The (Re)birth of the Architect for the Business Model Design

Business model both in new designs and it management have become centre stage in many of our existing organizations’ thinking. The need is not just too simply find new growth through new business models but to ‘react and adapt’ those existing business model designs that are in place, to catch-all the emerging possibilities that are around, hopefully before others do. Are we doing a good job of this at present?

BMC- Osterwalder & Pigneur. Visual source: Steve Blank

BMC- Osterwalder & Pigneur. BMC Visual source: Steve Blank

Those without a legacy or are really agile usually are in pole position to explore new opportunities quickly. Also to start with a blank business canvas is exhilarating. It seems we are in the era of the Entrepreneur or are we?

The entrepreneur has a great chance to pioneer, to quickly expand and seize those opportunities to disrupt those occupants serving a known market. The art of discovering the unmet needs of not just existing consumers but attracting in the ones presently outside the focus markets is such a valuable place to attack.

The constraints within the existing organizations

Designing the new business model seems an awful lot easier than if you were involved within the’ poor old’ established organization locked into its structures, systems, existing markets positions battling with satisfying existing shareholders. Just moving those conflict points along within the organization often seems certainly from the outside, in perpetual conflict. There is a real challenge to see things differently and design differently!

The established organization has to combat this increasing threat from all these “usurpers”. There is a strong call for change in existing organizations but there are often complex ecosystems to overcome and the demands for new structures and approaches to resolving these are increasing.

The ever increasing call for more C-EX’s of something

It seems we are continually called upon to add more chief officers in innovation, in information, in knowledge, etc., etc. to address the constant gaps found within existing organizations inability to adapt, focus and design the business. Specialisation is needed but we seem to increasingly lack the function of pulling this all together. The Chief Executive seems to be so out on a limb defending, cajoling, managing and simply reacting to constant crises across their shortening tenure; we are losing the bigger picture perspective when it comes to designing the business to shape it towards the future.

We need to manage the cross-cutting concerns in functionality, in constraints, in unlocking the resources successfully. Yes you could argue this is the role of the Chief Operating Officer but they seem far more focused on squeezing every bit of juice they can find from the existing operations. I hated it when the COO came knocking, you knew it was going to hurt. So who is this person then?

This person, I call the Business Architect who designs and develops the business ecosystem.

This person or function has to hold distinct views of the five essential aspects that impact across the organization. They are seeking out the unique ways for the internal competencies, processes and assets to combine and relate in seizing ‘breaking’ new business model design. They must have a comprehensive overview:

1.       They have the business strategy view and then are capable to break these down into the essential parts to tackle and address the strategic needs. They provide the strands for traceability to make sure these components are being actively worked upon

2.       Check and test the business capabilities and flag where gaps are found, assign the resource and focus to bridge these gaps and set about the building of the lasting capabilities needed to meet the business design needs

3.       Seek out and make sure the flow of business knowledge is occurring by applying a clear absorptive capabilities structure that sets about capturing, facilitating, accelerating and diffusing knowledge for it to flow throughout the organization and to its partners.

4.       Possess the best business operational view or be part of the inner team to support operational structures that cut across functional and organizational boundaries. This includes working the boundaries to extend and push any key design parameters, such as open innovation, platform innovation, collaborative ventures that extend and build on the existing entity.

5.       Have a clear view on the operation– perhaps not the responsible oversight but is able to capture, explain and link roles, capabilities and map these to the challenges being tackled today but designing those that need to be taken forward to build the future in more adaptive designs.

These five aspects have been discussed in numerous Business Architecture papers before and are suggested to provide the integrated view of the organization.

The absolute difference, for me, is not having these buried within the IT department but given the critical centre piece role of being the Chief Business Model Design Architect across the organization with an essential seat within the C-level team. They are responsible for the value configuration, building the necessary capabilities and focusing on the key activities and resources that are needed to implement change for different business models. They are a real change maker.

So we need strong business model design architecture today.

This person and his team design the business logic. It sets about to understand and describe the building blocks of business model design. It is the master of the Business model canvas, it understand the importance of the parts, their interlocking nature and can describe the rationale of how the organization creates, captures and delivers value for today’s business and is constantly exploring the future alternatives and having these designed into the future considerations.

The Business Model Architect designs the different blueprints. They work out offering through all the means necessary the common understanding, facilitate the roadblocks and design constraints so as to align the strategic objectives with the demands placed on the design of the organization. They work the team, they cut across boundaries, they set about ‘creating’ the organizational framework and deliver the “how we do it”, they are the business design translators.

They seek to design constantly what is needed, they look to instigate and demand changing capabilities to increase flexibility, to optimize and to adapt what is in place with what is needed to deliver the opportunities identified for giving new growth.  They map, model and design. They make design more dynamic to adapt to change.

Maybe they are tasked with offsetting  the entrepreneur out there, presently determined to disrupt their business. It is time for exploring all the value points of being the ‘incumbent’ and it needs this holistic business architecture approach.

They have and own the Architecture mandate for the organization for designing the architecture framework necessary for the business model and its design, not just for today but for the future.

The challenge is to provide them with all the tools and immense ingenuity available to them if they can harness it correctly, which I believe they can. ‘Locked’ within the organization is plenty of latent energy wanting to find new ways of working, new designs, structures and processes.

The design of new business models needs a clear focal point within established organizations. The very catalyst is that you need the Architect to orchestrate and completely manage this design process.

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Juggling Innovation around Business Model Design

Juggling Innovation image via Michael Grills

Juggling Innovation Is Hard
image via Michael Grills

There seems a lot at present going on around the Business Model and formulating its design. Following on from the Business Design Summit held in Berlin in April of this year there seems to be a gathering of momentum surrounding the Business model.

There is an awful lot of designing going on, actually it is hard to juggle with it all, even for me that has a 100% focus on innovation.

The Business Design Summit had as its primary question: “Are the Business Tools you are using relevant for today’s world?

It went on to ask “If you want to teach people a new way of thinking, don’t bother trying to teach them, instead, give them a tool, the use of which will lead to new ways of thinking”. “Your business ideas deserve better than PowerPoint and Excel”

The momentum is specifically aimed at Business innovation design tools and how to manipulate them and this is giving rise to the ‘school’ of tool-smiths. I wrote about the Business model canvas as set to explode in 2012 and events this year are certainly ‘exploding’ in multiple ways. Let me give some examples:

The Business Model has become even more critical to create and relate too. Rita Gunther McGrath has just released her book “The End of Competitive Advantage- how to keep your strategy as fast as your business”, published by Harvard Business Review Press. Her whole premise is that today “Strategy is Stuck as most leaders are using frameworks that were designed for a different era of business”.

Rita believes “we require a new set of practices based on the transient competitive advantage”.  We are in a time of fast evaporating competitive advantage and we can’t spend months crafting a single strategy, we need to keep exploring and reiterating different initiatives that are more focused, leaner, more defined, more transient in their nature.

This needs more fluid, greater visualization and more customer-centric approaches and modular strategic design approaches.

So what if?

What if you prototyped business models like architects sketch buildings this is one of the main appeals of the business model canvas, outlined in the book: Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, written by Alexander Osterwalder and Yves Pigneur, You can simply do that, sketch out new business ideas or quickly visualize existing businesses and the ‘multiple’ canvases can be used in teams as a sharing tool to structure the thinking.

What if you had a clear method to uncover what customers want to get done? How about a tool and methodology that will help you to Identify and prioritize the jobs-to-be-done? Knowing these is clearly of high value and can lead to rapidly achieving growth segments that tap into this. Jobs-to-be-done is very fertile ground many are exploring including Clayton Christensen, Tony Ulwick and Strategyn, Mark Johnson and Innosight and plenty more. One of the best books outlining a well thought through approach to this JtbD is in Lance Bettencourts book “Service Innovation: how to go from customer needs to breakthrough services”

What if we learnt to talk  always around the Value Proposition, not that difficult part of explaining ‘our’ (boring) business strategy? Recently we have been seeing the emergence of a Value Proposition Canvas from Yves Pigneur, Alex Osterwalder and Alan Smith. This will ‘emerge’ in a book “the Value Proposition Design” due to be published sometime soon. The VP canvas dovetails into the BM canvas. It takes the JtbD concept to achieve a greater fit between the value you intent to create and the expectations your customers have.

Part of the Business model canvas proposition is extending tools to build better models and through www.strategyzer.com this web site (at present) is dedicated to working away at different tools and becoming the official Alpha web-app from the makers of Business Model Generation developing software solutions.

Also expect to see further development through the Business Model Foundry and the Strategyzer Academy that will explore and educate upon all the emerging tools and techniques being ‘crafted’ away at present. I’d recommend joining the Business model hub by the way, another from this growing business enterprise, centred on the Business Model Canvas.

Juggling, juggling and juggling.

Have you thought about “Pruning the product tree?” Luke Hohmann and his company The Innovation Games Company are providing a range of serious but fun games that can produce concepts that shift your thinking. On his ‘pruning the product tree’ the focus is not on ‘cutting’ but ‘shaping’ to arrive at products that your customers desire more and so you eventually  create a ‘new canopy’ of innovating options. They are developing a whole range of innovation games

Within organizations there needs to be greater, richer conversations – those strategic conversations that are more creative, collaborative and working more though adaptive challenges arising more constantly than ever.  Lisa Kay Soloman, who teaches Design Strategy at the California College of Arts is co-authoring a book due out next year “Moment of Impact: how to design strategic conversations that accelerate change”, published by Simon & Schuster.

Have you checked out Dave Gray, founder and CEO of Limini. Dave has authored two books Gamestorming, a practical handbook for innovators and change agents and a second book, the Connected Company, offering a strategic blueprint and roadmap for businesses who want to innovate. He is exploring a “culture map” approach to help teams understand their cultures as well.

I could go on, as there is an awful lot of fresh thinking emerging.  Just take the ‘body of work’ that Steve Blank is producing centred around a methodology for focusing around the customer, take time out to get into his manual “The Startup Owner’s Manual” written with Bob Dorf.  More and more entrepreneurs have discovered Eric Ries and his thoughts on applying continuous innovation in lean ways to create radically successful businesses which are outlined in his book “The Lean Startup”.

One could look towards “Design Thinking” with Tim Brown (CEO Ideo) traditionally leading this charge but take a look at a book written by Jeanne Liedtka and Tim Ogilvie “Designing for Growth: A design thinking toolkit for managers” where they lead you through the ability to turn abstract ideas into practical applications and cover the mind-set, techniques, and vocabulary of design thinking, so helping us to unpack the mysterious connection between design and growth

So we have an awful lot of juggling taking place

Those who have not yet picked up on Gary Hamel’s quest for change through the reinvention of management and his moonshots for management should find the time- it sets the Business scene and future agenda. Then you have Steve Denning who writes about radical management over at Forbes and I’d certainly recommend reading his recent article “The Management Revolution That’s Already Happening” where he is suggesting that today’s organizations represent a failure so deep and pervasive that there are hardly words to describe it.

 A veritable revolution in management and its design is under way.

 Steve Denning argues we are fleshing out a “new management canon” – a huge paradigm shift. He believes we are in a creative economy that generates dramatic reductions in cost, size, and time, and improvements in convenience, of products and services with new systems of infrastructure, new ways of socializing, new meaning as to how time is spent, and new ways of living these possibilities

Those of you not yet ‘plugged in’ then I’d begin, the sooner the better, as there is a whole new way of thinking going on and any movement of this potential magnitude needs supporting and exploring, especially if you share in the belief that much is out of kilter within the business world. There is a ‘certain business revolution in the air’.

Something in the Air by Thunderclap Newman
“Call out the instigators
Because there’s something in the air
We’ve got to get together sooner or later
Because the revolution’s here, and you know it’s right
And you know that it’s right

We have got to get it together
We have got to get it together now”