Going “Gaga” with Business Models

I really don’t even know if I’ve ever heard one of her songs. From the little I know about Lady Gaga, I doubt that I’d ever be much of a fan. But I am a big fan of one thing: she has an entirely different, and very disruptive, business model. According to this article in Ad Age, she is accomplishing in 18 months what Madonna took a decade to do.

I recently spoke at a company’s supply chain strategy meeting and provided them with a perspective on the consumer products industry. I researched Pepsi and Coke, P&G and Alberto Culver, ConAgra and Kraft. I conducted interviews, analyzed data, scoured analyst presentations, and drew on my own experience in the industry. Then I gave my presentation and shared (with data and charts, of course) the challenges and strategic responses of some of the top CPG companies in America.

There’s plenty of value in learning about what these great companies do. On the other side of the coin however, maybe what I should have done is something different. Instead of focusing on the companies I chose to research, maybe I should have focused on companies that succeed by doing things differently. And instead of focusing on the strategic response common across these great companies, maybe I should have focused on disruptive responses that have led to breakthrough.

There are times when focusing on the existing business model is the right thing to do. ThinkWay recently helped an organization analyze their current situation by looking at their core value proposition, markets and customers, delivery system, key partnerships, organizational structure and financial model. Then we were able to set new objectives and identify new strategies and a path to growth. Nothing particularly disruptive but just what was needed for that organization at that point in time.

But there are also times when the best approach is the disruptive approach, when eeking out the last half cent of productivity, developing one more line extension, or restructuring one more time are not going to be enough. There are times when new, game-changing approaches need to be discovered. There are times when doing the same thing a little better isn’t going to be good enough and leaves a company vulnerable to the one who risks being disruptive.

There are times when companies need to go “Gaga” with their business models.