Business Model Innovation Like the Giants in 6 Easy Steps
Updated: Jul 28, 2021
Diving into the business model of the Giants
On one occasion when I applying for a position that utilized my love for writing, collaborating, and design thinking the job description required familiarity with the business model of Giants like Amazon, Alibaba, and Google. My focus and experience had been on other areas of innovation, so I thought it prudent to conduct some research.
As I dug into the success of the Giants, I noticed an underlying framework. Yes, it's true they each have uniquely different business models. In part, it's why they are the most innovative business models today. Well, that and they make billions in revenue each year. It's likely no coincidence the models appeared to have traces of design thinking. This post shares what I learned and six simple questions you can ask to begin to transform your business model.
Six Simple Questions to Transform Your Business Model
Nevertheless, many CEOs are just beginning to become aware of the potential of design thinking. And it is in service to you (CEOs) that I provide a framework of questions that can transform your company's innovation and business model. Dig into these six questions and discover a treasure of new opportunities to serve your customers, your team, and your shareholders.
#1: Who are my People of Interest? Think tribe, not individual.
In each of the Giant's business models, I noticed that they had identified the various tribes of people they had influence over. Notice it could be the label you give the people (like customers) or the product/service you provide (like digital media) that connects people into a tribe.
For example: For Google, their tribes are users (individuals using their search engine), businesses (wanting to advertise to their users), and content creators (Writers). Amazon's tribes were consumers, sellers (individual and commercial), businesses/developers, and content creators. Alibaba's tribes were broke down slightly different - core commerce (which they separate into wholesale and retail), cloud computing, digital media, and entertainment.
#2: What do my tribes want?*
Next, it was clear from the research that these Giants took a human-centered approach to research. Asking members of each tribe what they wanted and tuning into unmet needs. Not necessarily from the company but in general terms. For example, asking writers what they wanted. The larger your company, the more overwhelmed leaders often become with this task. However, from the standards of the Giants, it can be done. Eli Itin Innovation Consultant for NSI and Professor at Emeritus Institute of Management teaches that interviews with as few as eight people suffices. I find the following questions uncover a breadth and depth of information
As a (writer, seller, etc.) What's working for you/your business?
What's not working for you/your business?
How could improvements be made in X (their responses to question 2)
Besides, starting with these questions, I use the 5 Why's to dig deeper into each of the items. Digging into their answers and understand why they believe something is working, not working or how it could be improved.
#3: Do the needs of any of the tribes overlap?
In light of the information, you found in question number 2; you likely have a plethora of business model innovations from which to choose. However, you can strike gold when you find needs between two or more tribes that overlap. Google struck gold when they saw the following three tribe connections.
Their writers needed a way to monetize their content,
Advertisers needed cheaper avenues for advertising,
and search engine users needed to find relevant content.
They created a win-win-win with the innovation of AdWords and AdSense. It was not only a genius way to impact revenues; it was also a means of keeping all three stakeholders entangled with their brand. It's an established precedent that the more entangled a customer is, the less likely they are to leave when provided good customer service.
#4: How can my company be a connection to help them achieve what they want?
As a design thinker, this is where the real fun begins. It's the start of the creative process of innovation. Fully understanding the needs of each tribe - how do we, as a company, become a connection and or resource that solves their problem. The unfolding of question four is also an excellent area for employee engagement and employee fulfillment. As a company begins to understand how to serve its slice of the world for the greater good. Not just for the profit. Although genuine service and profit are intrinsically connected.
#5: Is it technically feasible for our company to provide their desired product/service?*
Not all that glitters is gold
The creative process and treasure hunt feel of question number four can put your team on a gold rush high. Identifying a new product/service idea leaves you believing you have struck gold. But not too fast, there is still much work to be done. Namely, as inexpensively as possible, prototyping the product/service and gathering customer feedback. Prototyping isn't a one-and-done proposition. It can take several attempts and may result in discovering it isn't feasible under the circumstances of your company to follow through on a particular idea. Nevertheless, if you can make it work, you have one last hurdle.
#6: Is the product/service viable for our business?*
Lastly, is this innovation viable for your business? This question is more than answering the question - will it make a profit? Yes, that's important. But does it align with the mission-critical priorities of strategy, structure, systems, shared values, style, staff, and skills? While adjustments are generally needed with innovation, veering from who you are as a company, in the long run, will fail.
*These are three power questions used in the innovation process known as design thinking.