Innovation Value is in Business Models, Not Products

18 09 2008

BusinessWeek has some data in this week’s issue on revenue and profit growth for companies named to its Most Innovative Companies list, with some clear dominance from companies seen as innovating business models (in yellow below) – as opposed to customer experiences (green), business processes (purple), or products (blue).


Source: BusinessWeek

This is in line with research from innovation consultancy Doblin, which finds a bit of an 80-20 rule about innovation: ~80% of innovation is in products that account 20% of the value growth, while ~20% of innovation is in business models and other more lucrative areas that generate 80% of the growth.  Doblin’s reasoning: product innovation is often needed just to keep up, while business models can revolutionize value creation.

Business model innovation has led to a host of recent developments, including software-as-a-service (SaaS), fractional ownership, pay per use/rental/subscription services in music and movies, and even advertising (witness Microsoft’s cashback Search).


An Appeal for Universal Preventive Care

21 08 2008

It’s campaign time and no matter who you’re voting for, you’re bound to see some change in Washington following this November’s election. I’ve never delved too deeply into public policy, but I’d like to suggest a public policy for universal health care. Not the uber-expensive, tax-you-50%-of-your-income version that guarantees full health care at any health facility (as in Germany, where they spare no expense to make sure you get the absolute best treatment but tax income heavily).

Rather, I suggest a universal PREVENTIVE CARE plan that guarantees every citizen will be afforded a personal regimen of preventive care treatment. Preventive care has a whole host of benefits, not least of which is reducing the ultimate cost of health care by eliminating high-cost failures before they happen. Preventive care is essential to providing individuals with the regular health guidance they need to make more accountable health choices and achieve early identification of potentially dangerous conditions. A national preventive care program could also push individuals to augment the national preventive care program with private emergency care insurance that could more accurately reflect the costs of riskier health choices – further encouraging individuals to recognize the high cost of smoking, overeating, and other dangerous health habits. Read the rest of this entry »

Growth Leaders | Jeanne Liedtka on

14 07 2008

I studied with Jeanne Liedtka in Darden’s full-time MBA program while we successfully proposed a new design-oriented Strategy Lab and executed a “blue ocean” consulting engagement with a major international architecture firm. Here, Jeanne discusses some of the bigger points from a forthcoming study on “growth leaders,” the individuals who consistently lead innovating organizations to better serve customer needs and deliver market-leading performance.

Vodpod videos no longer available.

Jeanne and her co-authors, including Sean Carr, director of corporate innovation programs at Darden’s Batten Institute, recently produced an article in the Sloan Management Review detailing some of their findings on growth leaders as well.  Follow the link for the article:

In Search of Growth Leaders

Transforming business with open source models | Why Nokia Bought Symbian

9 07 2008

A couple weeks ago, Nokia surprised the world when it announced it would buy out the other partners in mobile operating system company Symbian for $410 million, repackage the software, then release it to the world under a business-friendly Eclipse Public License.  Why would this leading handset maker turn loose the market-leading mobile operating system, installed on roughly two-thirds of the world’s handsets?  And what does it mean for the LiMo Foundation and Open Handset Alliance, both of which are developing open source operating systems for mobile devices as well?

Scott Anthony, the President of Innosight and a Discussion Leader at Harvard Business Publishing, has offered one of the best analyses of Nokia’s business case for turning Symbian open.

Why Nokia Bought Symbian, Then Gave It Away – Scott Anthony

Essentially, the folks at Innosight reckon that consumers don’t purchase cell phones for the operating system – they purchase for the looks and, increasingly, the capabilities.  With new SDKs for the iPhone and the buzz around other open development platforms for mobile devices, Nokia could see its handset business threatened should a “killer application” be developed for a different platform.  Now Nokia is opening up the largest mobile development platform in the world, seeking to attract the best developers to Symbian so that Nokia’s handsets will be the most capable devices in the world.

I wonder if Nokia is also stepping down a path similar to IBM’s transformation into a services organization.  Could Nokia become a consultant and deployer of services when the platform is open?  Might Nokia become the preferred enterprise partner for mobile applications, given its expertise in handsets and operating systems?

What Nokia lacks is an integrated service tier, like that of Google’s mobile services, to make a concerted effort at becoming a leading mobile services organization.  Google, which is leading the charge on Android, has the potential to be the leader in mobile ad services for advertisers and publishers targeting Android devices as well as extend its reach of ad-supported services like GMail and Blogger to a world of mobile devices.

Google Mobile servicesGoogle Mobile Services

Google competes on the basis of choice every day, so it’s not likely to require use of its services in an Android deployment, but it is particularly well situated to benefit from wider mobile access to its web and ad services.

Innovation in Recruiting: VisualCV

11 02 2008


Are you ready to take ownership of your professional web identity? A veteran of web services and a seasoned recruiting executive have teamed up to launch VisualCV, Inc. Their gorgeous multimedia web document resuscitates the resume, allowing you to post a professional resume, CV, or bio for public distribution or even application for employment. With a VisualCV, you can attach videos, image files, work samples, or other professional portfolio documents to provide a more compelling first impression – and if you’re a recruiter, you can cut down the time you waste screening out applicants for your positions. Read the rest of this entry »

Beyond Green

5 01 2008

When a hotel executive asked me recently what I would do to communicate the hotel’s sustainability initiatives to current and future customers, I proposed that the hotel explicitly abandon trying to advertise and promote its actual green activities to focus more on the emotional goodwill of sustainability through story telling and interactive displays – allowing guests to touch and feel (with hands and heart) the ways the world could be a better place. Read the rest of this entry »

Innovation in Services: Miriam’s Kitchen

18 10 2007

The value creators in our new economy are providing exceptional experiences by outperforming their niche in an industry network or tying together the nodes of the network and packaging the whole thing in innovative ways.

As part of my recent course at Darden on Innovation and Integration in Services – The New Economy, I made observations on a number of innovations as examples of value creation in this flat, networked world. This is my submission on Miriam’s Kitchen.


This organization falls strongest in the “Make Their Day” and “Be There” categories of the Fish! Philosophy. Miriam’s Kitchen, a provider of meals and additional services to homeless people in Foggy Bottom neighborhood of Washington, DC


Miriam’s Kitchen is noteworthy for a number of characteristics. It has always used hot meals as a way to gather people who could benefit from the area’s social services and introduce those services in a non-threatening manner. In that sense, the dining room aggregates a target audience and makes additional, highly valuable services know. Second, Miriam’s Kitchen attracted a great New York chef to run the soup kitchen. His culinary smarts have helped form food partnerships with local distributors and restaurants Read the rest of this entry »