What's in your Business Model?

The best businesses compete on business models, not just products.

What do Uber, Airbnb, Netflix, Amazon and Google have that allow them to dominate their market? -- Finely tuned and innovative business models.  In fact, their business models are so innovative they’ve created new categories by re-imagining the rules of how a business should operate in their industry.  Nespresso, Hilti, Dell, iTunes, Xerox and Dollar Shave Club are other examples of success born from a brilliant business model, not the product or marketing alone.

The business model is a blueprint for how all the moving parts of the business work together efficiently and in sync to produce social and economic value.  It’s the link between the business’s purpose for existing, and its strategies for operations and sales. All strategic planning should flow from the business model.

The book, Business Model Generation by Alexander Osterwalder and Yves Pigneur, popularized the business model concept and gave us all their Business Model Canvas as a design template.  I’ve adapted their version to create one that I believe is more complete, yet nowhere near as dense and speculative as a business plan. You can download it from the homepage and use it to evaluate your own business model. It’s a high-level organizing framework to explore the main factors of how the business operates.

ALIGN’s Business Model Blueprint identifies 12 key components, starting with the purpose for the business.  Besides making money, there’s a reason the business came to be.  Hopefully it’s rooted in the founder’s passion, talents and understanding of a market need.  Among the other components, businesses also need clarity around the customer group(s) they aim to serve and the problem, need, or ‘job to be done’ this group experiences. Turning inward then, we seek to understand what your business is exceptionally good at, and what competencies can lead to a competitive advantage and differentiation in the market. The value proposition lives at the intersection of the customer needs and the business expertise. Finally, how your goods and services are monetized is key.  What product or service ‘bundle’ is offered that provides such a high value to the customer that the selling price greatly surpasses the cost of production?  

These are the key elements we look at in phase one of any project, whether it’s a growth initiative, innovation or strategic business development. So… what’s in your business model and what elements need updating?  Download the Business Model Blueprint, fill-in your information and target at least 2 areas where it could be stronger. Let’s talk about how ALIGN could help.


Higher Ed: An Incubator for Strategy

Starting Up the University

It may surprise some folks that my 13-year career in non-profit higher ed contributes a large part to my business and entrepreneurial knowledge. But it was a pivotal time for me, because it was nothing like a traditional career in higher education.  For one, when I arrived, the University wasn’t even accredited, let alone open for business. (That came 16 months later!) I was one of only 8 people (today there are over 100) working to launch this non-profit, STEM university in downtown Harrisburg PA— without the benefit of lots of cash to support our creation.

Try convincing parents that their child should attend a brand-new university that practically no one’s ever heard of, operating on the top floor of a high school!  We had no track record of success, no alumni, no sports, no dining hall or dorms, and a just couple classrooms. Undergraduate education is a crowded market, and so is corporate training.  Yet, with the help of a skilled and spirited team, we launched a modern-day university which has gone on to be widely recognized as an educational innovator and leader.  At the time, only two other new universities were attempting similar launches, but they weren’t bootstrapping like we were. Maybe one day I’ll write a book about it, but for now, take my word for it, it was not for the faint of heart!

The Parallels of Strategy and Curriculum Design

I did a lot of strategy work in those years at Harrisburg University. We were constantly listening to the market and responding with new initiatives, fine tuning our offerings, experimenting with marketing strategies and building strategic partnerships.  Beyond the start-up experience, there’s more about my background starting a new university that has prepared me to be a strategy advisor.

The process for curriculum development, which I facilitated in collaboration with a slew of faculty and subject matter experts, is very similar in some regards, to the process of strategy development.  In both cases, you research and design a program to facilitate a fundamental shift in attitudes, actions and results.

Like designing learning, developing business strategy is a process of deconstructing a high-level objective into its foundational building blocks.  We look at the ‘current state,’ we envision a brighter ‘future state,’ and develop a set of activities to bridge the gap.  Using human-centered techniques, we assess the needs of our intended audience and leverage our expertise and imagination to invent meaningful solutions.  In the case of learning, the solutions are exercises and information to help the student internalize a new set of skills and knowledge so they can solve problems in their life and career.  In strategy development, we create a set of activities and information for employees to use in solving problems for their customers.  In both cases, it’s important to measure progress along the way, determine if change is happening, and calibrate the activities accordingly.  

Surprisingly to some, there are many parallels between inventing new programs for learning and creating new programs for solving customers’ programs and growing businesses.  If you’re curious about more connections between strategy and curriculum design, let’s schedule time to chat! To learn more about my background, check out my LinkedIn profile and read about the history of Harrisburg University of Science and Technology.