As they fight for survival in the era of online shopping, brick-and-mortar retailers are cutting costs by slashing head count and budgets for training. But that erodes their biggest edge over e-tailers: a live person customers can talk to face-to-face. For every dollar a retailer saves on staffing, it may be losing several dollars in revenues and gross profits if customers leave stores empty-handed because they can't find a knowledgeable salesperson to help them. The solution lies in optimizing staffing and training for each store, but most retailers don't know how to do that. This article offers them a step-by-step approach. It involves analyzing historical data, conducting experiments, and assessing the results, and when applied systematically can add as much as 20% to the revenues of existing stores. Even better, if staffing increases at some stores are offset by cuts at others, and vendors fund product training, those higher sales will cost retailers little or nothing to generate.

The case is about the emergence of the virtual contact centre, which employs a geographically dispersed workforce in the cloud. LiveOps' 'home-shore' business model combines the following innovations: (1) it allows agents to work when they choose to, but pays them only for the time they are serving customers, and (2) it is based on meritocracy, i.e., better performing agents get more work and are paid more. The virtual contact centre is evaluated against traditional contact centre solutions in the context of a relief operation helping storm evacuees connect with relatives in the wake of Hurricane Katrina.

Drawing on the idea that any business model is essentially a set of key decisions that collectively determine how a business earns its revenue, incurs its costs, and manages its risks, the authors view innovations to the model as changes to those decisions: What mix of products or services should you offer? When should you make your key decisions? Who are your best decision makers? and Why do key decision makers choose as they do? In this article they present a framework to help managers take business model innovation to the level of a reliable and improvable discipline. Companies can use the framework to make their innovation processes more systematic and open so that business model reinvention becomes a continual, inclusive process rather than a series of isolated, internally focused events.

Manufacturers in developed countries can no longer rely on lean management practices to stay profitable. They face increasing competition from plants in large emerging economies that are able to produce on a large scale at a lower cost, while still providing high quality. The way forward, the authors suggest, can be glimpsed from analyzing past winners of Europe's annual Industrial Excellence Award. Those companies have succeeded by using one or more of these strategies: (1) Leveraging data flows to integrate closely with supply chain partners. Germany's Schmitz Cargobull, for example, has become a leading trailer manufacturer by using sophisticated information technology to help customers monitor their vehicles. (2) Creating value downstream in other parts of the supply chain. One example is Markem-Imaje, a maker of industrial printers for coding products; the company adds value for customers by offering a variety of ancillary services. (3) Collaboratively designing manufacturing processes that can rapidly evolve to meet customers' needs. A prime example is ASML, which works closely with customers and suppliers to make innovations in production technology for the semiconductor industry. (4) Specializing in customized products. Focusing on small runs of custom-designed products has been an effective strategy for companies like BuS Elektronik and the Daimler Group's Smart car division.

Industries like restaurants and retail, which are populated by low-wage workers, have found it hard to increase employee productivity. New technology and methods are allowing them to increase their profits by shifting more work to their best workers.

To create value, companies typically focus on revenue, cost structure, and resource velocity. Improving these factors is the main focus of management literature. But all of them are vulnerable to sharp changes in demand and supply. Companies can innovate their business models to reduce the impact of such swings. But they can also create value by adding some risk. For instance, more than 30 years ago Rolls-Royce identified a major pain point in the aircraft industry: maintenance of airplane engines. An engine breakdown grounds the plane, while the airline pays for repair time and materials. So Rolls-Royce offered a service contract whereby the airline would pay for an engine's flight hours rather than for time and materials. The new contract triggered a completely new value creation dynamic, because Rolls-Royce was motivated to improve its own products and maintenance processes. Business model innovations are much cheaper than product and technology innovations, and they can be approached in a systematic way. Furthermore, nearly all the big ones have already been done-so you can simply adapt them to suit your own situation.

This case describes the innovative business model of Better Place Inc., an electric vehicle company. The key challenges in operating the business model are explained and data is provided to help compute the costs, benefits, net profitability and economies of scale that it offers.