What we've learned while facilitating the Business Model Canvas.
Below are true stories of how businesses have been enhanced due to using the Business Model Canvas Suite.
What is the Business Model Canvas Suite?
1) The Value Proposition Map – DISCOVERING how you product relieves the customer’s pains and give unexpected gains.
2) The Business Model Canvas – a SNAPSHOT of the business’s condition.
3) Environment Canvas – has the business leaders view the OUTSIDE AND FUTURE FORCES that affect the business.
What is the purpose of the Business Model Canvas and Why is it so Unique?
The Business Model Canvas is a visualization of your business. IT IS A SPONTANEOUS “BRAIN DUMP” OF THE BUSINESS' STATUS. IT IS A PROCESS OF IDENTIFYING THE TRUE VALUE PROPOSITION, CUSTOMERS AND KEY NEEDS.
It is a process of going deep and quiet in finding the business’ true value, assessing the business’ health and seeing how the business fits in the present and future environment. And the beauty of all of this is that it is done with “sticky notes” – adapting to the speed of Twitter and Snapchat– being able to stay in the race and not be left behind.
The Business Model Canvas Suite was created by Alex Osterwalder and team and is now taught world-wide, in businesses, and colleges. More information can be found at www.strategyzer.com
Why did Sue And Company ADD a Fourth Canvas?
As Sue and Company facilitated more business workshops, it became apparent that the three basic canvases gave a lot of information but no concrete ACTION STEPS to act upon those findings. So, with Sue And Company’s background in software design, it was decided to add the Agile Manifesto Scrum Board to the process. Many of the principles used in the Scrum Board process can be adapted to other businesses. This addition has kept companies in a constructive trajectory to their Business Model Canvas goals.
Why is it best to use an OUTSIDE Facilitator?
The Business Model Canvas is an Open Source Platform, so basically anyone can do it. But if you really want to do it and do it well, you need an outside facilitator. Why, for several reasons. FIRST, AN OUTSIDE FACILITATOR – CAN’T GET FIRED – NO EMBARRASSED ELEVATOR RIDES – EQUALIZING THE FIELD – NO “WHO DIED AND MADE YOU KING?” Facilitation is a skill, the more it is practiced, the better one is at it - experienced facilitator: “have seen this before” – has fresh eyes and is more likely to pick up on an a fundamental the business always glosses over, a fundamental that really should be reviewed, which seldom is because the team is too close to the product to see it. A facilitator is not married to the idea or product and can question everything.
Why use Sue And Company?
SUE AND COMPANY HAS EXPERIENCE WITH LARGE AND SMALL BUSINESSES, from start-ups, to established enterprises, helping with new products, on-going review, and internal restructuring. Sue And Company’s experience is what led to incorporating the Scrum Board as Action Steps into the Business Model Canvas Suite. Sue And Company implements the “Stand Up” covenant to the company’s team procedures.
"I’m going to show my Value Proposition Map to my Customers to show them why I am raising my rates! "
Yes, that is an actual quote from one of our clients. When a business can VISUALLY SHOW ITS PRODUCT – MARKET FIT, IT CAN NEGOTIATE FROM STRENGTH. It will know exactly what value it brings to its customers, what Pains it solves and what Gains it gives.
The No 'No' Rule Really Works!
The Business Model Canvas Suite cornerstone and greatest asset is how IT INVITES AND INCORPORATES GENERAL DISCUSSION AND STREAM OF CONSCIOUSNESS IDEAS from the team. But for that to really work, you have to have the “No 'No' Rule”. The team must be able to say “anything” not edit themselves, write down their thoughts, say their opinions. It is amazing how often two really bad ideas, on their own, become one really great idea when they come together!
Brain Dump – How can you work if you have all these thoughts always in your mind?
One client thanked us for the relief the canvases gave him by capturing all of his thoughts in a visual format. HE HAD ALWAYS BEEN SO AFRAID TO FORGET SOMETHING that he spent more of his time going over his plans in his head than executing them.
How do you write a Business Plan without a completely thought through and validated process?
The Business Model Canvas Suite will bring you through all of the aspects, short of a Cash Flow Statement, necessary to write an excellent Business Plan. The Business Model Canvas Suite not only allows you to identify each aspect of the business and the surrounding competition/environment, but is a process to VALIDATE each aspect. BECAUSE THE PROCESS IS PERFORMED WITH “STICKY” NOTES THE ASSUMPTIONS AND HYPOTHESIS CAN BE IDENTIFIED, AND INDIVIDUALLY TESTED. Their results can alter other factors. One of the most important factors of the “sticky” note methodology is that elements and aspects change and having information on sticky notes allow for constant change as validation results are compiled. Without question, starting with the Business Model Canvas will strengthen the Business Plan.
A Client could not decide where he should locate his business?
A client had many aspects of his retail store all ready to go, but he was looking at two potential locations. We drilled down on the Environment Canvas looking at what competition was near and who can also invade that area. BUT MORE IMPORTANTLY, WE MATCHED HIS VALUE PROPOSITION AGAINST THE MACRO-ECONOMIC FORCES OF THE SITES AND HIS CUSTOMER BASE. More than just looking at rent, one must see the full horizon of elements that can impact your business and how your business can impact them. The Environment Canvas gave us a physical map of what needed to be addressed and how that information impacted the business decision.
Well the first thing we are going to do is write a Business Plan…unfortunately the business founders didn’t even know they had different ideas on who should be the customer!
A substantial organization was seriously thinking about a major expansion. One member of their organization board asked Sue And Company to “quickly” go over ALL of the Business Model Canvas Suite with the board so they could go right into writing the Business Plan. WELL WE SPENT NEARLY 3 1/2 HOURS JUST TRYING TO GET ALL THE BOARD MEMBERS TO AGREE UPON WHO WAS THE CUSTOMER. Several more meetings ensued. The canvas process allowed for general and constructive discussion to settle and validate its decisions.
When the hypothesis and the data research structure is clear, you can bring on an army of students to help.
If you are near a college town, you have an army of cheap labor to draw from. The Business Model Canvas process allows for key metrics to be tested with clear and time boxed structures. WHAT A GREAT WAY TO QUICKLY GATHER DATA AND EVALUATE YOUR HYPOTHESIS.
How long has it been since you made money doing that?
On the back of a client’s business card was a long list of NAICS codes. This business did everything! Thankfully they asked to have the Business Model Canvas Suite facilitated for their top management. We had several Value Propositions Maps because the business identified several customers, all with different needs. It was when we got to the Revenue Stream block in the Business Model Canvas were we really able to visually analyze what of their many skills actually brought in a large enough revenue stream to warrant the business’s overhead. BY FOCUSING THEIR SKILLS MADE THEM MORE MARKETABLE TO THEIR CUSTOMER BASE.
The answer was right in front of our face!
In a cramped room were the owner, his top staff and all the canvases covering each wall, we were starting our second day to see if we could find some pattern, some way to kick start this business. As the sticky notes were being passed out, the question was asked to identify every product they had. We were just going to do a huge brain dump on all the product lines, when low and behold, a pattern started to form. SOMETIMES WHEN YOU ARE NOT LOOKING FOR IT – IT SHOWS UP. But you need the buy-in from the group to be willing to go with the facilitator, and to keep digging.
Sometimes you like it, but you have to let it go.
One of the hardest facilitations Sue And Company has done was to help a business divest itself from one of its most favorite products. Yes it was a great product, but it was holding the business back. It was using too many resources and had a very low income. BY MANAGEMENT PHYSICALLY SEEING WHERE THE ISSUE LIED LET THEM BETTER RATIONALIZE WHAT AND WHY THEY HAD TO LET GO. But the unexpected outcome was that the Business Model Canvas Suite process allowed them to see how a second, smaller business could be spun off with these products and not hinder the main organization. It became a win-win!
How much risk will the business really take?
AS A FACILITATOR IT IS IMPORTANT TO UNDERSTAND HOW OPEN THE BUSINESS REALLY IS TO EMBRACE CHANGE. One needs to know if they are just curious about the process or if they really want to move their business. One good question is: is their goal to create something new or improve an existing product. The key is this: creating something new, by definition will invite failure. Are they willing to fail? Are they willing to embrace the risk? Conversely, improving a product/system cannot have failure. It has to be better than that which it replaces. This, in one regard, has an even bigger risk because it cannot fail. These parameters lets the facilitator know how far the business can be pushed and what keeps them in a safer state.
Multiple customers – then use multiple canvases.
Several Sue And Company clients felt that they would be very unique to the process because they had several customer tracks. No problem. Many companies do have a B to C and B to B clientele in order to stay profitable. By going through a different Value Proposition Map for each client type, and facilitating the process as if that was their only client type, WE WERE ABLE TO SEE EXACTLY WHAT RESOURCES WERE UNIQUE AND IN COMMON TO BOTH. Going a step further and seeing how each client type affected the Revenue Stream, allows us to better balance what time, money and energy should be given to each of the business’ resources.
A business department was given a list of “Goals” but often times, “goals” are “band-aids” to a systemic problem.
A department in a large organization was reviewed by a vice president who wrote on a board a list of goals that department needed to reach. Sue And Company suggested the department go through the Business Model Canvas Suite starting with the Value Proposition Map. When we were done drilling through three different Value Proposition maps for the internal “customers” with which this department interacts, WE DISCOVERED THE CORE ISSUE THAT WAS PREVALENT THROUGH-OUT. When this ONE issue was corrected, the bulk of the “goals” fell into place because we clarified the underlying issue.
We discovered the market was shrinking when we did the Environment Map!
Nothing is more shocking than to think everything is going well only to discover the business is actually going down a waterfall in a barrel. The Business Model Canvas was facilitated at a business that could not seem to get out a rut. Its sales were flat and they could not figure out why. They had a great handle on its value, customers and a well-oiled business structured. IT WASN’T UNTIL WE DRILLED DOWN ON THE MACRO-ECONOMIC FORCES DID WE DISCOVER THAT THEIR CUSTOMER BASE WAS SHRINKING! This insight gave them the direction they needed to do a pivot and remain profitable.
The Value Proposition Map is the hardest of all of the canvases. Can you really get in your customer’s mind?
Sue And Company always starts with the Value Proposition Map, guiding the group to define “who is your customer.” It is surprising how many of our clients really do not know their customer. THEY SELDOM TAKE THE TIME TO SEE THE WORLD THROUGH THEIR CUSTOMER’S EYES. What is key is to see how the company's product is truly needed by their customer.
Integrating the Value Proposition Map to the Lean Canvas.
The Lean Canvas, designed by Ash Maurya and found at www.leanstack.com is best for evaluating if a germ of an idea should/could be a business (or new feature). The Business Model Canvas works best with ongoing businesses, since they are better to articulate who are their Key Partners, Activities and Resources. The Lean Canvas, on the other hand, concentrates on identifying the Product and Solution. In either case, Sue And Company always starts with the Value Proposition Map. CLEARLY IDENTIFYING THE POTENTIAL CUSTOMER’S PAINS AND GAINS, HELPS IN THE DECISION MAKING IF THE “IDEA” FOR THE BUSINESS HAS A VALID PROBLEM/SOLUTION FIT.
Always start at the beginning – regardless what the customer says.
A business, run by a gentleman who was very self-assured, insisted that we only do the Business Model Canvas, forgoing the rest of the suite. When opposing voices were heard while attempting to find clarity on who were the customer segments, cross conversations and differing assumptions took over the meeting. The following meeting started with discussion and populating the Value Proposition Map.
ALWAYS STARTING WITH THE VALUE PROPOSITION MAP WILL NOT ONLY BRING TO LIGHT DIFFERENCES FROM THE GROUP BUT WILL ALSO SOLIDIFY AND RE-INVIGORATE THE BUSINESS’S VALUE AND DRIVE.
Why do jewelry stores advertise during sports games?
Have you ever noticed during a televised sports game there are commercials of a guy giving his girlfriend some jewelry? Why, in the middle of blood and guts, would we be seeing a couple cuddling on the couch? Well ladies, let’s get this straight…WE AREN’T SUPPOSED TO BUY THE JEWELRY. WE ARE SUPPOSED TO GET THE JEWELRY. So, of course the jewelry stores know that the guys are thinking: “My girlfriend’s birthday is coming up, I don’t know what to get her…?” This is a classic case of really knowing your Value Proposition!