The Invincible Company
by Alexander Osterwalder et al.
The Invincible Company is the latest book by Alexander Osterwalder and Strategyzer (published this April). It takes a more holistic view on innovation: it does not look at a single innovation project but at the innovation portfolio and the organization enabling it.
To facilitate this it introduces a set of new tools. The portfolio map shows the development in the life cycle of an innovation from explore to exploit portfolio. It can be used to track many innovations and to make sure to develop a portfolio of ideas instead of putting all eggs in one basket.
The explore phase is about searching for new ideas and uses some well-known tools, including the business model canvas and ways of testing (see also Testing Business Ideas below). It also introduces a project scorecard to rank the innovations in the explore phase. A library of 27 successful business model patterns (based on the business model canvas) completes this part.
The exploit portfolio focuses on growing existing businesses and maps them similar to the growth-share matrix. The corresponding selection of 12 business model shifts shows examples of business model innovation in existing businesses.
Another section is dedicated to innovation culture. The culture map helps to define desired outcomes, identify enablers and blockers of innovation (e.g. innovation has no leadership attention) and design supporting behaviors. The proposed company structure envisions a chief entrepreneur reporting directly to the board.
In addition, innovation is seen as an independent skill and demanded to be a career path within the organisation.
Overall, the book recombines and adds to former Strategyzer books and focuses less on single innovation projects and more at the strategic level, innovation portfolio and culture. I like the bold demand for a chief entrepreneur at CEO level and the inclusion of non-US company examples. The book has the familiar fine collection of tools, examples and patterns, presented in a very accessible way (the responsible designers got credited on the cover).
Testing Business Ideas
I had another look at Strategyzer’s Testing Business Ideas, published last year.
It follows the development of a (single) business idea from exploration to execution. Along the way the focus is on reducing uncertainty within the business by increasing fidelity (and costs) of the experiments that we run to test assumptions.
The book features a comprehensive library of 42 experiments, grouped in discovery and validation phase. The experiments are presented in detail with up to 4 pages each and ranked by evidence strength and costs. They include classics such as paper prototype, landing page and clickable prototypes but also more advanced versions such as life-sized prototypes and mash-up (create your mvp from existing services). I especially like the example experiment sequences per industry that suggest a suitable set of experiments (e.g. for a b2c service, customer interview, followed by search trend analysis, then online ad and simple landing page etc.).
Overall a good introduction to testing in business model design and a handy manual for running your own tests.
by Madhavan Ramanujam and Georg Tacke
For Business Designers pricing is a major topic in several occasions, including pricing your value proposition to capture the value you created, introducing (new) products to (new) markets, or changing an organization's pricing strategy. Pricing is usually also one of the most critical assumptions for future revenue. It is crucial for the validity of your financial model but also notoriously difficult to predict. Monetizing Innovation gives a comprehensive introduction to the main topics around pricing and a tools to streamline the process. And who would be better to write about it than two partners of a pricing consulting firm (Madgavan Ramanuham and Georg Tacke).
Four monetization failures
They start with the claim that all failures in the monetization of innovation can be divided into four categories:
It is unclear how they got to that categories but that does not harm the usefulness of the rest of the book.
Each subsequent chapter introduces a pricing concept, of which the most important are:
Overall Monetizing Innovation offers a comprehensive and hands-on introduction to pricing that will give you a lot of material, tools, and a process for your next pricing or broader innovation project.
by Karen Berman and Joe Knight
Business Designers deal with financial statements in different stages of the Business Design process, wether it is analyzing industries and organizations, planning financial models for innovation, or managing their implementation.
How to read financial statements
People, who – like myself – have no formal finance education can be easily intimidated by financial statements, especially the balance sheet. Financial intelligence counters this reservation with accessible language and real-life examples.
The authors demonstrate that finance is less an exact science and more an art with room for interpretation and creative design (not to say manipulation, see for example the Enron case on page 168).
The book is organized around the three financial statements: income, cashflow, and balance sheet.
The book closes with a look on the numbers that investors are interested in and how to create a financially intelligent organization.
In summary, Financial intelligence is a great introduction to financial statements for non-finance professionals and makes the sometimes dry topic easy to digest and apply.
Business Design Digital is the hub for all resources on the innovation skill of the future.
David Schmidt writes about the art and science of creating and validating business models.