Business remodeling should not be confused with the Japanese philosophy of ‘Kaizen’ (continuous improvement) or the term ‘innovation’. Many may argue that it is same as innovation but there is a key difference. Innovation as a process redefines, enhances or redistributes organization value as part of Kaizen (continuous improvement) whereas remodeling businesses essentially stems from a dire need where organization value is rapidly diminishing. It is much larger than innovation.
Remodeling : New Direction, New Value & New Mindset
When organization value is rapidly diminishing it requires reinvestigating the market goals and analyzing the methods. This sets the new organization ‘Direction’ which is arrived after a thorough analysis of the ‘value’ your clients will be buying 5 years down the line.
Next comes looking into the ‘Value’. Most SMEs confuse value with either benefits of features or advantages of cheaper price. Value is neither of these. Value is an outcome of creating competitive advantage. It is not about one or two parts, it is about sum of many parts. This is an important factor to understand. That is why it is popularly referred to as value chain.
The last is the enabler — ‘Mindset’. Trying to force fit old mindsets to drive the new initiative is a disaster from step one. Fresh minds do not carry the burden of memory giving them a critical advantage in driving success.
Thus business remodeling requires a new market goal lead by competitive advantage sustained by skilled people.
Here I am providing a 5/15 Template that could provide useful insights to those who wish to undertake business remodeling.
Insight #1: MARKET
- What is the expected market revenue size of your remodeled business
- How will the new market evolve
- What geographies could the remodeled business appeal to
Insight #2: CUSTOMERS
- What would be a typical customer behavior of your remodeled business
- What kind of personality those customers are likely to have
- What could be the lifetime customer value
Insight #3: COMPETITION
- What kind of companies may stand in competition at the new turf
- What breed of innovators will challenge your remodeled business
- What possibly could be the disruptions by force majeure
Insight #4: VALUE
- What use cases the remodeled business can create
- What repeatability the remodeled business is likely to have
- How will the remodeled business measure value creation
Insight #5: PEOPLE
- How committed are the doers
- How experienced are the thinkers
- How persistent are the believers in the remodeled business
I hope this article will be useful in your quest and I wish you the best. You may download the full PDF from this page if you wish to keep this article with you.