top of page

Learning Nugget 25 - The Power of Business Model Thinking

Business Models.

The words roll of the tongue easily, but the reality is most people are really challenged to describe their current or desired business model in really simple terms. In fact most people haven’t even thought about it.

In simple terms the business model is how a company makes money. In most cases it’s design, make, ship, market, sell, support. This is the most common and long standing business model out there.

Here is a great HBR article on business models, that incorporates thinking from some of the worlds most profound business thinkers.


Another contemporary buzzword, but this one is real. It’s happen at pace.

Disruption happens, when companies business models are attacked. There are three sub model though that are equally important.

Their operating model

Their economic model and

Their customer experience (CX) model

Typically organisations focus on driving cost and efficiency into their operating model. Incrementally improving to “compete better”

Occasionally their economic model might change. A great example of that has been the past 5-7 years as everything moves to pay as you go, pay as you use, or “as a service” style models

CX typically is incrementally improved, like the operating model. Occasionally someone will come along and change the game (Zappos, Southwest Airlines etc) and others are forced to mirror to stay relevant.

So how can business model thinking help us ?

In learning nugget 24 we explored risk. Particularly the risk Board’s and CEO’s spend most of their time considering. Business model risk, and the associated sub models are key considerations in that risk evaluation.

The large majority of enterprise technology B2B sales professionals can talk only to how their technology might impact the operating model, or tweak the CX model by adding some additional channels (dare I say Omni Channel).

Most cannot envision genuine business model innovation, including all 3 additional sub elements.

To levearge the power of business model thinking you need to learn the skill of defining a business model. The most popular method of doing this is called the Business Model Canvas. Google it to find out more, there is a ton of resources, but here is a short really good 2 min video that describes the BMC.

Pictorially it is this simple;

A simple tool such as this can be a powerful way to gain a deeper understanding of your customer. More over with your unique insight, experience and perspective it may also unlock ideas for business model, operating model, economic model or CX model innovation, transformation or mere incremental improvement. Look at the sub questions in each section. There will absolutely be latent unmet demand in those questions. Companies are, in many ways, limited by their existing engrained business models. They can’t see the wood for the trees. They can change the engines on the plane 30,000 feet in the air.

Having a team of passionate outsiders thinking about their business model is incredibly valued.

It’s also not a challenging task.

A sales team could easily sit together and produce a completed canvas for a given account in 1-2 hours.

Ask yourself. What is your customer’s business model (and sub elements). Then ask, who or what could radically disrupt this business model (i.e. No Taxi company would have ever thought of or invested in Uber, just like no Hotel chain would have thought of or invested in AirBnB). What do their customers want, and what might disrupt them ?

Featured Posts
Recent Posts
Search By Tags
No tags yet.
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square
bottom of page