Business Model Innovation Leadership: How Do SME’s Strategically Lead Business Model Innovation?

Abstract

When SME´s practice business model (BM) innovation (BMI), leading strategically BMs through the innovationprocess can be the difference between success and failure to a BM. Business Model Innovation Leadership(BMIL) is however extremely complex to carry out especially to small and medium size enterprises (SME).There are so many opportunities, pitfalls and strategies to consider while “the business” has to be operatedsimultaneously.The paper provides a study of BMIL in practise in SME´s and show different ways of how they handle BMILand BMIL strategies. The SME´s were examined through a framework model called the BMIL strategy canvas.The research approach was action research carried out from 2008 - 2012. Intense study of 35 US and EU SME´sand 97 of their different BM´s form the empirical background. The findings represent learning and characteristicof BMIL with a strong reference to state of the art theory in BM and BMI.The research reveals that SME´s focus on very classic BMI approaches and BMIL strategies. SME´s focus inmost cases on reactive “outside in and reactive “inside in” BMIL strategies. SME´s are primarily focusing onmeeting needs and demands of an inside out “predefined” set of user and/or customer groups. SME´s arereacting to a specific customer or market demand but the BMIL strategies do often not put them in a better ormore central strategic position in their market and industry – and in the BMI process.The research shows some common approaches about SME´s BMI and BMIL strategy - Specifically, 1) MostSME´s do not formulate explicitly a BMIL strategy – they are doing BMI rather blindly 2) Very few SME´s arestructured about their BMIL strategy and BMIL strategy process 3) SME´s focus in their BMIL on very few andoften the same building blocks of the BM - especially the building blocks value proposition, target customer andvalue chain [Internal] – often regardless of the actual specific BMIL task, market demand and context of BMI 4)SME´s often leaves big BM potential behind because they cannot see the potential and are often not able tocapitalised upon these 5) SME´s is generally in lack of BMIL skills.