Business model innovation: BMI

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A clear and practical paper from BCG explains nicely what a business model is, what ‘innovating’ it means, and when and how to do it. The only caveat is the superior total shareholder returns it claims comes from BMI innovators vs. traditional innovators – it likely excludes BMI innovators who failed. So by all means check it out, assess whether BMI is appropriate for you, but if not, get back to driving performance in your existing business model.

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Beware divesting core business

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A rare example of clear and useful academic research from Emilie Feldman at Harvard [but treat it with care – see below]. Emilie “investigates “legacy” divestitures, the sale or spinoff of a company’s historical core business. Firms appear to divest their legacy businesses within the context of larger efforts to reshape their identities. I find that operating performance deteriorates in the years following legacy divestitures, and this decline appears to be linked to a loss of intangible resources embedded in the ...

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More ‘transformation’ hype

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Just had to pour some cooling water over another bit of hype on this issue. Harvard Business Publishing just promoted ‘Constant Transformation Is the New Normal‘ by Scott Anthony. See below for my reponse:

Please be careful about this kind of journalistic hype! There are plenty of less-thoughtful folk out there who will just pick up the headlines and set off doing dumb things urged on by discussions like this.
‘Transformation’ is about the most exaggerated and over-sold concept ...

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Successful transformation

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Readers will know I’m no fan of the obsession with ‘transformation’ in strategy, but it’s sometimes essential or advanageous. In Corporate Transformation under Pressure, McKinsey report a less than 40% overall success rate, especially when used in an effort to get out of trouble – as they say, “this finding seems to contradict the common wisdom that it is hardest to transform a company when it lacks an acute and apparent need for change“. As I’ve said in ...

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