How innovative business models can reshape an industry Hult Blog

Written by Olaf Groth, PhD – Global Professor of Innovation, Strategy, Management, Economics, Hult International Business School.   New business models   In today’s globalized world, new, innovative business models are emerging that are redefining roles and activating new players. The new structure they are creating gets disrupted and reshuffled. Value chains and industry structures[1] between participants are being broken down and re-arranged. Multi-dimensional value webs are emerging, in which actors may have multiple roles that defy simple classifications, such as supplier, customer, or competitor. Today, customers can also become suppliers; competitors can become collaborators; etc. In addition, entirely new actors are increasingly becoming part of our business ecosystems, which include social ventures, foundations, public-private partnerships, and sovereign wealth funds, to name just a few. As a result, more actors in a business ecosystem are able to create and extract value, and assets are optimized, because more people interact and contribute. Examples of this process include the early case of M-PESA mobile payments in Africa, the more recent cases of Zipcar and Buzzcar car sharing platforms, the Uber taxi service, and a development which will play out in the future—additive manufacturing. To explain this phenomenon, we can draw on three different schools of thought[2], which come together to produce a new model: ‘3D renaissance entrepreneurship’. This model makes industry ecosystems more participatory and decentralized, featuring very different types of actors. The most innovative form of this process is the emergence of various community sharing models. Why we are seeing these changes What is driving the development of this new model of 3D renaissance entrepreneurship? The convergence of the following trends in the global socio-technical and socio-economic environment of our business ecosystem: Empowerment of individuals globally through technology, such as mobile, broadband, etc. Democratization of innovation knowledge and capital through the adoption of open innovation that leverages individual consumer and expert inputs and ideas; jugaad innovation (meaning frugal, improvised innovation) that creates superior solutions using fewer resources; and reverse innovation that takes novel concepts from the developing world and applies them to industrialized economies Mobility and diffusion of talent that has been trained at the world’s premier innovation centers and then returns to its home country, or moves on to another country Fragmentation of economic and innovation actors with diverse interests, such as not-for-profit organizations and high net-worth individuals (Bill Gates, GeorgeSoros, etc.) Evolution of a global innovation ecosystem because more developing countries are tied into the global economy and have learned from foreign multinationals Scarcity of natural resources, due to increased air pollution, water shortages, environmental decline, and decreasing biodiversity Persistence of low global growth, as a result of economic crises in the U.S., E.U., and Japan, combined with slower growth in the BRICs (Brazil, Russia, India, and China) The increasing cost of technology in other areas of life (healthcare, education, transportation, energy, etc.). How we can harness the power of business model innovation In order to harness this new model of entrepreneurship we need to mesh, unlock, engage, and evolve: Mesh trends and forces that create innovation opportunity Unlock three-dimensional value by transforming value chains into value webs Engage actors in the value web to negotiate multipartner alliances Evolve the corporation into a borderless entity. The competencies you need to deal with these new models What does this mean for business talent, or in other words—you? To create value between all of these different actors we need to move away from the traditional approach of acting along linear value chains, and instead think in terms of value webs. Value webs are inherently more multi-dimensional and require the integration of different interests and inputs using different incentive and transaction structures.[Tweet We need to move away from the traditional approach of acting along linear value chains.] In essence, you need to become a renaissance entrepreneur, who thinks and acts in those multi-dimensional ways and can orchestrate integrative innovation and value-creation accordingly. You need to grow your renaissance brain and calibrate your skillset to meet these new demands. At different points in the process of ‘mesh, unlock, engage, and evolve’, you will have to conduct activities that lie outside of, or bridge, traditional functional roles and titles. For instance, as a marketing manager, you now need to be able to think about messaging to the broader market in such a way that disparate stakeholders are both represented appropriately by your campaigns and also spoken to by other messages you send within your value web. Similarly, as a platform engineer or a business requirements analyst, you now need to be able to work with divergent styles and processes that the more diverse sets of stakeholders and contributors bring to the platform. As a business development or strategy associate, you need to be able to lay out a vision, design programs, and chart execution paths that synchronize stakeholders and contributors at the right time and in the right sequence. In other words, as modern global executives, we need to be not only multi-dimensional strategists in this ecosystem, but also network entrepreneurs and commercial diplomats with a heavy dose of â€Å"soft† interpersonal engagement skills. And all of us need to get used to engaging, failing, learning, and improving much more rapidly as we figure out the right constellation of contributions and incentives. The bottom line is that each functional role is becoming more complex, tuning itself to the different directions of the value web, and getting used to constant repetition and adjustment. Doing this while engaging with different internal functions and external partners in the value web also requires ‘soft’ or ‘engagement’ skills. These include competencies such as: Connecting divergent interests and needs Selling ideas and solutions according to these divergent needs Thinking and acting entrepreneurially Synthesizing disparate pieces of data Being culturally attuned to disparate values Building teams with professionals and non-professionals that exhibit vastly differing styles Managing challenging relationships with non-business actors with emotional intelligence and empathy Mustering the courage to experiment and fail Exhibiting mental flexibility, persistence, and energy to regroup fast Creating rapport in different corners of a value web with equal amounts of integrity, ethics, and transparency. If you would like to find out more about Hult’s global business programs,  download a brochure here. Olaf Groth Global Professor of Innovation, Strategy, Management, Economics at Hult International Business School, PhD, MALD, Fletcher School at Tufts University Olaf Groth is Global Professor of Innovation, Strategy, Management, Economics at Hult International Business School as well as the Founder and Managing Director of Emergent Frontiers Group LLC, which advises senior executives internationally on global innovation trends, strategy, and commercial diplomacy. He has 20 years of experience in executive and advisory roles with Monitor Group, Qualcomm, Boeing, Vodafone, AirTouch, and a transportation start-up. [1] Porter, Michael E. (July-August 1997) How Competitive Forces Shape Strategy (Harvard Business Review). [2] Chesbrough, Henry (2006) Open Business Models (Harvard Business School Press); Kim, W. Chan Mauborgne Renee (2004) Blue Ocean Strategy (Harvard Business School Press); Khanna, Parag (2011) How to Run the World – Charting a Course to the Next Renaissance (Random House). Like game changers? Break the mould in the business world with a Masters in Disruptive Innovation from Hult. To learn more, take a look at our blog Mikron Challenge: Hult undergrads impress with innovative crowdsourcing solutions, or explore overall business challenges with a Masters in International Business instead. Download a brochure or get in touch today to find out how Hult can help you to find out everything about the business world, the future, and yourself. Hult Rotation offers you a chance to study in a truly global way. Our rotation program allows you to study and be immersed in some of the finest cities in the world. 📠¸: @jasminmanzano . Hult Rotation offers you a chance to study in a truly global way. Our rotation program allows you to study and be immersed in some of the finest cities in the world. 📠¸: @jasminmanzano . Each year, Hult seeks to enroll a talented and ambitious incoming class from all over the world. We look for diverse students with a wide range of experiences, perspectives, and interests—students who will thrive in our unique educational atmosphere. Are you ready for a truly global experience? 📠¸: @iambrunadiniz . Each year, Hult seeks to enroll a talented and ambitious incoming class from all over the world. We look for diverse students with a wide range of experiences, perspectives, and interests—students who will thrive in our unique educational atmosphere. Are you ready for a truly global experience? 📠¸: @iambrunadiniz . We’re excited to start 2020 on a ranking high! Hult is proud to have been placed #28 in Poets Quants 2020 rankings for Best Undergraduate Business Schools in the US. Taking a huge leap of 32 places from our 2019 position, we’re also very happy to have secured top positions in key categories like: life-changing experience, practicality of the degree, and global immersion. . With five global campuses, a student body of over 130 nationalities, and a learn-by-doing approach—Hult offers a student experience like no other. . We’re excited to start 2020 on a ranking high! Hult is proud to have been placed #28 in Poets Quants 2020 rankings for Best Undergraduate Business Schools in the US. Taking a huge leap of 32 places from our 2019 position, we’re also very happy to have secured top positions in key categories like: life-changing experience, practicality of the degree, and global immersion. . With five global campuses, a student body of over 130 nationalities, and a learn-by-doing approach—Hult offers a student experience like no other. . â€Å"I’m from an engineering background and needed a whole new skill set for the industry I wanted to switch to. I learned a lot about myself and how I deal with being out of my comfort zone. I learned both soft and hard skills, from how to work in very diverse teams to key accounting metrics and strategy. I was surprised by how weak I was at certain tasks in English or how strong I actually was in other areas. Hult gave me opportunities to try new things and meet people from places I never thought I would have friends. . My internship experiences gave me the chance to broaden my view of different cultures and different companies. I had the opportunity to work and live with people whose values differed from people in my home country. I thought that this would be difficult, but it gave me the chance to reflect on my own values and assess if they were a result of my home country environment or if they were intrinsically mine. . Diederick ter Kulve (@diederick.terkulve) Netherlands Masters in International Business . â€Å"I’m from an engineering background and needed a whole new skill set for the industry I wanted to switch to. I learned a lot about myself and how I deal with being out of my comfort zone. I learned both soft and hard skills, from how to work in very diverse teams to key accounting metrics and strategy. I was surprised by how weak I was at certain tasks in English or how strong I actually was in other areas. Hult gave me opportunities to try new things and meet people from places I never thought I would have friends. . My internship experiences gave me the chance to broaden my view of different cultures and different companies. I had the opportunity to work and live with people whose values differed from people in my home country. I thought that this would be difficult, but it gave me the chance to reflect on my own values and assess if they were a result of my home country environment or if they were intrinsically mine. . Diederick ter Kulve (@diederick.terkulve) Netherlands Masters in International Business . Say a big hello to our Bachelor of Business Administration program cover star, Elisa Orus Plana âÅ" ¨ . â€Å"I’m excited for the future—especially that I cant predict whats going to happen. Maybe Ill end up in Mexico working for a trading company or maybe in Africa, developing my own business. Everything is possible, and the options are constantly changing. I love the idea that Im never going to be stuck doing the same job until the end of my life if I dont want it to be like this. . Hult really supports me and my ambitions and truly believes that we deserve to be considered as professionals as well as students. Here, I get to express not just my opinions but all elements of myself. From my creative side with the Fashion Society to my finance and business sides in Trading Club and the Management Consulting Club. We get a different type of learning here. Not just essential knowledge and theory, but practical skills and mindset. The school is always evolving. We’re encouraged to innovate and to always look for new ways of doing traditional things. We learn how to be more confident and become aware of how we can impact our environment. The school aims to help you become a better version of yourself and to stand out from the crowd.â€Å" . Elisa Orus Plana French Bachelor of Business Administration Class of 2021 Say a big hello to our Bachelor of Business Administration program cover star, Elisa Orus Plana âÅ" ¨ . â€Å"I’m excited for the future—especially that I cant predict whats going to happen. Maybe Ill end up in Mexico working for a trading company or maybe in Africa, developing my own business. Everything is possible, and the options are constantly changing. I love the idea that Im never going to be stuck doing the same job until the end of my life if I dont want it to be like this. . Hult really supports me and my ambitions and truly believes that we deserve to be considered as professionals as well as students. Here, I get to express not just my opinions but all elements of myself. From my creative side with the Fashion Society to my finance and business sides in Trading Club and the Management Consulting Club. We get a different type of learning here. Not just essential knowledge and theory, but practical skills and mindset. The school is always evolving. We’re encouraged to innovate and to always look for new ways of doing traditional things. We learn how to be more confident and become aware of how we can impact our environment. The school aims to help you become a better version of yourself and to stand out from the crowd.â€Å" . Elisa Orus Plana French Bachelor of Business Administration Class of 2021"> During the final days of 2019, you probably reflected on what you’ve accomplished this year—and even this decade—and what you’d like to achieve in 2020. Let us know in the comments below. During the final days of 2019, you probably reflected on what you’ve accomplished this year—and even this decade—and what you’d like to achieve in 2020. Let us know in the comments below. â€Å"The first time we did group work on the program, I went head-to-head with a colleague. It taught me a lot about how I see people, how people see me, and how conflict can be resolved in a kind and productive way. The best feedback you get, when delivered constructively, is the most critical because it really feeds into how you lead. I’ve completely reversed my leadership style—the result is so much richer and more powerful when you lead from behind and lead with strength. . Studying in tandem with working, whilst challenging, gave me the perfect platform to directly apply learning concepts into my business environment, the competitive landscape, and the real-estate industry as a whole. When I started the program, I was very happy in my corporate role. But my courage and aspirations grew to the point that I took on a whole new direction. Having my career coach, Joanna, as a sounding board allowed me to really be strategic and get to know myself. She coached me thro ugh all the interviews, the research, and the questions. It went in parallel with what I was doing academically and after six months everything just clicked. . I went into the EMBA knowing I had nothing to lose and I’ve come out with everything. Great strength, global friends, amazing learning, mentors from professors, a job I love, and the knowledge that I can set my mind to achieve anything and with the right support and resources I’ll get there.† . Kashani Wijetunga British, New Zealand Sri Lankan Associate Director Senior Strategy Consultant CBRE EMBA Class of 2019 . â€Å"The first time we did group work on the program, I went head-to-head with a colleague. It taught me a lot about how I see people, how people see me, and how conflict can be resolved in a kind and productive way. The best feedback you get, when delivered constructively, is the most critical because it really feeds into how you lead. I’ve completely reversed my leadership style—the result is so much richer and more powerful when you lead from behind and lead with strength. . Studying in tandem with working, whilst challenging, gave me the perfect platform to directly apply learning concepts into my business environment, the competitive landscape, and the real-estate industry as a whole. When I started the program, I was very happy in my corporate role. But my courage and aspirations grew to the point that I took on a whole new direction. Having my career coach, Joanna, as a sounding board allowed me to really be strategic and get to know myself. She coached me thro ugh all the interviews, the research, and the questions. It went in parallel with what I was doing academically and after six months everything just clicked. . I went into the EMBA knowing I had nothing to lose and I’ve come out with everything. Great strength, global friends, amazing learning, mentors from professors, a job I love, and the knowledge that I can set my mind to achieve anything and with the right support and resources I’ll get there.† . Kashani Wijetunga British, New Zealand Sri Lankan Associate Director Senior Strategy Consultant CBRE EMBA Class of 2019 . â€Å"It was now or never. I knew that I’d have likely stayed in my neighborhood for years to come if I didn’t take this opportunity. I’d not lived or studied outside of the U.S. before. So I left my job as a global strategist at an advertising agency and moved halfway around the world. I’ve come back a more culturally aware, well-versed person. I’ve realized that everything is a learning experience and an opportunity for growth. Ill definitely carry this mindset with me into the future. Technology and social media allow us to be different people in several places at once. Im excited to see how I can establish myself in whatever city Ill be lucky enough to call home and still maintain deep connections with people all over the world. I’m inspired by my classmates every day. Hearing some of their life stories and how getting this degree fits into their greater mission has been very humbling. My biggest challenge has been finding the ‘right’ path for me. There have been rooms Ive felt like I shouldnt be in, but now Im proud to feel as though I truly belong, wherever I am.† . Dwayne Logan, Jnr. American MBA Class of 2019 . â€Å"It was now or never. I knew that I’d have likely stayed in my neighborhood for years to come if I didn’t take this opportunity. I’d not lived or studied outside of the U.S. before. So I left my job as a global strategist at an advertising agency and moved halfway around the world. I’ve come back a more culturally aware, well-versed person. I’ve realized that everything is a learning experience and an opportunity for growth. Ill definitely carry this mindset with me into the future. Technology and social media allow us to be different people in several places at once. Im excited to see how I can establish myself in whatever city Ill be lucky enough to call home and still maintain deep connections with people all over the world. I’m inspired by my classmates every day. Hearing some of their life stories and how getting this degree fits into their greater mission has been very humbling. My biggest challenge has been finding the ‘right’ path for me. There have been rooms Ive felt like I shouldnt be in, but now Im proud to feel as though I truly belong, wherever I am.† . Dwayne Logan, Jnr. American MBA Class of 2019 . Happy New Year, Hultians! . Happy New Year, Hultians! .