Importance of integration - new tool for canvas by Alex

For those who may not yet have seen the blog post, Alex has created a new tool as an addition to the canvas - the customer value canvas. It can be found through the link at the bottom of the Hub home page, or here

Business Model Alchemist

One of the most difficult challenges an innovation practitioner faces is reconciling all the different theoretical approaches, and variations on leading approaches. Often we are faced with incompatible or contradictory approaches and are left to reconcile the differences or adapt the approaches to make them compatible.

A great example of how approaches can be integrated is the collaboration between Alex Osterwalder and Steve Blank. The addition of the business model canvas to the customer development model (CDM) provided a strong tool to describe what Steve Blank instinctively knew was a key component of the model. The addition of the CDM to the business model canvas provided a process for the business model innovation in a start-up, entrepreneurial environment, to complement the existing business model innovation process in BMG. Steve Blank further extended the integration by the addition of the Lean/Agile product development as a method in "The Start-up Stack".

This new canvas tool takes integration in a different direction, vertical, by creating a 'plug-in' that helps one work out the details of the overall business canvas. Think of it as taking a portion of the canvas (value prop and customer segments) and blowing them up to focus on the details of that relationship. It is also is of great assistance in helping the client to focus on that part of the canvas and to identify and comprehend the relationship.

For some time now I have been experimenting with a couple of plug-ins to help clients work out the details of their value proposition in the business model. I have used the Value Mapping tool from the Board of Innovation, and the Whiteboard value map that is described in Cooper & Valskovitz's Entrepreneur's Guide to Customer Development. I have also experimented with some of the approaches in Ash Maurya's Running Lean; in particular, identifying three key problems and three solutions.

One of the best approaches I have plugged into the customer-value proposition analysis is the 'job-to-be-done' approach of Clayton Christensen and Mark Johnson. I use it in a table that has three columns. The first identifies the potential customers. The second column identifies the job each of these has to get done with which we can help, The third column identifies the need that customer has to get the job done. The 'need' becomes the value proposition in the model. By looking at column one we can identify key groupings of customers with similar jobs to form segments. Column three allows us to group based on value proposition and develop bundles of products and services.

I like this new tool by Alex and will be interested to see what the Hub community thinks of it and how it can evolve.

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Permalink Reply by Mike Lachapelle on January 17, 2012 at 3:48pm

Since writing this post, I have had a couple of conversations with people about the tools they are using and the importance of integration of ideas.

I would be very interested in hearing from the community about any tools or frameworks they have integrated with the BMG approach and the canvas. Please share, examples would be great.

Permalink Reply by Michael Joseph on December 9, 2012 at 1:56pm

Hello Mike,

Since we are looking into business models, not sure if you've read Randy Komissar's book,

Getting to Plan B : http://www.getting-to-plan-b.com/ 

Merging both frameworks will add important questions one could raise while conducting the assessments.

Permalink Reply by Kenneth McGrath on April 24, 2013 at 5:55pm

Just reading this book ("Getting to Plan B") now and enjoying it.

I note that the author mentions FIVE (5) business model considerations (all traditionally profit-motive based only) that he depicts as a "grid" and they include:

  1. Revenue Model
  2. Gross Margin Model
  3. Operating Model
  4. Working Capital Model
  5. Investment Model

I'm pretty sure that these can be derived from Alex's iPad software application since they are all calculations.  Has anyone done this "manually"?  Just curious.

 

I'm willing to share my work in terms of integrating the two models or showing how the BMC with the usual calculations would produce each of these items.  Anyone else interests in this?

Permalink Reply by David J Bland on January 24, 2013 at 1:45am

I tend to use a combination of Lean Startup, Customer Development, Kanban, Continuous Delivery and Iterative Development practices with the Business Model Canvas.

I use Empathy Maps, User Personas, 4 Actions Framework, AARRR Metrics, Kanban Boards, Experience Maps and others depending on the context.

The initial flow I follow is usually something like Vision Statement -> BMC -> Empathy Maps for the most important Customer Segments -> Experiments to validate/invalidate the Customer and Problem Hypotheses.

I thread the customer through the process so that the work isn't accidentally decoupled from the vision or the model. I want the customer problem to be at the center of it all.

While I've used the Value Prop Designer it hasn't resonated with me yet. Seems to be a mashup of an Empathy Map and Jobs-to-be-done which I can already address without introducing yet another tool.

Don't get me wrong I dig Alex's work and have a lot of respect for both he and Dave Gray, I just don't see a need for this tool in the consulting work I do yet.

Feel free to reach out if you have any questions. I try to write and speak about what I do when I have time.

@davidjbland

Permalink Reply by Mike Lachapelle on January 25, 2013 at 7:53pm

Thanks for the contribution David.

Two days ago I was speaking to a group on the comparison of enterprise architecture and business models (i.e. business design). By profession I am a Business Analyst and have spent time working on business and enterprise architecture. One of the critical differences I have found in the two communities (architecture and design) is the importance of integration of ideas that seems to permeate the design community. Architecture is a very competitive space and each approach (Zachman, TOGAF...) tends to portray itself as the complete and only solution to everything. I acknowledge that may be a bit of an exaggeration.

What really thrills me about the business model, or business design / entrepreneurial community is how thought leaders are more concerned with, or conscious of how the theoretical views can integrate. Steve Blank's "Startup Stack" is a prime example of this.

Beyond the theoretical though is how practitioners, like David, have integrated many approaches to create effective solutions. There is no 'right' or 'approved' answer to how this is done. But by understanding and integrating different elements, there is a very effective tool set for addressing issues.

I find great productivity in the Value Proposition Canvas; to the point where I have stopped using the Empathy map. As I write this I am about to meet a client to look at a new product line. The critical discussion we will have is focussed on understanding the potential customers, their pains and anticipated gains. Only by understanding those can they design and evaluate the effectiveness of their offer.

@David - I really like the way you have pulled all those approaches together.

Permalink Reply by Tony.Fan on May 4, 2012 at 7:53am

Who can give me a mail of this content?In China,We can not browse the content in flickr.Thanks so much.

Permalink Reply by Roark Freeman DVM on July 18, 2012 at 1:58am

I'm new, just joined and am awaiting THE BOOK. Can you please spare a moment and tell me how to best use the site? I am a Veterinarian working to create a Business Model for a regional Veterinary Center. When I've searched the site I find virtually nothing Veterinary or Medical. Yet there must be a Pattern somewhere that other professionals use. As a newbie, I don't know where to start. Are there actually any models posted on the site?

Permalink Reply by Mike Lachapelle on July 19, 2012 at 6:41am

Hi Roark

To the best of my knowledge there has been no specific discussions about business models in a medical context. So you may be breaking new ground on that subject. Some time ago I posted an analysis of non-profit medical services delivered in three locations. But I am not sure that would be particularly applicable in your situation.

http://businessmodelhub.com/forum/topics/health-care-non-profit-mod...

and 

http://businessmodelhub.com/forum/topics/business-models-for-innova...

I suggest you begin by looking at Alex's blog (link in the bottom right corner of the page) for any articles on understanding customers. The customer-value proposition is the core to any business model. Understanding the job that needs to be done by your clients/customers that you can help them with, or the problem they are trying to solve, is critical to a successful business. Identifying the key jobs or problems and what they need from you to solve them guides you to the value propositions you can offer.

After that you need to consider how you create revenue streams from those offers, and the channels you will use to communicate and carry out transactions. The customer relationships is used to look at your acquisition and retention strategies.

When you move to the infrastructure side of the canvas (activities, resources and partners) it is important to understand you are involved in a solution business - helping customers find solutions to the medical problem of their animals. In that type of business your activities include: what you do to acquire the problems these customers have, how you find options for a solution, how you choose and implement solutions and what controls do you place on the process. Resources will be concerned with tangible (like office), intangible (data, knowledge), human and financial things you need to run the business.

Most of this is explained in the book, but you should certainly read Alex's blog and browse the discussions in the forum and blog sections for solution businesses (consulting, law, medicine), or for understanding your customers/clients.

Permalink Reply by Roark Freeman DVM on July 19, 2012 at 4:15pm

Thank you for your reply. I am astounded that there are not many medical business models in the group. I am getting a handle on the terminology and understand much of what you have relayed to me. The BOOK is coming today. I will be studying it and I DO appreciate your reference to Alex's Blog. Best wishes.

Roark Freeman, DVM

Permalink Reply by Johan Steenkamp on December 9, 2012 at 11:20pm

I like your job-to-be-done approach. For those that missed it I found the details and discussion here useful:

http://businessmodelhub.com/forum/topics/a-practical-exercise-for-u... 

I noted the Value Proposition Canvas is under copyright (not creative commons) so I assume it has to be licensed to use? 

Permalink Reply by Mike Lachapelle on December 10, 2012 at 2:13pm

Hi Johan

The copyright for the Value Proposition canvas is held by Business Model Foundry. I discussed this with Alex, as a key member of the BM Foundry. 

Like the Business Model canvas, the use of the VP canvas is open to everyone for your own business, for your company or in a consulting capacity, with the requirement of proper recognition of the source and copyright holders.

The difference for the copyright comes into play in the situation where one wished to sell posters or tools based on the VP canvas. Also, when one wished to incorporate the VP canvas in a software solution. In these situations the person must get explicit approval and agreement of the copyright holders - Business Model Foundry.

Hope this helps clarify.

Permalink Reply by Johan Steenkamp on December 10, 2012 at 7:12pm

Thanks for checking details with Alex and confirming.

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