- create greater value for customers (current and prospective members and stakeholders),
- better leverage organizational resources, and
- deliver value in innovative ways.
And these leaders are using this approach in lieu of traditional strategic planning to establish customer-focused goals and objectives for the association. Strategy best becomes reality when organizations and their leaders use business modeling to breathe operational life to strategic decisions. Business modeling teases out how essential resources will be combined and managed to optimize revenue streams and expenses in pursuit of strategic objectives. They are the tools that address the tactical and operational complexities that always accompany strategic change.
Business modeling identifies an organization’s Unique Value Proposition for its most important customer segments, which is how essential resources can best be combined and managed to create the most value (successful products and services) for customers which:
- meet their needs
- solve their pain points, and
- help them get their jobs done.
Bostrom’s business modeling exercise is a multi-step process that involves:
- Ferreting out or updating of the organization’s value proposition by identifying problems needing solutions, pain points needing relief, growing needs to be met and/or capitalizing on existing and future opportunities
- Assessment of the nature and strength of current and prospective markets and their future potential
- Analysis of all product and service lines to identify and assess customers, competitors, and potential partners or affiliates
- Identification of marketing strategies, including product differentiation factors, channels of communication, and critical market segmentation
- Analysis of revenue and cost structures to assess potential profitability and obstacles
- Competitor and pricing analysis that dictate market positioning
- Development of financial strategies and forecasts with timetables, performance targets and exit strategies for key business elements
Strategic Planning from the Business Modeling Exercise
Through a series of questions and discussions, assess and diagram an organization’s current and future business model, an organization identifies customer segments served, products offered, and its unique value proposition. We then brainstorm how the organization’s model needs to change to grow in a scalable and sustainable manner while achieving the organization’s vision. Three (no more than five) goals are identified that encompass how the organization meets its customers’ needs, then we create a focused implementation plan for leadership, with objectives (strategies) and action steps (tactics) for each goal. Given the rate and complexity of change, we recommend creating an 18- to 36-month strategic plan that has a five to ten-year vision for the future. This timeframe provides the organization with the agility to proactively engage the industry and stakeholders now while allowing the organization to make ongoing adjustments in the future, using the solid foundation created by undergoing the Business Modeling exercise.
Design Thinking for Business Model Change
When facilitating a Business Modeling session, we use a Design Thinking (iterative ideation) approach to lead volunteers and staff through the process of examining an organization’s business model. This approach provides organizations with powerful ideas that are created by resources that already exist – its staff, volunteers and other stakeholders – who are taken through the design thinking and ideation process. This process also increases engagement and buy-in because of their involvement in the recommended solutions. The graphic below is a link to a brief video that explains the Design Thinking process. Because disruption, innovation and transformation have required associations to change the way they “do business”, our experience is this: associations who use Business Modeling will be better equipped to provide the tools its customers need to succeed in a nimble and responsive manner.