Business Model Innovation: 5 Steps for Strategic Ideation

The Business Model Ideation Process

The ideation process can take several forms. Here we outline a general approach to produce innovative business model options:

1. 1. Team Composition

   Assembling the right team is essential to generating effective new business model ideas. Members should be diverse in terms of seniority, age, experience level, business unit represented, customer knowledge, and professional expertise.

2. 2. Immersion Phase

   Ideally, the team should go through an immersion phase, which could include general research, studying customers or prospects, scrutinizing new technologies, or assessing existing business models. Immersion could last several weeks or could be as short as a couple of workshop exercises (e.g., the Empathy Map).

3. 3. Expanding Solutions

   During this phase, the team expands the range of possible solutions, aiming to generate as many ideas as possible. Each of the nine business model building blocks can serve as a starting point. The goal of this phase is quantity, not quality. Enforcing brainstorming rules will keep people focused on generating ideas rather than on critiquing too early in the process.

4. 4. Criteria Selection

   After expanding the range of possible solutions, the team should define criteria for reducing the number of ideas to a manageable few. The criteria will be specific to the context of your business, but could include things such as estimated implementation time, revenue potential, possible customer resistance, and impact on competitive advantage.

5. 5. Prototyping and Shortlisting

   With criteria defined, the team should be able to reduce the number of ideas to a prioritized shortlist of three to five potential business model innovations. Use the Business Model Canvas to sketch out and discuss each idea as a business model prototype.

Technique 3: Visual Thinking for Business Models

By visual thinking we mean using visual tools such as pictures, sketches, diagrams, and Post-it notes to construct and discuss meaning. Because business models are complex concepts composed of various building blocks and their interrelationships, it is difficult to truly understand a model without sketching it out.

A business model really is a system where one element influences the other; it only makes sense as a whole. Capturing that big picture without visualizing it is difficult. In fact, by visually depicting a business model, one turns its tacit assumptions into explicit information. This makes the model tangible and allows for clearer discussions and changes.

Visual thinking enhances strategic inquiries by:

• Making the abstract concrete
• Illuminating relationships between elements
• Simplifying the complex