A Behavior Model of Business

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Lots of organizations do things that are not "doing Business". When a company is doing business needs to change to doing it differently, it's important to know the difference between changing the business and changing the company. A clear picture of the forest helps to make better sense of the trees.

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A Behavior Model of Business

  1. 1. A Behavior Model of Business An Archestra Notebook © 2012, 2014 Malcolm Ryder / archestra research
  2. 2. Notes • A business and a company are two different things. A company conducts business. The company is a structure. The conduct is a behavior. The behavior may have a pattern. • As in math, a “variable” is a changeable state of a part of a pattern of interaction or influence. Varieties of the part occur within the pattern. • Interactions and influences are not necessarily sequential. Affected by the presence and varieties of included parts at any given time, they are systemic. They can be more or less emphatic, more or less recurring, and more or less preferred. • This discussion describes business; it does not describe companies.
  3. 3. A framework identifies what kind of elements are necessary to consider, and why A model associates selected types of elements in a logical pattern for static or dynamic interactions w x y z An architecture co-ordinates the specifications of the elements selected from the framework, to meet a situational requirement X1 X2 X3 W1 Y1 Y2 Y3 W2 Z1 Z2 Y2 ©2012,2014MalcolmRyder/archestraresearch
  4. 4. Overview
  5. 5. capital customer valuation capacity value props demands experiences operations brand process resources acquire assets pick marketscreate customers - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request ©2012,2014MalcolmRyder/archestraresearch
  6. 6. - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request Success factors are independent variables. Performance constraints are dependent variables. Objectives are intentions. PRODUCTION aims at relevance REQUESTS aim at quality Many different companies are “in” the same or similar business. This model abstracts the commonality of business above and beyond the company-level particulars of structure and timespan.
  7. 7. Management Issues Independent variables Dependent Variables Business value Business Outcome Investment basis Capital Capacity Resources Capabilities Organization Operations Value props Market definition Direction Goals Experiences Brand Transactions Position Return basis Demands Customer valuation New assets ROI A change here… precipitates a change here A development here… preconditions a result here PRODUCTION A type here is pursued for… a target here A type here is desired from… a condition hereREQUEST Business Environment Strength of the Business Business Impacts State of the Business BUSINESS CONDITIONS ©2012,2014MalcolmRyder/archestraresearch
  8. 8. A simple business does not have fewer factors. But the overall behavior may be less exposed, and/or less sensitive, to variations in most of the factors. Said differently, in a simple business, one or only a few of the factors highly dominate the behavior or its outcomes, regularly. A complex business does not have more factors. But the overall behavior may be more exposed, and/or more sensitive, to more of the different factors when any of those vary. Said differently, more of the factors can significantly affect outcomes, even though few or none of the factors necessarily dominate regularly. Covering a wide spectrum of instances The generic model shows basic elements in their most typical relationships. All the elements and relationships are always concurrent. Both the elements and the relationships vary in strength of presence and actual detail, and they can vary both intentionally and unintentionally. Any specific company’s business is an example of the model. Particular examples may differ, between companies and/or from one time to another. The generic model does not feature “centricity” of any of its elements or relationships. The model features “coherence”. A given instance of a business may, for some reason (usually competitiveness), feature “primacy” of some factor and call it “centricity”.
  9. 9. Walkthrough Some brief elaboration…
  10. 10. capital capacity operations process resources acquire assets - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request Assets are assigned both to support processing and to be processed, making them resources Example developments: - Relationships - Services - Products
  11. 11. value props experiences operations process resources pick markets - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request Processes, in effect, generate a group of supported targeted participants as a market definition Example developments: - Segments - Channels - Networks
  12. 12. demands experiences brand pick marketscreate customers - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request Transactions occur because a relationship is exercised between an available experience and a demand for the experience. Either one can precede the other. A customer is an instance of the relationship. Example developments: - Sales - Contracts - Adoptions
  13. 13. capital customer valuation demands acquire assets create customers - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request The volume and “worth” of customers is in effect a new asset, returned from (i.e. produced by) the capacity, proposition and brand. This new asset compares against the cost of the initiating capital – a difference which might be seen as profit-or-loss Value = the meaning of a distinction Worth = the impact of the value in a context
  14. 14. The summary state of the business Four fundamental requirements
  15. 15. capital capacity operations process resources acquire assets - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request CAPABILITIES…
  16. 16. value props experiences operations process resources pick markets - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request capital capacityacquire assets DIRECTION…
  17. 17. demands experiences brand pick marketscreate customers - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request value props operations process resources capital capacityacquire assets POSITION…
  18. 18. capital customer valuation demands acquire assets create customers - Performance constraints - Success factors - Objectives This is a model of a behavior called “business”. produce request experiences brand pick markets value props operations process resources capacity ROI… ©2012,2014MalcolmRyder/archestraresearch
  19. 19. © 2014 Malcolm Ryder / archestra research mryder@malcolmryder.com

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