Business Model Innovation is a paradigm shifting innovation that changes the way business operates, making it the most difficult to execute. It needs involvement of everyone in the system from top management to all employees. It also means a different way to engage with customers or deal with entirely new set of customers. Karan Girotra and Serguei Netessine in their HBR blog Why Large Companies Struggle With Business Model Innovation talk about three challenges for business model innovation in organizations.
First challenge they see is lack of top management support, that I think is must for any kind of innovation initiative to be successful in the firms. Yes, it is even more important when it comes to business model innovation as it involves a bigger change and can not be done by individuals without a proper execution strategy. Second challenge that they mention is reluctance to experiment. I like the way they describe the All or None approach that managements tend to follow. At the same time, I also know that it is not easy to experiment business models as it to experiment a new product or new service. New Business model involves fundamental changes to the system and that can be huge risk. Experimentation may or may not be possible every time, though it may be the need of the hour. Failure to pivot – their third challenge is interesting insight, something that most businesses can take care of.