Heidi Bertels

Business models outside the core

OVERVIEW: Leaders at incumbent firms increasingly recognize that in order to sustain growth and protect their companies from disruption, they must innovate “outside the core”—beyond the familiar markets and competencies on which the company has built its existing business. Outside-the-core innovation projects, which target new customers or non-consumers in new markets, can lead to high growth. However, they are also very risky: the odds of success for outside-the-core projects rapidly drop with each step outside the core. In a study of six outside-the-core projects using a business model perspective, we found that, contradictory to common wisdom, the likelihood of failure is not related to how many steps the project is outside the core. Instead, the risk of failure is influenced by false assumptions about the distribution channels, cost structure, unit margins, and velocity elements of the innovation, which are often carried over from the incumbent business model.

You’ve Been Framed! The Effect of Opportunity and Prosocial Framing on the Novelty and Usefulness of Student Solutions

Creativity, the production of ideas that are both novel and useful, is increasingly important to businesses’ long-term success. This study looks at whether instructors can use framing—increasing the saliency of some aspects of a perceived reality in a communication—to affect the creativity of student solutions. More specifically, building on research on issues interpretation, the study examines the effect of opportunity framing on the novelty of student ideas. Building on the literature on perspective taking, the study also looks at the effect of prosocial framing on the usefulness of student ideas. Using a sample of 76 students, I found that students who received an assignment description that included opportunity framing produced more novel solutions. Students who received the same assignment but with prosocial framing created less useful solutions. These findings indicate that the novelty and usefulness (i.e., the creativity) of student solutions can be affected by framing and suggest that framing can be a valuable tool for instructors aiming to encourage creativity. Furthermore, by demonstrating that different types of framing affect novelty and usefulness, this study also reinforces the importance of measuring novelty and usefulness independently rather than looking at creativity as a composite measure.