We've been discussing different approaches to strategy formulation.
We started by talking about the more typical, traditional, formal,
strategic planning process.
And then we've talked about some alternatives to that.
The strategic war room approach, the rapid prototyping approach, and
the design thinking perspective.
So I want to talk about one more, and
this is one that's known as the business model canvas.
So what is this, what's the point of the business model canvas?
Well, it's kind of an alternative to the sort of traditional business
plan approach, and the idea here is that it kind of hits a sweet spot,
it's not overly complicated and detailed, like a business plan can often be.
But it gives you a little more clarity into what's going
on in your organization than just some sort of back of the nap can quick idea.
So it tries to kind of split the difference between those things, and
I think ideally that accomplishes several things.
First of all, it really allows the organization to focus on what's important.
So again, once you strip away the sort of 40 plus pages of
stuff that's in a typical business plan.
You might be able to improve the clarity, and
the focus of what's really driving your business.
And that's why the business model canvass is used a lot in the tech sector, for
example.
This is something that's used quite a bit in that industry because it allows for
some sort of quick,
to the point focus, on what the business model is really all about.
So that's the focus piece,
I think another thing that it can bring you is flexibility.
So, the brevity of the business model canvas can also mean that it's
easier to tweak it, it's easier to adjust and react, get input from others as they
look at what you've laid out, and you can make some adjustments, make some changes.
So it might provide for a more flexible way to really alter your strategy
to think carefully about it as you sort to iterate through different ideas.
And finally, it can also bring transparency.
I mean, this is where your team might really better be able
to understand what your business is all about and understand the business model.
Remember, earlier we've talked about how strategies sometimes emerges.
An emergent strategy sometimes can come from
lots of different places in the organization.
So ideally, you want people throughout your organization to
really have a clear understanding of what your strategy is as an organization.
So, the business model canvas is a way to sort of convey that succinctly and
the brevity of it sort of allows everyone in the organization to
understand with some clarity what the business model is.
So ideally,
the business model canvas is something that you can put on one piece of paper.
So picture a typical one sheet of paper sized thing,
and we want to be able to capture the essence of what
an organization's business model is on that one sheet of paper.
And typically, a business model canvas includes nine elements.
So, it's going to say something about customer segments, who are your customers?
What is it that they're looking for, what do they think, what do they see,
what do they feel?
How do they interact with you as an organization as they pursue, or
purchase your products or services?
So, understanding the customer is an important aspect.
Another aspect is,
you need to have some clarity around the value proposition of your organization.
What's compelling about the value proposition of your business?
What is it that you can do that customers really want to buy or
to use or to partake in.
