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In previous articles #14 – The Entrepreneurial CRO: Evaluating your current Business Model, we set out a cause-effect approach to evaluating your current Business Model and in #15 – The Entrepreneurial CRO: Business Model concepts, tools and frameworks, put forward a number of static and dynamic tools and frameworks that CROs can apply.
In this article, we explore the approach to Business Model innovation and selection.
Business Model innovation and selection
- How can you develop innovative Business Model configurations?
In Business models: A challenging agenda, the authors propose an interesting typological classification across four characteristics – Identifying the customers; customer engagement; monetisation and value chain and linkages.
The authors suggest this typology provides a ‘map’ that can be overlaid onto the real world of industry and used to identify the range of existing and possible, but omitted Business Model configurations.
In a recent article Insurance beyond digital: The rise of ecosystems and platforms published by Digital Insurance, the growing importance of ‘ecosystems’ (a more established concept) and platforms (one, two (or more) sided) is discussed in considerable detail.
- What is the innovation process?
Innovation is said to be ‘messy’ and whilst there is a lot of truth in this statement, experimental-learning that incorporates rapid-prototype development can yield significant results in a relatively short timeframe.
The starting point is to co-create lots of ideas from a diverse group of individuals, preferably from both within and outside the organisation. Whilst incremental improvements can lead to efficiency gains, a recent article on Operating Models published by McKinsey Accelerating the shift to a next-generation operating model suggests ‘a different approach companies are taking is to “clean sheet” the future experience – to come up with a forward-looking concept that is unbound from all existing processes and systems – and rapidly test it to determine whether it works well’
- Select a limited # of ‘high-value’ options
The final step in the process and the most challenging, is to select a small number of Business Model innovations to take forward and scale. Not only does this involve tough decisions regarding the allocation of scarce resources, but may also have important implications for the existing Business Model, customer segments and channels to market.
CROs can play an important role in partnering with businesses to solve strategic challenges and deliver tangible business outcomes.
In a recent report published by the River Partnership CRO Survey – Insurance Risk and the Influence on Business Strategy, many CROs highlighted ‘additional pressures facing insurers related to profitability, business model change and regulatory pressure’.
Darren provides Enterprise Risk Management advisory services to the Insurance and Investment Management sectors. Helping Board and C-level executives address strategic challenges, by delivering solutions that create Enterprise Value and improve business performance.
Darren is an experienced executive with over 20 years’ global experience with multinational companies, including Chief Risk Officer reporting to the Board.
Darren is an Honorary Visiting Fellow of the Digital Leadership Research Centre, Cass Business School where he also holds an Executive MBA. Darren is a Certified Fellow of the Institute of Risk Management (CFIRM) and Chartered Insurance Risk Manager (ACII) of the Chartered Insurance Institute.
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