than improve the system.

2- Product vs Service. Great companies are blending the two for best customer experience. When you become too invested in one versus the other, you can lose your competitive edge.

3- Looking through same lens. If an opportunity arises that could harm current business, those who deny the new business strictly because it would cost the old business, will fail at business model innovation.

4- Investment is too costly. Current financial metrics will never reward future business innovations on a Return on Investment model. But, because new business innovation is likely to have different economics and thus generate different ROI models, one must look at financial outcome through correct lens.

5- Going against the grain is not popular. If creative folks within an organization challenge the current system, and those who are tasked to grow and sustain business are allowed to cut these employees off, business model innovation will fail. Doing things the same way, will lead to the same results.

Basically, the five words that kill businesses are “We’ve never done that before”.

For full article please visit: (http://blogs.hbr.org/cs/2011/10/five_reasons_companies_fail_at.html)