Business model performance importance.

Does everyone need a Business Model that works well every day?

The Business Model must capitalise on the unique value your business, opportunity, project or social event provides. Does your model deliver valuable outcomes for prospective customers? Will it form lasting relationships and create advocates?  

Does it show how you will make the money you want? How will your model utilise the new digital technologies and communications that are available? The model should also differentiate your business in the marketplace. Even with social functions and events, you must create an appropriate Business Model to generate better outcomes.

Today, your Business Model must differentiate your business because it must be creative and innovative in adversity. While providing unlimited employee holidays might not be part of its differentiation, it is one extreme example of applying creativity to the model.

More than ever, stakeholders place greater importance on social causes and a sense of purpose. The model should also reflect the aspects of globalisation, its competitiveness, which affects the business, and the technology that drives it.

The business model is a work of art.

In The New, New Thing, Michael Lewis refers to the phrase business model as “a term of art.” And like art itself, it’s one of those things many people feel they can recognise when they see it (especially if it is smart or terrible), but can’t quite define it. 

That’s less surprising than it seems because how people interpret the term depends on how they use it. Michael Lewis, for example, offers the simplest definition: “All it meant was how you planned to make something happen.”

‘Business Model’ was one of the great buzzwords of the Internet boom and was routinely used to glorify all half-baked plans. A company didn’t need a strategy, distinctive competence, or customers. A Web-based model was all it required while promising wild profits in some distant, ill-defined future.

The business model also tells a story.

The word “model” conjures up images of whiteboards covered with mysterious mathematical formulas. Your models, though, should be anything but strange. They are, along with the stories, at the heart of operations. Stories are needed that explain how your organisation works well through the good and the bad times.

A good Business Model answers Peter Drucker’s age-old question: Who is the customer? And what does the customer value?

It also solves every manager’s fundamental problems: How do you make money in this business? What is the underlying logic? Can it explain how you can deliver value to customers at an appropriate cost and profit to the shareholders?

Put quality time into how your business works.

Your decisions should align with your aspirations and be about choice, not chosen out of desperation. While the future offers many exciting opportunities, the workplace and workforce will change dramatically as we move into the very competitive global marketplace and times of adversity like prolonged droughts and the recent COVID-19 pandemic.

A well-conceived structure will motivate people to work on projects they enjoy and are passionate about. A model that helps all stakeholders cope with the competitive global marketplace driven by technology becomes essential.

Quotable Quotes

“You know your business model has broken when your employees and customers stop showing up”. Peter Sergeant

“It is so difficult for existing businesses to capitalise on disruptive innovations because their processes and business model, which made them effective in the past, leave them unable to compete in a new environment”. Peter Sergeant