{"id":1666,"date":"2012-04-26T08:02:26","date_gmt":"2012-04-26T14:02:26","guid":{"rendered":"http:\/\/workingknowledge.com\/blog\/?p=1666"},"modified":"2023-03-02T21:27:35","modified_gmt":"2023-03-03T03:27:35","slug":"kaplans-business-model-innovation-factory","status":"publish","type":"post","link":"http:\/\/www.workingknowledge.com\/blog\/kaplans-business-model-innovation-factory\/","title":{"rendered":"Kaplan’s Business Model Innovation Factory"},"content":{"rendered":"

Point<\/strong>: Experiment with new business models in a \u201cconnected adjacency\u201d before committing to them.<\/p>\n

Story<\/strong>:\u00a0 Saul Kaplan, founder of the Business Innovation Factory (BIF), just wrote a new book, The Business Model Innovation Factory<\/em><\/a>.\u00a0 Kaplan shares 15 business model innovation principles, weaving in his personal experience (from Eli Lilly to Accenture to BIF<\/a>) as well as experiences from numerous presenters at BIF’s Collaborative Innovation Summits<\/a>. My favorite chapter in the book was \u201cR&D for New Business Models.\u201d\"\"<\/a><\/p>\n

In the chapter, Kaplan describes how to deal the challenges of testing a new business model.\u00a0 Organizations can\u2019t easily jump from an entrenched business model to a new one.\u00a0 There\u2019s too much support for the old model and too many unknowns about the new one.\u00a0 The solution is to test the new business model in what Kaplan calls \u201cconnected adjacencies.\u201d A connected adjacency is like a real-world sandbox or living lab. For example, Kaplan details how Accenture changed its business model from being a systems integrator to being a business integrator.\u00a0 Accenture (Andersen Consulting at the time) started to rapidly build a strategic capability alongside its existing systems integration business. As Kaplan writes,<\/p>\n

\u201cIt was a connected adjacency that was given the autonomy and resources necessary to scale a rapidly-growing strategy practice from scratch \u2013 right next to the huge systems integration practice.\u00a0 We were an entrepreneurial business unit within the context of the behemoth. The emergent strategy practice would never have worked if it had to live by the rules of the core business model at the time.\u00a0 If not protected, it would have been swallowed alive by line partners from within the core business model. The new business model needed to be shielded, at least temporarily, within the relative safety of a connected adjacency.\u201d<\/p><\/blockquote>\n

Part of the success of experimenting in a connected adjacency is letting employees self-select to participate.\u00a0 In Accenture\u2019s case, the company went so far as to hire partners directly from outside the company \u2013 something the company had never done before in its \u201cpromote from within\u201d philosophy of the past.\u00a0 The connection between the existing business and the innovation sandbox is vital, however, because it lets ideas and experiences be transferred between the two spheres.<\/p>\n

In another example, Kaplan describes Babson College\u2019s creation of Babson Global, an entity separate from Babson\u2019s core business model that serves as an R&D platform for creating, prototyping and testing new approaches for teaching entrepreneurship and creating entrepreneurial ecosystems in communities worldwide.\u00a0 The entity is separate from the college but adjacent to it \u2013 faculty and staff from the college self-select to participate.<\/p>\n

Action<\/strong>:<\/p>\n