Tuesday, March 28, 2017

Book review: Business Model Generation

As an incoming member of Seth Godin’s altMBA program and a self-confessed book nerd, I was excited when I received a set of eight books provided to program participants as a pre-read.  

One of the books in the package was called Business Model Generation written by Alexander
Osterwalder and Yves Pigneur.  Business Model Generation is a handbook created to defy the thinking settled in outmoded business models and help individuals design tomorrow's enterprises.

This was one of the first books that I picked up and read for 3 key reasons:

1) I like the fact that the book was co-created by over 470 practitioners from 45 countries.   It speaks to the future of work concepts with the advent of the “gig” economy on the rise

2) Concepts in the book really appealed to the architect side in me – with a set of predefined building blocks, identified business models, business designing, overall strategy, and process flow concepts. 

3) The authors provide a simple framework to conceptualize, design, and execute a large scale change transformation initiative through the use of storytelling and purposeful adoption.

While the book is called a handbook, it feels more like a primer on the building blocks of a business operating model and a re-framed version of Porter’s Five Forces.  The concepts are simple, clear, and easy to follow along.  I particularly like the business model canvas template and various business case studies really bring the book’s concepts to life.  
The key drivers on the business canvas template are:

  • Customer Segments: Who are the customers? What do they think? See? Feel? Do?
  • Value Propositions: What’s compelling about the proposition? Why do customers buy, use?
  • Channels: How are these propositions promoted, sold and delivered? Why? Is it working?
  • Customer Relationships: How do you interact with the customer through their ‘journey’?
  • Revenue Streams: How does the business earn revenue from the value propositions?
  • Key Activities: What uniquely strategic things does the business do to deliver its proposition?
  • Key Resources: What unique strategic assets must the business have to compete?
  • Key Partnerships: What can the company not do so it can focus on its Key Activities?
  • Cost Structure: What are the business’ major cost drivers? How are they linked to revenue?

As a strategic management and entrepreneurial tool, this book will help quickly frame a business idea, prototype, and brainstorm on ways to innovate, improve, or transform business operations.  

It’s great method to create meaningful conversations with a client or internally within a firm - keep it handy as a reference guide!