Innovating with the Business Model Canvas

By: Asfand Gul Kasi

Focus capabilities and Organization to Maximize profitability

Delivery infrastructure: the essential bridge that turns a great strategy into profitable results.

The Importance of Delivery Infrastructure in Achieving a Successful Business Model

A brilliant idea and a strong value proposition are not enough to build a successful business. What ultimately determines success is how effectively you deliver that value. Delivery infrastructure is the bridge between strategy and results. It ensures that your promises to customers are fulfilled efficiently, consistently and economically.

Without strong delivery systems even the best business model will struggle to scale or sustain profitability.

1. Delivery Infrastructure: From Activity to Efficiency

Many organizations confuse being busy with being productive. However sustainable success comes from efficiency not activity.

Key Principles of Effective Delivery Infrastructure:

• Streamlined Processes: Eliminate unnecessary steps and reduce friction in operations.
• Clarity of Focus: Align operations with the core value proposition.
• Scalable Systems: Build systems that grow without dramatically increasing costs.
• Consistency: Deliver the same level of quality every time.

A strong delivery infrastructure translates strategic focus into economical and repeatable methods of execution. It ensures that value reaches customers in the most effective way possible.

2. Resource Management: Powering Effective Delivery

Delivery does not happen in isolation. It depends on how well an organization manages its resources.

Identifying Key Resources

Every business must determine which resources truly enhance delivery effectiveness:

1. Human Resources Skills, expertise and leadership.
2. Physical Resources Equipment, facilities and logistics.
3. Intellectual Resources Systems, processes & intellectual property.
4. Financial Resources Capital allocation and cost efficiency.

The goal is not to accumulate resources, but to optimize the right ones that directly improve delivery performance.

The Role of Partnerships

Strategic partnerships allow organizations to:

• Focus on core competencies.
• Outsource non-core activities efficiently.
• Reduce operational complexity.
• Increase flexibility and scalability.

Partnerships create a more focused organization by ensuring that each entity performs what it does best.

3. Execution and Team Dynamics: Turning Strategy into Action

A delivery infrastructure is only as strong as the people who operate it.

Aligning Teams with Strategic Focus

To ensure successful execution:

• Communicate a clear organizational focus.
• Define roles and responsibilities precisely.
• Align performance metrics with delivery goals.
• Encourage cross-functional collaboration.

When team members understand how their work contributes to value delivery, productivity increases and waste decreases.

Translating Focus into Action

Execution requires turning abstract strategy into concrete steps:

1. Break down strategic goals into operational tasks.
2. Assign accountability at every level.
3. Monitor progress using measurable indicators.
4. Continuously refine processes based on feedback.

This structured approach ensures that delivery is intentional, measurable and continuously improving.

4. Why Delivery Infrastructure Determines Business Success

A successful business model depends on three core elements:

• A compelling value proposition.
• A clearly defined customer segment.
• A reliable delivery infrastructure.

While the first two define what you offer and to whom delivery infrastructure determines how that value reaches the customer.

Without efficient delivery:

• Costs increase.
• Customer satisfaction declines.
• Scalability becomes difficult.
• Competitive advantage erodes.

With strong delivery systems:

• Operations become lean and focused.
• Profit margins improve.
• Teams operate with clarity.
• Customers experience consistent value.

Business Model Types and Strategic Delivery Focus

When designing the delivery side of the Business Model Canvas one of the most important strategic questions is:

What activities are strategically important?

The answer becomes clearer when we understand business model type a concept introduced in the “Unbundling the Corporation” article published by the Harvard Business Review.

Research suggests that companies perform better when they clearly align their delivery activities around a single dominant business model logic. Organizations that try to operate multiple types simultaneously often lose focus and efficiency.

Let’s explore the three primary business model types and what they mean for delivery strategy.

1. Infrastructure-Driven Businesses

Primary Driver: Scale and Repeatability

Infrastructure-driven organizations invest heavily in physical or systemic infrastructure. Their profitability depends on maximizing utilization and efficiency.

Characteristics:

• Large fixed costs
• Standardized offerings
• High volume
• Emphasis on operational efficiency

Examples:

• Electric utilities
• Traditional telecom companies
• Chemical manufacturers like Dow
• Educational institutions
• Business schools such as University of Virginia Darden School of Business

Even though schools may produce original content, their success relies on delivering a repeatable high-quality educational experience to many students consistently.

Strategic Focus for Delivery:

1. Optimize operations.
2. Increase throughput.
3. Standardize processes.
4. Lower marginal costs.

For infrastructure-driven firms the key question is: How do we run more value through our system efficiently?

2. Scope-Driven Businesses

Primary Driver: Economies of Scope (Breadth of Offerings)

Scope-driven organizations focus on expanding the number of related products or services offered to the same customer.

Characteristics:

• Deep customer relationships
• Cross-selling opportunities
• Portfolio expansion
• Relationship management focus

Examples:

• Luxury retailers like Neiman Marcus
• Financial institutions such as Bank of America
• Corporate law firms
• Consulting firms

A scope-driven bank may start with a checking account and expand into savings, mortgages, retirement plans and small business loans maximizing value per customer.

Strategic Focus for Delivery:

1. Strengthen customer relationships.
2. Integrate services seamlessly.
3. Enhance cross-selling capabilities.
4. Build trust and long-term engagement.

For scope-driven firms the key question is: How do we serve more needs for each customer?

3. Product-Driven Businesses

Primary Driver: Uniqueness and Innovation

Product-driven firms create something proprietary and differentiated that commands demand or a price premium.

Characteristics:

• Intellectual property focus
• Brand differentiation
• Innovation cycles
• Marketing intensity

Examples:

• Consumer goods companies like Nestlé and Unilever
• Game developers like Electronic Arts
• Film studios such as Metro-Goldwyn-Mayer

For example Electronic Arts succeeds not by owning the distribution channel but by creating unique games people want to buy. Similarly MGM’s success depends on producing compelling films that attract audiences.

Strategic Focus for Delivery:

1. Invest in innovation and R&D.
2. Protect intellectual property.
3. Strengthen branding and storytelling.
4. Speed up product development cycles.

For product-driven firms, the key question is: What makes our product uniquely valuable?

Why Business Model Type Matters for Delivery

Understanding your dominant business model type helps you:

• Clarify which activities are strategic.
• Allocate resources efficiently.
• Avoid operational confusion.
• Build competitive advantage.

Trying to operate simultaneously as infrastructure-driven, scope-driven and product-driven often creates internal tension and diluted focus.

Applying This to Your Organization

To refine your delivery strategy ask:

1. Are we primarily optimizing scale and repeatability? (Infrastructure)
2. Are we maximizing breadth of services to each customer? (Scope)
3. Are we creating unique, proprietary products? (Product)

Once you identify your dominant model you can align:

• Key Activities
• Key Resources
• Partnerships
• Execution priorities

Understanding Your Business Model Type: A Practical Quiz Approach

Before refining the delivery side of your business model it helps to pause and ask a simple but powerful question:

What type of business model does your organization fundamentally follow?

By examining real-world companies, we can sharpen our understanding and develop a testable hypothesis about our own model.

Infrastructure-Driven: Scale and Utilization

Consider ExxonMobil. The company extracts oil and gas and distributes it through vast retail networks. Its profitability depends largely on maximizing the use of expensive extraction and distribution infrastructure.

This makes ExxonMobil primarily infrastructure-driven the more volume they push through their system the more profitable they become.

Similarly, platforms that aim to serve many users in the same standardized way often fall into this category. Their success depends on efficiency, scale and repeatability.

Scope-Driven: Serving More Needs for the Same Customer

Now consider Kaiser Permanente. Kaiser integrates surgery, primary care, radiology and other services within one network.

Their strength lies in offering multiple related services to the same patient base generating an economy of scope. Instead of maximizing infrastructure utilization alone, they focus on expanding services around the same customer relationship.

This is the hallmark of a scope-driven business.

Product-Driven: Innovation and Uniqueness

Take IBM as a dynamic example across time:

1. Early Phase (Mainframe Computers): Product-driven building rare proprietary machines.
2. Consulting Era: Scope-driven offering various IT and advisory services to corporate clients.
3. Watson AI Phase: Infrastructure-driven creating an AI platform (Watson) designed for broad scalable usage.

Similarly, Johnson & Johnson operates primarily as a product-driven business. Its Band-Aids and shampoos compete with store brands by extracting a price premium through brand trust and perceived quality.

Applying the Lens to a Growing Company

Imagine a company like Enable Quiz.

• If they aim to build a platform used by as many customers as possible in a standardized way → Infrastructure-driven.
• If they embed their quiz engine inside larger learning management systems → Product-driven.
• If they expand into solving full corporate training challenges for select major clients → Scope-driven.

The difference lies in where the primary profit logic lives.

Operational Implications of Business Model Type

Understanding your model has practical consequences.

1. Sales Process

• Infrastructure-driven: Standardized sales process.
• Scope-driven: Flexible relationship-heavy sales approach.
• Product-driven: Channel-based or lighter direct sales.

2. Pricing and Packaging

• Infrastructure: Standard pricing.
• Scope: Customizable pricing structures.
• Product: Generally standardized sometimes premium-based.

3. Customer Support

• Infrastructure: Systematic and repeatable support systems.
• Scope: Highly customizable account management.
• Product: Often structured support though variation may occur for key accounts.

For example, implementing a CRM system in a telecom company (infrastructure-driven) requires automation and scale. Implementing one in a major law firm (scope-driven) requires customization to reflect unique client relationships.

Defining Key Activities and Key Resources: From Focus to Execution

Once you have a working hypothesis about your business model type the next step is to clarify two critical building blocks on the delivery side of the canvas:

• Key Activities
• Key Resources

But here’s the important distinction:

Not everything that is important is strategically key.

Keeping accounting records clean, drafting contracts or handling payroll may be necessary. But are they uniquely strategic? Probably not. Key activities are those that are:

1. Fundamental to your profit logic and
2. Difficult to substitute or ignore without damaging the model.

If you have clarity about your delivery focus, only a few items should qualify.

1. Identifying Key Activities

The right question is not:

“What do we do every day?”

Instead, ask:

“What activities directly drive our business model advantage?”

Example: Enable Quiz

Assume Enable Quiz operates primarily as an infrastructure-driven platform focused on scalable quiz deployment.

Its potential key activities might include:

1. Instructional Design

Developing high-quality quizzes that reliably assess user knowledge. This includes:

• Asking the right diagnostic questions
• Structuring assessments intelligently
• Ensuring measurement accuracy

This is strategically unique because the company’s value depends on credible assessment.

2. Product Development

Maintaining and improving the quiz infrastructure:

• Platform reliability
• Feature enhancement
• Scalability improvements

Even infrastructure-driven companies must innovate. For example, Amazon Web Services continuously develops new services despite operating an infrastructure-focused model.

3. Monitoring Tech Trends & Best Practices

Understanding:

• Emerging skills
• Changing technical standards
• Workforce upskilling needs

This activity strengthens quiz relevance and keeps the product aligned with market demand.

2. Filtering Strategic Activities

In team discussions, everyone naturally believes their function is “key.” That’s normal.

To filter effectively, ask:

• Does this activity directly drive our business model type?
• Would removing it fundamentally weaken our competitive position?
• Is it uniquely important compared to standard operational tasks?

This helps narrow the list to what truly matters.

3. Identifying Key Resources

If key activities are what you must do key resources are what you must have.

For Enable Quiz these might include:

1. Quiz Banks (Existing or Desired)

Even if early-stage you can denote future resources with:

• Parentheses
• Question marks
• Or “Target Resource” labels

The canvas is a discussion tool, not a perfection test.

2. Performance & Analytics Data

Data about:

• Which quizzes perform best
• Completion rates
• Learning improvements
• Engagement patterns

Analytics capability becomes a strategic advantage when used to continuously improve user experience.

3. A Growing User Base

Even if currently small this is critical for:

• Network effects
• Feedback loops
• Revenue scaling
• Infrastructure utilization

For infrastructure-driven models scale itself becomes a key resource.

4. The Power of a Focused Canvas

When you map Key Activities and Key Resources onto your canvas you’re not creating a static document.

You are:

• Clarifying strategic priorities
• Forcing productive discussions
• Aligning execution with delivery focus
• Testing your assumptions about your model

If your business model type is infrastructure-driven, your key activities and resources should support scale and repeatability.

If scope-driven they should support relationship expansion and service breadth.

If product-driven, they should support innovation and differentiation.

5. A Practical Exercise

Take a moment and complete this for your organization:

Step 1: List 8–10 Important Activities

Then narrow them to 2–4 truly strategic ones.

Step 2: List Current and Desired Resources

Mark future ones clearly.

Step 3: Ask

Do these align with your assumed business model type?

If not, either:

• Your activity list is wrong or
• Your business model hypothesis needs revision.

Strategic IT Project Chartering: A CIO’s Guide to Process-Driven Digital Transformation

Introduction: From Business Model Clarity to IT Execution

This section is for Carla, the CIO and for any technology leader tasked with delivering meaningful digital transformation. Once you have a working view of your key activities, aligned with product/market fit and the customer journey you possess something extremely powerful: a strategic anchor for IT decision-making.

The challenge is not launching more IT projects. The challenge is ensuring those projects drive real outcomes not just technical outputs.

The Four Common IT Pitfalls

Based on experience across enterprise projects four recurring issues often undermine strategic IT initiatives:

1. Order-Taking vs. Consulting

IT teams frequently fall into the trap of simply building what users request. While users understand their operational needs they are not software architects. Strategic IT must move from order-taking to consultative problem-solving.

2. Output Over Outcomes

Enterprise software is often deployed in large batches to “show progress.” But checking boxes is not the same as delivering business value. IT must prioritize measurable organizational outcomes over technical output.

3. Automating Broken Processes

There is a persistent myth that good software will magically solve organizational inefficiencies. It won’t. Software can automate and standardize, but only if processes are well designed first.

4. Avoiding Small-Batch Iteration

Large monolithic implementations reduce learning. Working in small batches enables testing, feedback and refinement ensuring what is built actually works.

The Three Strategic Inputs You Already Have

Before beginning any major IT initiative revisit three foundational questions:

1. Who are our buyers and why do they choose us?
2. What journey do they take with us?
3. Which activities and resources are strategically critical to delivering value?

These answers live inside your Business Model Canvas. They form the strategic charter for IT.

From Key Activities to Process Inventory

One practical way to operationalize strategy is by building a process inventory derived directly from key activities.

This is not the traditional “giant poster in the COO’s office” version of process mapping. Instead, it is:

• Anchored in strategic activities
• Broken into manageable components
• Designed to guide software prototyping

Atomic Processes: The Building Blocks

Each process should be decomposed into atomic processes defined by three elements:

1. A Specific Input What triggers the process?
2. A Series of Steps Including hand-offs and decision pivots.
3. A Discrete Output What measurable result is produced?

This structure enables IT teams to prototype, test and refine with clarity.

Eliminating Waste: NVA, BVA and RVA Time

A well-designed process inventory helps reduce inefficiencies:

• NVA (Non-Value-Added) Time: Fixing mistakes, waiting, rework. Eliminate it.
• BVA (Business-Value-Added) Time: Reporting and administrative coordination. Minimize it.
• RVA (Real-Value-Added) Time: Activities directly tied to strategic priorities. Maximize it.

This distinction ensures IT investments strengthen the activities that truly matter.

Example: Donor Qualification at United Children’s Theater

Consider United Children’s Theater, a nonprofit providing arts programming to public schools.

One of their key activities is donor development.

An atomic process within that activity might look like this:

Input:

A validated fundraising lead.

Steps:

• Assess whether the lead donates to arts.
• Assess whether they support K–12 education.
• Determine if funding is available this year.
• Pivot based on qualification outcome.

Output:

• Qualified opportunity
• Temporarily unqualified (schedule callback)
• Permanently disqualified (close and cancel tasks)

The CRM platform (e.g., Salesforce) becomes a tool that supports this clearly defined process not a substitute for defining it.

Why This Approach Works

By grounding IT projects in:

• Clearly defined key activities
• Structured atomic processes
• Validated stakeholder input

You can:

• Link software features to business strategy
• Prototype before full deployment
• Avoid building unused functionality
• Reduce waste and rework
• Focus on measurable outcomes

This creates a virtuous cycle where IT becomes a strategic enabler rather than a reactive service function.

Key Partners: When and How They Truly Matter

Introduction: Not All Partnerships Are Strategic

The Key Partners block of the Business Model Canvas can feel deceptively important. Every company interacts with vendors, suppliers and collaborators. But the critical question is:

Who is uniquely strategic to delivering and scaling our product–market fit?

The answer depends heavily on your stage of development.

Early-Stage Ventures: Learn Before You Leverage

In the early phases of a venture discovery, validation and early customer creation partnerships are often premature.

Why?

Because:

• Partners cannot invent product–market fit for you.
• They cannot deeply understand your customer journey before you do.
• They are focused on running their own businesses.

At this stage, founders and core teams must build intimacy with the customer experience. You must:

• Personally guide customers through the journey.
• Identify friction points.
• Refine messaging.
• Smooth operational rough spots.

Outsourcing this learning too early weakens your understanding and delays clarity.

For a company like Enable Quiz potential partners such as learning management system providers may seem attractive. But if Enable Quiz approaches them with:

“We have an idea we’ve tested a little…”

It will likely be ignored.

However, if they approach with:

“We have validated product–market fit, satisfied customers, measurable outcomes and a scalable growth model…”

Now the conversation changes. Partners amplify success they do not create it.

The Role of Amplification

Once product–market fit is established partners can become powerful growth engines:

• Learning Management Systems (LMS): Broader platforms that could integrate and distribute quiz solutions.
• Consultancies: Firms that recommend tools to clients.
• Third-Party Sales Forces: Organizations that extend market reach.

But here’s the rule:

You must be able to package the “magic” of your product–market fit before handing it to a partner.

If you cannot clearly articulate how your solution works, why customers buy, and how it reliably delivers value, a partner cannot scale it.

Mature Businesses: Strategic vs. Transactional Partners

For established organizations the question shifts from whether to have partners to which partners are truly strategic.

A partner is strategic if they:

• Directly support a key activity.
• Enhance or protect a key resource.
• Amplify proven product–market fit.
• Are difficult to substitute without harming performance.

Transactional vendors, even important ones are not necessarily strategic.

A Practical Test for Identifying Key Partners

Ask these questions:

1. Does this partner strengthen our core profit logic?
2. Would losing this partner significantly damage our competitive position?
3. Do they help us scale validated value not experiment with it?
4. Are they aligned with our long-term delivery focus?

If the answer is yes to most of these they likely belong in the Key Partners block.

A Stage-Based Perspective

Early Stage

• Focus on learning.
• Minimize reliance on partners.
• Build deep customer understanding internally.

Growth Stage

• Begin identifying amplification partners.
• Bring proof of traction and scalability.

Mature Stage

• Evaluate which partners are uniquely strategic.
• Formalize relationships that strengthen key activities.

Final Reflection

If you are early in your venture, do not agonize over partnerships. Treat them as a future hypothesis.

If you are operating an established business, actively review:

• Who your organization interacts with.
• Where collaboration creates leverage.
• Which relationships are strategic versus operational.

Partnerships are powerful but only when built on validated value.

First create the magic. Then find partners who can amplify it.

Cost Structure: Aligning Expenses with Your Engine of Growth

The final element of the Business Model Canvas is Cost Structure and it is far more strategic than simply listing expenses. The real question is:

How do our costs align with our revenue logic and growth engine?

Using Enable Quiz as an example we can break costs into two foundational categories and then connect them to growth strategy.

1. Fixed vs. Variable Costs

Understanding this distinction is essential.

Fixed Costs

These do not increase significantly with each additional customer.

For Enable Quiz, examples include:

• Assessment Development Designing and building quizzes.
• Platform Product Development Engineering and maintaining the quiz infrastructure.
• General & Administrative (G&A) Accounting, HR & leadership overhead.

Once the platform is built, adding another customer does not dramatically increase these costs. This is typical for infrastructure-driven businesses.

Variable Costs

These rise in proportion to customer growth.

Examples include:

• Promotion (especially paid media, pay-per-click advertising)
• Customer Support
• Onboarding and Consulting Services

If acquiring one more customer costs $2 in paid promotion that cost scales linearly. More customers = more variable expense.

2. Costs Must Match Your Growth Engine

Costs only make sense when evaluated alongside revenue.

A useful lens is the three engines of growth:

A. The Paid Engine

Here, the key relationship is:

Customer Acquisition Cost (CAC) < Lifetime Value (LTV)

If promotion is variable, you must test whether each marketing dollar produces profitable subscription revenue.

The question becomes:

• Is our acquisition cost lower than what we earn over the customer’s lifetime?

If not, scaling paid acquisition simply accelerates losses.

B. The Sticky Engine

In a sticky model, retention drives growth.

Here, cost focus shifts toward:

• Customer support
• Proactive engagement
• Experience improvements

For example:

• If you proactively call inactive customers and help them succeed does their lifetime value increase?
• Does investing in better onboarding reduce churn?

Variable costs tied to retention may actually increase profitability if they meaningfully extend LTV.

C. The Viral Engine

In a viral model, growth depends on customer sharing.

Costs may shift toward:

• Improving the customer journey
• Optimizing share triggers
• Product experimentation

Promotion becomes less about paid ads and more about increasing organic amplification.

In infrastructure-based companies like Enable Quiz this often means investing in improving the core journey rather than buying traffic.

3. Managing Innovation Costs Wisely

One of the biggest cost traps especially in mature organizations is over-investing in unvalidated innovation.

Traditional approach:

1. Write a long plan.
2. Allocate large budget.
3. Optimize for scale.
4. Hope it succeeds.

Modern innovation-friendly approach

1. Observe personas and problem scenarios.
2. Identify weak alternatives.
3. Test using a product proxy.
4. Scale only after evidence appears.

For example, instead of fully engineering a “talking bicycle compass” you might simulate the experience manually to test engagement first.

This approach:

• Minimizes sunk cost risk
• Reduces uncertainty
• Allows iterative scaling

It is far more cost-efficient in fast-moving markets.

4. Strategic Cost Questions to Ask

When reviewing your Cost Structure ask:

1. Which costs are truly fixed versus variable?
2. How do they align with our growth engine?
3. Is CAC lower than LTV?
4. Are we investing in retention experiments that increase lifetime value?
5. Are we validating innovation before scaling it?

Corporate Innovation: What’s Hard and What’s Solvable

No company wants to become the next Blockbuster disrupted by a faster more adaptive competitor like Netflix.

That fear drives massive attention toward corporate innovation and digital transformation. But in practice, these efforts are difficult not because companies lack intelligence or resources, but because they struggle with focus, prioritization, pipeline management and disciplined testing.

Let’s break down the hardest (yet solvable) challenges.

1. Maintaining Product–Market Fit (Not Feature Creep)

One of the biggest traps in established companies:

“What if we just add a red button to the product we’ve sold for 20 years?”

That’s solution-first thinking.

True innovation requires:

• Defining customer segments in their terms, not yours
• Clarifying value propositions that matter to them
• Tracing those back to customer jobs
• Studying alternatives and how they’re evolving

If you’re not revisiting:

• Who the real customer is
• What job they are hiring you to do
• What they would do instead

…you are innovating inside a shrinking box.

The Canvas helps here because it forces:

• Explicit customer segmentation
• Explicit value articulation
• Clear mapping between problem and solution

Innovation fails when it optimizes the old solution instead of revalidating the job.

2. Prioritizing Innovation: The Three Horizons of Growth

Another classic problem:

Senior leadership says:

“Be more innovative.”

But gives no time budget or structure.

This is where the Three Horizons model becomes powerful.

Horizon 1 (H1) Core Optimization

Timeframe: 3–12 months

These improve the current business.

Example (fictional poultry automation company):

• Improve sales data to better target maintenance contract renewals.
• Deploy better analytics to increase core revenue.

Characteristics:

• Low uncertainty
• Clear metrics
• Direct tie to existing cash flow

Horizon 2 (H2) Adjacent Expansion

Timeframe: 2–4 years

New business model or new technology but not both.

Example:

• Expanding to China via a joint venture
• Same technology, new operating model

Characteristics:

• Moderate uncertainty
• Requires new capabilities
• Builds next wave of growth

Horizon 3 (H3) Transformational Bets

Timeframe: 3–7 years

New technology + new business model.

Example:

• Moving from industrial poultry farms to consumer backyard automation
• Entirely new channel
• Different product requirements
• Different customer economics

This is effectively building a startup inside the company.

Characteristics:

• High uncertainty
• Low short-term revenue
• Strategic future optionality

Why This Matters

If you measure H3 projects with H1 metrics, you will kill them too early.

If you fund H3 like H1 without discipline, you waste capital.

The key is:

Match expectations, metrics and funding cadence to the correct horizon.

3. Managing the Innovation Pipeline

Think of innovation as a flow:

• H1 → Core business (cash generator)
• H2 → Fledgling growth engines
• H3 → Concept testing and option creation

A healthy pipeline requires:

Diverse Idea Generation

Not just internal brainstorming.

Options include:

• Internal incubators
• Cross-functional teams
• Reverse hackathons (learn from users)
• University partnerships
• Industry collaboration

For the poultry example:

• Engage backyard chicken communities
• Partner with agricultural technology programs
• Observe real customer workflows

The goal:

Expand your idea surface area beyond your current org chart.

4. The 90–120 Day Discipline (Pivot, Persevere & Kill)

Here’s the paradox:

H3 investments may mature over 3–7 years…

…but they should not go 3–7 years without evidence.

A disciplined innovation process typically:

1. Generates an idea
2. Defines hypotheses
3. Runs lean experiments
4. Makes a decision within ~90–120 days

Decisions:

• Persevere (double down)
• Pivot (change direction)
• Kill (reallocate talent and capital)

This protects:

• Capital
• Employee morale
• Strategic clarity

It prevents teams from being trapped in long doomed projects.

Importantly:

Killing an idea early is not failure. It is disciplined portfolio management.

5. Why Digital Transformation Is So Hard in Real Life

Because it requires:

• Rethinking customer jobs
• Reallocating capital away from the core
• Operating multiple horizons simultaneously
• Running short-cycle experiments inside long-cycle bets
• Protecting H3 from H1 pressure

Most companies are optimized for efficiency. Innovation requires tolerance for uncertainty.

That tension is structural not cultural weakness.

Turning Corporate Innovation Into Action

You’ve already done one of the hardest parts: You built a testable product–market fit foundation.

Now the question becomes:

How do we turn that into a structured, disciplined corporate innovation system?

The answer is to slightly modify the traditional Business Model Canvas to make it more innovation-friendly.

1. Replace “Propositions” with Problem Scenarios

Instead of focusing on your solution, focus on:

• Customer segments
• Problem scenarios
• Jobs to be done
• Alternatives
• Catalysts/disruptors

Why?

Because problems and jobs persist, while solutions change constantly.

Streaming disrupted Blockbuster because it solved the same job (home entertainment) in a better way. Self-driving technology is disrupting automotive and transport because it reframes the job of “getting somewhere safely and efficiently.”

When you anchor innovation around problem scenarios, you:

• Get out of your internal worldview
• Enter the customer’s world
• Become more sensitive to shifting alternatives
• Detect disruption earlier

That’s what makes this approach innovation-friendly.

2. Identify Disruptors and Catalysts

In the poultry automation example (“Cooped Up”):

Customer Segments

• Industrial poultry farms
• Large commercial buyers (e.g., food brands)
• Backyard producers
• Channel partners

Core Jobs (Objective, Persistent)

• Grow poultry efficiently
• Produce eggs and meat
• Maintain animal health
• Optimize feed and yield

These jobs exist whether Cooped Up exists or not.

Disruptors

• Machine learning
• Trade rule changes (e.g., imports from China)
• Backyard poultry movement

The question becomes:

What are these disruptors doing to these jobs?

That’s the strategic lens.

3. Translate Strategy Into Horizon-Based Investment Charters

Once you’ve mapped:

• Customer segments
• Problem scenarios
• Disruptors
• Innovation goals

You convert them into Investment Charters aligned to H1, H2, H3.

Horizon 1 Core Optimization

Example Charter

Goal:

Improve maintenance contract renewals using better data science targeting.

Metric:

Increase qualified renewal leads by 20% in 7 months.

Characteristics:

• Months, not years
• Direct revenue impact
• Clear performance KPI

If it works → scale. If it doesn’t → adjust quickly.

Horizon 2 Adjacent Growth

Example:

Enter China via joint venture using existing technology.

Metric:

Show revenue traction and positive trajectory within 2–4 years

This should demonstrate:

• Market validation
• Economic viability
• Path to becoming an H1

Horizon 3 Transformational Innovation

Example Charter

Goal:

Find product–market fit for backyard chicken automation.

Method:

• Design sprints
• Lean startup testing
• Agile teams
• 90-day experimentation cycles

Metric:

Within each 90-day cycle, produce evidence of demand (customer pull, engagement, willingness to pay).

Even though full maturity may take 3–7 years, validation happens in short cycles.

This prevents:

• Long expensive dead ends
• Employee frustration
• Strategic drift

4. The Output: Agile Innovation Team Charters

The real output of this process is:

Clear team charters tied to horizon-appropriate metrics.

Each charter answers:

• What problem are we solving?
• For which customer?
• What method will we use?
• What timeframe applies?
• What metric determines continuation?

This isn’t about blame.

It’s about disciplined portfolio management.

5. Key Assets and Investment Vehicles

Beyond projects, you also define:

• Core capabilities (e.g., data science team)
• Investment mechanisms (e.g., joint ventures)
• Potential acquisitions (e.g., buying a backyard coop manufacturer)

Innovation isn’t just about ideas.

It’s about:

• Deploying the right assets
• Using the right vehicles
• Matching them to the right horizon

Why This Works

This approach solves the four major corporate innovation problems:

Hard Problem | How This Solves It Losing product–market focus | Anchors innovation in problem scenarios Random “be innovative” mandates | Structures investment across horizons Weak idea pipelines | Forces external and internal exploration Long, unfocused projects | Imposes 90-day validation discipline

The Big Shift

Traditional companies optimize existing solutions.

Innovative companies:

• Focus on persistent customer jobs
• Monitor disruptors
• Invest across horizons
• Run short validation cycles inside long bets
• Allocate capital intentionally

That’s how you avoid becoming the next disrupted incumbent.

The End…...

Thank You For Reading