Saturday, April 18, 2020

The qualities of business models: Thinking about “...ilities”

Most people will be familiar with the ...ilities that IDEO uses for design thinking: desirability, feasibility, viability. In a previous post about the strategic change of business models, I discussed synergy, scalability, flexibility, innovativity, simplicity, and repeatability.

In their recent work (The Invincible Company), Osterwalder and Pigneur position IDEO's ...ilities on their Business Model Canvas and add adaptability to include factors from the business environment. Here I like to present some initial ideas that follow and extend the ideas from Osterwalder and Pigneur.

As presented in the picture below, the basic positioning by Osterwalder and Pigneur is followed, except that their viability (‘earning enough money’) is replaced by profitability (which more directly expresses the monetary focus).

In my perspective, viability is central and is firstly related to the value proposition. The value proposition is often seen as the key element or core component of a business model. As such it seems evident that a key concern should be whether the value proposition is viable or not.

Secondly, viability is also determined by a holistic perspective on the business model (the sum is more than the parts, how do the components fit together). As such, it also brings desirability, feasibility, and profitability together and can be seen as their ‘sweetspot.’

Thirdly, viability is also determined by how the business model fits in its business environment (adaptability) and institutional environment (legitimability). The latter deals with the broader values, logic and rules of social structures that influence stability (and change) in social life.