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Innovation through the business model

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The conference on the theme "Innovation through the business model" was organised by students of the Master 2 "Management of Technology and Innovation", a Master's degree co-delivered by the University Paris-Dauphine, INSTN, Ecole des Mines ParisTech and ENS Cachan. It was held on 8 April 2013 at the Ecole des Mines ParisTech and was co-led by two master students, Delphine Bihin and Benjamin Le Pendeven. Report.

mticonference3A conference to try to answer key questions such as how to create a business model to innovate, repensing the business model of innovations, qHow to change/create a business model (strategic hesitation, sequential, portfolio of business models, etc.), highlight the dThe gap between the vision of the business model and the human and financial resources, the Is a business model primarily about one company, while a value chain is about several companies? what relationships with stakeholders - customers, partners, suppliers - when a radical change of business model is needed, what tinternal managerial transfers between short- and long-term business models,...

The different components of innovation through the business model were highlighted through various concrete examples. Gathered around the table were :

- Alain Bénichou, President of IBM France ;
- Mickaël Oualid, holder of the Free Car Project ;
- Jacques-Etienne de T'Serclaes, President of the Agence pour le Don en Nature ;
- And Yves Pigneur, professor-researcher at HEC Lausanne and co-author of the best-selling Business Model Nouvelle Génération.

A reminder of the main problems of innovation through the business model was made. The following issues were highlighted :

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- the question of creating a business model by strategic trial and error (sequential, rapid prototyping, etc.);
- the problem of innovation through the change of business model;
- the operational and organisational implications of the change in the business model, and in particular the question of the inadequacy between the business model designed and the resources available (human and financial in particular);
- the change in consumer attitudes made possible by the modification of the business model;
- the fact that the business model is specific to each firm but nevertheless dependent on the value chain in which it is involved (role of stakeholders, etc.).

To start the debate, the eight internal barriers to innovation through the business model (identified by Saul Kaplan) were presented :

1. "The product is king, only he is king."
2. "Our IT managers consider the system change to be unsuitable."
3. "But we're going to cannibalize our other business lines?! »
4. "No introduction to new partners with unexpected profiles."
5. "Work on a revolutionary service, but you'll be evaluated by your current boss."
6. "The idea is wonderful, but we don't see the return on investment."
7. "The rebels, we discipline them! »
8. "No real-world experimentation unless you're sure the prototype is perfect."

Based on different experiences, let's illustrate innovation through the business model. ?

benichoualain-ibm2Alain Bénichou, President of IBM France, explained how a global company such as IBM has been able to innovate with its business model and continues to do so. Initially a manufacturer of tabulators, then computer components and finally PCs, IBM today generates 45 % of its turnover from software and 45% from services.
Mr. Bénichou stressed that the most important changes in business model and organization occurred during a period of deep crisis for the company, as in the 1990s. This period was critical for IBM - almost bankrupt in 1992 - and the painful recovery in the years that followed (half of the workforce had to leave IBM). Nevertheless, it was pointed out that periods of crisis are not the only ones that favour the transformation of the business model.
Mr. Bénichou then spoke about the operational and organizational changes brought about by the successive changes in the business model. These have been made possible by the strong corporate culture present within the structure. Finally, he demonstrated the central place of the client in the value chain, while putting into perspective its impact in terms of its ability to imagine a new business model.

We then left the world-class company to focus on a disruptive project for the Conservative auto sector.

oualidmickaelMickaël Oualidpresented its project to offer a streamlined car that is virtually free for the consumer, thanks to partnerships with major consumer brands. Through his presentation, the question of hopes and obstacles to innovation in a conservative market was addressed. Mr. Oualid explained that the stagnation of his project is mainly due to the difficulty for some automotive industries to change their way of thinking.
He said that " Everyone needs a "small" car and for everyone, the first criterion for buying is PRICE! ", knowing that at 6000€, the price of a car represents only 5% of the turnover generated by its use and that 3.700 € per year are necessary for its operating costs (2.900 € is the amount of the annual average basket in shopping malls). 1.000 € C.A potential if the car is designed as a MARKET PLACE open to new services of uses. In fifteen years of life on average, a "small" car will generate nearly 114 K€ by its use.

He therefore proposes a new concept of "Free car project", based on a NEW ECONOMY: "The one who pays is the one who makes money with it. " accompanied by the importance of OPEN DESIGN: 

* robust and open design = iconic design
* single car = lower costs
* sustainable business model = ecology
* free car = increased purchasing power
* new marketing tool = relaunch of the consumption
* new ecosystem = new jobs
* Lean production = Made in France

 He also noted that even if the latter change takes place, it will be difficult to change the owner's consumption habits with regard to his or her car. Thus, the customer has a determining role in the success or stagnation of a project.

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The business world then gave way to the associative mode, in order to demonstrate that innovation through the business model concerns all types of organization.

mticonference2Because Jacques-Etienne de T'Serclaes created his association, the Agency for Donation in Nature, on a disruptive business model. While the majority of associations in France are largely supported by public subsidies, DNA receives none. Its activity of redistributing unsold and non-food products to the most deprived has been built on private partnerships by associating a triple purpose: economic, social and environmental. By acting as an intermediary between industries - which destroy millions of products a year - and charities - which help the most destitute - ADN brings distant worlds closer together while responding to current issues (economic and structural crisis, impoverishment of the population, mutual aid, etc.).

mticonference

The interventions ended with the theoretical reminders from the Professor Yves Pigneur.

pigneuryvesBased in part on the examples cited in previous interventions, he described the steps involved in creating a business model, and how this could be a strong variable for innovation. Mr. Pigneur also insisted on the importance of taking the customer into account in the process of creating the business model and its daily implementation: it is by proposing the product or service to the customer that we see if the project is profitable and viable. Through the definition given of the business model, he also explained the importance of taking into account the different stakeholders in the value chain and the construction of the business model.

 

www.master-mti.fr

(Source: MTI Master. Thank you for this editorial collaboration).

 

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