Business Models Need Frequent Review
Benson Garner, President — Innovation Principle
• competitive strategy • 2020 Vision • WayPoint Analytics • business model
Monday, June 15, 2015—Over the course of my career, I've worked with a lot of companies (in addition to owning a few!) and, looking back, I've come to the conclusion that a well-thought-out business plan will always make money. As such, it's vital that executives and managers learn about business modeling and value propositions.
I recently sat down with Benson Garner for our third talk in a series of interviews on the subject. This time we discussed some of the steps that go into fixing malfunctioning business units and sub-units.
"When I meet with clients at their offices to understand their issues, they usually have some difficulty in just trying to describe the problem," Benson explained. "We start by mapping out the existing business model and that process usually helps us uncover the elements that aren't allowing the business to function as it should."
"For example, a lot of distributors treat their counter-sales operation the same way that they treat normal customers," Benson said. "If you assume that they're the same customer, you use similar channels to try to reach them, you try to monetize them the same way, and so on. However, what works for your normal distribution business simply doesn't work for countertop sales."
In this case, the business model itself may not be bad – since it could work very well for your normal customers – but it's the wrong business model for the unit. The infrastructure could lead to unnecessary costs and you're missing out on opportunities unique to the market.
"Many times the solution becomes obvious over the course of a conversation," Benson explained. "The business model will more often than not identify the root cause of a problem and offer up a solution. Our clients may have had these issues for years, but frequently we're able to sit down, talk things out, and brainstorm some answers in the course of a single afternoon."
"The key is that somebody in your organization has the answer, whether they know it or not," Benson said. "If we can't find the answer just from looking at the business model, we'll talk to other people in the organization who can help us identify the problem."
Bringing in a business modeling expert like Benson offers a terrific return on investment since they can help you identify problems that you may otherwise struggle with for years. Once you get a better grasp of business modeling, you can start to apply it to other portions of your business and experience greatly improved results.
For more information about Benson Garner, visit: www.bensongarner.com