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Erik Simanis and Stuart Hart offer an interesting perspective on innovation in an article in the the new Summer 2009 issue of MIT Sloan Management Review. In particular, they offer a vision of a world in which businesses and communities are more closely intertwined.
The authors contrast “structural innovation” that companies have traditionally practiced — a transaction-oriented model where companies try to create better products to satisfy markets’ unmet needs — with a model they refer to in terms of “business model intimacy” and “embedded innovation.” In this model, a business innovates by working closely with a community to improve people’s lives. An example is Grameen Bank, with its microlending program in Bangladesh that grew out of founder Muhammad Yunus’ personal experience with Bangladeshi villagers.
Write Simanis and Hart:
At its foundation, business model intimacy is a kind of relationship in which the identity of a community is fused with that of a company. The glue that binds this shared identity is a jointly constructed vision of a better life and community — a strategic community intent — anchored around a new business.