Business Models Inc.

What are the effects of business modeling on your people?

October 28, 2011 | Camilla van den Boom

They will understand the significance and impact of strategic questions

The likelihood that employees will understand the significance and the impact of strategic questions will increase when they are actively involved in defining the playing field and in making strategic choices. This is how they will develop greater strategic insight that they will apply in their daily activities and actions. They think and work with a strategic framework every day. The strategic framework determines their actions, their decisions and their behaviors on a daily basis. In this respect, business modeling plays a crucial role.

They will understand their own business activities

Business modeling enables organizations, departments, teams, and individual employees to come to grips with their own business activities. It makes clear what it is all about and it provides a way of seeing and thinking about business. Individual employees become aware of the phenomenon of “management.” As one of the employees of a client company said during the evaluation meeting: “We have acquired deeper insight into the way our department operates. We oversee the business landscape. As if it is our own business.” Another employee added: “We do not make decisions any more from a gut feeling, but rather from a well-founded feeling. We have started to operate as if we were a company, as if we had become a business venture.” And a third employee pointed out, laughing: “In the past, our every day work was like visiting a playground.”

They will learn how to ride the bike

Business modeling is a process in which everyone can participate. It is literally a skill you learn as a professional. It enables employees to gain insights into what business is all about. Colleagues can go into discussions about the current business model and determine its strengths and its weaknesses. The business model canvas facilitates discussions about business and captures all elements of the revenue model. Everyone sees and understands the effects of the elements in the multiple interactions and inherent connections.

They are actively involved and buying into the process, as well as the outcome

In our approach, the redesign of the business model and accompanying changes start right on day 1. It remains a fact that there is much more support for change when employees are involved at an early stage. Any change in operations brought about by a new business model will be given far more room to succeed when employees are involved from the very beginning. This will not only bring better insights to the table, as those who interact with customers on a daily basis take note of the new business model. In addition, a strong network of ambassadors emerges who will convey the business model message and changes to other departments and teams.

They will get a clear view of the effects of its own strategic choices

Business modeling is commonly used as an iterative process where the team acquires insight into the current business model by studying and defining the potentials in the market. The team will perceive the effects of actions on its own organization and department. By application of the business model canvas, it becomes clear to everyone which customers they are serving and what revenues they generate. You get a better understanding of the financial merits and the potential of the current budget. As a result, conclusions and decisions are made based on financial calculations. By making such inventory of business activities and their consequences, the team will obtain a clearer view of the effects of its own strategic choices. For this reason, business modeling should be an integral component in all processes related to corporate strategy development or corporate business planning, and be integrated into the annual budget process.