Creating new business models is hard. Creating an organization that is continuously creating new business models is extremely hard. The closest I’ve seen is organizations running an Agile Product Development (APD) process. APD focuses on creating a culture and processes that support small, semi-autonomous, high performance teams.
Unfortunately, APD isn’t the answer when it comes to business model innovation. The brightest minds in Agile lay this out well even if they don’t say the words “business model innovation” when they talk about where APD has challenges:
When I came to U.C. Berkeley in 2010 to run the Lester Center for Entrepreneurship in the Haas School of Business we were teaching entrepreneurship the same way as when I was a student back in 1995. Our core MBA class used the seminal textbook New Venture Creation by Jeffrey Timmons of Babson College that was first published in 1977. The final deliverable for that class was a 30-page business plan. We had multiple business plan competitions. As I looked around at other schools, I saw pretty much the same landscape – business plan classes, business plan competitions and loosely coupled accelerators that focused primarily on mentoring.
Over my career as a serial entrepreneur I observed that since the late 1990s, no early-stage Silicon Valley investor had used business plans to screen investments. Even those who asked for them never read them. Traction and evidence from customers were what investors were looking for – even in “slow” sectors like healthcare and energy. There had been tectonic shifts in the startup world, but our business school curriculum had barely moved.