Skip to main content

Business model intimacy


Courtesy: NobelPrize.org
The Grameen Bank success story continues to be researched and written about. Other companies have tried to repeat the Bank's model. Is there a fundamental difference between the original innovation and the followers? In MIT Sloan Management Review (Summer 2009), Erik Simanis and Stuart Hart compare the original model with that of India-based Hindustan Unilever's model and point out a crucial difference.

Grameen Bank was a result of personal bond and shared vision between Nobel laureate Muhammad Yunus and Bangladeshi farmers/villagers. Yunus and the villagers spent quality time together as a community before the innovator launched the bank. While Grameen Bank became a profitable and scalable village bank, the authors say that Hindustan Unilever's project is "unlikely to grow into anything more than a new distribution channel." While Grameen Bank generated a "groundswell" of demand," Hindustan Unilver's entrepreneur turnover rate reached 50% within 3 months of project launch and the company's resource-intensive push strategy only "met with consumer skepticism."

The difference, the authors say is: business model intimacy. It is a community-company relationship with a jointly constructed vision. The "better life for the community" vision instills a sense of responsibility in the community for the success of the company.

Companies including those in India -- where business model innovation is often the only form of innovation you find -- should learn from Yunus' original innovation model where intimacy is an essential attribute. For some companies, this might require moving away from profit-maximizing, which is typically achieved by compromising value for other stakeholders in the ecosystem. For all organizations pursuing business model innovation, Yunus' model certainly requires two things: (a) Change in the way they understand "value" and (b) Change in how they understand and practice innovation.

Do you know of other intimacy-embeded business model innovations?

Comments

Popular posts from this blog

Explorer mentality Vs conqueror mentality

A fixation on competitors and on beating them is evidence of what Amazon's Jeff Bezos calls a conqueror mentality. In contrast, people waking up in the morning thinking how to innovate for the customer -- and having intense fun innovating -- is evidence of an explorer mentality.

The explorer mentality resulted in Amazon allowing negative reviews of its products. Reacting to this, a book publisher objected, saying "You make money when you sell things." But Bezos thought, "We don't make money when we sell things; we make money when we help customers make purchase decisions." So explorer mentality also demands a willingness to be misunderstood for long periods of time.

During his 16 years as CEO, Bezos' Amazon has delivered shareholder returns of 12,266% (industry-adjusted), and the company's value has grown by $111 billion. More in HBR Jan-Feb 2013.

Before you watch another news report, watch this whistleblower

If the leftist media was biased back in 2001, it is an outright mafia today Bernard Goldberg, a 28-year-veteran at leftist media outlet CBS, has exposed the "pettiness, hypocrisy, and bias inside CBS ... Just turn on your TV set and it’s there … but it’s there too often in too many stories."

Shockingly, you see not only political bias, but social bias as well.

In both political and social topics, the leftist media puts out content that dupes both loyalists and new-comers. Why are they so biased: self-serving purposes such as ratings and manipulation for votes.

Goldberg exposes the leftist media.
Manipulation Leftist media constantly attempts to manipulate people's mind with the following tricks.

1. They lie. Or misinform.

2. They hide certain things, as though these things did not exist or did not matter.

3. They won’t let the other voices be heard. More recently, author Sharyl Attkisson was not allowed to freely air segments that exposed Obama scandals such as Operation…

M&A perspective: IT staffing Vs IT consulting

This report is a simple analysis by HT Capital -- a boutique investment banking firm in New York. It basically makes the point that being a staffing company (Vs consulting company) does not provide adequate returns to most investors, especially from an M&A perspective.

Peter Rozsa, co-author of the report, is a Senior Managing Director at HT Capital. He was also my "classmate" at a Columbia Business School executive education program. I have Peter's permission to make the report available here.

Click to download PDF report.