The Risk-Driven Business Model: Four Questions That Will Define Your Company Hardcover – July 8, 2014

"The Risk Driven Business Model" is focused on something called "business model innovation." In the authors' own words, this is not innovation in the product-oriented sense: they state that business model innovation delivers existing products based on existing technologies to existing markets. Rather, business model innovation is all about changing the way that business is performed--in other words, competing with the same basic product in the same market but with an entirely new underlying business model. Two classic examples of business model innovation given by the authors are Toyota and Zipcar: Toyota's lean production system revolutionized the automotive industry by focusing on the way cars are manufactured and distributed, and Zipcar's way of renting cars by the hour instead of by the day upended the rental car industry.While maybe not as sexy as "traditional" technological or product focused innovation, business model innovation has a lot going for it, as the authors of this book point out with tons of very convincing examples. There's not a lot of uncertainty: the market already exists and you know the key players. It's easy to transfer a business model innovation from one industry to another (witness how nearly every manufacturing facility now uses elements of Toyota's production system) than to transfer a technological or product innovation. Once an innovative business model has been established, it's hard for competitors to copy or steal it, since it is often largely internal to the company. And most importantly, it is not nearly as difficult or random as the process of technological innovation: it may only require small changes in the way things are typically done to completely upend a business model.Even if you've never heard the term, we've all seen business model innovations in our daily lives before, ranging from Toyota to, yes, Amazon.com, but what this book does extremely well is structure and explain exactly how they work. Dividing up types of business model innovations into four categories based on changes to the decisions a firm makes--changes in what decisions are made, when they are made, who makes them, and why they are made--is a very intuitive classification scheme. The authors provide a simple but very powerful framework for using these categories of decisions to map out your current business model, find its inefficiencies, and innovate on the business model by changing the way decisions are made in the business.I have no doubt that this framework is going to prove extremely popular with entrepreneurs and established companies alike. It's a fresh and interesting way of thinking systematically about how to improve a business, based on decades of case studies. In some ways, this book is a complement and a counterpoint to the classic  The Innovator's Dilemma: The Revolutionary Book That Will Change the Way You Do Business  by Clayton Christensen, focusing on an entirely different kind of innovation: not the exciting, but very rare, once-in-a-generation innovation in the technological space that may arise an industry, but the much more frequent (and potentially more important) every day innovation that occurs in the way that business gets done.

Innovation is an overly used and abused concept. In that regard, many books claim discussions, contributions and insights on innovation that when one delves a bit under the surface they get disappointed to find out that the presented arguments are shallow and rather ad-hoc opinions. Two reasons for this persistent phenomenon especially in management books: lack of a well-thought out comprehensive framework, but also lack of well researched cases that support the authors' argument.Reading Girotra's and Netessine's book you realize what a good analysis (based on research) and a robust framework look like! Their cases are very well developed and they are extremely helpful in building up intuition as to what BMI is and moreover, how managers can benefit from it. I have first hand experience on the educational value of their cases since I have taught several of them in my Executive Education programs either at the Judge Business School of the University of Cambridge (where I currently reside), or at the Huang Executive Education Center of the Georgia Institute of Technology where I used to be a Professor of Technology and Management.What I think, though, is the most valuable take away from their book is the following: the realization that innovation is something broader than engineering designs and product features. Something less cryptic and at the same time more powerful. Innovation happens on the way we conduct business, and it is usually this type of innovation that brings the highest "bang for the buck"! Take for example the case of Zara: you "walk" senior executives through it, and then you ask them a simple question... Is this innovation? I have done this simple Q&A so often and it still amazes me how difficult to figure out that this is innovation, and a very rewarding type of it. 'The Risk-Driven Business Model' helps the readers to grasp this very fundamental insight: innovation can happen on the way we do business, and understanding how to do it is not a difficult task. Actually, it is a simpler than one thinks, and the book gets across a process for doing it.There is no question in my mind about this book turning into a bestseller. The good news is that this will not be another hot-air bestseller, but a successful translation of rigorous academic research into tangible, actionable insights! Given that, this book holds promise to turn into a classic. Well done Karan and Serguei!Overall,

Excellent Book. Very Insightful!

Another book that promises to "outsmart risk" and "shortcut" the process of business model creation and definition. Sensational studies of the big public popular well known corporations. Look for another book to understand risk, how to manage it in the context of your business and life itself. If you just looking for a quick reference and you can read fast go for it.

This book is required reading for eCornell's Digital Transformation certificate. Although, the e-book is included with registration, I appreciate the hard copy for reference. Highly recommend if you want to define processes for disrupting your industry.

„How many organizations would have been as daring as Walmart in transforming inventory management? How many would have been as willing as Amazon to reconsider a foundational strategy like stockless fulfillment? And who but Google would, in effect, let highly paid engineers do their own thing for the equivalent of a day a week?”Great book from Prof. Karan Girotra for everybody who wants to know, how transformation works: start with analyzing your value chain for (the two kinds of) risks and eliminate them by using Girotras strategies.

A practical framework to design business models at startups and established corporations.

Awesome insights and great case studies. Helped me understand in retrospect where I have implemented BMI in my organization without knowing about it

What do firms like Amazon, Li & Fung, Toyota, Volkswagen, and Zara have in common? Unlike Apple, none of these companies created a product that was revolutionary (iPhone), nor they developed a technology that was far superior to the existing ones (Blackberry). What they did was changing the decision-making architecture of their respective industries, a change that fundamentally altered the risk born by the value chain, either by reducing it or by allocating it in a smart way. In short, these companies are all examples of risk-driven business model innovation (BMI).This book provides an intuitive framework to guide the reader “behind the stage” of many successful BMI companies, explaining how they succeeded by changing what decisions they made, when they made them, who made them, or why they were made. The examples and the analysis in the book are described with rigor and depth, while at the same time steering away from technical jargon, thus making for a cogent and accessible reading. The content of the book is well organized, and each chapter is intelligently structured; a nice touch are the “caveats” boxes at the end of each subsection, in which the lessons learnt are revisited from a different angle, providing a fuller picture for a deeper understanding. This book permanently changes the way one sees and thinks about companies… it’s a mindset shift, like watching a movie not as the general public does, but as a movie director does—understanding what goes on off the screen that makes the movie happen.I will certainly recommend this book to all my MBA students at Wharton, especially those who consider a career as entrepreneurs or aspire to bring disruptive change to their companies.