When I was working on yesterday’s post about the business model experiment that Kaiser Chiefs are running, I came across a quote from Paul Morley that bothered me enough to trigger this post. It’s from the discussion of the idea in the Financial Times, and Morley is suggesting that the experiment is a terrible idea. Here’s why:
If you’ve got the time, it is always best to listen to a great album from beginning to end, preferably with a break in the middle where you turn the record over – creating four very specific moments of drama, the beginning and ends of sides one and two, with moments of surprise and intrigue carefully distributed in between to make separate songs work as a whole.
Bringing It All Back Home, Bob Dylan’s 1965 album, is my choice from the 1960s for the perfect album sequence…
Consequently, letting listeners choose their own album sequence is bad.
Look, I still own about 800 records on vinyl, so I can understand why he’s saying what he’s saying. But still – give me a break!!
Bringing It All Back Home is nearly 50 years old now. Criticising modern artists for not following the same tropes today is exactly the same as saying that Dylan should have been making records in exactly the same way as people were around the time that Robert Johnson was five years old. It’s just nuts.
This is dominant logic thinking – and this is an approach that can kill you in turbulent environments.
A firm or industry’s dominant logic is usually determined by whatever business model first led to success. While things are stable, it is fine to just keep innovating incrementally. However, when things around you start going unstable, you need to start experimenting.
Here are three signs that your business model might be obsolete – if you say:
- We should be doing things in exactly the same way that we were fifty years ago: I don’t think we need anything more on this – it’s a huge danger sign.
- I want you to think outside of the box: this one is tough, because it sounds like you actually are asking people to innovate. However, here is what it usually means:
“Think outside the box” usually means “make a small jump that will move one edge of the box out just a tiny bit”. Incremental. If someone asks you to think outside of the box, and you come back with a star instead of a slightly rejigged box, you’ll most likely be in trouble. Thinking outside of the box is a good sign that your business model is too old.
- We have to educate the market: this can mean two things – “our new idea is ahead of its time, so people don’t understand it yet”, or “if we just explain it to people, they will still love the business model that we’ve been using all along.” Unfortunately, it usually means the latter. I have yet to hear someone use this phrase when they weren’t already deeply in trouble.
It’s really difficult to move beyond the dominant logic of your firm, or your industry. In part this is because of how strongly connected these offerings are with existing suppliers and customers. Changing the business model is just the first domino in a long line that will then inevitably fall.
Nevertheless, if you see one of these signs that your business model is obsolete, the time to act is now. And at this point, you can’t just move the lines of your box. You’ll have to experiment to see if you can come up with a star.