“We cannot solve problems by using the same kind of thinking we used when we created them.”
A powerful quote coming from one of the world’s greatest minds and probably the most famous theoretical physicist Albert Einstein. He died 64 years ago and that famous quote is more relevant today than it was many decades ago. Even though he was best known for his work in physics, many of Einstein’s lessons and famous quotes are very applicable to the current state of businesswhere borders have opened up (ASEAN, APEC, European Union, WTO, One Belt Initiative, etc.) and products or services (especially in the tech market) that are functional today becoming obsolete tomorrow!
In a Harvard BusinessReview (HBR) article written by Johnson, Christensen and Kagermann, they shared the story of Apple when it introduced the iPod. The authors described that Apple did something far smarter than just wrapping a good technology in a snazzy design. It wrapped a good technology in a great businessmodel. Combining hardware, software, and service, the model provided game-changing convenience for consumers and record-breaking profits for Apple.
Great businessmodels can disrupt, reshape industries and drive spectacular growth. Yet many companies struggle in business-model innovation. The fault lies on managers who are highly skilled yet tactical oriented. They may not be able to grasp and understand their existing model well enough to know when it needs changing. The key is relentlessly thinking out of the box, no matter how cliché it may sound, it is a necessary and extremely effective way to understand the dynamic changes happening in the marketplace.
To determine whether yourfirm should alter its businessmodel, the HBR article advise these steps:
- Articulate what makes yourexisting model successful. For example, what customer problem does it solve? How does it make money for yourfirm?
- Watch for signals that yourmodel needs changing, such as tough new competitors on the horizon.
- Decide whether reinventing yourmodel is worth the effort. The answer’s yes only if the new model changes the industry or market.
As a visionary, don’t just preach traditional strategies to yourleaders and make them mere “caretakers” of the business. Challenge the status quo and calibrate yourteam to be creative while preparing them to embrace change. Let them deep dived into the essence of businessmodel innovation.
The significance and contribution of every start up businessin the economy is so great. As people become more and more equipped and aware as a result of the rapid pace in technology, the methods, approaches and techniques in Management, Human Resources, Finance and Marketing and all other areas in the businessalso changes — making it more challenging for the enterprise to face tremendous difficulties.
Once a businessreaches a certain level of success, it becomes very easy for them to rest on their laurels and become complacent. When you feel invincible, yourbusinessnaturally becomes vulnerable, making it very easy for the competition to take advantage and get passed you. So no matter how big or successfulyourbusinessis, you must never stop questioning and challenging the status quo. The risk is just too high to drop yourguard. Pursue businessmodel innovation, it may just be the spark that will finally bring you closer to yourvision.
I’ll end this article with another famous quote from Einstein, “Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.”
Prof Enrique Soriano is a World Bank/IFC Governance Consultant, Senior Advisor of Post and Powell Singapore and the Executive Director of Wong + Bernstein, a research and consulting firm in Asia that serves family businesses and family foundations. He was formerly Chair of the Marketing Cluster at the ATENEO Graduate School of Business in Manila, and is currently a visiting Senior Fellow of the IPMI International School in Jakarta.
He is an associate member of the Singapore Institute of Directors (SID) and an advisor to business families worldwide, a sought after governance speaker, book author and have written more than 200 articles and publications, including two best-selling Family Business books (Ensuring Your Family Business Legacy 2013 and 2015). You can read Prof Soriano’s business articles for free at www.Faminbusiness.com