Seizing the White Space for Innovation
A while ago I received Seizing the White Space by Mark W. Johnson in the mail. Seizing the White Space is an approachable 200 pages, and is an easy, and pleasant read.
Mark W. Johnson is chairman of Innosight, a strategic innovation consulting and investing company.
The book is focused on business model innovation and introducing a simple framework for thinking about potential business model innovations and evaluating the positives and negatives of a potential business model. The book first defines ‘white space’ with the following two-by-two matrix:
After reading the book I was left with two questions that I would love your feedback on. If business is about margin and profit maximization:
- Are companies typically better served by moving into white space areas or by licensing their IP to someone for whom the activity is core (or pursuing some other type of external collaboration)?
- Why do many organizations think that they have to develop an opportunity or otherwise hide it away?
One of Mark Johnson’s initial points is that we lack a shared vocabulary for discussing and comparing business models. As a solution Mark offers up his four-box business model framework:
Looking briefly at the four elements from the four box business model, they are as follows:
Customer Value Proposition (CVP) – An offering that helps customers more effectively, reliably, conveniently, or affordably solve an important problem (or satisfy a job-to-be-done) at a given price.
Profit Formula – The economic blueprint that defines how the company will create value for itself and its shareholders. It specifies the assets and fixed cost structure, as well as the margins and velocity required to cover them.
Key Resources – The unique people, technology, products, facilities, equipment, funding, and brand required to deliver the value proposition to customers.
Key Processes – The means by which a company delivers on the customer value proposition in a sustainable, repeatable, scalable, and manageable way.
The book talks a bit about non-consumption as a source of opportunities and how there are often four main barriers to non-consumption:
In addition to showing how you should try and pursue business model innovation, the book also tries to share some cautionary tales of how not to do it, including visible cases like Delta’s Song effort, and lesser-known cases like SAP’s Pandesic effort.
There is also a great quote in the book from A.G. Lafley that I’d like to share:
“Innovation is risky but it’s not random. Innovators have a disciplined invention process. They may not be able to articulate it, and sometimes the Eureka! moment happens in the shower, but it stems from a disciplined process.” – A.G. Lafley
Finally, as intrapreneurs seek to solve customer jobs-to-be-done along functional, emotional, or social aspects, management needs to remember that business model innovation projects require an incubation period before accleration can occur. This incubation period may need to be several years. So, if your organization is serious about business model innovation, is it willing to make the kind of financial and time commitment to launch a business model innovation and work on getting the business model right and seeing if it will scale by testing it in the marketplace?
Taken all together I found “Seizing the White Space” to present a clear approach to evaluating not only potential new business models, but for evaluating your current business model as well.
Braden Kelley is a popular innovation speaker, embeds innovation across the organization with innovation training, and builds B2B pull marketing strategies that drive increased revenue, visibility and inbound sales leads. He is currently advising an early-stage fashion startup making jewelry for your hair and is the author of Stoking Your Innovation Bonfire from John Wiley & Sons. He tweets from @innovate.
NEVER MISS ANOTHER NEWSLETTER!
Live from the Innovation Studio comes EPISODE FIVE of a new ‘Ask the Consultant’ series of short form videos. EPISODE…Read More
The reality is that for most of us project managers, whether we want to acknowledge it or not, the process…Read More