“If you do innovation investments, do it in business modeling if you want the highest value back”, said Professor Bengt Järrehult from SCA that organized the workshop Customer Development and Business Model Innovation together with Henrik Berglund from Chalmers.
Bengt Järrehult told us that traditionally, companies spend most time on innovation related to product development. However, they often innovate less in areas such as finance. And research has shown that the most value for the company can be created in the financial area, for example business model innovation.
Therefore, SCA and Chalmers challenged us participants to come up with new business models for Frog Chemicals, a company specialized in lube for spinning cycles. Each group got an A2 canvas with Alex Osterwalder’s famous business model system on it. The system contains nine different perspectives on the business model, for example customer segment and revenue stream. We wrote post-it notes which we placed in each area, describing how we developed a business model that support the fictive case of Frog Chemical to sell 5-years service contracts. The post-it notes we used were an innovation in itself. A new pimped up version called Stattys that stuck to the surface with static electricity. This made it possible to drag them around on the canvas easily.
We struggled at first with the collaboration in the group and eventually we discovered that we were trying to develop three different business models at the same time. That showed the inherent complexity of the process: another group suggested that a facilitator should be used for bringing all the aspects of the business model together. “The hard thing is focusing on one area of the business model at the time”, said one of the participants.
Bengt Järrehult also talked about the importance in developing more than one business model and then test it before you make a final decision. Ask for feedback from the customers and then iterate. “Don’t fall in love with your first business model”.
Professor Henrik Berglund from Chalmers also talked about customer development and how this process differs from traditional product development, where you first build a product and then launch it to a market. In a customer centered process, you involve the customer and ask for feedback through the whole development process, which contributes to reaching a better market-product fit faster.
“You need to get out of the building to learn and discover the product together with the customers. If you don’t do that you don’t know what you are doing wrong, until you are out of money”, said Henrik Berglund.
Article by Lisa Renander, Co-founder & CEO, Go Enterprise AB
För mer information:
Activity: Customer Development & Business Model Innovation Workshop at IIA 2011
Date: 19th - 20th of October 2011
Place: Sky City Conference at Stockholm Arlanda Airport
Profile of participants: Innovation practitioners
Hosted by: Innovation Pioneers
Partners of IIA 2011: Swedavia, Microsoft, Logica, Vinnova, Maxibit, Bergenstråhle & Lindvall, SISP and Baker & McKinzie.
The initiating companies of Innovation Pioneers:
Astra Zeneca, Alfa Laval, Electrolux, Volvo IT, Atria,The Absolut Company (Pernod Ricard), Ergonomidesign, Ericsson, Googol, Hjälpmedelsinstitutet, IKEA, Innventia, SCA, Stora Enso, Tetra Pak and Uponor.