Building businesses that your customers love AI Group, Melbourne

Your Head The biggest tool for creativity

Your Head The biggest impediment to innovation

2 x 40 = 80

We understand our current way with linear development

240= ?

However, exponential development are not comprehensible for humans

240= 1,099,511,627,776

We love MOTS ore f he ame

1 Beyond optimization of the past

We have to unlearn the past and rethink our business from the customer perspective If you do not do it, others will

Do we really need somebody to tell us when we have to watch a show?

Or do we want to hear from Peter, what he thinks on US credit rating?

Do we need accountants?

Actually, accountants are just one mean to get our books done, manage cash or get expenses ready for taxes.

Do we need taxis?

People want to move easily and with convenience in cities. Taxis are just one mean to do it.

Do we need truck drivers?

We need to move goods around. Human driven trucks are just one mean to do this.

2 Beyond product innovation

Don’t think in markets or products but in customer needs or jobs-to-be-done

The company invented the digital camera in 1973 …

…was the partner of choice for Apple to enter the digital camera market

…but never understood that digital is not a product innovation but demands a whole new business model

Digital was not about the best quality that traditional customers of Kodak loved

From keeping to sharing memories – Digital solves new jobs for customers

Customers discovered new uses, no sane person would have ever thought off

„Wow, I have invented the future of advertising. We do not need any videos or pictures or even color anymore.

The future will be a text ad with maximal 95 characters.

It‘s brilliant, isn‘t it?

Would you have dared to say this?

Instead of looking for better products, Google Adwords brought back relevance to the ad industry

3 Don’t optimize the past, invent the future

If you don’t think from your customers’ perspective and their jobs-to-be-done, you will be exterminated

product/services happy customers

creates

X

value proposition

solves

delivered by

business model

The customer perspective: Technology does not create value. It is the value proposition the customer loves

customer’s job-to-be-done

addressed by

Do we need hotels?

Do we just need a bed like at Formule 1?

Or do we need a place with people in order to connect to the place like at AirBnB?

Customer job to be done

We do not need a hotel. We need an accommodation plus extras like connecting to people. That are the jobs-to-be-done. Customers hire a product or service to get a job done. The products are a means to an end, not an end in themselves.

The value proposition creates the value for the customer, not the product!

Value Proposition The job-to-get-done is solution neutral. The job is to provide accommodation plus extra benefits like connecting to people. Potential solution: §  3* hotel §  Formule 1 Hotel §  AirBnB (accommodation

plus connection to people) §  friend that life in the city

It is of uttermost importance to understand the core job we solve for our customers

4 It’s not the product alone that creates value

The value proposition has to be delivered by the whole business model

„What is a

business model?“

The business model is the DNA of your business

Are you aware of your DNA?

The business model gives meaning to your employees and customers

4 key questions for a successful business:

What excites our customers?

Value Proposition

How do we create value for our customers?

Value Architecture

How do we earn money?

Revenue Model

Who is our team? What values do we pursue?

Team & Values

Value Proposition

Customer •  Who is our

customer? •  What job do we

solve for them?

Value •  What value do we

create for our customers? What value do we create for our partners?

What excites our customer?

Value architecture

Offer •  What is our offer?

Distribution & Communication Channels

•  How do we reach our customers?

•  How do we communicate with our customers?

How do we create the value?

Value Chain •  What activities do

we have to do to produce our offer?

•  How does our value chain look like?

Partner •  What partners do

we need?

Core Capabilities •  What are the core

capabilities we need?

Revenue Model

Cost Structure •  Cost structure is

defined by your value architecture.

Revenue Sources •  With what do we

earn money?

How do we earn money?

Team & Values

Team •  Who is our team? •  What

competencies do we have in our team?

Values •  What values do we

life in our team? •  How do we

interact with each other and with customers?

Who is on our team? What values do we live?

CustomersWho are our customers?What job do we solve for our customers?

Customer BenefitWhat benefit do we create for our customers?What benefit do we create for our partners?

O!erWhat is our o!er?

Value ChainWhat are our value creating steps?What is our value chain?

Core CapabilitiesWhat are the core capabilities we need?

Distribution & Communication ChannelsHow do we reach our customers?How do we communicate with our customers?

PartnerWhich partners do we need?

Questions for a Successful Business Model

Cost StructureCost structure is defined by the value architecture.

Revenue SourcesWith what do we earn money?

TeamWho is on our team?What competencies do we have on the team?

ValuesWhat values do we pursue?How do we interact with each other and the customers?

Revenue Model

Team & Values

Value PropositionValue Architecture

CustomersWho are our customers?What job do we solve for our customers?

Customer BenefitWhat benefit do we create for our customers?What benefit do we create for our partners?

O!erWhat is our o!er?

Value ChainWhat are our value creating steps?What is our value chain?

Core CapabilitiesWhat are the core capabilities we need?

Distribution & Communication ChannelsHow do we reach our customers?How do we communicate with our customers?

PartnerWhich partners do we need?

Questions for a Successful Business Model

Cost StructureCost structure is defined by the value architecture.

Revenue SourcesWith what do we earn money?

TeamWho is on our team?What competencies do we have on the team?

ValuesWhat values do we pursue?How do we interact with each other and the customers?

Revenue Model

Team & Values

Value PropositionValue Architecture

Creating businesses that customers love!

The Leadership Revolution Conference, Melbourne Dr. Patrick Stähler, fluidminds Pty Ltd.

New boxes

to think in.

New process

to discover

the future

Please show me how you open this sachet of sugar?

5 New boxes to think in are not enough

Think like a designer. Plan the process, not the result, prototype, iterate Start with customer insights

Point of View

Business Design is a process of opening your mind and focusing at the end

1

Customer Insight

3

Ideate 2

Understand 4

Design

5

Decide & Prototype

6

Build & Learn

Customer Insights based on jobs-to-be-done are the starting points for business model innovation

Customers’ insight

New value proposition

Business model

innovation

6 Don’t start with a solution

Observe the customer experience journey aka jobs-to-be-done Follow the whole customer journey

1

Customer Insight -  Observe your customers

What job is not yet or badly solved?

-  How does the Customer Experience Cycle look like?

-  On what customer insights is your idea based?

-  validate customer insight

Buy Delivery/ Assembly Usage Comple-

ments Service Disposal

Observe the customer along the whole customer experience journey and find badly or unsolved jobs-to-be-done

§  Understand how the customers are buying, using and disposing the product

§  Understand the whole lifecycle of customers‘ utility

Source: cp. Kim, W.C., Mauborgne, R., Knowing a Winning Business Idea when you see one, HBR Sep-Oct. 2000

Customer Experience Journey

§  How can we improve the buyer‘s utility cycle? §  Can we do more for the customer?

§  Can we leave something to the customer?

Unsolved job-to-be-done What is the biggest problem with socks?

2

Understand -  understand the current

solutions and their strength & weakness

-  understand how the potential customer thinks and decides

-  understand the market & market mechanism

3

Ideate Develop as many ideas as possible in the area of -  customers/ value

proposition -  value architecture -  revenue model

Customers

Customer Benefit

O!er

Value Chain

Core Capabilities

Distribution & Communication Channels

Partner

Business Model:

Cost Structure Revenue Sources

Team Values

Revenue Model

Team & Values

Value PropositionValue Architecture

Use the canvas to fine tune your business model around a better value proposition

4

Design -  decide for three or four

options -  design the business

models for the options -  check the

interdependencies in the business models

-  work on the uniqueness (positioning)

-  optimize the building blocks

Customers

Customer Benefit

O!er

Value Chain

Core Capabilities

Distribution & Communication Channels

Partner

Business Model:

Cost Structure Revenue Sources

Team Values

Revenue Model

Team & Values

Value PropositionValue Architecture Use the canvas to develop your business model!

5

Decide & Prototype -  decide for the best model

to go for -  build prototype -  test prototype with

customers -  write business case -  decide again or work on

different option

6

Build & Learn -  execute business model -  learn continuously from

customer feedback and control KPIs

-  adjust and refine continuously the business model

1

Customer Insight -  Observe your customers

What job is not yet or badly solved?

-  How does the Customer Experience Cycle look like?

-  On what customer insights is your idea based?

-  validate customer insight

2

Understand -  understand the current

solutions and their strength & weakness

-  understand how the potential customer thinks and decides

-  understand the market & market mechanism

3

Ideate Develop as many ideas as possible in the area of -  customers/ value

proposition -  value architecture -  revenue model

4

Design -  decide for three or four

options -  design the business

models for the options -  check the

interdependencies in the business models

-  work on the uniqueness (positioning)

-  optimize the building blocks

5

Decide & Prototype -  decide for the best

model to go for -  build prototype -  test prototype with

customers -  write business case -  decide again or work on

different option

6

Build & Learn -  execute business model -  learn continuously from

customer feedback and control KPIs

-  adjust and refine continuously the business model

More Information on http://blog.business-model-innovation.com

Dr. oec. Patrick Stähler fluidminds Pty Ltd. Level 19, 1 O‘Connel Street Sydney NSW 2000 Phone +61-2-8249 1861 info@fluidminds.com.au