A post on the Innovation Excellence blog asks, “Is business model innovation just another name for strategy?” The author, John Steen, answers in the affirmative in the case of incremental innovation, but argues that radical business model reinvention reaches beyond the conventional strategy toolkit.
I think that strategy and business model innovation diverges when we talk about radical business model innovation. Why? Because strategy is still based upon conventional thinking about planning, prediction and measurement. Moving to very different business models needs the tools and concepts from innovation management rather than predictions and plans from strategy textbooks. Tools such as real options and the three horizons will help stage the innovation process to reduce downside risk and capture the upside. Innovation jams and lead-users might be useful to get new ideas on other business models. Stage-gate methods might enable us to trial new business models and scale up as some models show signs of being successful.