Business model innovation is the process of making changes to an organizations value proposition to customers and its underlying operating model to enhance advantage and value creation. It is a way for organizations to adjust their business model to take advantage of changing customer demands and expectations. A business model is a document or strategy that outlines how a business or organization delivers value to its customers. Business model innovation can deliver more lasting competitive advantage, particularly in disruptive times.

Key points about business model innovation include:

• Importance: Business model innovation is now an essential capability for organizations seeking to drive breakout growth, reinvigorate a lagging core, or defend against industry disruption or decline.

• Process: Business model innovation reflects a fundamental change in how a company delivers value to its customers, whether that’s through the development of new revenue streams or distribution channels.

• Holistic approach: Successful business models take a holistic approach by integrating different aspects of the business into a well-organized and thought-out system.

• Learning and iteration: Business model innovation is a fast process where the main goal is continued learning. It involves analyzing the customers point of view, understanding consumer behaviors, testing prototypes, and updating the entire concept.

Business model innovation is critical to business transformation and can help organizations achieve breakout performance.