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The Business Model Canvas

The Business Snapshot is based upon the Business Model Canvas initially proposed by Alexander Osterwalder in 2008. Per Wikipedia, “the Business Model Canvas is a strategic management and lean start-up template for developing new or documenting existing business models. It is a visual chart with elements describing an organization’s value proposition, infrastructure, customers, and finances. It assists organizations in aligning their activities by illustrating potential trade-offs.”

While the Business Model Canvas is a good tool for organizational strategists interested in presenting a macro view of their business (using the Canvas to seek investor funding, for example), we found that there was an opportunity to evolve the Business Model Canvas in a way that allowed us to emphasize several key aspects we find critical when designing for humans.

 

Evolving the Canvas to a Snapshot

Humans first.

The first change we made to Mr. Osterwalder’s Business Model Canvas was to move “customers” from the right-hand to the left-hand side of the canvas. We read the Business Snapshot from left to right, so we wanted to ensure that the first building block, from a visual perspective, led with the Customer. With the Customer building block moving left, the orientation of the other building blocks shifted as well.

Defining the "Customer"

When we consider a “customer”, we like to consider a broad definition when describing any person that interacts and engages with a proposition from the organization (i.e. a product, service, or other offering). Examples of “customer” could also include, guest, patient, citizen, soldier, constituent, student, or another business or organization. And while we still want to honor the original intent of the "segment" name (a data-informed slide of the customer base), we wanted to emphasize the importance of empathizing with these segments. Therefore, we dropped the word "segment" from the Customer building block.

"Relationships" isn't the best term

The original intent of the “Customer Relationship” building block was to describe what “assistance” was provided to customers (i.e. self-service,
assisted service, automated service, etc.). We consider these as activities, and ought to be represented in the Activities building block. Therefore, we’ve renamed “Customer Relationships” to “Interactions” in order to better describe where and how the customer engages with the organization during their journey to fulfill their human needs. See the Customer Lifecycle, Journeys, and Needs for more detail.

Organizations don't exist in vacuums

Another modification made to the Business Model Canvas was to draw attention to external, macro factors that organizations can’t control. These external factors include customer Influencers, Trends that can inhibit or accelerate innovation, and direct or indirect Competition to an organization’s propositions.

 

How to use The Business Snapshot

The Business Snapshot is not a tool or exercise to be completed in a workshop. Rather, it is a framework designed to foster conversations about business transformation. Changing business results means changing individual building blocks within the Snapshot. Changing building blocks will have ripple effects to all other building blocks. For example, seeking-out new customer segments in order to drive new revenue may force new partnerships, require new channels, new resources, and introduce new costs into the business model.

When an organization describes their initial business challenge, they generally describe the challenge from a perspective of increasing effectiveness and growth (left-side of the Snapshot), improving efficiency and productivity (right-side of Snapshot), or reacting to an external disruptive event (i.e. a Trends or Competition in the market).

An organization’s initial business challenge is a description of something that requires immediate and focused attention from their organization in order to sustain or grow their business in the future.

Customer Experience Journey Mapping is well designed to assist organizations wrestling with business challenges that align to a human and their needs. This human-centered business challenge may emanate from either the right or left-side of the Snapshot in an Ambidextrous Organization.

Ambidextrous Organizations are simultaneously focused on:

  • Increasing effectiveness & growth: Generally, these are opportunities to engage differently with new or existing customers in order to generate new or expanded revenue streams.
  • Improving efficiency & productivity: Generally, these are opportunities to reduce risk, decrease waste, or maximize output from an existing process.
  • Mitigating or taking advantage of external disruption: Generally, these challenges relate to a direct or indirect competitor, or P.E.S.T.L.E. trends in the market.
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Questions to consider when evaluating the Business Snapshot building blocks

Customers

  • Which customer segment(s) are best positioned to help meet the business challenge?
  • What is the value of these segments to the business?
  • Are these new customer segments or existing customers?

 

    Interactions

    • What does the customer lifecycle look like as they pursue a journey to acquire and use a solution to fulfill their needs?
    • Where along the customer lifecycle does the business engage with the customer?
    • What is the nature of the engagement (i.e. automated, in-person, digital, etc.)?

    Channels

    • Through which channels do customer segments want to be reached?
    • Which channels work best for fulfilling customer needs?
    • How do competitors reach these customers now?

    Propositions

    • Which one of our customer’s problems are we helping to solve?
    • What bundles of products and/or services are being offered to this particular segment during their journey to fulfill needs?
    • Which customer needs are being satisfied with this specific product and/or service?

    Revenue Streams

    • What is the revenue model?
    • For what value are customers willing to pay in order to fulfill their needs?
    • For what do they currently pay?

     

    Activities

    • What activities do the propositions require?
    • What activities do interaction channels require?
    • What activities do revenue streams require?

    Resources

    • What resources do the propositions require?
    • What resources do interaction channels require?
    • What resources do revenue streams require?

    Partners

    • Which activities do partners perform?
    • Which resources are provided by partners or suppliers?
    • Which partner propositions are bundled with the business’ propositions?

    Cost Structure

    • Which activities are increasing risk, decreasing productivity, or reducing efficiency?
    • Which resources are increasing risk, decreasing productivity, or reducing efficiency?
    • Which partners are increasing risk, decreasing productivity, or reducing efficiency?