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Building a Business Creation Engine

Updated: Jul 17, 2021

In their article, "The hard truth about business model innovation" Christenson et al explain, with reference to the Business Model Journey, the three stages that all businesses inevitably pass through, namely Creation, Sustaining innovation and Efficiency Innovation.

The writers argue that "The hard truth about business model innovation is that it is not the attributes of the innovator that principally drive success or failure, but rather the nature of the innovation being attempted. Business models develop through predictable stages over time — and executives need to understand the priorities associated with each business model stage."

Companies should build Business Creation Engines, capable of "....turning out a steady stream of innovative new business models, but to date (at 2016/7) no company we know of has built an enduring capability like that".

What is needed is to turn an event-the act of creating a new business and business model-into a repeatable process at the corporate level. The writers conclude, explaining that:

"Executives sometimes prefer to invest in their existing businesses because those investments seem less risky than trying to create entirely new businesses. But our understanding of the business model journey allows us to see that, over the long term, the greatest innovation risk a company can take is to decide not to create new businesses that decouple the company’s future from that of its current business units."

#innovation #businessmodels #strategyexecution

The Hard Truth About Business Model Innovation

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