Order the book on Amazon.
Reinvent Your Business Model shows the way to get there. It dispels the common misconceptions about what a business model is and isn’t – and provides a practical framework for how one really works. Successful incumbents face unique challenges in creating the new – as the very capabilities that make them successful actively inhibit exploration and innovation. View the quick guide to Reinvent Your Business Model.
View the quick guide to Reinvent Your Business Model.
Reinvent Your Business Model will equip a new generation of innovators with the insights and the tools that they need to develop a repeatable business model innovation capability and seize the white spaces where the greatest growth opportunities lie.
“Why can’t powerful, well-financed companies be as innovative as nimble start-ups? With Johnson’s book they can- it’s a realistic playbook that shows us how to get out of our own way and become as good at breakthrough innovation as we are at sustaining the core.”
CEO, Johnson & Johnson
Business Model Fundamentals: The Four-Box Model
How Ford is Test Driving Its Future
Everyone’s talking about a future in which vehicles are shared rather than owned, autonomous rather than driven, and where car companies make large shares of their profits on digital “mobility services.” But if you are the Ford Motor Company and face the prospect of investing billions in new technology while your century-old business model is overturned, you might first have a few questions. How are consumers going to react to all of this? What do they really want?
To help test drive the future, in 2016 Ford paid about $50 million to acquire Chariot, a startup mobility service. Incubated at Y Combinator, the venture was aimed squarely at the most important, most reliable, most consistent mobility need that consumers have every day: getting to and from work. While this seemed like a small bet for a $165 billion company built on the mass production of vehicles, the deal was scouted, in part, by Jim Hackett, then head of Ford Smart Mobility who has since been elevated to CEO
Ford’s Chariot and other new ventures have yielded five key lessons for dealing with the uncertainty of new business models in new markets by testing and learning one’s way forward.
1. Be ambitious but start small
2. Satisfy social, emotional, and functional “jobs” of customers.
3. Examine the Profit Formula
4. Establish new rules, norms and metrics
5. Create a portfolio of new business models
The future is arriving much faster than had been expected even just a couple years ago. By conducting small tests with consumers first, piloting early concepts in the market before investments reach the billion-dollar threshold, Ford is positioning itself to take advantage of new opportunities, rather than be disrupted by them.
20 Examples of Business Models
Partner with membership associations and other affinity groups to offer a product exclusively to its members, exchanging royalties for access to a larger customer base.
e.g. Betterment, IBM Watson
Harness software that automates processes previously requiring human labor and cognition to reduce operating costs.
e.g. Century 21, Orbitz
Bring together and facilitate transactions between buyers and sellers, charging a fee for each successful transaction.
e.g. Fast-food value meals, iPod/iTunes
Make purchasing simple and more complete by packaging related products together.
e.g. Wikipedia, YouTube
Outsource tasks to a broad group that contributes content for free in exchange for access to other users’ content.
e.g. Waze, Facebook
Use data management and analysis processes to capture value from having access to or ownership of data.
e.g. OpenTable, Airbnb, Uber
Enable value-creating interactions between external producers and consumers through open, participative infrastructure with set governance conditions.
e.g. Dell, WebMD
Deliver directly to the customer a product or service that has traditionally gone through an intermediary.
e.g. Time-sharing condos, NetJets
Allow users to own part of a product or service but enjoy many of the benefits of full ownership at a fraction of the price.
e.g. Spotify, LinkedIn, Dropbox
Offer basic services for free but charge for upgraded or premium services.
e.g. Luxury cars, Xerox, MachneryLink
Make high-margin, high-cost products affordable by having the customer rent rather than buy them.
e.g. Southwest, Walmart, Xiameter
Offer low-price, low-service version of a traditionally high-end offering.
Negative Operating Cycle
Generate high profits by maintaining low inventory and having the customer pay up front for a product or service to be delivered in the future.
e.g. Amazon Web Services, car2go
Charge the customer for metered services based on actual usage rates.
e.g. Gillette, personal printers
Offer the higher-margin “razors” for low or no cost to make profits by selling high-volume, low-margin “blades.”
e.g. iPod/iTunes, Amazon Kindle
Offer the low-margin “blades” at no or low cost to encourage sales of the higher-margin “razors.”
e.g. IBM, Hilti, Zipcar
Rather than sell the products outright, sell the service the product performs.
e.g. Minute Clinic
Provide lower-cost standardized solution to problems that once could be addressed through high-cost customized products or services.
e.g. Netflix, Five Four Club, Dollar Shave Club
Charge the customer a subscription fee to gain access to a product or service.
e.g. Angie’s List
Grant members access to a network, generating revenue through membership fees and advertisements.
“Most managers think the key to growth is developing new technologies and products. But often this is not so. To unlock the next wave of growth, companies must embed these innovations in disruptive new business models. That’s what Mark Johnson’s book so convincingly demonstrates.”
Professor of Business Administration, Harvard Business School
APPLE’S EPIC REINVENTION: THE IMPACT OF ITUNES
Meet Mark W. Johnson
Mark W. Johnson
Co-founder and Senior Partner, Innosight
Mark W. Johnson is co-founder and senior partner at Innosight, a growth strategy consulting firm, which he co-founded with Clayton Christensen in 2000.
Mark’s most recent work has focused on helping companies envision and create new growth, manage transformation, and achieve renewal through business model innovation, and he is a frequent writer and speaker on these topics.
In addition to Reinvent Your Business Model: How to Seize the White Space for Transformative Growth, Mark is also coauthor of the book Dual Transformation: How to Reposition Today’s Business While Creating the Future, a blueprint for how successful companies can leverage disruptive change to fortify today’s business and create tomorrow’s growth engine.
In the News
December 4, 2018
This Forbes India piece mentions Ford and Xerox’s failed business models from ‘Seizing the White Space’ by senior partner Mark W. Johnson.
NOVEMBER 8, 2018
Business model transformation in law and other lessons from ‘Reinvent Your Business Model’ by Mark Johnson are discussed in this Forbes piece.
November 2, 2018
Principles from ‘Reinvent Your Business Model’ by co-founder Mark Johnson and the importance of business model innovation are discussed in this Wall Street Journal piece.
OCTOBER 26, 2018
Innosight co-founder and senior partner Mark Johnson discusses the importance of a well-thought-out business model in technology.
OCTOBER 16, 2018
Innosight’s Mark Johnson in a podcast with Innovation Leader.
OCTOBER 15, 2018
Innosight co-founder and senior partner Mark Johnson talks business model innovation and “Reinvent Your Business Model” on Sarder TV.
September 14, 2018
Innosight’s Mark Johnson’s new book “Reinvent Your Business Model” makes Inc. Magazine’s top 10 business strategy books of 2018.
August 8, 2018
Innosight’s Mark Johnson discusses how companies can innovate to achieve transformative growth and explore beyond their core business, or “seize the white space” in this Middle Market piece.
JULY 27, 2018
Innosight’s Mark Johnson discusses how rethinking your business model can help your company achieve growth and scale in this new piece.
JULY 13, 2018
cORPORATE BOARD MEMBER: How A Board Can Encourage A Company To Innovate
Innosight’s Mark Johnson is featured in this Board Member piece sharing insight on how growth strategies for the future should look different than the past.
JULY 12, 2018
Mark Johnson, author of the new book ‘Reinvent Your Business Model’ shares insight on seizing white space opportunities for transformational new growth.
JULY 11, 2018
cHANGETHIS: Breakthrough Technologies Don’t Create Transformative Growth. Breakthrough Business Models Do.
Innosight’s Mark Johnson discusses why technology alone is not enough to propel the kind of sustained growth that can transform your whole enterprise.
JUNE 25, 2018
Learn more about “Three Principles for Engaging Employees in Business Model Innovation” by Mark W. Johnson, Innosight co-founder and author of new book, Reinvent Your Business Model: How to Seize the White Space for Transformative Growth.
May 29, 2018
Ford’s Chariot urban commuter venture shows how to deal with the uncertainty of new business models by testing and learning one’s way forward.