Business strategy without business modelling – it could be ugly #bmgen

There has been some on-line discussion about the difference between buisness strategy and business modelling.

Well clearly there is a difference. Strategy is around the tactics and actions you are going to put into place to reach your goals and objectives. Modelling is around how all the “operational” components of your business fit together, customers, channels, relationships, resources, activities and partners all linked through your value proposition(s) to deliver your goals and objectives. See the connection?

The best business modelling tool I have used is the Business Model Canvas developed by Alex Osterwalder. Here is a link to a great two minute video showing all about it. I strongly recommend you take the time to look at it.

What is evident is, that to develop sound strategies for the medium to long term you need to innovate your business model.

Broadly speaking you need to take the Canvas and firstly build the model as it is today. You then dissect & innovate the “as is” model having reviewed your business environment to develop a hypothesis, or two or three, on what tomorrows environment might look like. This is then translated into the Canvas, or a number of Canvases to present visual representation(s) of potential future business model(s). Preferably, if practical, you then test the model(s) and ultimately choose one. You then translate the preferred hypothesis into the new business strategy. One based upon logical analysis which has challenged the status quo.

(One colleague suggests, as a method of developing innovative thinking, taking the “as is” model and removing components (post-its) systematically from each of the 9 boxes to make you take a realistic view of your environment and to break any paradigms that might exist. Not a bad approach if your team are stuck developing the future hypotheses.)

Once you have innovated your business model you are in a position to develop the pathways to success and the strategies you need to reach the goals and objectives.

Sure, there are lots of ways of developing business strategy, but a disciplined approach using business model innovation within a collaborative framework does, based on our experience, elicit some of the best plans.

So yes, business strategy and business modelling are different, but they go together like a hand fits in a glove!

We are passionate about strategic planning and business model innovation, your questions are always gladly received.

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