Business model experimentation

A while ago, I wrote about business model experimentation as one of the requirements for Business Model Management (see this post). It is advisable to experiment with new business models first, to test them and to try out different models and variations. One of the advocates of business model experimentation is Chesbrough in his discussion of open business models.

In a recent HBR article (Feb. 2009) titled 'How to Design Smart Business Experiments,' Davenport argues that managers should follow a more rigorous approach to business experiments. He promotes decision-making based on scientifically valid, quantitative methods made possible by new, broadly available software and some straightforward investments to build capabilities. Davenport also states that the scientific method is not well suited to assess a major change in business models. It is more suited for strategy execution than strategy formulation.

Still, I am already looking forward to seeing paradigm discussion emerge in the board room. ;-)