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What is ‘Developing innovations with winning business models’?

Developing innovations with winning business models is a well-tested approach that lets you uncover insights and real needs of the customer, and then move from idea generation to developing a solid value proposition together with a winning business model in an iterative way.

Why use ‘Developing innovations with winning business models’?

When you innovate there is no guarantee for success in the market. There are many unknowns: where are the best opportunities, what are the customer needs, what is the best solution, how will you make money? Using this approach you will develop successful innovations with winning business models, with less wasted effort and less risk.

How to develop innovations with winning business models?

Our approach is based on concurrent development with multi-disciplinary teams, involving customers or external experts in your project, and doing that in an iterative way.

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What are the 3 key benefits of our way-of-working?

• Successful innovations with great business value
• Less wasted effort through early decision making, clear focus, and multi-disciplinary involvement
• Reduced risk through early customer interaction and validation

Innovation is about creating a solution with value for customers that is successful in the market and for the business

When you innovate there are a lot of unknowns. Who are the customers, what do they need, which influencers, stakeholders, and partners should be involved, will they all see the value of the innovation, and do they want to pay for it and if so how? Will it be better than current alternatives or competitor products, will it work and what comes next? What capabilities to you miss, and will you be able to create value for the business?

A lot of questions and a lot of uncertainty. The risk of launching a product or service that will not be successful is high, but there is no alternative, innovation is key to survival and growth.

Innovation is about creating a solution with value for customers that is successful in the market and for the business. By understanding the real needs of the customer and moving from idea generation to developing a solid value proposition together with a winning business model, you will create successful innovations and reduce the risk in an iterative way.

Continuously combining three points of view: customer and ecosystem, solution, and business

The ‘Developing innovations with winning business models’ approach combines three points of view from the start: the customer and ecosystem, the solution, and the business.

You can start in two ways: A) look for new areas of opportunity, or B) further develop an opportunity area you already identified into a solid value proposition.

A)   Multi-sourcing insights

To look for new areas of opportunity you need to combine three types of insights:

1. Real insights into customers, ecosystems and markets

In this phase you will not only look at customer and consumer needs and insights, but also at insights and needs of ecosystem partners and stakeholders.

2. Solution insights from (new) technologies from inside and outside the company

You will bring in solution insights from (new) technologies, from start-ups, universities, suppliers or other industries. And you will take on board insights from the business, such as business models that you use now versus what others are using in your or parallel industries.

3. Business insights based on strengths of the company that can be leveraged 

You will also look at what strengths you have that you can leverage further. Strengths like assets, technologies, channels, relationships, etc.

By combining those three types of insights in what we call a ‘wall of insight’, new opportunities emerge, for which you can generate ideas for potential solutions.

B) Develop value propositions together with the appropriate business models

The next step is to develop value propositions and at the same time define the appropriate business models. If you had already identified an opportunity area you would start at this point.

• A value proposition describes the value you will bring to your target customer on his or her need, with your product or service offering, and the unique selling points over alternatives.
• The business model describes how you will make it work and make money with it.

Here again, you will once more combine these three points of view (customer and ecosystem, solution, and business) to answer the following questions interactively and iteratively, but now, in contrast to the first phase less divergent and more solution driven:

1. Customers and ecosystem: who are your target and stakeholders and what do they really need?

• Target group and ecosystem
• Needs and insights
• Competition and alternatives

2. Solution: what is the solution that addresses the needs better than alternatives?

• Product or service and benefits
• Unique selling points
• Roadmap

3. Business: what is the winning business model and what are the risks?

• Business model
• Strategic fit, capabilities, risks
• Market size and  business case scenarios

This approach ensures your value propositions address a true customer need, for which a feasible solution can be developed in the ecosystem, and that leads to a viable business.

Through iterative loops you will create successful innovations and reduce risk, by validating the value proposition with customers and by understanding its business potential long before high investments are made.

Having a clear view on these three points of view is key for success.

However, these three points of view have become more difficult as there is often not just one customer, for which you develop a single standalone product and where you earn money by the difference between price and cost. ‘Developing innovations with winning business models’ addresses these complexities.

From a single end-user to complex ecosystems

In business-to-business, the number of stakeholders, with often different needs, can be high. But also in business-to-consumer, it is not only the end-user that determines the solution and business model nowadays. The digital transformation is opening up new opportunities. Many products and services are connected in platforms and several platforms form complex ecosystems.

In this approach, you will analyze these ecosystems. Through this, new opportunities to deliver value will be identified and possible barriers are taken away. Visualizing the ecosystems in our value network tool allows you to understand relationships between the different stakeholders and to look for possible partners to develop and launch your proposition in the market.

From products to services and solutions

Customers ask for solutions to their problems, not just a product. Product companies move into services. Data becomes abundant, allowing new value to be created. All this leads to the fact that a value proposition nowadays can have many aspects that need to work together seamlessly.

So developing the solution means product, software, service, data, etc. And this means that you need to have experience in developing innovations leveraging these areas. When developing the value proposition and the business model, you will address all the relevant parts, making the end result robust.

From price and cost to winning business models

Your new product or service should be great for your customer, but also good for your business. While understanding cost and pricing might have been enough in the past, business model innovation is part of the creating successful value propositions.

And there is more to consider. What assets and capabilities can you leverage and which ones do you have to build? What is your right to play and right to win? And do the earnings outweigh the risks?

A business model describes how a business or organization creates, delivers and captures value. It describes how your proposition will establish itself in the market (customer segments, customer relationships, channels, revenue streams) and what is required to do so (key activities, key resources, partnerships, cost structure).

These days there are many ways how to monetize your proposition. It is no longer solely selling products. It is always worthwhile to explore various business models to ensure the winning model is chosen.

Concurrent and iterative

The ‘Developing innovations with winning business models’ approach combines proven methods like Concurrent Development and iterative Lean Start-up thinking.

• Concurrent: making sure all parties are on board, from marketing, R&D, operations, IT, finance etc., so that the value proposition is developed in a concurrent way from the start.Making sure all parties are on board is key to prevent working on ideas that are not addressing a true customer need, or for which no feasible solution can be developed, or ideas that do not fit your strategy or do not deliver any viable business. Also, you should not hesitate to involve customers, partners or external experts in your project.
• Iterative: short cycles of ideate – validate – learn, quickly honing into the right value proposition, making a pivot when needed, or stopping. The early customer and market interaction provides a clear focus and enables informed decision making. Listing the most critical assumptions of your idea allows you to do the right experiments to validate them. With the learnings and new insights, you will gradually sharpen your idea and build your value proposition. After each learning loop, there are three options:

1. Go

Your proposition is strong and you have evidence to prove it and go to the next loop.

2. Pivot

You believe in the idea but one or more elements in your proposition need to change.

3. Stop

You no longer believe that this is a big enough opportunity to pursue.

By following this approach you develop a solid value proposition for your innovation together with a winning business model in an iterative way.

Three benefits of developing innovations with winning business models

• Successful innovations with great business value
• Less wasted effort through early decision making, clear focus, and multi-disciplinary involvement
• Reduced risk through early customer interaction and validation