Henry Chesbrough’s article in today’s WSJ about the importance of business models in innovation reinforces a point we often make here: the most important, effective, and disruptive innovations are often the result of new business models, not new products or technologies. (Think Netflix to Blockbuster or iTunes to the rest of the music industry.)

Often, we look at the core reasons companies are unable to create new business models: they have entrenched infrastructures and a vested interest in maintaining them, they struggle to see the world as it could be vs as it is, they are risk averse, insular and myopic. They are fat and happy. Disruption tends to come from the upstarts and companies on the margins that need to find a new way in.

Chesbrough raises another good point: Business models are nobody’s job. R&D looks at technology. General Managers try to maximize profits within their systems and structures for predictable quarter-to-quarter growth. The CFO tends to look at different factors and metrics. Marketing focuses on current brands and capabilities. The CEO generally looks at the bigger picture vs. the business unit level challenges.

In other words, for many companies, business model innovation is out of scope - no one owns the responsibility. And yet, it offers perhaps the biggest point of leverage for innovation.

Maybe it’s time to appoint a CBMO. And if you’re not in a position to create structural change in your organization by adding this job, why not pick up the discipline and responsibility yourself? If you’re not looking at the model, you’re not maximizing your innovation potential. Start there and then branch out.

I’m searching for the visionaries. Where have they all gone?

Crafting a true vision for your brand/business seems to be the exception, not the rule these days. Too many companies are jumping into product ideas without a firm sense of purpose and path.

When Apple launched the iPod, Steve Jobs had a true vision for the product. The iPod wasn’t ever just going to be an MP3 player. From its inception, it had a much bigger footprint. The iPod was a vehicle for reshaping our relationship with content - all media content. What looked like a music player was really a blueprint for a total media revolution. It didn’t take long for iTunes to fundamentally reshape the music industry. It didn’t take long for the video iPod to offer television. The brand plan was more than a strategy, it was a vision for creating an industry.

This foresight is too rare. And I fear that as consumers play a bigger role in cocreating and codesigning the products and brands they love (a business initative I am 100% behind), more companies will misunderstand the relationship between a product idea and a vision for a business. Consumers will do a great job of informing and shaping innovation, but we cannot outsource to them the path for the brand. That job must be done by someone within the company, someone with vision and a clear purpose.

Vision is a critical factor in successful innovation. Don’t let it get run over by a pipeline of semi-related extensions. You can operate without a clear vision in the short run. But it will always catch up with you in the end.

For those of you who are not yet operating in an open source world, harnessing the global diversity of talent, why not consider Opening Source. It’s a little step into the brave new business model.

Opening Source is about opening your innovation up to your full cadre of employees, reaching out beyond functional expertise to get everyone involved. Becoming more transparent - sharing your business objectives with the company and then engaging everyone in the task of spotting opportunities and creating solutions. Being open to different points of view, experiences and expertise.

It might be that what looks like a chemistry problem can be solved by a structural solution. Or perhaps a financial challenge unknowingly creates a sales opportunity. Or the experiences of the adminstrative staff — a different age and psychographic than upper management — enable them to see a new product or business model opportunity.

If you’re not yet ready to look outside the company for answers, are you at least doing enough to surface ideas within your company?

Great article in Biz Week about the power of Design to innovate technical goods. Design focuses on human factors - usability, ergnomics, emotions - which can can differentiate just as much — even more — than bells and whistles. Also note the attention to systems thinking — innovating the ecosystem, not just the product. Read.

http://www.businessweek.com/innovate/content/jan2007/id20070109_587285.htm?chan=innovation_innovation+%2B+design_innovation+and+design+lead

What do you do when your audience is aging, you operate through a single point of distribution and your future success depends on creating the next generation of brand loyalists?

If you’re the Metropolitan Opera, you innovate the distribution channel by digitizing live opera and beaming it to movie theaters throughout the U.S. and Canada. It’s simply the latest example of the arts taking advantage of advances in technology to create a wider audience — call it democratizing an art form. The new high definition movie broadcasts will provide “a unique opportunity for people to experience world-class opera in their local community,” says Peter Gelb, General Manager of the Met. “Plus the movie theater environment and affordable ticket price make these events something the entire family can enjoy.”

While some may think of this as a clever marketing stunt, consider the broader opportunities when viewed as business model innovation. It’s a distribution play. Check out the link below to learn whether the Met is coming to a theater near you.

http://www.metoperafamily.org/metopera/broadcast/hd_events.aspx