Business model innovation: from playing the game to changing it

Business model innovation is redefining how manufacturers create and capture value. 

In brief

• Manufacturers must move beyond efficiency to reinvent how value is created, delivered and captured.
• AI and digital capabilities are unlocking new energy value pools and recurring revenue models. 

This article is part of a seven‑piece series exploring commercial, growth and innovation (CGI) and the strategies reshaping performance.

Manufacturing is at a crossroads. Disruption is coming from every direction: natural disasters that strain supply chains, geopolitical conflicts that reshape trade flows and the fundamental shift from physical to digital products. Together, these forces are creating what I call a “perfect storm,” one that is rewriting customer needs and reshaping product demand.

Where the value lies: HVAC and energy

One way to see this in action is through “value pools.” Take the HVAC industry. Rising energy costs and sustainability pressures are creating opportunities to move beyond traditional HVAC systems into broader areas of home energy management. This includes smart thermostats, electric vehicles, refrigerators, dishwashers and other connected appliances, all of which tie into a home electrical system. 

As we move forward, HVAC remains a critical entry point for understanding energy efficiency, although the real opportunity lies in exploring how these interconnected systems contribute to the overall energy ecosystem. The question becomes not just how to optimize heating and cooling, but where the next layers of cost savings, efficiency and customer value will emerge across the home. 

This expansion also changes the types of services companies provide and the people who deliver them. As new technologies and interconnected devices proliferate, human expertise becomes even more essential in designing, managing and maintaining these complex systems.

That’s business model innovation in practice: identifying emerging value pools shaped by today’s energy and sustainability challenges and building new solutions that benefit both the customers and the business.

Looking ahead

One of the biggest barriers I see is short-term thinking. Many organizations focus on the next quarter or next year. But real innovation requires visioning three to five years into the future. 

That kind of foresight allows leaders to anticipate disruption, design new offerings and plan the roadmaps needed to bring them to life. Crises, whether climate events, supply chain shocks or pandemics, have shown us the risk of not planning far enough ahead. But they’ve also shown us the opportunity: forced innovation often leads to lasting breakthroughs. 

The role of CGI

This is where the commercial, growth and innovation (CGI) approach helps. CGI gives manufacturers a structured way to:

• Identify where customer needs are shifting and uncover new value pools. 
• Apply AI and analytics to connect products, anticipate demand and create personalized experiences. 
• Balance short-term cost savings with long-term business model innovation. 
• Align stakeholders around a shared future vision for growth. 

CGI helps companies move deliberately from playing the game, to winning it, to ultimately changing it, redefining what their businesses can deliver for customers, shareholders and society. 

The call to action

The state of manufacturing today is one of convergence: physical meets digital, efficiency meets innovation, short-term pressure meets long-term opportunity. Companies must ask themselves: 

• Are we content to play the game? 
• Can we win the game by scaling what works? 
• Or are we ready to change the game, creating new value for our customers and new growth for our business? 

The next three to five years will answer that question. The time to start planning, and innovating, is now.