Risk-managing the business model: locating tripwires at the start

Purpose This paper aims to address risks inherent in business model innovation. The authors make the case that entrepreneurs and managers, in relying on sources of innovation when designing business models, need to pay heed to these hidden risks – or tripwires – that can prevent the venture from efficiently, effectively and profitably scaling. The authors provide a guiding framework to help entrepreneurs and managers identify four distinct tripwires in their business model underlying the sources of innovation. Design/methodology/approach The authors build a systematic framework of the four tripwires – structure, scaling, systems and strategy – underlying offer-driven, customer-driven, finance-driven and resource-driven business model innovations. By relying on academic research, the authors’ scholarly work on organizational decline, innovation and corporate turnaround and the authors combined experiences and observations in industry, this study makes explicit and highlights problem areas in the business model, providing examples of representative companies to illustrate the challenges and consequences of failing to identify and manage its tripwires. Findings The authors demonstrate that awareness and attention to the tripwires underlying sources of innovation can mitigate a business model’s future challenges. Business model innovations can and often do conceal hazards that become apparent only as a venture begins to grow. As such, it is essential that entrepreneurs and managers attend to these potential problem areas in the early stages of designing their business models. In bringing awareness to innovation-related tripwires, the authors offer a risk-management “patch” for managers and entrepreneurs when developing their business models. Originality/value Business model innovation is a powerful tool to help in identifying growth opportunities. Yet in launching, scaling or transforming their business models, entrepreneurs and managers can encounter unforeseen challenges. While sources of innovation in the business model prioritize the discovery of growth opportunities, this has often come at the expense of the potential risks underlying them. The authors provide a means to identify four distinct tripwires that may be triggered when implementing business model innovations.

Corporate governance and turnaround: Evidence from Australia

We examine the relationship between ownership and outside director attributes and corporate turnaround outcomes using matched samples of 99 turnaround and 99 non-turnaround listed Australian firms during the 2004–2015 period. Based on agency theory principles, we propose that key shareholder groups (block ownership, director ownership, institutional ownership) and outside directors are related to firm-level turnaround outcomes, and particularly changes in these attributes across decline to turnaround periods. Our results provide evidence that turnaround and non-turnaround firms differ in terms of their ownership and board composition structures, and that changes in director ownership and the degree of board independence are important in determining the likelihood of turnaround success. JEL Classification: G33, G34, M40

Business Model Transformation of Legacy Newspapers in The Age of The Digital Attention Economy

This chapter explores ways in which legacy newspapers may transform their business and operational models to ensure profitability and protect journalistic ideals. This transformation is explored through the lens of Norwegian media company Amedia, an early innovator. Our analysis sheds light on the ways in which the industry has come to understand the digital attention economy as defined through key innovations initiated by Google and Facebook. At Amedia, these innovations paved the way for a major corporate turnaround in which data harvesting and AI play major roles. The turnaround is still ongoing after seven years, but preliminary conclusions can be drawn. Within an ecological view of organizational adaption, this chapter proposes six theses about design requirements and transformation for legacy newspapers and concludes with four key findings: a) survivability will be difficult without the implementation of a new AI-operational model and business model built on software, b) a space is emerging that supports profitable quality journalism with strong commitments to veracity and fairness, c) most outlets still need advertising revenue to achieve profitability, and d) roles and skill-sets of top managers and journalists are undergoing major changes.

Reversing organizational decline

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Organizational aging often leads to performance decline that can prove terminal if not addressed properly. Firms can use corporate turnaround strategies as a proven means of obtaining the swift solutions that are essential. By creating a relevant framework, it is possible to identify specific actions and negate the obstacles and diverse range of risks that have potential to impede turnaround success. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Fighting organizational decline: a risk-based approach to organizational anti-aging

Purpose Most mature organizations face a major decline in performance at some time during their existence. For more than three decades, it has been suggested that the management practices that could cure a troubled company could have also kept it well. Inspired by this concept, this paper is proposing a preventive approach to early implementation of turnaround strategies as an alternative for otherwise traumatic rescue efforts, further along the downward spiral. Design/methodology/approach Corporate turnaround strategies and associated risks are integrated with a risk-based approach, along with a proactive decision-making process. The link between turnaround research, resource-based view, the sources of organizational decline, and the governance of organizational-decline-related risks – is explained. Findings The integrated model streamlines a preventive organizational process for considering the suitability of commonly used turnaround practices – for the non-crisis business routine of a mature company. By considering and adjusting the risks associated with such practices, it addresses risk aversion at the early stages of decline and determines the optimal sequence and timing of retrenchment and recovery activities. As such, it encourages mature companies to take actions for reducing their exposure to organizational decline. Accordingly, the model is named the “Anti-Aging” framework. Research limitations/implications Empirical testing of the suitability of turnaround strategies for non-crisis situations is proposed as a direction for future research. Practical implications The Anti-Aging framework opens an opportunity for the senior management of a mature organization to respond earlier to organizational decline and avoid the trauma associated with otherwise more challenging conditions, for the benefit of all stakeholders. Originality/value The Anti-Aging framework proposes an innovative way of bridging the gap between the benefits of early implementation of turnaround strategies, and major obstacles faced by willing, traditional management teams of mature organizations.

Development of an integrated canvas on turnaround strategy

Purpose The purpose of this study is to provide a comprehensive understanding regarding corporate turnaround. An integrated discussion regarding different corporate failure factors, conditions, symptoms followed by turnaround strategies and its results have been provided. Design/methodology/approach Authors have done a comprehensive systematic and integrated literature review study of research articles on corporate turnaround. The paper reviewed discussed different dimensions of turnaround management. The authors applied thematic reductionist categorisation with logical arguments to develop an integrated turnaround canvas (ICT). Findings An ICT has been developed. ICT is a holistic framework to comprehend turnaround strategy. Impact of precondition and turnaround levers on cash flow dynamics and the operational and strategic levers for successful turnaround performance of the firm has also been presented. Authors have also tabulated the entire spectrum of corporate turnaround. Research limitations/implications This conceptual work would help researchers interested in turnaround research to anchor their study at different points in ICT canvas. This could be at the decline precondition stage, corporate failure state, turnaround levers (strategic and operational) application phase and in terms of turnaround performance. Practical implications The ICT canvas would help managers to identify the set of corporate failure preconditions which might lead their firm to decline phase. The ICT canvas would also help managers based upon the identification of decline preconditions to select an appropriate turnaround interventions required to arrest the corporate failure. Finally, the ICT canvas would help in identifying the operational and strategic levers for successful turnaround implementation and thus achieving the desired corporate performance. Originality/value This is one of the first studies to provide an integrated perspective on corporate turnaround as the developed ICT canvas consisted of identification of decline preconditions, corporate failure, turnaround levers (strategic and operational ) and turnaround performance.