When SME´s practice business model

When SME´s practice business model (BM) innovation (BMI), leading strategically BMs through the innovation
process 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 operated
simultaneously.
The paper provides a study of BMIL in practise in SME´s and show different ways of how they handle BMIL
and 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´s
and 97 of their different BM´s form the empirical background. The findings represent learning and characteristic
of 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 in
most cases on reactive “outside in and reactive “inside in” BMIL strategies. SME´s are primarily focusing on
meeting needs and demands of an inside out “predefined” set of user and/or customer groups. SME´s are
reacting to a specific customer or market demand but the BMIL strategies do often not put them in a better or
more 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) Most
SME´s do not formulate explicitly a BMIL strategy – they are doing BMI rather blindly 2) Very few SME´s are
structured about their BMIL strategy and BMIL strategy process 3) SME´s focus in their BMIL on very few and
often the same building blocks of the BM - especially the building blocks value proposition, target customer and
value 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 to
capitalised upon these 5) SME´s is generally in lack of BMIL skills.

The generic BMIL strategies drawn from our research on the SME cases show a first picture of what SME´s
strategically do and how they practice Business model innovation leadership. Via a careful analysis of SME´s
different BMIL approaches - their strategic BMI tasks, contexts and their BMIL vision, mission, goals and
strategies we analysed each of their BM´s. The strategic BMI task analyse shows
- BMI is carried out in businesses in many different ways related to the various BMI tasks. However very
few of the enterprises we investigated do BMIL and very few have really a BMIL strategy.
- What the SME´s are targeting and not targeting related to existing BM(s) and new BM(s) today (AS IS). It
also shows quiet clearly what SME´s do and what they can/will/could do/target through strategic BMI (To
Be). BM and Innovation Leadership literature SME have until now mainly considered BMI as development
of the value proposition in the BM and on single BM perspective (from Idea to market implementation) of
BMIL. SME´s are generally doing the same according to our research and their BMIL strategy and practice
is mainly build around a single business and BM strategy approach.
In our proposed BMIL framework this is define as value innovation leadership approach and strategy. Value
innovation leadership is focused on the business viewpoint – an inside out viewpoint – related to the 7 building
blocks of the BM. Our research also shows that the BMI is primarily built upon and focused on managing
product-, service and process innovation processes –– the upper corner part of value innovation leadership- .
This is in the BMIL framework just a very small part of the real BMIL potential and indicates that Businesses are
not really using the full potential of BMI and BMIL strategies.
Today it is the task for managers at the BMIL level to manage and do the process of strategically BMIL thinking,