The Risk-Driven Business Model: Four Questions That Will Define Your Company

This book is required reading for eCornell's Digital Transformation certificate. Although, the e-book is included with registration, I appreciate the hard copy for reference. Highly recommend if you want to define processes for disrupting your industry.

„How many organizations would have been as daring as Walmart in transforming inventory management? How many would have been as willing as Amazon to reconsider a foundational strategy like stockless fulfillment? And who but Google would, in effect, let highly paid engineers do their own thing for the equivalent of a day a week?”Great book from Prof. Karan Girotra for everybody who wants to know, how transformation works: start with analyzing your value chain for (the two kinds of) risks and eliminate them by using Girotras strategies.

What do firms like Amazon, Li & Fung, Toyota, Volkswagen, and Zara have in common? Unlike Apple, none of these companies created a product that was revolutionary (iPhone), nor they developed a technology that was far superior to the existing ones (Blackberry). What they did was changing the decision-making architecture of their respective industries, a change that fundamentally altered the risk born by the value chain, either by reducing it or by allocating it in a smart way. In short, these companies are all examples of risk-driven business model innovation (BMI).This book provides an intuitive framework to guide the reader “behind the stage” of many successful BMI companies, explaining how they succeeded by changing what decisions they made, when they made them, who made them, or why they were made. The examples and the analysis in the book are described with rigor and depth, while at the same time steering away from technical jargon, thus making for a cogent and accessible reading. The content of the book is well organized, and each chapter is intelligently structured; a nice touch are the “caveats” boxes at the end of each subsection, in which the lessons learnt are revisited from a different angle, providing a fuller picture for a deeper understanding. This book permanently changes the way one sees and thinks about companies… it’s a mindset shift, like watching a movie not as the general public does, but as a movie director does—understanding what goes on off the screen that makes the movie happen.I will certainly recommend this book to all my MBA students at Wharton, especially those who consider a career as entrepreneurs or aspire to bring disruptive change to their companies.

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Startups and established firms alike, rapidly changing business landscapes require constant innovations in their business models to create new opportunities and sustain success. This book builds a powerful framework that helps managers identify the inefficiencies and risks in their enterprises, and offers guidelines on how to turn them around to their advantages. Various manifestations of information risk and incentive-alignment risk are analyzed in a wide range of industries, including retailing, transportation, health care, and defense. The insights are drawn from battle-tested examples, many of them based on the authors' own academic researches. Highly recommended for managers and MBA students.