This is an article that presents the BCG-Business Model Strip which synthesizes ideas from the Boston Consulting Group (BCG) approach to business model innovation and Rod King's tool of the Business Model Strip. Unlike in tools such as the Business Model Canvas and Lean Canvas which have limited uses especially for business (profit) model improvement projects, the BCG-Business Model Strip can be used for translating an ambidextrous strategy into reality. The BCG-Busines Model Strip can be used for exploration (business/profit model innovation) projects as well as exploitation (business/profit model improvement) projects. In short, the BCG-Business Model Strip is the only business (profit) model visualization tool that can be used for managing both Lean Startup and Six Sigma projects.

1.
“BCG-­‐Business
Model
Strip:
A
Visual
Tool
for
Continuously
Improving
and
Innovating
on
Profit
Margins”
By
Dr.
Rod
King
(rodkuhnhking@gmail.com
&
@rodkuhnking)
“The greatest challenge, which every business leader faces, is to continuously
improve and innovate on profit margins.” Rod King
BCG: an iconic name in the field of Strategic Management as well as
Management Consulting. Whenever I hear or see the abbreviation, “BCG,” I’m
reminded of the Boston Consulting Group’s (BCG) popular business tools such
as the Growth-Share Matrix, Experience Curve, and Advantage
Matrix. In recent months, I’ve added the tool of “Strategy Palette” to my
library of popular BCG tools. The Strategy Palette can be used to continuously
improve and innovate on a business’s profit margin. But, what is the Strategy
Palette?
Featured in the recent Harvard Business Review Press book, “Your Strategy
Needs a Strategy” by Martin Reeves, Knut Haanaes, and Janmeya Sinha (all
of whom work at BCG), the Strategy Palette is a collage of five archetypal
approaches to strategy: classical, visionary, shaping, adaptive, and renewal.
The type of archetypal strategy, which an organization selects, depends on
trade-off that is based on three dimensions of a given
environment: unpredictability; malleability; harshness.

2. My key insight from the book is that a mature organization should use
an Ambidextrous Strategy, that is, a mix of strategies to facilitate
continuous improvement (exploitation) projects and continuous
innovation (exploration) projects. Exploitation projects deal with
formulating, executing, and managing classical and visionary strategies
while exploration projects deal with formulating, experimenting with, and
managing adaptive and shaping strategies. In my work, the goal of an
Ambidextrous Strategy is to relentlessly pursue sustainable
competitive advantage (top profit margin) or an ideal win-win
solution that eliminates a Big Urgent Market Problem (BUMP).

3. A simplified but dynamic graphic of the Strategy Palette is presented above;
the strategies are mainly organized around a double loop (“rollercoaster” or
ambidexterity lifecycle) and according to unpredictability of the
environment.
The strategic why, what, how, and when of the Strategy Palette are described
in detail in the Your Strategy Needs a Strategy (YSNS) book as well as in BCG’s
website (https://www.bcgperspectives.com/yourstrategyneedsastrategy). The
YSNS book offers a “Self-Assessment” (checklist of questions), “Four
Ambidexterity Techniques” (separation; switching; self-organization;
ecosystems), Ambidexterity Tactical Approaches, and “Eight Critical
Roles” for identifying and translating strategies on the Strategy Palette into
reality. However, the book’s approach is largely qualitative and not
directly related to visual templates for systematically managing
Business (Profit) Model Improvement and Innovation projects. In
other words, a Business (Profit) Model is not offered as a unit of
analysis/design for formulating, implementing, and managing every strategy
on the Strategy Palette. Rather the book presents BCG's Business Model
Innovation Framework as a tool for mapping and managing business
model innovation as in the case of Visionary Strategy on the Strategy Palette.
In a slide deck , which is entitled “The Ambidexterity Principle: How
Ambidextrous Leaders, Strategists, and Teams Create Win-Win Solutions,” I
present a comprehensive portfolio of tools for holistically solving problems
using the Ambidexterity (Win-Win) Principle and Ambidextrous Strategy. I
regard the description of “Your Strategy Needs a Strategy (YSNS)” as a
strategy-centric way of expressing the Ambidexterity Principle, which is

4. about creating ideal win-win solutions. The Strategy Palette can be regarding
as a means for translating into reality the Ambidexterity Principle. Ideas in the
YSNS book such as “Eight Critical Roles” have been translated into visual tools
that are easy and fun to use as well as scalable. In this article, my objective is
to highlight the tool of the BCG-Business Model Strip which uses topics
from BCG's Business Model Innovation Framework and in particular, BCG’s
components of a business model. The topics are presented on visual business
system templates that I developed. BCG’s components of a business
model are presented below.

5. The main topics or “windows” are related to the three engines of a business
model including their functions of creating, delivering, and capturing value.
Although other visualizations of a business model exist such as in the Business
Model Canvas and 4 Box Business Model, I prefer the hierarchical
structure of topics in BCG’s business model diagram. This higher
hierarchical structure combined with granular topics means that a business
model can be presented at multiple levels such as at strategic, tactical, and
operational levels. Thus, the BCG-Business Model Strip is a multi-level
template for improving and innovating on the profit margin at both
enterprise and industry levels.
As illustrated above, BCG’s topics can be structured into three windows, each
window of which has three panels as follows:
• PROFIT MODEL: Profit Margin (Strategy); Cost Model; Revenue Model
• VALUE PROPOSITION: Product/Service; Channels/Relationships; Customer
Segment
• OPERATING MODEL: Value Chain; Organization; Suppliers/Inputs (Key
Partners)
Incidentally, the three windows of Operating Model, Profit Model, and Value
Proposition respectively correspond to activities of the Lean Startup
heuristic of “Build-Measure-Learn.” The above hierarchical topics including
windows and panels are presented on a BCG-Business Model Strip that uses
the universal system framework of the Business Ecosystem Story Tool (BEST).

8. The logic (flow) diagram for the BCG-Business Model Strip is presented
below. Thereafter is a template of the BCG-Business Model Strip that contains
9 topics that describe the “panels” of a business (profit) model.

9. To facilitate use of the BCG-Business Model Strip, I’ve added a checklist of
questions, most of which are obtained from BCG’s article, “Business Model
Innovation: When the Game Gets Tough, Change the Game.”

10. The above BCG-Business Model Strip, which visually synthesizes ideas from
myriad business tools, has several benefits and uses. A key benefit is that the
BCG-Business Model Strip provides a common visual language for
mapping a project’s business model (profit margin) at strategic,
tactical, and operational levels. Another benefit is that the BCG-Business
Model Strip can be used for managing continuous improvement
(exploitation) strategies such as in Six Sigma projects as well as for
continuous innovation (exploration) strategies such as in Lean
Startup projects. Each strategy on a Strategy Palette can be systematically
managed using a BCG-Business Model Strip.

11. To date, business model or system visualizations, which are used for
improvement projects such as the SIPOC diagram, Fishbone (Ishikawa)
diagram, Five Forces, Value Net, and Balanced Scorecard, differ from
visualizations and tools used in continuous innovation projects such as
the Business Model Canvas and Lean Canvas. As a versatile business
system and communication model, the BCG-Business Model Strip is the
only template that can be used to present a large percentage of business tools
in the literature. The BCG-Business Model Strip can even be adapted to
present and facilitate the popular technique of SWOT Analysis. Lean Startup
concepts such as Problem-Solution Fit, Product-Market Fit, and Business
Model Fit can also be illustrated using the BCG-Business Model Strip. In
short, the BCG-Business Model Strip is a visual tool for universal
problem discovery and solving especially in business.
In practice, the primary use of the BCG-Business Model Strip is
to collaboratively visualize, document, analyze, improve, and
design Business (Profit) Models. The BCG-Business Model Strip is the
only template that explicitly considers documentation of trade-offs in an
environment with a view to not only developing an ambidextrous strategy but
also managing a business (profit) model for eliminating those trade-offs at
enterprise and industry levels. Consequently, the BCG-Business Model Strip
can be used for financially planning and managing projects for
continuous improving and innovating on profit margins. The BCG-
Business Model Strip provides an alternative as well as a
complementary tool during the lifecycle of a
business/strategic/financial plan.

12. The 9 panels of the BCG-Business Model Strip are visually arranged to
facilitate supply chain analysis, process (SIPOC) improvement, and business
(profit) model innovation as well as performance management such as in the
Balanced Scorecard. Three “ROD Storyboard” questions facilitate use of the
BCG-Business Model Strip for any project. The ROD Storyboard questions are
as follows:
• Present System (Business/Profit Model): Where currently are we?
• Future System (Business/Profit Model): Where must we go?
• Strategy: How best must we get there?
A comprehensive presentation on the BCG-Business Model Strip is
available here (http://www.slideshare.net/RodKing/the-bcgbusiness-model-
strip-rapidly-manage-profit-improvement-and-innovation-models) .
Below, I have presented an example on visualizing Apple’s business
(profit) model for the classic iPod. The example can be extended to
illustrate how Apple uses an ambidextrous strategy to continuously improve
the profit margin of the classic iPod while continuously innovating with a
view to disrupting the iPod Profit Model with introduction of the iPhone and
iPod touch.

13. Other ideas such as from Porter’s Five Forces and Brandenburger &
Nalebuff's Value Net can be superimposed on the Apple’s BCG-Business
Model Strip to facilitate multilevel industry analysis as well as supply chain
analysis and value net analysis.

14. So, for leaders who want to adopt an ambidextrous strategy, which focuses on
continuously improving and innovating on profit margins, the most cost
effective approach may be the BCG-Business Model Strip. Other approaches
that use a business (profit) model as unit of analysis require disparate tools
which require greater time to understand and use. Using the BCG-Business
Model Strip provides a common visual language for collaboratively and
rapidly translating ambidextrous strategies into reality.

15. As our environment including industries gets more unpredictable, malleable,
and harsh due to increased entropy, the need for rapidly developing and
managing ambidextrous strategies would increase. In such a volatile,
uncertain, complex, and ambiguous environment, the traditional, rigid, and
voluminous documents of the business/strategic/financial plan become
increasingly irrelevant for exploration strategies and
programs. A lifesaver may just be the BCG-Business Model Strip which can
be used not only for facilitating the formulation and implementation of
exploration (Adaptive and Shaping) Strategies but also for facilitating
exploitation (Visionary and Classical) Strategies. In short, the BCG-Business

16. Model Strip is the single tool that can be used at any stage as well as
throughout the lifecycle of an Ambidextrous Strategy for rapid profit
improvement and innovation.
You can freely download a copy of the slide deck on the BCG-Business Model
Strip here (http://www.slideshare.net/RodKing/the-bcgbusiness-model-strip-
rapidly-manage-profit-improvement-and-innovation-models).
Your feedback is appreciated.
One more thing …
“Unidextrous competitive advantage, which follows the shape of a single S-
Curve, is increasingly temporary or transient. Ambidextrous competitive
advantage, which follows a fractal S-Curve (S-Curve of S-Curves of S-Curves of
…), is sustainable.”
A "Sporting" Visualization of BCG's Business Model Diagram
In the article above, I present a visualization of BCG's business model diagram
using a tessellation, the visual format of which is similar to that of the 9-
panel tessellation of the Business Model Canvas. However, different
tessellated "interfaces" as well as process (flow) diagrams can be
used to present the structure and logic of a system including a
business (profit) model. My favorite tessellated interface is a
zoomable "fractal 3x3 grid" which, in theory, is an infinitely scalable 9-
panel tessellation. Consequently, a business model diagram, which is based on

17. a fractal 3x3 grid, can be used for massive collaboration projects on improving
and innovating on business (profit) models.
Below, I present another tessellation, that is, a "tennis court" on which I
show topics of BCG's business model diagram.
The BCG-Business Model Court most closely maps the structure and
topics of the original BCG-Business Model Diagram. The BCG-Business Model
Court contains only two topics that are not on the original BCG-Business
Model Diagram: "Suppliers/Inputs (Key Partners)" on the side of

18. the Operating Model and "Channels/Relationships (Distribution)" on the side
of the Value Proposition.
It's interesting that in the referenced BCG’s article on business model
innovation, the article's title uses a sports metaphor: “Business Model
Innovation: When the Game Gets Tough, Change the Game.” Staying in the
realm of sports metaphors, we could visually define an enterprise using
the layout of a ping pong (table tennis) table in the center of the BCG-Business
Model Court. The enterprise or "ping pong (table tennis) table," which consists
of four central panels, is highlighted in yellow as follows:

20. The above business (profit) model diagrams provide a richer visual language
for discussing how to rapidly improve and innovate on business (profit)
models. In addition, any strategy on the Strategy Palette can be rapidly
mapped and managed using the visual template of the BCG-Business Model
Strip as well as BCG-Business Model Court.
Rod King, PhD
August 25, 2015
rodkuhnhking@gmail.com & @rodkuhnking