Book Review: Seizing the White Space

Seizing the White Space: Business Model Innovation for Growth and Renewal
Mark W. Johnson
Harvard Business Press (2010)

Johnson poses an especially important question: What underlying forces prevent great companies from embracing transformational opportunities? Marshall Goldsmith wrote a book whose title reveals what he thinks: “What got you here won’t get you there.” The “white space” referred to in the title of Johnson’s book “is the range of potential activities not defined or addressed by the company’s current business model, that is, the opportunities outside its core and beyond its adjacencies that require a different business model to exploit.” Paraphrasing Goldsmith, the business model that got you to your core won’t achieve success for you in your “white space,” whatever and wherever it may be. Throughout military history, there are countless examples of leaders who fought the last war. Perhaps the most famous (infamous?) is the Maginot Line in France over which German planes and gliders flew (many filled with paratroopers) and around which German tanks sped. The French forces surrendered within a few days, without a fight.

As Johnson explains in Chapter 2, the business model he proposes has four key elements:

“First, every thriving enterprise is propelled by a strong customer value proposition (CVP) – a product, service, or combination thereof that helps customers do more effectively, conveniently, or affordably a job they have been trying to do.

“Second, a product formula defines the way a company will capture value for itself and its shareholders in the form of profit.

“The third and fourth elements of the model, key resources and key processes are the means by which the company delivers the value to the customer and itself. They are the critical asse4ts, skills, activities, routines, and ways of working that enable the enterprise to fulfill the CVP and profit formula in a repeatable, scalable fashion.”

Near the end of this book, Johnson focuses on Jeff Bezos and notes (as does Bezos) several major as well as minor modifications that Amazon made while seizing its own “white space,” before finally selecting the single-detail-page model for its third-party business. The lesson to be learned is this: “As assumptions are tested, success or failure increases the knowledge in the system [as it did at Amazon]. As the enterprise gains traction and turns the corner toward viability, demonstrably knowledge takes over. At that point, clearly defining the metrics of success gives you a clear path toward achieving it, better enabling the nascent initiative to absorb the inevitable early failures along the way.”