Eleven Component Parts of a Business Model in Fourth Generation R&D

When it comes to developing a 4G business model, the template is shown in the “Eleven Component Parts of a Business Model in Fourth Generation R&D” figure. The 4G business model is an extension to the model described by Alexander Osterwalder. The 4G additions are the 4G Knowledge Channel, 4G capabilities and architecture (as a dominant design), the 4G pipeline of capabilities in development, 4G open innovation, the 4G Six Stages of Innovation, and the 4G pair of nested innovation iterative process that includes a spiral iterative process. These additions convert the Osterwalder model which is 3G to a 4G model. They are also a precursor to the Business Model Canvas of Agile Business/Technology Management.

As described in Phase 2 in the Matrix, a prototype set of capabilities and an architecture to structure the capabilities as a candidate for a new dominant design are initially developed in Phase 2 by the primary lead supplier as ‘capability stacks’. In Step 2 of the spiral process applied in Phase 3, these capability ‘stacks’ are refined, developed, acquired and shared by a ‘galaxy’ of partners eventually in a 4G Innovation Hub to build all the parts of a dominant design that include business models and industry structures. A ‘galaxy’ of partners is needed to form the minimum viable group (MVG) of linked capability ‘stacks’ for suppliers of all the parts of a solution for customers. The MVG is an extension to the minimal viable product (MVP) described in lean entrepreneurship since MVG enables a much larger scale of value creation driven by formation of a new dominant design that would contain multiple products and services.

Step 3 of the spiral process in Phase 3 does validation of the new value propositions and the prototype of a dominant design with actual customer testing initially in 4G Application Labs and later in an Innovation Hub. The prototypes containing critical parts of the new proposed dominant design are developed and tested in Phases 2 and 3. Validation testing in Step 3 in Phase 3 also further discovers, defines and confirms stakeholder needs as the new capabilities for suppliers and customers to accomplish a required task, perform a job or achieve some set of objectives that have value described in Value Innovation.

In Step 4 of the spiral process in Phase 3, the tacit behavior that was observed with tools such as video ethnographic tools in Step 3 is used to form explicit knowledge in which gaps between desired stakeholder performance and a candidate dominant design are identified and analyzed. To fill the gaps, new or modified scenarios (similar to pivots in lean entrepreneurship) are created in Step 1 of the next iteration of the spiral process. The 4G pair of iterative processes continues until desired results are achieved or the project is terminated.

Integrating the business elements of human resources planning, the Ninth Principle guides human resource management (HR) inside an organization by recognizing that innovation leadership requires people as innovators to have “T-shaped” knowledge which has horizontal breath across many business disciplines such as finance, law, marketing, sales, information technology and engineering, but also vertical deep knowledge in at least one discipline and a good understanding of all twelve principles of 4G that guide innovation management. The career path for such qualified innovators leads to Chief Innovator Officer and CEO.