Profit IdeasAre You Still Using Yesterday's Business Model?
Benson Garner, President — Innovation Principle
• competitive strategy • 2020 Vision • distribution industry trends • business model
When was the last time you re-evaluated your business model? Our world is changing at an increasingly quicker pace. However, some distributors are still using the same business model they had five years ago or, in extreme cases, the same one that they inherited along with their company.
In this video interview, Benson Garner discusses the importance of keeping your business model current. While many of us recognize that the world is changing all around us, not everybody connects the change that they see outside to what needs to be done inside their own business. Distributors used to be able to get away with rarely touching their business model, but today such an attitude could be a serious liability.
"Companies used to set up a five year plan which they would periodically check to make sure it was on the right track and was the right strategy," Benson said. "However, we're seeing businesses decrease that time. Some companies are starting to use two year plans or even one year plans. Personally, I recommend to my clients that they look at their strategy on a continuous basis."
"It's very easy to continuously review things when you're using a business model canvas," Benson explained. "By tying your Key Performance Indicators (KPIs) and metrics directly to the canvas, with a KPI attached to each of the nine building blocks, you're effectively re-visiting your strategy whenever you evaluate those KPIs."
This technique allows you to monitor your strategy. When one of the KPIs or metrics are off, it can be a signal that something is wrong with that piece of the business plan.
"If a channel isn't performing the way it once did, something might be going on there," Benson said. "If customers aren't buying the same way they used to, it could be a signal that the value proposition is no longer relevant. If you find that you're no longer able to afford certain suppliers or manufacturers, you may have something to look at in your infrastructure."
By looking at your business plan on an ongoing basis, you're more aware of market conditions and more able to respond to new trends. Most of the time, this gives you a pretty significant advantage over your competitors.
"You can be sure that the competition isn't monitoring their business model on a daily basis. Some of them might not even know what a business model is," Benson remarked with a chuckle. "It's an easy way to gain an advantage. By always watching, you're able to determine what the problems are far more quickly and may even figure out the answer right away."
The best in any business often need to constantly reinvent themselves to stay ahead of the curve. One of the great examples might be Tiger Woods. Some years ago he decided to reinvent his golf swing because golf clubs were changing and his competition was improving. While some people scoffed, this allowed Tiger to stay at the top of his game.
It's an all-important lesson: Whatever you were doing yesterday isn't good enough if you want to maintain your lead – or even just survive – in the future. The best in the world stay the best by engaging in perpetual innovation and, if you want to dominate your market, you need to take that same approach.
For more information about Benson Garner, visit: www.bensongarner.com