Why Companies Fail at Business Model Innovation

I found various reasons why companies fail at business model innovation. In example, product focused business models are vulnerable to being disrupted by models that “blend both product and service to significantly change the value proposition.” Also, organizations fail blindly to take cannibalization off the table “even if a new business model may have significant upside potential.” Additionally, ROI hurdles are too aggressive for fledgling models and lastly, organizations “shoot their renegades. Or, if they don't shoot them, they wear them down until they leave.” (Kaplan 2011)

This was an interesting post because it pointed out a perspective which is very different from the focus of my research this week. I learned that sometimes it’s not the tools we need to adjust but our attitudes to new and untested waters- in the sense that perhaps organizations need to look at all the ways that a new business model CAN work instead of focusing on how it won’t.

Do you think a shift into such a more positive attitude to change would inspire more acceptance in implementation of new models? How can we inspire this shift?


Kaplan, S. (2011) “Five Reasons Companies Fail at Business Model Innovation” Retrieved from http://blogs.hbr.org/cs/2011/10/five_reasons_companies_fail_at.html

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