Episode 3

Alex Osterwalder | Author, Entrepreneur and Speaker

Grow Your Business with Strategizer’s Proven Frameworks – An Interview

Dr. Alexander (Alex) Osterwalder is a leading author, entrepreneur, and in-demand speaker whose work has changed the way established companies do business and how new ventures get started. Ranked No. 4 of the top 50 management thinkers worldwide, Osterwalder also holds the Thinkers50 Strategy Award. He invented the Business Model Canvas, Value Proposition Canvas, and Business Portfolio Map together with Yves Pigneur – practical tools that are trusted by millions of business practitioners from leading global companies. His books include the international bestseller Business Model Generation, Value Proposition Design: How to Create Products and Services Customers Want, Testing Business Ideas, and The Invincible Company, to publish in spring 2020.

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Key Points:

  1. Don’t fear failure, but do have a plan. Failure without strategy and purpose is … well, not that great.
  2. The four things great companies do.
    1. Create value for your customer.
    2. Create value for your organization.
    3. Create value for your team.
    4. Influence society
    5. BONUS: Improve sustainability and equality.

Time Stamped Show Notes:

0:44 – What does Strategizer do?

2:28– What does new growth engine mean?

4:48 – Is entrepreneurship all about finding the right idea?

8:17 – Talk to me about the business model canvas.

12:10 – What kinds of opportunities are hiding in business model exploration?

16:00 – How do you exploit and explore opportunities left by COVID-19?

21:42 – How will companies choosing to never go back to physical locations impact business?

24:45 – Who have inspired you in your career and life?

30:55 – What leads to the attitude that you have control of your own happiness?

33:40 – Where do you see opportunity in 2020?

35:28 – What seems like a good idea, but never is?

37:05 – Wrap-Up: Find Alex online and all the place here

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Full Transcript

Justin:

Hey, hello, and welcome. You are back on Catalyst. I’ve got another great guest with me here this morning as we continue our series focusing on innovation, especially with everything that’s happening in the world right now. It’s kind of the theme on Catalyst anyway, so I’m excited to introduce Alex Osterwalder, who has a ton of great context. Alex, before I get into my diatribe, tell me a little bit about yourself and then your organization, which is Strategyzer, which again, falls right in line with our audience is normally looking to hone in on and learn about and help them navigate, certainly in these times, these crazy variables that we’re all dealing with. So tell us a little bit about what Strategyzer does and maybe a little bit about your background as well.

 

Alex:

Sure. Well, first of all, thanks for having me.

 

Justin:

Absolutely.

 

Alex:

So I’m Swiss based in Switzerland. Often people think I’m coming out of Silicon Valley, but no it turns out I’m Swiss 100%. I spend a lot of time, obviously, traveling around the world also including the Valley. I co-wrote and co-authored and led some best sellers out there like Business Model Generation, Value Proposition Design, Testing Business Ideas and we just came out with our last book called Invincible Company. Very arrogant title, but we wanted to help companies learn how they can constantly reinvent themselves. But I don’t just write books and advise leaders. Most of my time I’m spending on building our company, Strategyzer, which is a company that does technology enabled services. So we help established companies around the world transform themselves to create new growth engines. And that’s a fun task, it’s also quite hard sometimes and now with COVID-19, that’s kind of a disruption of everybody and leaders are waking up to the fact that they should get ready for disruption of any kind, so I think with all the difficulties around COVID-19, also an amazing opportunity to start working differently.

 

Justin:

Agreed. So you used a word in there that I want to drill into. So growth engine, and we use it all the time around here as well. We kind of vary into revenue engine. Tell me a little bit about what that means to you.

 

Alex:

So for me, a new growth engine is going into a new arena, to use terminology as coined by Rita McGrath, and creating new potential areas where you can grow. A great example of that is Amazon coming out of that E-commerce retail, then they went into logistics, then they went into Amazon web services. That was the biggest growth engine for that company over the last decade with amazing profits. Everybody at the beginning said, “You guys are crazy. You’re an E-commerce. You shouldn’t do that.” But they had the long term perspective to build these new growth engines and it’s not just a coincidence that Amazon has a real culture of innovation. And there’s a lot of things we can, and should, criticize about Amazon, but one thing is clear. They are world class at innovation and they’re world class at systematically creating these kinds of growth engines.

 

Alex:

And I’m not just talking about financial growth, right? The other aspect is also creating more value for customers, for your company, and for the team and society. So there are different types of growth that you really want to create, but at the end of the day, the sustainability of your business model from a financial perspective will allow you to have a bigger impact in the world in many different ways.

 

Justin:

Yeah, the Amazon model is, I hear that cited all the time by entrepreneurs and I think the concept there is often it’s so simple, it seemed so intuitive, use your own technology, build your business on top of it, and in essence that technology becomes the product even more so than the product offerings built on top of it. But that over-simplistic and “why didn’t I think of that?”-type moment is what entrepreneurs struggle with, right? Everyone that we’ve now glorified and kind of put entrepreneurship on a pedestal, which was much different 15, 20 years ago. I guess, why the entrepreneurship focus? Is it simply to solve that predominant problem? Or what draws you to that space?

 

Alex:

So let me actually draw this one here just to quickly visualize why entrepreneurship is so important today, not just in the startup world but also for corporations. So I like to sort of split the world inside a company into two areas. One I’ll call exploit, this is managing the existing, your business models that you have, the products that you have, and then explore, which is really the world of ideas. So let me put ideas here and kind of established company in terms of a building with some flags on top. These two worlds are very different, right? Here we’re talking about managing the existing, improving the business models you have. That’s a relatively linear process where uncertainty, if you want, if you look at uncertainty over here is not so high because we know the customers, we know the business model, etc.

 

Alex:

The problem is when you disrupt it, you kind of end up in this space where you need to explore new business models where uncertainty is very high. And doing both of these at the same time? That’s the challenge, right? So often it’s not enough to just manage the existing anymore because when you get disrupted, you better have something new coming up. So the search for new business models and new propositions is a very different process. You test thing, you learn, okay, it didn’t work, you adapt your idea and you constantly iterate here. So there’s this myth in entrepreneurship and innovation that it’s all about the right idea. Well, the reality is actually that you need to invest in several projects here, several projects, not just ideas, but projects, in order to get one that will kind of make it over here. So we call this innovation funnel.

 

Justin:

Essentially these companies always have multiple threads of exploration going on because not everything’s going to work, right? Not everything’s going to land. What’s the best that bubbles to the top?

 

Alex:

Exactly. And if I just stick to this image and then we go back to chatting a bit about this, if you look at early stage venture capital, it turns out you need to invest in 250 projects in early stage venture capital in order to create an outlier, okay? So if in a company you often look for 500 million or billion dollar business, that means you should invest like a venture capitalist into something like 250 projects because, and this is the big thing here, the big idea, you can’t pick the winner. It’s not about picking the idea because you can’t. If an entire venture capital industry can’t pick the idea, you must be a pretty delusional manager or leader to believe you can do better than them. You can’t, right? But what you can do, and this is the key thing, as a leader you can create the conditions for the right ideas to emerge. And people say, “Yeah, but in an established company we do acquisitions.” Well, that’s one tool and it can get very expensive and you even make better acquisitions if you’ve been experimenting and you’ve been learning. You can make the acquisition as one of the tools in your toolbox to go faster, but in some cases you actually want to grow it yourself. And there’s some companies beyond Amazon, so it’s the usual suspect, there’s some other companies that do this extremely well, but it means creating this dual kind of system.

 

Justin:

And I know that at Strategyzer you guys use something called the Business Model Canvas. How does that relate to kind of that entire concept? Or is it completely different?

 

Alex:

No, so maybe just sorry if I go back to sharing the screen, but I think this visually makes it simpler and I’ll explain it for those people who are not watching, just listening. You basically always start with an idea, right? The innovation, entrepreneurship starts with an idea and the goal is to build a real business. And the last thing you should be doing is a business plan because in a business plan you kind of make this curve that goes upward, you put beautiful numbers in a spreadsheet and you make everybody believe it’s brilliant. And if you’re really charismatic, it will look brilliant and nobody will think you actually will fail. But the reality is, this is a chaotic process with ups and downs and forwards and backwards and if you get through this, if you survive, kind of make it to that real business, this is a search process, okay? Not an execution process. And business plans as an execution tool are great, but in the search process won’t work.

 

Alex:

So what you need to do, and this is where the Business Model Canvas comes in, that was our first tool and then we created a series of other tools, because like a surgeon, an innovation surgeon, you want several tools, right? You don’t do heart surgery with a Swiss Army knife just like you shouldn’t do innovation and entrepreneurship with one tool. But the Business Model Canvas is something, very simple tool, to visualize your idea in the sense of an ideas maybe just direction, but to make it real you need to describe how are you going to create value for customers, it’s actually a tool called the Value Proposition Canvas, looks like this. And the Business Model Canvas to visualize how you believe you’re going to create value for your company. How do you create, deliver and capture value?

 

Alex:

So you just visualize this very quickly. It should take you maybe an hour or half a day, whatever. But then the key thing is you get out of the building, to use Steve Blank’s words, right? From the idea you take this Business Model Canvas and you start testing and the good thing now with your Business Model Canvas is you learn from the experiments in the market, you talk to customers. Oh, you learned that was a stupid idea, well, you just change the elements in your Business Model Canvas and Value Proposition Canvas, so rather than building a prototype, which is expensive, you kind of adapt your idea on paper. And then at a certain point, you will have enough evidence that okay, now I’m going to make my first technological, physical prototype. So you basically iterate your whole series of Business Model Canvases and Value Proposition Canvases until you’ve got it right. And is one more element technically how this work is, take an idea, map it out on a Business Model Canvas and Value Proposition Canvas, and then you ask, “Okay, what needs to be true for this idea to work?” That will generate your hypothesis, the underlying assumptions.

 

Alex:

So these are little pieces that you can test so you take this big idea, break it down into small assumptions, and the assumptions are what you’re going to test. Then you’re going to adapt the business model and ultimately at one point you’ll figure out based on evidence, not based on a wonderful PowerPoint or a spreadsheet, could this really work? So you don’t rely on the idea and kind of your charisma, which you also need because you want to raise money, etc., and lead the team, but you rely on evidence to know if you had a vision or if that was a hallucination. Because you really, really need to stress test and at one point you’re better off to kill the idea and say, “Look, there’s nothing there. We’re going to stop.” And that is what established companies are really bad at. Venture capitalists are really good at killing ideas by not giving them follow-up investments and that’s where we can really learn and remember that we really need to kind of build a Silicon Valley almost within our established companies.

 

Justin:

That’s a great distillation in terms because so many entrepreneurs and founders focus on one of those aspects and not the other, right? What’s of hyper value to the client, that is going to be such a great tool or product and people are going to flock to it, but no underlying business model. Probably even more predominantly in the inverse, a lot of focus on business model without a focus on the customer and that’s certainly something that I think we’re seeing the ramifications or at least that concept is becoming predominant to where the customers changing in these times of COVID-19, social unrest, all of these different variables that are being thrown at companies and that buyer change they don’t have a good lens into, they don’t have a good window into and therefore, they’re not iterating.

 

Alex:

There’s a piece I’d like to add because you really made a very good point there is that often entrepreneurs they kind of focus on product, technology, services, price and so and of course you need that to succeed, but at the end of the day, look at the number of companies that created great technologies, even great products the customer wanted, but they didn’t have the business model to actually capture value for themselves and they went bankrupt.

 

Justin:

Mm-hmm.

 

Alex:

Or even worse I believe is if you create a great product or service, you go out to the market, you grow like crazy but you never built the business model that’s protectable, okay? So you remain very vulnerable. So I believe startup entrepreneurs, just like innovators, are under exploring the potential of business models. It’s not about innovative business models necessarily, it’s about building the best business model around your products and services because there are ways to compete on superior business models and that is the piece that I think is missing a little bit of the toolbox still of many entrepreneurs because they think it’s all about the product and the service. No, it’s not. Actually, at the end of the day, you can have a great product or service, if you have no business model you’re going to die. The other way around, is the same thing. But here’s the thing, it’s harder and harder to compete on products and services and price if you don’t have a protectable business model, if you don’t have a moat around it. So that’s the key thing.

 

Alex:

I’ll give you a simple example. The iPod, when it was launched it was a thousand songs in a pocket. Great technology innovation. What most people didn’t realize, it was a business model strategy. Steve Jobs got us to put all the music on iPod in iTunes and guess what that means? That we’re switching costs. It was hard for us to switch to a new device when we bought a new device because we’re locked in. So we would buy Apple products again. That strategy could work for any kind of technology product, but too many technology entrepreneurs remain in the transactional space. So you need to think about these techniques like switching costs, there are many others to build better business models. That is a completely under explored possibility, opportunity for entrepreneurs and innovators.

 

Justin:

Yeah, absolutely agreed. So that process that we’re talking about is often the process that we think of when we think entrepreneurship, right? Starting a business, developing a product, taking it to market. Let’s pivot a little bit and talk about more when you drew that graphic earlier the managing element, right? We’ve got our business model, we’ve got our customer value proposition, we’re in market and then something like COVID happens, which is really a once, or previously was a once in a decade type of variable, but now we’re there. Now we have to react to that, right? And so oftentimes we don’t think about the agility and the entrepreneurship aspects that have to function within an established business. Walk me through that process. How can businesses that are somewhat mature, they’re in market, and now their customer changes, which is exactly what just happened.

 

Alex:

Yeah. So let me go back to this exploit, explore image, right? Because what happened with COVID-19 is all of a sudden the business model that you were managing, in many cases, was dead. And sometimes near death and sometimes it’s actually a positive disruption if you take Zoom and Netflix, but many companies are not in that space. So now you’re catapulted into this space of explore and here is where some companies get it wrong. So they go and brainstorm and pivot into a new market, a new area without testing. It doesn’t mean because there’s an extreme sense of urgency and because you have little time that you shouldn’t test. I’ll give you a silly example from my world. So we also do physical events, some training events, and we canceled them all for 2020 and we said we’re going to do all virtual, but we said we probably want to test interest and price point before we really start building these kind of online courses or online events.

 

Alex:

And funny enough, we tested three prices, $1,300, $1,600, and $1,900 for a virtual master class. Guess what? Something unexpected happened. The conversion rate for $1,900 was double from the conversion rate of 1,300 –– so completely unexpected. So it’s not because you now have to start to be an explorer again that you should just invest in ideas. Ideas are cheap. They’re everywhere. What you really want to put in place is this ability to rapidly test and some companies already have this in their DNA because they built this exploit, explore engine beforehand. So we like to call that the invincible company, but you could also call it the resilient company because these kinds of companies are very capable to explore and test. So now you just have to do it fast and of course, sometimes the pressure is really big because you’re running out of money so the first thing you always have to do is reduce the exploit to the absolute maximum. Airbnb, good example. They didn’t have a choice other than letting go of people, but here’s the important part. If you are a great company, you will do that in a responsible way, in a respectful way.

 

Alex:

If you look at Airbnb and some other companies in the technology space, well, they behaved differently. They had to let go of people, but they did it respectfully and they treated them like human beings and they said why they made this decision and they continued some of the explore at the same time. So they tried to navigate this space. Surprising enough that they can even survive. That is the hardest hit industry right after airlines, so it’s pretty remarkable what they have done. Again, there are many things we can criticize, but we’ve seen the best and the worst coming out in many companies around the world during this crisis. I would put Airbnb, even though they had to let go of people, on the very positive side because the way they have managed this crisis is really, really remarkable.

 

Justin:

So just flat out, is there a disruption proof company? Is there a way to create a disruption proof company?

 

Alex:

Yeah, so absolutely and that’s this ability to why you’re world class at execution. You build up a world class exploration capability and here’s the thing, every company will say, “Yeah, yeah. We do innovation. We have innovation activities.” And that’s a challenge, I would call that innovation theater. Steve Blank, Rita McGrath, and myself, we call this innovation theater because it’s a lot of activity for the show. It’s not strategic. So I believe those incubators and accelerators you’ll find in all these companies are just innovation theater in many cases and only few actually built really resilient, what we call invincible companies. My favorite example at the moment is Ping An, a Chinese company, so people don’t like talking about China and certain parts of the world at the moment, but still it’s a great example of a company that was a boring finance and insurance conglomerate. The founder, Peter Ma, wrote a little bit about a decade ago he said, “We’re going to die. Technology companies are going to kill us. Our business model is dead.” So they decided to strategically invest into becoming a technology company. 10% of their profits, 1% of the revenue, but it wasn’t just the money.

 

Alex:

Peter Ma hired a co-CEO with Jessica Tan who was responsible for exploration so they gave innovation power. That’s the missing piece. If you don’t give innovation power, you don’t put it at the same level of execution, you will never build a resilient company. So invincible companies are those that invest as much in exploration as they do in execution and that is still very rare.

 

Justin:

Sure, yeah. That’s a big investment benchmark right there. I’m curious, so that notion of resiliency and agility and investing within innovation requires a lot of collaboration, requires a lot of communication, and organizations really have to be aligned. And we’re also hearing a ton of chatter and I think some of this is PR and some of it’s real as well, in terms of companies never returning to a physical space. I’m curious to get your take on how that impacts, or if it does impact, an organization’s ability to be innovative and to be agile.

 

Alex:

Yeah, so I’m not an expert on that, so probably I’m just going to contribute to the chatter, right?

 

Justin:

Sure, sure.

 

Alex:

But if we take Strategyzer as a company, we’ve had and distributed heritage now for the 10 years that we exist, so we have people all over the world so we always worked remotely and one of the key reasons is for access to talent. So we have a great pool of developers in Poland and I don’t think these salaries are a lot than in other places in the world because they can work for any international company. So it’s not about the cost savings, it’s about talent. And I also think this is the big one, I think the most important one that we neglect it’s the human part for your team. If you have a family, if you have children and you have to commute 90 minutes or an hour a day to your work and back from work, you just lost two hours with your loved ones and that makes a difference. If you can three days or two days a week spend that time with your family instead of commuting, you just increased the quality of life of an entire family by a lot, right?

 

Alex:

So that’s the aspect I would look at. There’s a productivity aspect already. You’re losing time roaming around, but then there’s also just the aspect of let’s increase the quality of life. So I don’t think it needs to be pure remote or pure physical. It will always be a mix. Some people love the physical connection and that’s important. Some people hate it. So you also need to match what works for people, for the team members. So there are a lot of variables here, but the one I would really put on top is let’s think of how we can create better work places. Yes, it’s about efficiency, but it’s also about how do we create value for the team, for the team members? Some want to stay remote and some don’t want to stay remote, but let’s figure out the right configuration and work on that because I do believe that we’re not taking care of our team members enough yet in most companies. The stats show that seven out of 10 people don’t want to work where they’re working. That’s insane. That’s where most people spend most of their time. If you don’t enjoy work and you don’t see it almost like a hobby, that is terrible, right? That is another aspect of quality of life and the way we work plays into that.

 

Justin:

So I’m always curious to understand folks like yourself who think in this manner and who are focused on making change in organizations and people. What big moments in your past have, actually before I focus on that, from a mentorship standpoint or from a people aspect in your life, who have been those big individuals who have guided your path and also kind of contributed to the mentality that you have?

 

Alex:

Well, so many, many, right? There’s so many that mentioning a couple of names is almost unfair, but definitely a big kind of breakthrough in my career was when I applied at Mckinsey and I got crushed in the job interview. Because of that, I actually applied as a PhD student with my longtime, now co-author, friend and mentor, Eve, at the University of Lausanne. I would never have had that opportunity if I hadn’t been crushed at a job interview, so there’s opportunity coming out of failure. So Eve has been a great mentor for the last 20 years in terms of just shaping my conceptual thinking is definitely one. And when it comes to innovation and entrepreneurship the other was Steve Blank, and then there’s many, many more names. Those two people have really shaped my conceptual and my entrepreneurial thinking, but then the list is very long if you go back to somebody who I never met, even people you never meet become your mentors. So Prince, the musician, was kind of a distant mentor when I was young because he helped me kind of figure out my way of doing things, which led to my path in innovation.

 

Alex:

I don’t care what people think, I just want to do good work. Just like I believe Prince never really cared that much about what people thought about his music, he just wanted to make good music. Of course he cared, but he didn’t make bad music just to get more people to listen. That’s the kind of stuff that’s interesting, but the two big mentors around innovation and entrepreneurship are definitely Eve, number one, and Steve, number two.

 

Justin:

So I’m curious, what happened in the interview?

 

Alex:

So just questions that I refused to answer. McKinsey is a great firm and really smart people. I’ll never be that smart, but in the sense that they want to check your analytical thinking and it was a question around something you can look up on the internet and I said you can look that up on the internet. I don’t like fake stuff, so I didn’t want to do a fake thinking exercise to showcase. Ask me a real question and I’ll give you my real opinion and I’ll show you my real skills, but I’m not going to try to showcase how good I am on something that’s fake. So kind of being strong, let’s say, and stubborn probably cost me that, but that’s what comes with entrepreneurship. An entrepreneur who isn’t stubborn in one or way or another is probably never going to build a company, right?

 

Justin:

So you mentioned that failure led to what became a really catalytic moment in your career. You met one of your mentors, Eve. I’m curious as to what was, in contrast to the McKinsey interview, what was it about that interaction and that meeting that immediately told you this is the direction I want to go?

 

Alex:

Well, it’s not that I knew from the interview that this is going to be my career for the rest of my life, but it was more the possibility that actually got catapulted into a great opportunity. He wanted to work with me, I wanted to work with him and then the rest kind of happened over time. It could have very well been the same type of interview and I would have taken the job, but the person would not have been as formative as Eve. It could have gone in the wrong direction and there’s some of that in everybody’s life, so not every failure is going to turn into an opportunity. But somebody, ah, gee… I can’t remember if I can remember this quote, quoted this Chinese proverb when she said when there’s a crisis or failure, some build a bunker and there’s a storm coming or others build a windmill. So it’s what you make out of the situation that is important. If that job had been wrong, I would have pivoted to something else.

 

Alex:

So one of the things I’ve just never, from my aspect, I don’t like doing stuff I don’t like, so I just don’t do it. So I’ve never had a job for very long that I didn’t like because why would I waste my time with that? So I always pivoted to new things. The number of mistakes I made and the number of things that didn’t work out for me is enormous, but I always changed. I never stuck to it. I never thought, “Oh, but I’m going to earn more here.” No, if I don’t like it I’m not going to do it. And I think that’s something that I’ve seen with others. They’re stuck in a golden cage, they work in what bank or finance or so and they don’t follow, again, it’s not easy following your passion, but they’re stuck and they complain. Either you don’t complain and you live with it, or you make a change. So it’s no right and wrong, but just don’t complain because it’s always in your hands. You’re the one making the decision, so I’m not somebody who likes people who complain because if it’s our hands, make the decision.

 

Justin:

I’m curious if you’ve thought critically about what allowed you to have the confidence to avoid those situations because, as you said, so many people just inherently, and I don’t know if it’s… We could probably speculate on this all day, if it’s upbringing, if it’s environment, if it’s experiential, but so many people get stuck in rut that they hate, as you said, this is the area that we spend the majority of our lives within and there is of course that opposite reaction where it’s like, “I’m not going to do anything that I don’t enjoy for a long period of time.” I’m curious to get your opinion on why people have such different reactions to those situations.

 

Alex:

So I could now lie and make myself look really smart. I think it’s and unlimited capacity for failure and maybe stupidity and naivety of seeing the consequences of my actions and I obviously did get a little bit smarter of over time so I don’t make the same mistakes, but I sincerely believe you need to look stupid 100 times until you smart. So it’s that ability to fail and learn and just accept. So I don’t think it had anything to do with brilliance. It had to do with, to a certain extent, naivety and just not wanting to deal with stuff I don’t want to deal with and then just trying something else. So just going ahead. Some people maybe sometimes rightfully so, they fear the risk and there’s a good aspect to that as well. I think it’s this balance so today I’m a bit smarter. I don’t take insane risks, which I might have taken 20 years ago or so, but you need to embrace failure and it’s not stupid failure, right? So sometimes you see entrepreneurs who believe their idea so much that they will just go ahead with their vision and then they learn it was a hallucination.

 

Alex:

Turns out, actually, great entrepreneurs are pretty risk takers. They make calculated bets. They know they can fail, but they also know how to make calculated bets. It’s back to this idea of venture capital –– you spread your bets and you only continue to invest when some of the bets payout, but you increase, gradually increase. You don’t make one big, crazy bet and that I’d say is my ability to make a lot of silly kind of small bets and then see what sticks and then kind of invest there where I see traction. So listening to those weak signals. So some naivety, some stupidity, and then the ability to actually pivot into the right direction would probably be my recipe for everybody.

 

Justin:

Yeah, that’s great. So at this point, I’d love to ask just a couple rapid fire questions, get a little bit of insight from you on and off the cuff manner. So what are you most excited for, for the remainder of this year? Certainly, with everything that’s gone on, a lot of folks see a lot of opportunity in that as well. Where do you see the opportunity?

 

Alex:

So I, for our company, for myself, COVID-19 has accelerated our kind of move to digital by a lot and because it has accelerated the move to digital with clients. So we work a lot with pharmaceutical companies, we brought them all online. So all of the innovation sprints we do with our clients are now online and this, I believe, really allows us to get to a different scale because we can help clients a lot more when we don’t have to send coaches throughout the world. So this digital acceleration and really creating new digital products, which are very different. It’s not just filming. When they invented film cameras people would just film the theater. No, this is actually a new space. So using these digital tools now that people are a little bit open to working online remotely, you can do amazing new things, but you need to be creative so that you don’t just film the theater. You need to be creative to create more value based on what’s possible with these digital tools. I’m really excited about that.

 

Justin:

Yeah, agreed. What’s one thing that you’re great at, but hate doing?

 

Alex:

I wouldn’t know because I kind of avoid everything that I hate doing, so I can’t answer that question.

 

Justin:

Good answer, good answer. And finally, what’s one thing that always seems like a good idea but never is?

 

Alex:

That never is? Probably investing in a great idea without testing it. Just believing your own vision is usually a bad idea. Believing your vision and testing that it’s not a hallucination constantly is, I think, something that you want to do. And like any entrepreneur, once you have some success you start believing, okay, you touch this idea it’s going to work. As soon as you get arrogant, arrogance is always a bad idea. I can guarantee you that. In entrepreneurship that will always cost a lot of time, energy, and money.

 

Justin:

Well, that’s what great about the model that you shared earlier in terms of the customer value proposition and just keeping that front and center and that’s evolving constantly. It’s certainly evolving as a result of events like COVID-19 and so on and the organizations that had a great line of sight and a great relationship with those customers are the ones that are pivoting in the way that you’re describing. Certainly, the ability to go virtually when you mentioned those are different products, they’re potentially different content, they’re being served up in a different manner and they’re doing different things. The client is really the only person that can tell you whether that’s going to succeed and fail. Either they’re going to do it prior to you making the investment and running full force or they’re going to do it afterwards and obviously the after is much more painful.

 

Alex:

The thing I would add to that, if I may, is that I believe really great companies focus on four things. Clients is one, right? Focusing on clients to create value for the customer is number one. Without that you don’t exist. The second one is actually focusing on how you’re creating value for your organization because if you don’t do that, you’re going to go bankrupt and you can’t create value for the customer. But then the third and the fourth are more interesting is you need to think of how you’re creating value for your team because if you don’t do that, they will abandon you in situations like now, so guess what? People who felt treated badly during COVID-19, as soon as the economy’s good again, will take some time, but they’ll change their job. You’ll lose your talent, so you need to treat your workers and team great as well. And the fourth one, I really, really believe in is that companies have a role to play in society and that the lowest hanging fruit is to create a great workplace because that’s a brilliant way to influence society. People who are happy at work will be happy at home. It’s those kinds of things.

 

Alex:

And then if you really want to push it, I love companies that actually feel like they need to have an impact on society and the environment because that’s actually good business. Take Unilever, putting the environment at the center for them was a growth engine so they believe sustainability and profit can go in harmony. So I do believe companies that work on all of those four levels are really, really great companies. Those who neglect one, two, three or four of those, they’re not going to make it for very long.

 

Justin:

Yeah, that’s an awesome framework for success. Alex, as we wrap up here, first, are these frameworks available on your site or how can someone engage with you to learn more?

 

Alex:

Yeah, we have a free model where we like to give away a lot, so go to Strategyzer.com. You can even download a hundred pages of every one of our books that we wrote. We like giving people something to see the teaser. There are online courses. A lot of free tools also to download. We write about our learnings, insights on our blog. Just check it out. There’s a lot of stuff that you can get for free and if you like it there are different products you can buy.

 

Justin:

Yeah, definitely a hallmark of a great company in terms of a value forward approach. So if you guys want to connect with Alex certainly go to Strategyzer.com. He’s on Twitter, he’s on LinkedIn. His Twitter is AlexOsterwalder, W-A-L-D-E-R, and again, Alex, thanks for joining us here today. Great insights and I really enjoyed the conversation.

 

Alex:

It was my pleasure. Great conversation. Thanks for having me.

 

Justin:

Thank you so much. Best selling author, co-founder of Strategyzer, Alex Osterwalder. Again, thank you so much. If you guys want to download this episode or any past episodes, of course we’re out there at LeadMD.com/BestPractices and always remember, never miss a chance to be inspired.

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