Does Your Business Model Impact Your Decision Making?

I’ve been given the real gift of being invited into many businesses to look at their operations, marketing, and sales functions. I call this a gift because it’s benefited me as much as anyone, even considering the great marketing we’ve done for so many companies.

Your Model Matters

Yet, there is one thing that is very clear to me in this experience – that your business model matters. The simple model of how you operate and run your business will eventually sink into every aspect of your business.

Maybe you don’t really understand your own model. That may be because, for many companies, the industry defines the model. Yet, those companies that understand how to shift their model inside of their industry can be real winners. Think Netflix, circa 1999. So, your model really matters – and how aware and proactive you are in developing your model will make the difference in your business.

Your Model Defines You

And as I’ve seen over time, the model of your business can have two distinct outcomes.

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First, it can limit you and your company. Your business becomes a slave to the model. Sayings like “we’ve always done it this way” or “our competitors do it like this” are surefire signs of a company that has a model so embedded that it’s become a limiter to their growth and innovation. No one in the organization can see outside of the confines of the model, and as companies in your market innovate, you’re left behind wondering what happened.

Despite my relatively short time in business, I know for a fact that businesses change, and that markets change, too. And if your business model limits you, you’re dead.

Second, your model can free you. If you can start to understand your current model and your industry’s model, and then start to innovate, you can create real change. The way you do this is by first committing to fully examining your model – so well that your awareness lets you rise above the industry, beyond the expectations, into a larger and better model that truly serves your audience. You begin to play against the model, find shortcuts, and improve the model as a means of business development.

True innovators know that no innovation happens in a bubble. No exciting business model is ever just a good idea; the qualification of a great business model is that it serves your client base in a way that provides value above and beyond your current market by those who have excelled at innovation.

Questions to Start the Discussion

So, how do you start to question your business model to see how you might be able to innovate? Ask these following questions to yourself.

  • What is our highest cost in our business? How could that change?
  • What are the industry expectations that we use to create value?
  • What unique aspects of your industry impact your model?
  • If the market shrinks by half, how would the industry change? How would you have to change?

Now, ask the following questions to your customers. Yes, your customers.

  • Why do you choose to work with us?
  • How do your explain what we do? Listen for the answer and language here.
  • What would be nice for us to offer you?
  • What would we have to do to earn more of your business?

All of these questions can help you start to unpack your model and open your eyes to possible innovation.

Can Marketing Drive Innovation of Your Model?

Marketing can help drive the adoption of your model, and help formulate the overall approach, testing, and validation of that model for your market. I would argue that a marketing department is the right department to take on the positioning of a new business model.

We’ve helped businesses unpack new models, and helped them to define the overall path to success on those models. If you’re interested in changing up your model, let’s talk. 

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