The Winning Laugh

monsters inc

Monsters, Inc. ‘s main duty was to provide all citizens in Monstropolis with energy in the form of captured screams collected from children. James P. “Sulley” Sullivan found that laughter produced more power than scream had done and reestablished the company to have the monsters make children laugh. In this way James became the new CEO of the new company, Monsters, Inc. Laugh Floor. By changing the way of producing the energy, the protagonist of the Pixar’s famous animated movie also bettered the job of his colleagues: at that time they were not scared from the children anymore, and they enjoyed the job even more.

It could be assumed that Sulley and his colleague Mike Wazowski unconsciously became an example of Business- Model Innovators.

business-model-innovation


As Constantinos Markides writes in his “Disruptive Innovation- In Need of a Better Theory” (2006), the key to be Business- Model Innovators is not to discover new products or services, but simply redefine what an existing product or service is and how it is provided to the customer.

From a recent (October 2012) research project (Business Case Studies Final) of the Nordic Innovation, a Danish waste management company could be easily and positively compared to the case of Monsters, Inc. Van Gansewinkel today is specialized in making energy and products based on waste materials, by supply cycles, where materials are re-used in closed loops. What is really important to notice is that originally it was a classic waste collecting business, and only a small part of the waste was recycled, when the procedure was relatively straightforward.

The company decided to turn its business around, as the classic waste collection was decreasing. It started producing secondary raw materials on specification, based on demands from customers rather than on what was easy to produce from the waste materials it had. This constituted a new way of looking at its own supply chain, transforming the waste collection business into take-back systems.

Van-Gansewinkel-logo

Van Gansewinkel has innovated its Business-Model from two points of view: fistly the company became a materials pooler by having established system of specifications of the different raw materials which are produced from waste products; secondly the company became a process coordinator by applying a holistic view of the production cycles. And – what is even more important and effective – Van Gansewinkel turned the company’s main cost, the waste removal, into their source of revenue, and in this process they have set up production cycles that close loops between production, use and re-use of products.

It also caused a virtuous cycle: by supplying secondary glass for bottle manufacturers, the company enabled the production to be carried out at lower temperatures; this caused a 10- 12 % reduction in the energy use, and, as a consequence, the heat generated is now used for central heating, further lowering the energy use of the company.

Regarding the financial aspect, despite the global economic crisis sales and revenues have increased by 10%, and the growth level of the company has been around 10-12% over the last 4-5 years. And, even more important, in the same period at least 200 people have been hired in relation to changes made in the company.

So, as P. Thomond and F. Lettice wrote, innovations can be thought of as falling onto a continuum from evolutionary to revolutionary (DIExplored-CEConf2002final). […] Terms such as “disruptive”, “radical”, “non-linear”, “discontinuous”, “breakthrough”, “paradigm-shifting” and “revolutionary” have all been used to describe what is in essence the opposite of sustaining innovations. Introducing a revolution, a drastic change into the business model could make the company not only survive, but even more gain over the competitors .

business shriek

Coming back to the Markides’ study, he tells that new business models improve to such an extent that they are able to deliver performance that is sufficient in the old attributes established competitors emphasize and superior in the new attributes. And, moreover, as more customers – both existing and new ones – embrace the new business receives increasing attention from both the media and the established players.

This is exactly what happened to Monsters, Inc., whose new CEO James was interviewed by the Business Shriek, and all Monstropolis knew about the new company, and to Van Gansewinkel, which became a case study.

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