The Invincible Company … another fabulous book from Alex Osterwalder and Yves Pigneur … the ultimate guide to relentless innovation, transformation and growth

March 11, 2020

Over the last 20 years, Alex Osterwalder and Yves Pigneur have been dedicated to a single mission: how to help companies continuously reinvent themselves. They call themselves “the plumbers of business”.

Alex and Yves joined me at the recent European Business Forum in a highly entertaining and interactive innovation lab for 500 business leaders. They make an interesting duo. Alex is the performer, whilst Yves is the impresario – an evolution of their earlier days when Alex was the PhD student, and Yves his teacher at the University of Lausanne.

In preparing for the event, I had a number of Skype calls with Alex, in his Swiss mountain home. It looked more like a nuclear bunker, with plain concrete walls, and a small window showing the snowy mountains outside. In the centre was Alex at his desk, surrounded by 3 huge screens, with his headphones on. It looked like Strategyzer‘s mission control room.

On the walls were hundreds of yellow Post-It notes, plotting out the new book – lots of keywords, diagrams, arrows, connections – although the Skype camera kept falling to the floor where he was surrounded by weightlifting equipment. I wasn’t sure whether “invincible” was more an aspiration for business leaders reading the new book, or for himself.

They dedicate their work to designing better tools, using the power of information design, to create deceptively simple but incredibly useful templates for business to think, plan and execute. Most famously they created the Business Model Canvas.

Now they are going further – to consider not just business design, but transformation, and relentless transformation – with a fabulous new book, The Invincible Company.

Here’s a photo from Yves’ early notebook as they thought through how to visualise the challenges of these three areas:

The book combines their focus on business models with their new approach to innovation portfolios, which are key to the long-term success of any business. It becomes “invincible” because it builds a whole series of great ideas, innovations and business models that ensure its success today, and into the future. Alex and Yves believe there are three crucial areas that every business leader needs to consider in order to remain relevant and prosperous:

  • Companies have to develop truly ambidextrous organizational structures where the innovation arm is given equal power alongside the existing business.
  • This innovation team needs its very own culture, processes, skills, metrics, and incentives to explore potentially new business models and value propositions.
  • They need to better manage their portfolio of existing businesses and new opportunities – sustaining today, whilst cultivating tomorrow.

Companies need a new and integrated approach to managing a dynamic portfolio of established and emerging businesses –  to protect established business models from disruption as long as possible, while simultaneously cultivating the business models of tomorrow.

Exploit the current business: Every portfolio starts with a look at managing and improving the businesses you already have. Here you assess two areas:

  1. Profitability: How much profit does the existing business models generate?
  2. Disruption risk: How protected is your business model, and how likely is it to be disrupted? Models at risk may be established businesses, increasingly prone to disruption by new technology, new markets, or regulatory changes.

Explore: the future business: As you manage the present, you also look towards the future for new areas of growth. Here you assess two different areas:

  1. Expected profitability: How big can an idea for a new business become? What’s the potential? How big is the size of the new market, revenue potential, pricing, etc. Here it is equally important to judge how robust a business model is, eg in terms of recurring revenues, long term growth, scalability, and protection from competition.
  2. Innovation risk: Here you evaluate how much you de-risked a good looking business initiative. New ideas may be unproven, and risky to invest in. The more confidence you have that an initiative will work, based on tests and the resulting evidence, the more you might choose to invest time and resources into it.

Amazon is a good example of a company that intentionally manages a diverse portfolio of existing and promising new business models. The company continues to produce growth with its existing businesses (e-commerce, AWS, logistics), whilst also developing a portfolio of potential future growth engines that may become big profit generators one day (Alexa, Echo, Dash Button, Prime Air, Amazon Fresh, etc).

Investors who seek long-term sustained growth, should be demanding an “invincible” organization built on a portfolio of short and long-term innovative business models Such companies can better allocate capital and resources better at each stage of development. It also demands a continuous flow of new ideas and innovation to sustain your business in a turbulent and uncertain future.

You can download the sneak preview here, and order the book here.


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