I usually think of the productive chain when I go to a super market for organic products, with processes like: identify and certify suppliers, contract and balance supply, receive and store products, position in store and promote, sell and update stock, monitor and discard products due, evaluate demand and adjust. All of this besides the support processes with people, infrastructure and business management. The logical organisation of activities and resources utilized defines the value flows and provides the systemic vision to coordinate them, in order to generate sustainable value for customers and shareholders. WholeFoods was recently acquired by Amazon in a multi-billion transaction, for the brand’s high penetration in the market and for the processes that operationalize this valuable business
Strategy is a term that still evokes a certain reverence, prepared by privileged minds and able to do wonders. In companies it is normally formulated or revised annually by the senior management, off-site and with support from an expensive consultant. Later it is communicated to the others, with a climate of great expectation by the impact it will bring to the business and possibly in the organization, reversing poor performance and building growth. Unfortunately, up to 80% of companies fail to implement their strategic plan! More important than trying to elaborate over the unpredictable future, would be to equip the organization with a collective intelligence and means to systematically learn how to generate more value in the business. Strategy does not need to be an existential rethinking, but more of a reflection on the way as you go
A brilliant business idea, implemented with a great combination of resources and organization, should deliver good results. However, results tend to worsen, or may even become unfeasible as time passes by. Inevitable changes on external context and on internal conditions bring misalignment among market, strategy, and operation, as well as resources and activities need coordination to respond effectively to clients and business requirements. This dynamic to stay focused and improve continuously the company’s ability to generate more value, based on principles and purpose established, configures its Management Model. When the Management Model is not defined or appropriate, a culture of performance does not grow in the company, investments are not properly prioritized, stakeholders do not learn how to maximize results, and leaders do not develop.
All business idea, no matter how good it is, can only make a difference when put into practice, and so demonstrating its ability to generate value. There are many ways of combining resources and organizing their productive relation, considering human and technological competencies, internally only or integrated with third parties. This arrangement is called Operating Model, as the result of an exercise of structuring options to run the business efficiently and sustainably. With the Operating Model defined, leaders can promote an active collaboration among business participants, based on a shared vision of the working processes involved, for an optimized execution.
When you want to start a business, or to understand an existing one, it is key to think about Business Model. It describes the logic of how the company creates, delivers and captures value from the market, under a strategic vision. After all, every business is an exchange of value between parties, which can happen in various ways. The Business Model makes it easier to communicate business concepts, develop strategies, and align stakeholders, so to structure and test the idea for generating desired results. It begins with the perception of a need or an aspiration, either expressed or implied, that one believes can be met in a profitable and sustainable way.
If you have not thought yet of the Business Model for your company or institution, you are missing an opportunity to make great difference.