Business Models Interlinked

Business Model Correlation

At the Kaospilots, we work with many different thoughts and models in our four disciplines – Creative Business, Project, Process and Leadership Design, and several of these models can be thought of as directly interlinked, even though they are made from different schemes of thought and by different people.

By thinking these models as part of the same framework, and developing them in tandem, they can feed into each other and enrich the understanding of each other.

The models I will explain as interlinked in this paper are business/project models: • The Hedgehog concept – Jim Collins, Good to Great • KaosPilot variant of Dee Hock Stepping Stones – Dee Hock/KaosPilot • The Business Model Canvas ‐ Alexander Osterwalder & Yves Pigneur, Business Model Generation • The Buyer Utility Map – W. Chan Kim, Renee Mauborgne, Blue Ocean Strategy • Strategy Canvas ‐ W. Chan Kim, Renee Mauborgne, Blue Ocean Strategy

I will not go into extensive explanations of each of the models, but expect the reader to have knowledge of these models, or alternatively to dive into the sources to read the basic facts about the models.

The Hedgehog Concept The Jim Collins concept is based on three overlapping circles, where you can create your best in the center field where all three circles overlap.

1) what you are deeply passionate about 2) what you can be the best in the world at 3) what best drives your economic engine – what people want to pay for

The KaosPilot variant of Dee Hock Stepping Stones The Stepping Stones by Dee Hock was originally conceived as an organizational development model, used iteratively. Inspired by our work with Dee Hock, the Kaospilot later added two other “stones” to the model: Idea and Need, and we are now using the model as the basis for Preject, i.e. getting all stakeholders on the same page before heading into praxis in a Project.

The Business Model Canvas The Business Model Canvas is a great framework for creating the overview of the business engine behind a business idea. It requires the user to think of both the value creation part and the organizational and cost structure part of a business.

The Buyer Utility Map The Buyer Utility Map from Blue Ocean Strategy was originally published in Harvard Business Review in an article titled: “Knowing a Winning Business Idea When You See One”. The map is a matrix with 6 distinctive steps in the users experience with the product/service on the horizontal axe: Purchase, Delivery, Use, Supplements, Maintenance, Disposal. And 6 Utility Levers on the vertical axe: Customer Productivity, Simplicity, Convenience, Risk, Fun and Image, Environmental Friendliness.

The point of the Utility Map is that you’ll have to be able to show that you are doing something new/different from the competition in at least one of the fields in the matrix to claim you have a winning business idea.

Blue Ocean Strategy Canvas A graphical “analysis” of the way your competitors and the market are fulfilling the customer’s needs, and the way you are. Often to create a blue ocean is about reframing the questions, and perceiving the product/service/customer need from a new angle, i.e. when you are selling short distance flights, are you then competing with business class or are you competing with train and car travel?

Correlation between models The models and concepts are correlating, so by developing them in tandem and using the models to consistency checking each other, you will gain a deeper understanding of your business concept and a more consistent basis for communicating and developing your business idea.

Starting with the Hedgehog Concept (HC), your Dreams should feed directly into your Idea in the Stepping Stone Model (SS).

Your analysis of the Need in the SS will give you two answers: Who needs it, and thus What will they pay for.

The What should be consistent with the economic drivers in the HC, The Who needs it will feed directly into the Customer Segment in the Business Model Canvas (BMC)

The Economic driver/Pay for in the HC will fuel your Value Proposition in the BMC, and also feed the Revenue Stream in BMC.

And staying with the HC, the Best at will feed directly into the Key Activities and the Key Resources in the BMC.

And this will later in your work with BMC help you define your Key Partners, because they are the ones who should cover all the Key Activities, that are necessary for creating the business, but you and your team are not doing.

Taking it a step further you can look at the right hand side of the BMC, i.e. the value creation part. This part must be consistent with your Concept in the SS.

And the Team in the SS model shall be consistent with/give you input to your definition of Key Resources and Key Partners in the BMC.

The Left hand side of the BMC, i.e. the engine behind, and cost of the Value Creation will feed into the Structure of the SS model.

Finally The Buyer Utility Map (BUM) will also feed directly into your Value Proposition in your BMC.

The fields in the BUM where your offers are distinctly different from the rest of the market/competition, will be the areas in your Blue Ocean Strategy Canvas (SC), where you are either opposite of the competition or where there is no competition at all because you are looking at the market and service in a new way, i.e. your Blue Ocean.