An interview with Alexander Osterwalder

Lately we have told about a special master class on creation of business models given by Alexander Osterwalder to the MBA SKOLKOVO students. Below is an interview with Alexander after his lecture

-What is your general impression of the School and SKOLKOVO Campus?
-I think it’s great! And specifically what I liked is the work places - that’s the first thing that I noticed. It is a perfect environment for my work – these paint walls, you can use them to draw on, to stick up things. That’s actually pretty rare, either in schools or meeting rooms, you wouldn’t meet this kind of infrastructure which is necessary for creative thinking.
Besides the new building, which is nice too, but also having such comfortable classrooms that help you to do creative work - that's brilliant. These are my first impressions about the school.

- What else do you need for your creative work?
- Brilliant people (laughs). So the class is fine, there are many people from different countries. Some of them are entrepreneurs, they want to go to entrepreneurial career, some of them want to return to their companies. So the group of students is excellent to work with.

- Do you feel the cultural differences of students' learning?
- It is difficult to generalize. There are certain differences, but I can only speak from my experience, from the groups I worked with.
So, I would point out one common feature: it is difficult to the entrepreneurs to put themselves into the shoes of the customer before designing a new product or service or a new business model. In some countries, it becomes a kind of norm. In others it doesn’t. For example, in Europe I’m working with a pharmaceutical company on service innovation, and they can’t put themselves into customers’ shoes in different countries. So there are certain cultural differences from one country to another, and differences in one business area to another.

- Let's speak about your approach to teaching business models. What are the main points you can note?
- The main point is why entrepreneurs and managers should look at the business models. It’s more and more important for the companies not just to look at new technologies, products, services, distribution network and its markets but most importantly - to understand how all these pieces work together. Because the most powerful business is not the one that launches a new product or enters a new market, but one that did some big picture changes. Take Apple with the iPhone: Yes, there was a product innovation in the middle, but what they’ve changed is the business model around it. Take Skype – today it’s the biggest operator of international calls in the world. And what’s special about Skype is with their different technology and a different business model they have a totally different economics. They changed the telecom industry. And if you don’t understand those dynamics, you don’t have the tools to become a great business person.
How do I teach it? Several things that I think are important. One of these - I use these tools of design creativities, visual thinking. I use a lot of images, I get people to draw on the walls and to put notes. That is crucial to combine theory and visual aids.

- Can you mark out any new trends in education?
- In business we’re trained to decide between different options – A, B, C. But that’s the past. The future requires people to be innovative and creative. So it’s not just to be able to decide between A, B and C, they must have the ability to create alternatives, new possibilities, that’s what really important. So you need to educate business students to do that. And business schools are not very well equipped to do that. So typically what do they do? They look into design methods. How do designers work? How do architectures work? They try to teach those methods to business students to create new strategies, new business models, new services

And again I go back to the topic of classrooms. What can you do in places where you can’t draw on the walls, where there are no educational boards, where there is no place to attach drawings? You'll have just something to discuss, to talk. However, current trends require visualization, they require a brainstorming session, when you have something to draw and to paint. If you do not have the space for creativity, then you will not do! Thus, the usual room can prevent you from creative work.

- What was the outcome of your master class for you as a teacher?
- What I wanted them to achieve is to be able first to describe, then to challenge, but also to invent the business model – that so we did for one and a half day.
And I trained them to know about the tools, understand the tools and know how they can apply the tools to come up with the great business model. And I hope we achieved it.