Alexander Osterwalder, The Invincible Company – InnovaBuzz 293

Alexander Osterwalder

Alexander Osterwalder, The Invincible Company

In this episode, it’s a privilege to have as my guest, Dr Alex Osterwalder, co-author of Business Model Generation, Value Proposition Design and The Invincible Company. Alex is an entrepreneur, speaker and business model innovator. He is co-founder of Strategyzer, a SaaS company that helps organizations develop new growth engines, better value propositions and powerful business models via online applications and facilitated online courses.

Alex invented the Business Model Canvas, a strategic management tool to visualize, challenge and (re-) invent business models. Leading organizations and start-ups around the world use it. He is a frequent keynote speaker at Fortune 500 companies and has held guest lectures in top universities around the world, including Wharton, Stanford, and Berkeley.

In our discussion, Alex and I talked about:

  • How established companies can change/adapt their business models in certain times
  • Why you should always be focused on creating long term value
  • How to be more innovative through experimentation if you release the fear of humiliation

Stephanie Hayes in episode 163 suggested we interview Alex.

Listen to the podcast to find out more.

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Innovation is taking a market opportunity and technology opportunity and turning that into real value for your customers and your business. @AlexOsterwalder on #InnovaBuzz podcast Click To Tweet

Show Notes from this episode with Alexander Osterwalder, Co-Author of The Invincible Company

Key points and takeaways from this episode include:

  • We need to create world-class organisations where it’s fun to work and where every person can do their best and have a good time. 
  • World-class organisations create value for customers for themselves, for their teams, and for the society. A company that creates value not just for its shareholders and for the profit and growth of the company but also for the society is able to attract more talent. Create value not just for the company but for the society as a whole by becoming a sustainable organisation.
  • It’s how you treat people in times of crisis that people will remember.
  • Creating a responsible company is what will allow you to create more growth and profitability. 
  • Short term manipulation of numbers does not make a lot of sense. What you really need to focus on is the long term creation of value and the numbers will reflect that. 
  • We need to create organisations that are able to constantly reinvent themselves. Organisations need a portfolio of initiatives that explore the future, and it’s something that we can now be a lot more systematic about.
  • Innovation has to be strategic.
  • You need to create an innovation culture in addition to your execution culture. You need to foster these two cultures under one roof. 
  • The number one task of a leader is to tear down the obstacles that are preventing your innovation talent to start exploring new ideas.
  • Innovation is rarely a talent problem. It is rarely an idea problem. It is more about the structure. Leaders can put these in place in terms of leadership support, organisational structures, and innovation practice. 
  • Innovation and R&D are not the same things. Innovation is about value creation for customers and the business. It’s about taking a market opportunity and technology opportunity and turning that into real value for your customers and your business. 
  • Innovation is not about technology. You don’t need technology to innovate and create value. Technology is a great thing but it is just a small subset that may not completely power a completely new innovation, value proposition, or business model. The whole opportunity space when it comes to innovation is larger than technology.
  • Constant reinvention not just about technology. It’s about creating a business model portfolio that will equip you for the future and will prepare you for disruption.
  • Companies that are good at exploration are able to deal better with the crisis than companies that are purely focused on execution.
  • Cost-cutting yourself into the future is a short term measure. Cost-cutting is not bad but it’s not enough to get you to survive another 10, 50, or a hundred years.
  • Don’t classify yourself under just one industry. You want to transcend industry boundaries and think about value creation as well as the right business model to create value for different sets of customers.
  • Create a portfolio of business models that you are managing and work really well today as well as a portfolio of exploration of where your business could go tomorrow. 
  • Exploration needs to have autonomy independence and strategic intent and importance, otherwise it’s going to get killed by the execution arm of the company. 
  • Innovation culture should go beyond the efficiency and sustainability of innovation which is all about protecting your existing business models. 
  • A business model is the unit of analysis.
  • Create an ecosystem where you are not just focusing on your existing business model. As a leader, you need to create the conditions for completely new business models to emerge. You need to symbolically show that the future is important. You need to put in place specific metrics for innovation. You need to give powerful people in the company the mandate to explore new business models.
  • Leaders need to create the conditions for great new ideas and business models to emerge. They need to redesign the system. It is not just a leadership commitment. What leaders need to do is to step up and invest in the future.
  • Empower the innovators in your organisation to create disruptive business models. Companies who are able to establish players and build these innovation ecosystems internally are better equipped than any startup coming into the field.
  • Great companies make small investments not because they want small returns. It’s because they know that’s how you get big returns.
  • Systematise failures in order to find the winners. Do a lot of experiments. That winner, then, pays off all the failed projects by far. 
  • Create an internal Silicon Valley beside your world-class execution engine. One doesn’t replace the other. They need to live in harmony. 
  • You learn from failure. You get more experience over time and it’s not your fault when you fail. In innovation, it is nobody’s fault when you fail. Put those people who are working on that project on to the next project. They will do better and might fail again. However, keep in mind that over a hundred teams that are exploring, one will get it right. You can’t pick that one team. You need to create a funnel that allows one team to emerge. 
  • No company can be invincible but you can put in place the mindset and conditions to stay ahead of others because you are constantly reinventing yourself. 
  • The Three Characteristics of an Invincible Company:
    1. They never sit back and say that they are a good company. They constantly reinvent themselves whilst they are successful. Innovation is not a workshop that you do at one point in time. It’s a continuous activity.
    2. They compete on superior business models. They don’t just compete on technology, product, or price. They build superior business models that outcompete others.
    3. They transcend industry boundaries. You can’t classify them in one industry. Their business model becomes their unit of analysis. 
  • To constantly reinvent yourself, you need a portfolio of business models. You need to manage what you have and be better at that. You need to assess your disruption risk, and in order for you to fight that disruption risk, you need to create an exploration portfolio. You need to manage this duo portfolio. 
  • The Portfolio Map is a shared language for leaders to manage their portfolio of businesses – what they have today and their new initiatives.
  • “Invent Patterns” allow you to design better business models. “Shift Patterns” allow you to shift from an outdated business model to a new one. The Business Model Pattern Library allows you to deeply understand how to compete on business models and not just on product/service, price, or technology.
  • Create an innovation culture in addition to your execution culture. Exploit and Explore equips you with the things you need to have in place to design and manage that culture. 
  • You need stability in an organisation. Not everything is exploration. Some of it is management. 
  • There is an opportunity in this crisis because we were disrupted. We will learn from it, and we will come out of it stronger. 
  • Not everybody should be an innovator just like not everyone should be an executor. 
  • Organisations that are more geared towards execution makes it hard for innovators to survive and thrive.
  • Not everybody needs to be an explorer. Not everybody is comfortable with uncertainty. In this particular crisis, those who are comfortable with uncertainty and exploration need to take care of those who are less comfortable. Give them confidence and protect them because not everybody is made for this type of environment. 
  • Some are more geared towards being an innovator and explorer. Some are more geared towards being an executor and manager. These need to live in harmony. It’s not a value judgement and it’s not that one is better than the other. They are two different professions and two different mindsets, but it’s a team effort.
  • You cannot get innovation without humiliation. You need to be prepared to look stupid a hundred times before you look smart. It’s a skill that you develop over time and you become fearless because you know that ultimately you will get there.
  • The ability to get up after failure is a skill. Failure is terrible but it’s part of the process, and you need to trust the process. 
Don't classify yourself under just one industry. Transcend industry boundaries and think about value creation as well as the right business model to create value for different sets of customers. @AlexOsterwalder on #InnovaBuzz podcast Click To Tweet

The Buzz – Our Innovation Round

Here are Alex’s answers to the questions of our Innovation round. Listen to the interview to get the full scoop.

  1. #1 thing to be more innovative – Don’t fear humiliation. The number one skill of explorers is to humiliate themselves a hundred times until they get it right.
  2. Best thing for new ideas – Be relatively fearless when it comes to humiliation.
  3. Favourite tool for innovation – Constantly believe that you can learn from every interaction. Test ideas constantly. Experiment relentlessly knowing that every interaction is a learning opportunity where you can test your beliefs of the world.
  4. Keep project/client on trackTeam Alignment Map
  5. Differentiate – Have the courage to race above what everybody else does. Don’t hesitate to do it differently just because you believe it’s not the right way. Being a leader in innovation requires getting out of your comfort zone and trying something that nobody else is doing. 

To Be a Leader

Don’t fear experimentation and failure. Try to create a better workplace with better work practices for a lot of people to have more fun at work. At the end of the day, the journey itself is the most important and not just the outcome.

Reach Out

You can reach out and thank Alex through their website.

Suggested Guest

Alex suggested I interview entrepreneur Steve Blank and innovation expert and author Rita McGrath. So Steve and Rita, keep an eye on your inboxes for an invitation from us to the InnovaBuzz podcast, courtesy of Alexander Osterwalder.

Links

Books

Cool things about Alex

  • In 2015, he won the strategy award by Thinkers50, called the “Oscars of Management Thinking” by the FT, and ranks #15 among the leading business thinkers of the world.
  • In 2013, he won the inaugural Innovation Luminary Award by the European Union. 
  • He is a founding member of The Constellation, a global not-for-profit organization aiming to make HIV/AIDS and Malaria history.
Constant reinvention is not just about technology. It's about creating a business model portfolio that will equip you for the future and will prepare you for disruption. @AlexOsterwalder on #InnovaBuzz podcast Click To Tweet

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Jürgen Strauss

Dr. Jürgen Strauss is a transformational marketing strategist, podcaster, speaker, the chief innovator and founder of Innovabiz who partner with innovative, exceptional business coaches and consultants to enable you to build visibility, professional credibility and a deep connection with your ideal, dream clients, so that you will achieve growth and be able to make a difference to more ideal clients. Jürgen's mantra is Let's Make Marketing Human again. He believes that marketing is the art and science of creating and sustaining exceptional, remarkable customer experiences and relationships. You can find Jürgen on LinkedIn, as well as on Innovabiz' Twitter, Facebook, The InnovaBuzz Podcast, The Tales of Marketing Transformation Show and his personal Photography website.

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