Companies have sophisticated and proven tools for executing known business models. For example, complex financial equations are like a surgeon’s scalpel; they create precise cuts into the organization, and maximize operational efficiency. So why does it feel like the exact opposite when companies aim to identify future business models and value propositions? Why aren’t the tools and methods proven and precise? In this post, I offer up a toolbox for business strategy and innovation. These tools can help entrepreneurs and intrapreneurs search for and validate better value propositions and business models.
In most companies, cutting edge tools and precise methodologies result in a perfect execution of a known and validated business model. Yet when it comes to innovation and strategy, companies are as unprepared as a surgeon operating with a swiss-army knife. Organizations just lack the right tools for the job to be done. Companies who are searching for future business models and value propositions need better business tools to achieve strategic goals and create sustainable businesses.
What are business tools and why should you use them?
What is a business tool anyway? Is it a hammer? Is it an app? Alex Osterwalder shares his definition:
’Business Tools’ are conceptual frameworks that are specifically designed to help business practitioners solve a concrete (and limited) business problem in a real-world context. The best tools are conceptually sound, simple, practical, visual, have a great user interface (UI) and provide a great user experience (UX). These characteristics makes them fit for the real world and increases adoption by business practitioners.
Business tools help strategists address today’s complex challenges in two ways: by providing a structured approach and a shared language.
- Structured approach: tools frame strategic conversations and ensure all the important aspects of a problem are being addressed. They help organize information and prioritize the work.
- Shared language: tools align teams around a visual concept, making complex ideas clearer with an image.
A team of strategists armed with the right tools are able to cut through complex business issues and build out an organization that can sustainably compete in the market. There is clearly a gap between the tools a company uses to execute a known business model and the tools they use to design future growth engines.
We need the right set of business tools to design businesses and sustainable growth.
Business thinkers have enjoyed the use of many excellent business tools in the past. For example, Michael Porter's 5 Forces were incredibly helpful for analyzing industry forces. However, in today's business environment, it's increasingly difficult to categorize companies in terms of industries (look at how Apple transcends multiple industries like music, hardware, and software at the same time). The Value Chain was another helpful tool for manufacturing companies. But the Value Chain lens is less helpful for service focused companies like banking, entertainment, technology, or even pharmaceuticals. These two examples were useful for a specific purpose, but aren't the right remedy for designing future growth engines.
Strategyzer’s mission is to fill that gap by creating a set of tools for business strategy, business design and innovation. These tools are integrated and work like plug-ins around the same framework. Each one of them focuses on solving a specific business problem. But this toolbox isn’t complete, there are a lot more tools to create! Our team is currently learning more about investment readiness to develop tools that help assess innovation metrics and evidences of a promising business opportunity.
Strategyzer’s Toolbox: integrated tools for complex problems
The Business Model Environment: describes the environment in which you design your business model.
The Business Model Canvas is the blueprint for how you create value for your organization
The Value Proposition Canvas makes explicit how your product and services create value for customers
The Testing Card describes how you intend to verify if the assumptions around your idea are valid in a test.
The Learning Card works hand-in-hand with the Testing Card and helps you capture learning from your tests.
The Progress Board helps you monitor your progress by tracking all your hypotheses, Test Cards, and Learning Cards.
The best tools empower companies.
There's no doubt that tools empower us. Strategyzer was built on that very principle.
Our toolbox also integrates other excellent tools and concepts. For example, The Strategy Canvas and the Four Actions Framework by W. Chan Kim and Renee Mauborgne bring a new visual and organizational layer to the development of value propositions. The Gailbraith Star Model offers another complementary perspective to our Business Model Canvas. The Canvas also goes hand-in-hand with popular business principles like the Lean Startup and Customer Development, both fathered by Steve Blank.
The more we align ourselves with evidence based approaches, the stronger these tools will be for business practitioners. If we train executives, intrapreneurs and entrepreneurs to use strategy tools, we can literally change the way business is done in the 21st century.
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