Executive Interviews: Interview with John C Camillus on Business Model Innovation
May 2009 - By Dr. Nagendra V Chowdary

John C Camillus
Donald R. Beall Professor of Strategic Management, Joseph M. Katz Graduate School of Business and College of Business Administration.

• What according to you is the best way for companies to stay focused during these unprecedented times? What should they concentrate on?
  Two things to bear in mind. First, each organization should affirm its identity – the values, aspirations and competencies that constitute its distinctive, enduring core. Looking at problems through the lens of its identity enables an organization to make better and consistent strategic decisions. Second, experience and some emerging research have led to the understanding that the criterion of “humanity” should inform and guide strategic decisions. The two dimensions of “humanity” are (1) humankind and (2) humaneness. In its first meaning of “humankind”, the term humanity demands a global perspective and recognizes the importance of all economic strata in the population. In its second meaning of “humane”, the term humanity captures the imperative of being sensitive and responsive to human needs, whether it is through the ergonomics of product manufacture and design, through the empathy that should inform, for example, the design of consumer financial instruments, to the recognition and response to the importance of employees as the source of sustainable competitiveness, customer satisfaction and economic performance. At the University of Pittsburgh, we have amajor ongoing research project called the “Business of HumanitySM” which focuses on understanding and documenting the positive and immediate economic impact of humanity-based decisions and also seeks to shift the strategy paradigm to embrace appropriately these considerations. In this project, what is unusual is that the arguments in support of humanity as a key driver of strategic decisions are being developed on economic grounds and not as ethical imperatives or facets of corporate social responsibility.

• Is there any way to manage the downturn without downsizing?
  The answer is an emphatic “yes.” Downsizing should be the very last alternative to consider. If, unfortunately, it is determined to be inevitable, there are critically important guidelines for minimizing the harm that downsizing can do to an organization. Downsizing is an obvious and superficially easy and attractive response. But I have seen the deep and long-term damage that downsizing does to an organization. Employees should be motivated to commit their hearts and minds, not just their time, to the organization’s success. If the organization has no loyalty to its employees, why would they be loyal to the organization? Competitive advantage is built on knowledge and knowledge resides in people. The tacit knowledge that employees possess is vital to the organization’s distinctiveness. Employees who see a future with the organization can be expected to participate more effectively in developing creative alternatives or sharing the pain of cash shortages.

• What according to you is a business model (with elaborate and differing definitions apart) and what components would constitute a business model?
  A business model is essentially an entrepreneurial, integrated, high-level conceptualization of how an organization intends to employ its tangible and intangible resources to create value in products or services and offer this value attractively and accessibly to customers or clients.

• What is the importance of having a wholesome and holistic understanding of business models?
  Two fundamental reasons. First, a business model is a precursor to developing a business strategy where the details of appropriate technology, product and service differentiation, target customer segments, organizational architecture and alliances are articulated. The more ‘wholesome’ and distinctive the business model, the more competitive and effective the business strategy will be. Second, the rapidity with which the business environment is changing requires constant evolution and frequent modification of the business model. The more “holistic” and systemic the business model, the more the avenues for innovation.