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Dannie Jost

you make it sound really easy. i think that i have been thinking it all wrong!

it could also be that i remain a philosopher, and those are not very often the best of business people.


Dannie, the question is rather - did I simplify it completely out of whack? Until well counterargumented I'll stand by it, humble retreat will be offered otherwise!

Ah, but philosophy is all about cutting to the core is it not? And that is always simpler... ;)

John Dodds

Too complicated - the business model should be implicit in the strategy but otherwise totally right. That's why big business tinkering with 2 and 3 is so futile.


John, yes and no in my mind:

Implicit yes, the value and how to be different defined in the Strategy is implemented by the Business Model and often some vice versa effect exists; the resources given opens for value to be delivered (knowledge, expertise etc.)

But I still would argue for a clear split for two reasons:

1. Two different focus.
Strategy is focus on the customer, a result of what constitutes a value for the customer. While the Business model is focus on my organisation, what resources do I need, how am I going to use them to deliver that value.

2. Two different time-scales.
Strategy is long-term: What constitutes value for a customer is mostly a mid- to long-term perspective. I may help him finding new values that he did not know of, but still that takes time, otherwise the value for him could be age-old with little change over time.
Business Model is, or rather should be, a combination of long and extremely short term: Even if the big picture BM could be a bit rigid one should tweak, change and better one's resource use (i.e. Business Model) on an every day basis.

When reading "visions" and "strategy statements" I all too often see a mix of the two, or even a complete omission of a mention of "what value for what customer", but lot's of "how to use resources".

Maybe the worst are where "what value for customer" has been replaced with "what value for me" like "We're going to be number one in our industry!" or "We will seek a x% return on equity..."

And we know what that leads to... (funny, when I read such visions I go "ah, bank robbery is a part of the Strategy...hmmm")

But of course, a note of disclosure: Thingamy is a Business Model builder with instant implementation and execution.

In practice when I do a demo for an end-user I always try to find his strategy (most often I have to simplify it... given above tendencies), and with that at hand commencing to build a Business Model is surprisingly easy!

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