When things are chugging along in a satisfactory manner I think we get lulled into a mindset that the baseline will take care of itself, and we can find ways to just increase it. A tweak here, some social media there, a pinch more efficiency. It’s really easy to do, and I’ve not been immune. It works in the right circumstances.
Those circumstances have gone, and it feels a little like the morning after the night before. As we contemplate the wreckage after the party we’ve had, we might want to give up some of things we’ve been doing without thought to the consequences, and one of them is the way we’ve used business models.
The challenge I see with business models is how we use them. Lots of good work goes in from very bright people until we have something beautifully polished that we stand back and admire whilst the investors applaud. Precise expectations are set.
In the current reality however, they pose a number of potential problems:
- They paint a wonderful picture of the future based on the truths we’ve understood whilst constructing them, but in current conditions those realities are fleeting.
- We build systems and measures based on the truths we have assumed, and our commitment to those can make us wilfully blind to emerging truths.
- The models create filters or membranes between the business, its customers, suppliers and community. In many ways, we reduce them them to data points at a time when what we can’t measure matters at least as much as what we can. Emotion, Intuition and our Senses. We observe the business rather than “feel” it.
- It is easy for a compelling business model to reduce a business to some sort of 3rd party. We no longer own the business, the model we have created does. We become detached, and somehow rent the business more than own it.
- In conversation, we no longer talk about the business, we talk about the model.
Models work best for commodities, where the objective is scale and we can use volume as a battering ram against the competition. Many businesses offer examples, from banks and insurance companies to supermarkets and energy companies. Models work well if you want to harvest as much as possible as quickly as possible. They do that well until one morning we wake up to find we’re Northern Rock, or AIG, or Safeways, or Enron.
If on the other hand, we want to make stuff that matters over the long term, business models are great as an audit and reflection tool, but not a rule giver.
Artisans don’t do business models.
They own their business in every sense. They are driven by real time relationships with those who buy from them, the materials they use, and the people they work with.
For Artisans, the business is an evolving love story. The business carries their signature, every hour of every day.
There are no filters, because they need to know they are making stuff that matters.