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If Your Glasses Are the Wrong Prescription, You Won't See Opportunities in Front of You

May 18, 2008
In the last twenty years, business has focused primarily on doing what it has always done, except in applying less expensive, higher quality methods and installing very expensive information technology. That focus means that many opportunities to create better business models have been missed.

It takes a lot of time, money, and attention to make those fundamental changes in business processes and create massive data, information, and knowledge networks. Those resources of time, talent, and money were not available for business model innovation. Further, becoming so good at doing yesterday's business model makes companies less interested in changing for tomorrow.

In the new technology industries, the rate of technical innovation is so high that attention to that area also drains away focus from business model innovation. When successful with technology innovation, those companies often have to grow rapidly.

For those who then need to add lots of people, facilities, and equipment to fulfill the promise of their success, the strain to implement that growth becomes an albatross that weighs down companies into focusing on continuing their existing business models.

Surveys I have conducted also have shown that business model innovation has been receiving relatively little attention, even in the most successful companies. Cost-cutting and process redesign were always accorded a higher priority, even though they are usually more expensive to pursue, take longer, are less likely to succeed and usually provide much smaller benefits.

As a result, there is an untapped backlog of opportunities for those who now seek them. You will be examining not just the opportunities that became available now for the first time, but also ones that have been available for some time that are being ignored by most companies. This situation reminds the authors of the relative ease with which Federal Express succeeded with hub-and-spoke overnight envelope delivery while the delivery time for first class letters was growing ever slower.

As an example of this point, let's look at the Goldcorp Challenge. By providing a global online contest for geologists to provide ideas for locating more gold, Goldcorp was able to be much more successful. Certainly, the explosive growth of the Internet made that new model easier to do.

But simpler versions of the same idea could have been done centuries ago. The methods employed for sending information back and forth would have been slower and more cumbersome. Also, fewer people might have participated. In gold mining, those differences would not have been very overwhelmingly harmful. The results might not have been as great, but the business model would probably have worked long before the year 2000 when Goldcorp acted.

Have you had your focus checked lately?
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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