VUCA, the acronym of Volatile, Uncertain, Complex and Ambiguous, may be a term that has its origins in the military, but seems to be characterizing pretty well the world we currently live. This is quite known.

What is perhaps less understood, rarely discussed and perhaps not even fully recognized is the relationship between increasing complexity or uncertainty and the tendency to refer to he importance of business model innovation. Leaders and senior executives across industries, in fact, increasingly claim that “business model innovation is a priority”. Why? What does this claim mean, in essence? How can we think about it in practice and pragmatically?

Answering these questions requires to appreciate that there are distinct ways to think about business model innovation. They are related but not the same. What possible ways of thinking about business models we have?

It also requires understanding that, from a decision-making standpoint, there are distinct classes of challenges that managers in companies are confronted with. Each implies a different relationship between cause and effect and, in turn, requires different leadership styles. Interestingly, business model innovation happens to fall outside more normal challenges for which companies are generally better organized. What types of challenges we can think of, and which one resemble the innovation of business models?

Building on these premises, this talk aims at illustrating a pragmatic way of thinking about innovation of business models and offer an answer to the related questions.