Business model innovation is the process whereby a business re-positions itself by considering why it exists and what its purpose is. This is different from product innovation which is about thinking about developing new products or services that will give you a competitive edge.
Simple (business) environmental analysis tells us that the world doesn’t stay the same. Politics, technology, legislation, economic and global affairs all move really quickly and if a business doesn’t respond to these changes quickly, then they will become obsolete. There are many examples all around us, especially in high street retail, media and travel.
Whilst implementing a business model change may be hard for all kinds of social and cultural reasons, threshing it out on paper is really pretty simple. There are many a business model canvas which can be used to drive a solid conversation about current and future threats and what may need to change in order to outpace your competitors and survive disruption.
The reason it is necessary for tech product managers to continually look at business model innovation is that if they don’t the products that they’re building might be solving the wrong problem really well. Building an amazing product for an out of date business model is largely a waste of time, effort and resources.
Being in tech product means that you are in the business of understanding problems that need to be solved. At a senior level this isn’t just about the needs of the customer, it’s also about making sure that the problem the whole business is trying to solve is clear, relevant and pertinent too.