It is often said that we best serve our company if we keep it “focused.” I remember a seminar tag line I’ve seen; “Growing your business through focus.” The question is, of course, what are you focused on?
I think the meaning of this is that we can’t be all things to all people. Sooner or later, we need to home in on our core competencies and make sure we define where we can add value with our products or services. Yet, if we are too focused, we can miss many other major opportunities for business model innovation. The old standby metaphors are useful here: if we think we are in the horse drawn carriage business instead of the transportation business, we will not be able to respond to the disruptive technology of the “horseless carriage.”
And if we are too focused at the industry level, we may miss an opportunity to benchmark ourselves with other more compelling business models. I like the example of the job shop oriented production floor that didn’t think it could schedule product any faster than it was already scheduling it. Then someone got the bright idea of looking at how the airline industry scheduled seats in an airplane. This was totally outside the manufacturer’s industry, but scheduling seats with a limited capacity (only so many seats in an airplane), with many no shows (customer’s who don’t get the final assembly drawings or unique parts to the floor in time), and last minute “walk-ins” turned out to be an ideal model for scheduling this flexible job-shop production line.
As mentioned earlier, focus will cause us to miss the disruptive technology coming from outside our industry to render our products obsolete. The mainframe computer industry totally missed the importance of the Personal Computer. The FDA and the Pharmaceutical Industry may well miss the force of consumers taking matters into their own hands and using nutriceuticals to avoid illness in the first place rather than treat diseases after they are contracted. With the baby-boomers aging (the last statistic I heard is that one boomer turns 50 years old every seven seconds), this wellness trend is sure to spawn some disruptive technologies in health care as we know it.
So how do we balance this need to be focused in our business but at the same time not miss the signals? The only way we’ve found so far is to be fully involved with the customer, the customer’s customer, competitors, and the industry in general in order to be able to command a view that takes in all the major activities around your products. We then have to be willing to move swiftly to change our business models, improve or re-invent our products, and introduce new methods and products to achieve superior results for our customers.
Some very excellent examples for the process of continuous business model innovation are revealed in Mitchell and Cole’s book The Ultimate Competitive Advantage. (Mitchell and Coles, 2003, ISBN 1-57675-167-8). In those case studies, we can see how too much focus can blind us to the changes in our markets. We can also see without too much of a stretch of the imagination how always listening to the customers when it comes to products can be totally misleading. I hasten to add that this isn’t always true and it is definitely NOT true when it comes to service levels for the customer. But it is highly likely that the customer isn’t seeing the disruptive technology that YOU need to see in order to survive and thrive in this global marketplace. So be prepared to go beyond your immediate customer to the end user and find out what is really needed and what could be coming down the pike in the way of whole new ways of solving the end user’s problem or improve his or her life.