Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.

A New Approach to Business-Model Innovation

Editor's Note: Take a look at our featured best practice, Business Model Canvas: Guide, Process and Tools (43-slide PowerPoint presentation). The Business Model Canvas is a versatile tool that can be used to describe, discuss, design, choose, challenge, improve, innovate, pivot or invent a business model. The document provides an overview of the business model canvas and how it links to strategy analysis and development. It offers [read more]

* * * *


Of course you know business model innovation. It’s common practice among innovators. A lot of markets have been disrupted by new business models, often initiated by start-ups and new entrants:

  • Airbnb disrupts the market for accommodation as you can rent online unique places to stay from local hosts in 190+ countries. In 2014, Airbnb had 25 million guests’ bookings.
  • Ted-ed (the newest TED initiative) disrupts the traditional publishing market in education with free educational lessons-to-share from people all over the world in videos format.
  • Streaming services like Netflix disrupt the traditional television market, as you can watch TV shows and movies now anytime, anywhere. Netflix has 65 million streaming subscribers in 2015.
  • Cloud-based solutions, like iCloud replace local infrastructure, hardware and software. iCloud had in 2013 already 320 million users.
  • And of course, Uber; the 2009 start-up, disrupting the license system that protects taxicab franchises in 58 countries thus far. In the US only, Uber has  at this moment more than 160.000 active drivers.

In my work, as speaker on innovation and design thinking, I travel all over the world to inspire innovators how to start innovation more effectively. The business model canvas with it’s nine business model building blocks, introduced by Osterwalder, Pigneur & al. in 2010 is well-known and used in every country I visited, from Canada to India and from Brazil to Japan. Like you probably, everybody really appreciates the simple tool. It’s most often used to analyze existing business models or business models of new entrants. It’s a great tool also to catch your basic idea and to communicate it in a simple way to others.

A lot of managers at big corporations are well aware of the threats of new start-ups entering their market. They really want to overturn the conventions of their market before others do. The awareness to be working on new business models is there, but big challenge for most of them is:

“How do I come up with a new Business Model that disrupts my own market?”

I was very pleased that Dutch consultants of McKinsey recently published a new approach to business-model innovation that will help you how to come up with new business models. It’s practical 5 step method to turn your present beliefs upside down.

Let’s take a closer look at their five steps:

1. Outline the dominant business model in your industry. 

As a start you answer the essential question: “What are the long-held core beliefs about how to create value?”.

2. Dissect the most important long-held belief into its supporting notions. 

How do notions about customer needs and interactions, technology, regulation, business economics, and ways of operating underpin the core belief?

3. Turn an underlying belief on its head. 

Formulate a radical new hypothesis, one that no one wants to believe—at least no one currently in your industry. Ask yourself outside-the-box ‘What-if’ questions. :

4. Sanity-test your reframe. 

Many reframed beliefs will just be nonsense. Applying a reframe that has already proved itself in another industry greatly enhances your prospects of hitting on something that makes business sense. Cross-industry innovation is hot. I can really recommend the inspiring book ‘Not Invented Here’ of Marc Heleven and Ramon Vullings.

5. Translate the reframed belief into your industry’s new business model. 

Typically, once companies arrive at a reframe, the new mechanism for creating value suggests itself—a new way to interact with customers, organize your operating model, leverage your resources, or capture income.

These five steps make sense. In their approach I recognize of course the creative process of divergent – and convergent thinking. I suggest you give it a try.

The success in applying this new approach to generate new disruptive business models is in my view dependent on one thing: the ability of you and your colleagues to postpone your judgment and really think outside-the-box formulating your ‘What-if’ questions. Be sure to practice this together upfront and create the right physical and mental environment for being creative together. These 25 rules for perfect brainstorming might help you with it.

“Yes, big companies can be disruptive too. Give it a try.”

30-slide PowerPoint presentation
Innovative business models can reshape industries and drive tremendous growth. However, many organization find business model innovation difficult. The framework outlined in this presentation is based on the HBR article "Reinventing Your Business Model," authored by Clayton Christensen, [read more]

Do You Want to Implement Business Best Practices?

You can download in-depth presentations on Business Model Design and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.

For even more best practices available on Flevy, have a look at our top 100 lists:

These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.

Readers of This Article Are Interested in These Resources

27-slide PowerPoint presentation
As core markets become saturated with new entrants and products, we find it more and more difficult to grow the core. We find traditional approaches that have successfully driven growth historically are also reaching points of diminishing returns. Business Model Innovation (BMI) is a powerful, [read more]

218-slide PowerPoint presentation
29-slide PowerPoint presentation

About Gijs van Wulfen

Gijs van Wulfen (1960; Dutch) is a keynote speaker on innovation and the founder of the FORTH innovation method, a proven structured way to ideate new products, services and business models. He is a LinkedIn Influencer with more than 260,000 followers worldwide and he was chosen in the top 10 of the International Top 40 Innovation Bloggers 3 years in a row. He is a best selling author on innovation with his latest book titled "The Innovation Expedition: A Visual Toolkit to Start Innovation."

, , , , , , ,

Complimentary Business Training Guides

Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function






The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.

Connect with Flevy:


About Flevy.com   /   Terms   /   Privacy Policy
© . Flevy LLC. All Rights Reserved.