According to Mark W. Johnson, a leading consultant and author of Reinventing Your Business Model, they keys to business transformations are:
- Identifying “white space” growth opportunities by tapping into entirely new customer opportunities with a completely new business model that changes the competitive landscape.
- Generating valuable, new ideas for engaging with customers, designing new or transformed business models that fulfill the jobs customers need to get done more effectively, efficiently and profitably.
- Successfully entering emerging markets, re-conceiving business models that recognize the unique unmet needs of consumers in these markets, profitably and efficiently.
- Creating new systems, rules, and metrics that enable companies to organize for and implement new businesses successfully.
Seizing the White Space
Kodak invented digital photography in 1975 but didn’t capitalize on it. Xerox famously devised the mouse, the laser printer, and the graphical user interface but failed to commercialize any of them. The $2 billion Digital Equipment Corp. spent developing a personal computer turns out to be too little, too late.
What makes opportunities like these so difficult to grasp is that so often they require companies to move far beyond their core into uncharted territory — into their white space. That’s a scary place, one where many companies’ experiences is, as one CEO put it, “unblemished by success.” But if the danger is all too obvious, its causes are not. The white space is hard to navigate not because it’s uncharted but because so many companies try to go there with the wrong map, the one they’re currently using — their existing business model.
And who can blame them? Every successful company is already fulfilling a real customer job with an effective business model. The problem is that few organizations can explicitly articulate what that model is. Day to day, they go along guided by implicit rules of thumb, metrics, incentives, and the odd success story. But without an explicit understanding of their business model — the premise behind its development, the way its parts work together, its strengths and weaknesses — they don’t know whether they can use it to take advantage of new opportunities, or if a different model is needed.
Seizing the White Space offers the path to understanding that development of a practical business model requires the inclusion of these four fundamental building blocks:
- The value proposition fulfills an important need or desire
- The profit formula shows how your company makes money delivering the value proposition
- Key resources the value proposition requires
- Key processes needed to deliver the value proposition
Describe how you “seized the white space” or watched another company do it.