If you've haven't worked with Strategyzer's ground-breaking business model canvas you're missing out on one of the most powerful tools for innovation available. Its utility ranges from blank-slate innovation to the introduction of new strategic initiatives within existing organizations.
Its power lies in its ability to create and communicate the fundamentals of an organization's business vision.
Leveraging the Business Model Canvas for Analytics
If you have worked with the business model canvas, you may be wishing to leverage it more fully in your day-to-day operations. You might be wondering, "How do I measure the execution of the different elements on the canvas? How do I identify and communicate the most critical aspects of the elements arranged on the canvas?"
This article takes a hypothetical business model for Toro, the leading worldwide provider of innovative solutions for the outdoor environment. From lawnmowers in your garage to the golf course, Toro provides a wide array of tools for residential and professional use. (The business model below was built from details of quarterly analyst calls and available online research. No relationship with Toro is implied.)
A Hypothetical Canvas for Toro
While the completion of the Strategyzer canvas for Toro is outside the scope of this article, you may note critical business model elements broken into key sections: the value proposition, the customer, revenue generation, partners and so forth.
This work is generally completed in group work sessions as strategies are conceived and revised.
The Business Model Canvas as Data Dashboard
After the canvas is complete it becomes primarily a tool of reference. What we propose here is to extend the canvas into a day-to-day tool to assess the results from the canvas.
We want to first measure the execution of the plan through a small set of key performance indicators (KPIs). To arrive at these KPIs, we suggest distilling the critical performance questions of the model. Bernard Marr, the innovator of the key performance question (KPQ) talks about the process here.
These key performance questions (KPQs) provide a focused set of subject areas for the development of the KPIs themselves. Rather than proceed with an open-ended selection of individual KPIs, the use of key performance questions and the business model canvas create clear boundaries around "what is important."
Keep the KPI Count Manageable
Focus is not the only question of developing KPIs for the canvas. There is also the question of quantity. We strongly advise to keep the count down to a limited set that can be committed to memory. Ideally, this would be less than 10. Marr's personal recommendation is 7.
It won't come as a surprise that the rigor of identifying the KPQs and KPIs can be challenging. We want the executives, managers and employees of an organization to align around them, to be familiar with them and to ground their initiatives with an eye to these metrics. It's a tall order, but well worth it.
Integrating KPIs Directly on the Canvas
Now let's marry the KPIs to the canvas. We'll continue with the Toro example.
As you've seen above, we've mapped the KPIs directly onto the surface of the canvas and associated them with the appropriate part of the canvas. While there is a wide range of aesthetic approaches to this, the key outcome must be that we can assess - quantitatively - how the business model's vision is unfolding. Simple KPI colors draw the eye to status - and the relative challenge of resolving.
The Indicators Will Change Over Time
Of course, as critical performance questions are resolved, new "bottleneck" considerations will come to the fore. These new KPIs can be swapped out for the old, the organization can be brought along on the journey, and the shared vision for the enterprise maintained.
Most importantly, the business model canvas can take its place as a living tool and top-of-mind for everyone in the organization. Consistently distributing the canvas directly to employees, texting links to it and making it visible in strategic locations will all help highlight its importance - and ensure everyone has access to the company strategy.
Alignment with a Traditional Dashboard
While the canvas shown above can be useful enterprise visualization, it is equally desirable to flesh out these same KPIs into a more actionable format. This can be done through a coordinated KPI dashboard. The metric selection, measurement, definitions and color-coding should be consistent.
Of course, the metrics on the KPI dashboard can provide further interactive features as well.
What Gets Measured Gets Done
The creation of Strategyzer's business model canvas doesn't need to be a "one-and-done." We see it as the beginning of the journey rather than a culmination. Developed correctly, it can become the foundation of a powerful approach to organizational communication, alignment and status.
With the additional of overlaid measurement, employees can see both what they're doing - and how well they're doing it.
If you would like to learn more about working with the business model canvas or building out your key performance indicators for the canvas, feel free to reach out.