On innovation & transformation

Phil McKinney offers up some interesting thoughts on business models and innovation
"The ultimate objective of any innovation is to transform business and transform lives. How do you know if your innovation is of that transformational kind? Here are my definitions that I use for the different stages/types of business:

  • If you charge for undifferentiated stuff, then you are in the commodity business.
  • If you charge for distinctive/differentiated tangible things, then you are in the goods business.
  • If you charge for the activities you perform, then you are in the service business.
  • If you charge for the time customers spend with you, then and only then are you in the experience business.
  • If you charge for the benefit customers (or "guests") receive as a result of spending that time, you are in the transformation business.
I would argue that to win in the market, you need to aim your innovation efforts towards creating a transformational business."

Although libraries don’t usually “charge” for services, activities or experiences, it’s easy to identify with the business models of goods, services, experiences and transformational. And to echo Phil's thoughts ... I would argue that to excel in the public services market, we need to aim our innovation efforts towards creating transformational libraries.

1 comment:

stevenb said...

I'm not sure who originally applied the commodity-goods-service-experience model to business, but I am guessing Phil got his information from a book called The Experience Economy that was published in 1999. It's a good read if you are interested in futher exploring designing better user experiences - which is going to be essential for any transformed library. We blogged about this early on at Designing Better Libraries: