The New Psychology of Business Models

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Management 3.0 – a psychological shift. You have a great business idea but you are not sure how to develop it. Should you follow conventional wisdom and write-up a thirty-page business plan? In my management 3.0 model, startups will have more success if they adopt lean and agile business development principles, where failing fast is the premium strategy and the lean business model reigns supreme. In the management 3.0

Kill Your Business Model Before It Kills You

Harvard Business Review

Postal Service to stay in business. This vignette raises a key leadership question: Why do leaders wait too long to modify or abandon their business models? The Postal Service, even with the constraints of its government mandate, has known for years that its traditional model was coming apart; Kodak realized that film was being replaced by digital media long before it changed its investment strategy; AOL knew that dial-up subscriptions were fading years before it took action.

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What Happened When Linkin Park Asked Harvard for Help with Its Business Model

Harvard Business Review

Technology has forced music artists to completely rethink the way they approach their businesses. The most successful artists in this new landscape have begun to look at new business models and new industries to strengthen their existing brands. But by 2013, Linkin Park and Machine Shop had to address the fact that digital music (first downloads and then streaming) had changed the business dramatically. A New Model. Enter Harvard Business School.

Kill Your Business Model Before It Kills You

Harvard Business Review

Postal Service to stay in business. This vignette raises a key leadership question: Why do leaders wait too long to modify or abandon their business models? The Postal Service, even with the constraints of its government mandate, has known for years that its traditional model was coming apart; Kodak realized that film was being replaced by digital media long before it changed its investment strategy; AOL knew that dial-up subscriptions were fading years before it took action.

What Makes Some Silicon Valley Companies So Successful

Harvard Business

We met with leaders at private equity funds, venture capitalists, and incubators, including Andreessen Horowitz and Playground. Yet while that kind of leadership is crucial, it’s the ability to tap the collective minds of the organization that drives the business. Managers act more as enablers and connectors, providing regular feedback and tracking progress. In many cases elements of the acquired business’ culture can become a model for the acquiring company.

3 Ways to Get Your Own Digital Platform

Harvard Business

And despite their relatively short existences, digital platforms such as Uber, Airbnb, Pinterest, and Snapchat are wreaking havoc on traditional businesses. Network businesses have always been around, from matchmakers to real estate brokers, but it’s the move to digital platforms that has led to market-shaking effects. Organizations that manage digital networks (we call them network orchestrators) are different from traditional product and service providers.

How Ford Is Thinking About the Future

Harvard Business

” But if you are the Ford Motor Company and face the prospect of investing billions in new technology while your century-old business model is overturned, you might first have a few questions. Incubated at Y Combinator, the venture was aimed squarely at the most important, most reliable, most consistent mobility need that consumers have every day: getting to and from work. The shared model lowers urban congestion and carbon emissions.

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Determination is Not Enough; Content Creators Need Blockchain on Their Side

Strategy Driven

operate using for-profit, centralized business models that are wholly dependent on third parties. The reason these name-brand companies are migrating to blockchain is because they recognize it offers a more efficient way to manage projects and tasks. Brad Robertson is the founder and CEO of Polyient Labs , a Phoenix-based blockchain incubator with offices in Denver and San Diego. Online Marketing and Website Development Blockchain business management strategydriven

Light the Fire and Clear the Path

Mills Scofield

Because that was how I was managed and led from the start of my career, because that was really all I personally and gratefully knew, that was how I managed and led others; how could I know otherwise? I’ve been privileged to help Sidney keep the spark going when the daily frustrations of managing a staff, fundraising, and emotional drain of cancer’s reality take a toll. MED tried to grow into other emerging markets, but no viable business model emerged.

To Grow a Digital Business, Learn from the Startup Community

Harvard Business Review

What seems certain is that if you’re managing an incumbent company, you cannot predict, much less invent, the future on your own. WPP, the world’s largest marketing-services company, has bought more than 400 digital businesses over the past decade, and it gives them sufficient autonomy that they continue to grow; around 40% of the company’s revenues now come from digital offerings. Growing Digital Business. Innovation Business models Internet

How to Make Sustainability Every Employee’s Responsibility

Harvard Business

” You aren’t alone; while most organizations talk the talk of sustainability — doing things like integrating environmental and societal concerns into their business models — very few walk the walk. Based on this research, I have developed a three-phase model that shows how companies can move beyond rhetoric and take ownership of sustainability. My framework for creating such sustainability ownership has three phases: incubate, launch, and entrench.

Light the Fire and Clear the Path

Mills Scofield

Because that was how I was managed and led from the start of my career, because that was really all I personally and gratefully knew, that was how I managed and led others; how could I know otherwise? I’ve been privileged to help Sidney keep the spark going when the daily frustrations of managing a staff, fundraising, and emotional drain of cancer’s reality take a toll. MED tried to grow into other emerging markets, but no viable business model emerged.

What Western Companies Need to Know About Partnering with Startups in India and China

Harvard Business

A useful starting point in analyzing China-India differences is the argument made by Harvard Business School Professor Tarun Khanna that India is essentially an institutionally weaker and more chaotic version of economies like the U.S. incubators) that nurture startups typically embody local government efforts through which state policy is implemented on the ground. px photography/Getty Images.

Don’t Acquire a Company Before You’ve Asked These Questions

Harvard Business

First and foremost, companies outside of the technology sector are making acquisitions to get their hands on technologies that they see as complementary (or threatening) to their existing businesses – especially those that could underpin a fuller and more digital experience for their existing customers. When a business provides access to an interesting segment of customers, why not target them with a more compelling offer yourself? Julian Watt/Getty Images.

Zipcar Doesn’t Just Ask Employees to Innovate — It Shows Them How

Harvard Business

But even a business model innovator like Zipcar must eventually respond to a changing world. A stark reality recently crept up on Zipcar: It had designed its entire customer experience as a desktop-and-laptop experience, so it didn’t have a way to sign up, service, and help members manage their memberships from their phones. Employees were invited to a meeting where leadership discussed its mobile business imperative.

Why Are Immigrants More Entrepreneurial?

Harvard Business

In a recent study , we investigated a different explanation: Cross-cultural experiences may increase individuals’ capabilities to identify promising business ideas. By applying this kind of arbitrage, a temporary or permanent migrant can decide to replicate a profitable product or business model available in one country but not in another. The business opportunities they came up with were rated by four venture capitalists and industry experts blind to the source.

Why Some of the Most Groundbreaking Technologies Are a Bad Fit for the Silicon Valley Funding Model

Harvard Business

The Silicon Valley model, for all of its charms, was developed at a specific time, for a specific industry, which was developing a specific set of technologies. While it can offer valuable lessons for other industries and other problems, the model is not universally applicable. We’re now entering a new era of innovation , one that the model doesn’t quite fit, and we will have to develop new approaches to build the future. The Silicon Valley Model.

The Benefits of Taking a Slower Approach to Innovation

Harvard Business

In our experience, managers tend to focus their innovation efforts on processes that are either large in scale (new products and business models ) or swift in development (hackathons, rapid prototyping, or emerging platforms). And, for those managing such projects, it can be difficult to sustainably guide them through circuitous organizational terrain. The company began experimenting with various models for engaging those particularly dedicated fans.

Embracing Bad Ideas To Get To Good Ideas

Harvard Business

” I heard top management ask that question many times during the two years I spent working on new products at The New York Times. In the case of The New York Times , what management was really asking my colleagues and I was: are the three, soon-to-be launched paid products you’ve been working on going to turn out to be any good, or are we wasting our money? An advertising business, GoCARD distributed free, artist-designed postcards in bars and restaurants.”This

The Strategic Mistake Almost Everybody Makes

Harvard Business Review

The general point is right — a dollar of investment in incrementally improving the core is almost always going to earn a greater near-term return than a dollar invested in a growth business that might take years to incubate. If we just take our investment in innovation and redirect it to our core business, we’ll be much better off.”. And I’m the last to argue against making today’s business as resilient as possible.

The Clean-Tech Economy at the Base of the Pyramid

Harvard Business Review

In my 1997 HBR article, Beyond Greening: Strategies for a Sustainable World , I made the case for sustainability as a key driver of business growth. doesn't lack for technology; what it lacks is the imagination and capability to design the strategies and business models of tomorrow. infrastructure and business models — and so policy inertia and entrenched incumbents can stifle them. Global business Sustainability

Creating a Future for (American) Cleantech

Harvard Business Review

Our framework for thinking about industry-level systems, which we first described in HBR in 2009 and which draws from Clay Christensen's work on disruptive innovation, has four components: 1) enabling technologies; 2) business models that successfully commercialize the technologies; 3) value networks, or market ecosystems, that support the business models; and 4) standards and regulations that enable scale.

How GE Stays Young

Harvard Business Review

GE is an icon of management best practices. That includes learning from the outside and striving to adopt certain start-up practices, with a focus on three key management processes: (1) resource allocation that nurtures future businesses, (2) faster-cycle product development, and (3) partnering with start-ups. You need to think like a portfolio manager, allocating resources both to innovate in your core and for the future.

Groupon Doomed by Too Much of a Good Thing

Harvard Business Review

Clayton Christensen would agree with the intuition that Groupon displays but ignores: businesses should become profitable before they become big. The best way to manage a fledgling business is for managers to be impatient for profit but patient for growth. First, when a business is impatient for profit, managers are forced to validate their assumptions and demonstrate that customers are fundamentally willing to pay an acceptable price for the company's offering.

What BMW’s Corporate VC Offers That Regular Investors Can’t

Harvard Business

To fill the void and build such a new BMW startup unit, Gimmy partnered with an experienced innovation manager from BMW, Matthias Meyer. The prevalent model of startup cooperation in recent years has been corporate venture capital and accelerators (CVC&A). As a result, top founders prefer independent, noncorporate accelerators, and, to date, no corporate accelerator has truly accomplished incubating world-class startups. Creating the Venture Client Model.

Why Today’s Corporate Research Centers Need to Be in Cities

Harvard Business Review

The business model of these firms was to make markets , and they were large enough essentially to monopolize the technology categories if successful. Basic science in genomics is the platform on which new biological drugs rely; advances in machine learning support the Internet of Things in everything from home appliances to automobiles; and new computational methods manage both power plants and grocery store supply chains. Something is happening in Midtown Atlanta.

How Startups Overcome the Capital Gap

Harvard Business Review

Imagine you''re a first-time entrepreneur with an unvalidated business idea and no track record of making money for investors. You can go to an incubator and potentially try to convince them to write a $15-$25K check to get your idea off the ground. However, the best incubators also look for large, venture fundable business opportunities. Let''s suppose your idea is a good, viable business idea, but not a billion dollar market opportunity.

Procrastination Is Essential to Innovation

Harvard Business Review

This post was co-authored with Bob Moesta , Managing Partner of The Re-Wired Group in Detroit. According to the Journal of Management , NASA scientists and engineers found that performance increases as deadlines shorten, but when the deadlines became too short, performance declined. By reframing it as being analogous to launching a business, I talked myself down. I've never published a book before, but I have incubated businesses.

Why Silicon Valley Rules Don’t Work for So Many Older Companies

Harvard Business Review

Many of these entrepreneurial lessons have been codified in books, the new bibles for innovation — not just for entrepreneurs but also for managers looking to create new and innovative innovation businesses inside existing corporations. With the support of a corporate team, each project team implemented rapid prototyping: iterating experiments on the different components of their new business design and strategy in order to identify the right business model.

The Two Questions to Ask Before You Innovate

Harvard Business Review

Its members had a carefully constructed PowerPoint document, replete with facts and figures that showed the attractiveness of what we''ll call the booming management-training market in China (details have been disguised to protect the client''s confidentiality). A meticulously constructed business plan showed how the venture could thoughtfully expand into six major cities in China. Yet, the presentation highlighted a critical gap between the team and its senior management sponsors.

Kodak and the Brutal Difficulty of Transformation

Harvard Business Review

In the decades that followed Kodak established a dominant position in the lucrative film business, with its "you push a button, we do the rest" slogan demonstrating its commitment to making photography accessible to the masses. The engineer behind that project, Steve Sasson, offered a memorable one-liner to the New York Times in 2008 when he said management's reaction to his prototype was, "That's cute — but don't tell anyone about it.". It's the business model, stupid.

Help Us Innovate the Innovation Process

Harvard Business Review

Innovation, in operations, products, business models and ecosystems, isn't merely a competitive advantage, it's the competitive advantage. Dig into the genesis of a paradigm-busting new product or service, and you'll usually find that its success owes more to the indomitable spirit of a lone innovator than to the obliging climate of an inherently pro-innovation management model. Ultimately, every management process must be a catalyst for innovation.

Innovation Is as Much About Finding Partners as Building Products

Harvard Business

The technology-driven disruption model that brought us computing, the internet, and mobile apps is no longer sufficient. Executives of the “old economy” are certainly aware of their own vulnerability, as they witness the impact of Uber on the taxi industry, Airbnb on hospitality, and automated asset management on financial services. Scotiabank is also a leader in adopting this type of new model.

Six Strategy Insights RIM's New CEO Can Use

Harvard Business Review

It involves too many people When a strategic plan needs to finely calibrate the moves of loosely controlled business units and achieve consensus, then it often makes sense to include a wide range of stakeholders in the discussions. It is rushed Despite being faced with new and complex challenges, many businesses in turbulent industries devote too little time to strategic planning, often compressing the discussion into a single, marathon meeting.

The Promise of a Truly Entrepreneurial Society

Harvard Business Review

Most large companies seem to have lost the taste for entrepreneurship, their CEOs preferring to focus on using technology to maximize profit from existing businesses, as Clayton Christensen and others have shown, or not to invest at all. In terms of management, the advent of the entrepreneurial society means above all replacing the rigidities of industrial-age mind-sets, with their command-and-control, top-down orientation. Managing the transition. laura schneider FOR HBR.

Don’t Abandon Innovation — Simplify It

Harvard Business Review

What can be done, in the spirit of Bill’s admonishment, is to stop getting tangled up in all of the variations, nuances, tools, techniques, models, frameworks, and paradigms of innovation. These are all good things, but they should be part of the normal course of business and the drive for continuous improvement. They quickly develop prototypes and models that can be tested both in the laboratories and with customers (rapid experimentation).

All Hail the Failure Sector

Harvard Business Review

Since at least the 1980s (the era of deregulation, that is, over which Alfred Kahn presided) managers of big companies have been upbraided for their intolerance to risk. As Dick Morley — an MIT manufacturing innovator with deep experience in the auto industry — put it to us, "the trouble with big companies is that they take nice high-risk, high-return opportunities, then manage the risk out of them to the point that there's no return left."

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To Reform Capitalism, CEOs Should Champion Structural Reforms

Harvard Business Review

Its weaknesses, like short-termism, speculative trading, absentee ownership, profit- and shareholder-centric orientation, inability to account for non-monetary value, exploitation of labor, and extractive use of natural resources are creating too many disruptions across the globe for the model to survive. CEOs manage them, employees work for them, customers buy from them, suppliers sell to them, investors buy their shares, and governments regulate their activities.

Solving Your Biggest Innovation Challenge

Harvard Business Review

Our analysis suggests that big companies should focus instead on what we call "innovation at scale" — that is, achieving repeatable and sustainable organic growth from new products, services and business models that build on the core business. This approach, too, is challenging: just 6% of the companies we analyzed managed to innovate at scale consistently through the period. Game-changing innovation is a beautiful thing.

The Secrets to TripAdvisor's Impressive Scale

Harvard Business Review

As we have seen with the recent speed bumps at highfliers like Groupon and Zynga, taking "lean startups" from foundation to creating sustainable, scalable, profitable business models is a very rare and special task. So I'm highlighting a few companies outside of the Google/Amazon/Facebook pantheon that have built large, sustainable, profitable business models at scale. Scaling Lesson 1: Focus On Finding A Great Business Model. Scaling is hard.

The 5 Things IBM Needs to Do to Win at AI

Harvard Business Review

By making such a bet, IBM will face much greater resistance than Gerstner faced, both internally (business units protecting turf) and externally (investors decrying the poor short-term results and future risks). IBM Watson’s progress in the health care market is a significant example and driver of the transformation, providing big lessons to IBM and to every large company that must disrupt its own business — or watch competitors do it first. Can the elephant dance again?

How IBM, Intuit, and Rich Products Became More Customer-Centric

Harvard Business Review

The issue arose as a result of changes to IBM’s business model for software. Technology companies using the cloud model provide their clients software or other computer technologies in the form of services delivered over the internet. The technologies and trends shaping tomorrow’s businesses. The parts of the business where the approach is used most intensively grew revenue by double digits in 2014. How well do you know your customers?

The 5 Requirements of a Truly Innovative Company

Harvard Business Review

Can you think of any business topic that’s been hotter for longer than innovation? Trouble is, it’s hard to think of any business challenge where real pro­gress has been harder to come by. In a McKinsey poll , 94% of the managers surveyed said they were dissatisfied with their company’s innovation performance. Within any industry, mental models tend to converge over time. Innovation-friendly management processes.