Living Business Models December 2014
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The lean-start-up approach—a novel new-business-creation strategy pioneered by entrepreneur Eric Ries—is gaining popularity. Entrepreneurs begin with only a list of untested hypotheses about what their new business might do, and the lean-start-up approach requires entrepreneurs to use these hypotheses to create a business-model canvas—a single page that lists items such as partners, activities, resources, value propositions, and cost structure. A traditional business plan is static, whereas a business-model canvas can change easily in response to feedback from potential customers and partners. The lean-start-up approach also calls for agile development, which relies on incremental and iterative product development.
The University of Cambridge's (Cambridge, England) Peter J. Williamson, a professor of international management, and Eden Yin, a senior lecturer in marketing, published "Accelerated Innovation: The New Challenge From China" in the Summer 2014 issue of MIT Sloan Management Review. The article argues that "Chinese companies are finding new ways to innovate that reduce lead times and speed up problem solving." By breaking up the innovation process into many small steps, Chinese companies can pursue a very effective fast-follower strategy that relies on the iterative improvement of products. Tufts University (Medford, Massachusetts) Fletcher School of Law and Diplomacy adjunct professor Thomas Hout and Boston Consulting Group (Boston, Massachusetts) senior partner David Michael discuss fast behavior by Chinese companies in "A Chinese Approach to Management" in the September 2014 issue of Harvard Business Review. For instance, the authors highlight baby-products manufacturer Goodbaby Child Products Co. (Kunshan, China), which introduces roughly 100 new products every quarter. The authors also discuss home-appliances company Haier Group (Qingdao, China), which has thousands of independent business units. Not all products will succeed, but all products will elicit feedback from the marketplace.
And in a recent strategy+business article, journalist and book author Jeffrey Rothfeder describes how waigaya—"unplanned, agenda-free meetings"—have become commonplace at the Honda Motor Company (Tokyo, Japan). Rothfeder explains that "at the heart of waigaya is a single concept: Paradoxes and disagreements are the essence of continuous improvement." Such constant, iterative discussions can result in the identification of emerging issues at an early stage.