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Business model innovation is one of the most dynamic strategies available to forward-looking business leaders by providing expanded ways to explore business opportunities, potentially change the game in your industry, and deliberately design your firm for strategic competitive positioning and leadership. This requires challenging your thinking to open up your mind to new and different ideas and learning from other industries.
To explore this business innovation mindset more fully, we are publishing here a recent article contribution from Institute member Matthew Chang, Founder of Chang Industrial (and its DBA, Chang Robotics) -- an innovative engineering firm with a focus on transformational technology, collaborative robotics, and autonomous systems. The Institute is happy to have expert guest contributors from both inside and outside of our industry that will share their unique perspectives and experiences with business innovation so we can learn more about important cross-industry innovation topics.
Written by: Matthew Chang, Founder, Chang Robotics
In many respects, creating and growing a business has never been harder. Post-pandemic shifts, political strains, marketplace disruptions, and the growing stress on supply chains are changing the very nature of business. But conversely, this upheaval is opening the window for new models of business to take shape.
While no two ventures are exactly alike, the architects of some of the most successful endeavors are aligning around common principles that will define our economy and our business ecosystem for generations to come. These business principles are collectively forging more purpose-driven business models and a leadership mindset that include the following perspectives:
Values are essential.
For every company, it is the existence of high and immutable values that propels their highest achievements. In my own company (Chang Robotics), there are six: Generosity, Diversity, Mentorship, Integrity, Exceptional Accountability, and Innovative Thinking.
As we align on ideas for changing the world (such as cost and speed of food distribution, easing stress points in health service, or raising the bar for industrial EV) the paths become clear when we measure them against our six values.
Many are virtual. Nearly all employ Agile management.
Many of these companies are partially or entirely virtual. In engineering, nearly all employ the principles of Agile project management and Lean engineering that are key to successfully making the expansive moves required to achieve high profits in a challenged economy.
They change the world in immediate ways.
Today’s rising ventures are zealous about ways to enact the maximum amount of innovation quickly, allowing them to change the world in immediate ways. As partners, they bring new power to traditional organizations by helping them eliminate years of development time and millions of dollars in cost.
For example, our company recently developed human-facing robots (we call them “co-botics”) in partnership with a leading hospital network. The equipment eliminates 10 percent of the nursing workload by handling the lifting, carrying, sorting and recording parts of their jobs. It increases accuracy while reducing physical strain, and conserves nurses’ time to spend in interaction with patients.
Another of our innovations (with Kodiak Technologies) is re-imagining the world’s largest industrial snow removal vehicles in a way that leverages existing technology and customer relationships to make an immediate impact on the airline industry. It also becomes a design template for other vehicle types that require large power output.
Their altruism pays high dividends.
The mission of true purpose-driven companies goes beyond money. These ventures’ sustainability values (and their spiritual missions) are closely integrated with their financial goals. While these may sound like a sacrifice, their altruism pays surprisingly high dividends. Over the last decade, the valuation of purpose-driven brands has soared by 175%. Even more impressive: In a study of 28 companies over a 17-year period, purpose-driven companies grew by 1,681%, during a period when the S&P 500 average grew just 118%.
In short, these companies prioritize the well-being of employees, customers, suppliers, and the community. They know that trust is key. They operate with transparency at all levels.
They require new kinds of funding.
Traditional VC and IPO funding is typically not available for today’s lean startups. By their nature and structure, they do not fit the templates for traditional VC funding, which favors or even requires being built for exit. Most typically these businesses create growth through Joint Venture partnerships and perpetual innovation to create high impact and long-term value creation. When they take outside funding, ideal investors are individuals, family offices, or impact funds aligned to facilitate and benefit from the high innovation they create.
They can benefit from federal and municipal funding.
Interestingly, purpose-driven businesses are well positioned to leverage federal and municipal funding for programs such as net zero operation, migration away from fossil fuels, recycling/repurposing, and innovations to mitigate climate change. In fact, I believe the nature of these dynamic companies is teaching the government how to innovate more effectively as well.
They invest their own profits for impact.
Now we are touching at what I believe can be the biggest benefit of today’s best companies. They go beyond traditional philanthropy by investing in other promising startups in their industries. Instead of stifling potential competition, they embrace the dynamic growth of their entire sectors (and even partner with these companies where fitting), creating a ripple effect that impacts the ecosystem itself.
Great companies invest in other promising startups.
At its highest fruition, the current roster of successful founders and companies could become one of the most ideal and important sources of early-stage funding to lift the other aligned ventures around us. This concept is a principle I hold at my very heart. My own company invests a full 10% of our profit to other startups within our ecosystem and sector.
This is possible because the lean and efficient models we are building are also creating the means to assist other startups. In this way, the strong ventures can rise to an even higher level by serving as incubators and catalysts for others. With the “hand-up” of investment and mentoring, recipients can also accelerate the growth of even more aspirational ventures, creating a virtuous cycle and a model for entrepreneurial growth in any part of the world.
Our own company has gone a step further and formalized our mentoring and funding through the annual Jacksonville Venture Competition (JVC), which recently completed its second annual event. Through this program we have invested in multiple synergistic companies that rise up through competition.
This is my challenge to all other organizations like our own -- that you contribute a 10 percent “tithe” of your earnings to investment in others. It is sure to be one of the most meaningful impacts you can make to your communities, your industry, and the business ecosystem of the nation and world.
To the degree we rise together, we can make the coming seasons and decade the most remarkable yet in American history. It is within our reach to create the business model for a more sustainable and equitable future, and by doing so, to become more powerful—and perhaps even exponentially more powerful -- as forces for good.