Opinion: Spatially challenged? Here’s the book for you

Mark W. Johnson, Seizing The White Space: Business Model Innovation For Growth And Renewal, Harvard Business School, 2010.

Have you looked closely at your company’s business model?  Do you have a clear understanding of how it delivers value to your customers, and profits for your organization?

If the answer to these questions is no, this book should serve as a useful guide. 

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According to Mark Johnson, very few organizations have an understanding of how their business models work – including the premise behind its development, interdependencies and strengths and weaknesses. This inhibits their ability to identify competitive threats, as well as to use business model innovation as a growth source.

He says executives often underestimate the importance of business model innovation, despite numerous examples of companies – from Amazon to Wal-Mart – that have used it to reshape entire industries. Similarly, many examples of innovative products and services have failed because of poorly developed business models.

The author provides a framework for understanding your business model, and a playbook for adapting it to potential growth opportunities available.

Mark Johnson is chairman of Innosight, an innovation-based consulting, research and executive training firm. He cofounded the business with Clayton Christensen, a Harvard professor and author of management classics The Innovator’s Dilemma and The Innovator’s Solution.

Mr. Christensen’s influence is apparent, particularly in the section on large companies rejecting innovations not corresponding to their business models – Kodak and the digital camera being a prime example, he says. 

The book’s premise first appeared in a 2008 Harvard Business Review article co-written by the authors. Mr. Johnson developed this initial article into Seizing The White Space through additional case studies, and by providing a blueprint for evolving companies to capitalize on market opportunities.

He suggests many new market opportunities can be found in a company’s “white space.” The term describes opportunities to serve customers in ways that force companies to evolve beyond their core, and require development of new business models. In a reference to the Jim Collins classic, he suggests that in today’s environment, being ‘built to last’ “requires businesses to continually transform by looking to uncharted waters and adapting business models accordingly.

The book provides a number of examples including Amazon, Procter & Gamble, Tata, Dell, Better Place and Zara that have used business model innovation to grow and, in many cases, transform their industries. Amazon, in particular, is portrayed as a company that understands its customers’ needs and has built new business models to exploit these opportunities.

Seizing The White Space provides a useful four-box model for understanding the dynamics of a business model. Key elements of this include customer value propositions; the profit formula; key resources that the value proposition requires, and the processes needed for delivery. Using this model will help you understand the strengths and limitations of your current model, and what changes may be required to deliver on white space opportunities.

As well, based on his firm’s research, Mr. Johnson lays out a process for designing and implementing new business models. His objective is to turn business model innovation into a disciplined and repeatable process and a valuable source of competitive advantage. 

A recent survey found that more than 50 per cent of executives believe that in the future, business model innovation will be even more important for competitive success than product or service innovation. This book will help you navigate this process. 

Micheal Kelly is dean of the Telfer School of Management at the University of Ottawa.

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