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Lots of organizations do things that are not "doing Business". When a company is doing business needs to change to doing it differently, it's important to know the difference between changing the business and changing the company. A clear picture of the forest helps to make better sense of the trees.
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A Behavior Model of Business
An Archestra Notebook
© 2012, 2014 Malcolm Ryder / archestra research
Notes
• A business and a company are two different things. A company conducts business. The company is a structure. The conduct is a behavior. The behavior may have a pattern.
• As in math, a “variable” is a changeable state of a part of a pattern of interaction or influence. Varieties of the part occur within the pattern.
• Interactions and influences are not necessarily sequential. Affected by the presence and varieties of included parts at any given time, they are systemic. They can be more or less emphatic, more or less recurring, and more or less preferred.
• This discussion describes business; it does not describe companies.
A framework identifies what kind of elements are necessary to consider, and why
A model associates selected types of elements in a logical pattern for static or dynamic interactions
w
x y
z
An architecture co-ordinates the specifications of the elements selected from the framework, to meet a situational requirement
X1 X2 X3
W1
Y1 Y2 Y3
W2
Z1 Z2
Y2
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Overview
capital
customer valuation
capacity
value props
demands experiences
operations
brand
process resources
acquire assets
pick marketscreate customers
- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
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- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
Success factors are independent variables.
Performance constraints are dependent variables.
Objectives are intentions.
PRODUCTION aims at relevance
REQUESTS aim at quality
Many different companies are “in” the same or similar business. This model abstracts the commonality of business above and beyond the company-level particulars of structure and timespan.
Management Issues
Independent variables
Dependent Variables
Business value Business Outcome
Investment basis Capital Capacity Resources Capabilities
Organization Operations Value props Market definition Direction
Goals Experiences Brand Transactions Position
Return basis Demands Customer valuation New assets ROI
A change here… precipitates a change here
A development here…
preconditions a result here
PRODUCTION
A type here is pursued for…
a target here A type here is desired from…
a condition hereREQUEST
Business Environment
Strength of the Business
Business Impacts
State of the Business
BUSINESS CONDITIONS
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A simple business does not have fewer factors. But the overall behavior may be less exposed, and/or less sensitive, to variations in most of the factors. Said differently, in a simple business, one or only a few of the factors highly dominate the behavior or its outcomes, regularly.
A complex business does not have more factors. But the overall behavior may be more exposed, and/or more sensitive, to more of the different factors when any of those vary. Said differently, more of the factors can significantly affect outcomes, even though few or none of the factors necessarily dominate regularly.
Covering a wide spectrum of instances
The generic model shows basic elements in their most typical relationships. All the elements and relationships are always concurrent. Both the elements and the relationships vary in strength of presence and actual detail, and they can vary both intentionally and unintentionally. Any specific company’s business is an example of the model. Particular examples may differ, between companies and/or from one time to another.
The generic model does not feature “centricity” of any of its elements or relationships. The model features “coherence”. A given instance of a business may, for some reason (usually competitiveness), feature “primacy” of some factor and call it “centricity”.
WalkthroughSome brief elaboration…
capital
capacity
operations
process resources
acquire assets
- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
Assets are assigned both to support processing and to be processed, making them resources
Example developments: - Relationships- Services- Products
value props
experiences
operations
process resources
pick markets
- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
Processes, in effect, generate a group of supported targeted participants as a market definition
Example developments:- Segments- Channels- Networks
demands experiences
brand pick marketscreate customers
- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
Transactions occur because a relationship is exercised between an available experience and a demand for the experience. Either one can precede the other. A customer is an instance of the relationship.
Example developments:- Sales- Contracts- Adoptions
capital
customer valuation
demands
acquire assets
create customers
- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
The volume and “worth” of customers is in effect a new asset, returned from (i.e. produced by) the capacity, proposition and brand. This new asset compares against the cost of the initiating capital – a difference which might be seen as profit-or-loss
Value = the meaning of a distinctionWorth = the impact of the value in a context
The summary state of the business
Four fundamental requirements
capital
capacity
operations
process resources
acquire assets
- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
CAPABILITIES…
value props
experiences
operations
process resources
pick markets
- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
capital
capacityacquire assets
DIRECTION…
demands experiences
brand pick marketscreate customers
- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
value props
operations
process resources
capital
capacityacquire assets
POSITION…
capital
customer valuation
demands
acquire assets
create customers
- Performance constraints
- Success factors
- Objectives
This is a model of a behavior called “business”.
produce
request
experiences
brand pick markets
value props
operations
process resources
capacity
ROI…
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