The Executive’s Playbook for Decision Model Innovation (Part 4)

Where Customer Centricity meets Decision Intelligence

Value-Creation Logic 2.0

In the previous posts, we identified the commoditization trap and introduced Decision Model Innovation as a way to avoid it. Now, we turn to how DMI reshapes the fundamental business model logic of creating, capturing, and delivering value. Think of a classic business model as a triangle: one angle is how you create value for customers (the benefit you provide), the second is how you capture value for your company (the profit you earn), and the third is how you deliver value (the infrastructure and processes that actually provide the value to the customer)​. In this chapter, we’ll refresh these concepts and then reframe each in terms of customer decisions.

We’ll see that DMI essentially updates the “Value Creation Logic 1.0” (the traditional create–capture–deliver framework) to Logic 2.0 where decisions are central. We’ll also discuss the critical link between a customer’s willingness-to-pay and their decision process, and identify which parts of the value triangle tend to “break” first under commoditization pressure.

Business-Model Triangle Refresher: Create, Capture, Deliver

Most strategy or business model frameworks boil down to three questions: How do we create value for customers? How do we capture some of that value for ourselves? And how do we deliver that value to the customer?​ Different models use different terminologies, but the essence is the same: