Use Great Companies as Basis for Your Business Model
The best ideas for business model innovation can come from companies outside your industry. There’s a reason everyone inside your industry is constrained by the thinking of that industry. They say things like, Everyone knows you can’t . . . or It’s been that way since . . .
Companies outside your industry aren’t forced to deal with the constraints of your industry. If you’re clever enough to sift through great ideas, filtering out the irrelevant but keeping the occasional gold nugget, you’ll find your best business model innovations.
Companies around the world valued ideas from the Walt Disney Company to such an extent that Disney University was created. Disney charges thousands of dollars to educate companies in every business imaginable on the secrets of its successful business model.
Here are some examples of great ideas coming from unrelated industries:
Most people credit Google with the 10-percent rule — allowing employees to spend 10 percent of their time on unrelated projects. However, Google borrowed this idea from 3M. Since 1948 3M has allowed employees to spend up to 15 percent of their time on pet projects.
Many savvy businesses have followed the lead of franchises in regard to marketing expenditures. Franchises charge a flat percentage of sales to be spent on advertising and marketing. Rather than just spending ad hoc, savvy businesses have adopted a percentage of sales to be spent on marketing regardless of the sales level.
Good or bad, many businesses have adopted Walmart’s fanatical keep costs low philosophy.
Outsourcing and offshoring was a trend started by a handful of large technology companies.
The toner refilling industry borrowed many best practices from the long-established automotive rebuilding industry.
Inventor Dean Kamen was clever enough to borrow his own best practice. Kamen sold his gyroscoping wheelchair to Johnson & Johnson and used the same core technology in the Segway Peoplemover.
An uncanny number of Vince Lombardi’s Green Bay Packer players have become very successful in business. Most of these players attribute their business success to the lessons they learned on the football field.
A business owner was struggling with his manager’s productivity. In particular, employees were lingering in the manager’s office too long. The owner remembered a story about Ray Kroc wanting his McDonald’s managers on the floor and not in their offices. Kroc’s solution to the problem was to saw the backs off of the chairs in the manager’s office and make it less comfortable to sit.
The business owner simply removed the guest chairs from each manager’s office. This tactic cut the drop-in meeting time from ten minutes to two minutes and greatly improved productivity.