This article introduces a universal model for Business Model Project Management, which covers creative problem solving, strategic management, business model visualization, and project management.
The 4 Bases of the BUSINESS MODEL DIAMOND: Why Some Businesses Thrive While Others Dive
1. The
4
Bases
of
the
BUSINESS
MODEL
DIAMOND:
Why
Some
Businesses
Thrive
While
Others
Dive
by
Dr.
Rod
King
(rodkuhnhking@gmail.com)
"The Business Model Diamond is the iPhone for business tools: a one-in-all
platform or interface for rapidly commercializing business ideas, conceptual
(R & D) solutions, and ambidextrous strategies."
Rod King
2. Nowadays, there is an explosion of tools in the business world. It is hard
for people to keep up with the proliferation of tools, most of which do not explicitly
relate to well-known tools such as Porter's Five Forces and Value Chain as well as
Kaplan & Norton's Balanced Scorecard and Strategy Maps. The result is a Tower of
Babel regarding tools: there is no common language or visual platform that
relates to all tools. The Business Model Diamond attempts to resolve this
problem especially in large organizations such as multinational corporations. The
Business Model Diamond also solves the perennial problem of poor or
inadequate commercialization of business ideas, conceptual (R&D)
Solutions, and ambidextrous strategies; this problem exists at all levels in the
world of entrepreneurship: in startups as well as small, medium, and large-scale
businesses.
From a high level, the Business Model Diamond consists of four main elements or "
fractal cards:"
• BANNER: consists of header with sub-topics of "Project/Organization" and "Job To
Get Done"; sometimes, the banner contains "desired ends" or topics such as
"Mission/Purpose/Vision/Values"
• PROBLEM (TRADE-OFF): usually consists of a proposed/validated customer
problem or Big Urgent Market Problem (BUMP)
• SOLUTION (STRATEGY): usually consists of topics of a conceptual solution or
hypothesis that is described by a statement of "Strategy," "Value Proposition" and
"Product/Service" as well as "Pain" and "Delight"
3. • BUSINESS MODEL ENGINE (PROJECT): consists of more detailed solution in
the form of three interdependent engines: Enterprise Engine (which creates
value); Customer Growth Engine (which creates demand and delivers value); Value
Capture Engine (which captures/shares value). A Business Model Engine
(Project) facilitates the commercialization of business ideas, conceptual (R & D)
solutions, and ambidextrous strategies using profitable and sustainable business
models.
4. A more granular view of the Business Model Diamond is shown below.
5.
6. At the simplest level, the Business Model Diamond can be regarded as a visual
checklists that summarizes topics that should be covered when discovering and
solving customer problems. Such a visual checklist ensures that all the components
of a Business Model Engine are working and aligned to achieve an explicitly stated
Value Proposition and Strategy that eliminates the customer problems. Further, a
visual checklist for different business tools, frameworks, and
methodologies facilitates the identification of similarities and differences in tools
for business and customer problem solving as well as accelerates learning,
decision-making, and implementation of projects where team members use
multiple business tools and frameworks.
At a greater functional level and especially for Business Model Improvers and
Innovators, the Business Model Diamond can be regarded as a visual worksheet and
platform that can be used for holistically documenting, improving, innovating, and
testing the viability of business models. Past as well as present tools for business
model visualization can be unified using the meta-tool of the Business Model
Diamond.
Unique to the Business Model Diamond are its four (ICES) perspectives:
Investor, Customer, Enterprise, and Strategist Perspectives. The ICES
perspectives respectively relate to four questions: Why? Who? How?
What? Successful businesses constantly keep these four perspectives/questions in
focus while trying to find a positive dynamic balance that solves a validated Big
Urgent Market Problem (BUMP). In businesses that fail, the four perspectives are
either fragmented or misaligned while a critical customer problem remains
unsolved.
7. The Business Model Diamond can be directly related to classic tools such as in Six
Sigma Methodology, Supply Chain, Generic Strategies, Value Chain, SIPOC
Process, and Balanced Scorecard. As a visual problem solving tool, the Business
Model Diamond can be used to iteratively translate into reality any proposed or
given strategy such as on Martin Reeves et al's Strategy Palette or Canonical
Business Strategies (Differentiation/Low Cost (Disruption)/Blue Ocean Strategy).
8. Recent tools such as the BCG-Business Model Court, Business Model Canvas, and
Lean Canvas can also be derived from or translated into the framework of the
Business Model Diamond. Topics from the respective models are used to populate
boxes for the four perspectives.
9.
10. In the Business Model Diamond below, the Build-Measure-Learn process of the
Lean Startup Method is directly mapped to the perspectives of the Business Model
Diamond. The iterative process of the Build-Measure-Learn loop provides a means
of using a Minimum Viable Product (MVP) to validate, reject, or pivot the
strategy for a Business Model Engine. Consequently, in the diagram
below Strategy, Business Modeling, and Execution/Experimentation
(Activities) are seamlessly integrated for the rapid commercialization of
business ideas.
11. Also, the Business Model Diamond can be used for projects in Discovery-Driven
Planning/Growth. The basic template or fractal card of the Business Model
Diamond, which can be used for each of the four perspectives, is shown below. Can
you think of business tools that can or cannot be related to the Business
Model Diamond? We'd certainly like to hear from you.
12. In conclusion, the Business Model Diamond is one of the tools that is ushering the
new paradigm of Unified Problem Solving and Strategic Management where
the ultimate objective is to provide a single tool or platform that can be used for all
activities of problem discovery and solution especially in business. Using a visual
platform for business tools can save a lot of time and money as
communication and decision-making costs are reduced to a minimum while
maximizing productivity and efficiency in discovering and solving customer
problems. Finally, the Business Model Diamond can be used as a visual project
planning and management tool for rapidly testing the viability of
innovative ideas, projects, and business models.
13. What do you think?
ONE MORE THING ... The Business Model Diamond relates to Porter's Five
Forces as well as Brandenburger & Nalebuff's Value Net as shown below:
14. NOTE: A PDF document of all the above visual templates can be obtained
from here: http://www.slideshare.net/RodKing/the-4-perspectives-of-the-business-
model-diamond-while-some-businesses-thrive-while-others-dive
Rod King, PhD
October 2015