Business models and tools: Are they helpful or SAD?
I find that simple models and tools are helpful. There are several original examples elsewhere in this blog. They provide a common language, a focus, a way to share good practice or to avoid elephant traps. But they often go wrong and become SAD.
Superficial
They can become the ends, not the means. The box tick without relevance. “Bureaucracy rules.OK.OK.OK.”
Action
There is no action, sometimes compounded by jargon and arrogance. The risks aren’t managed and the business case isn’t completed.
Demotivation
Staff lose heart when completing forms becomes more important than the basics. (For example, with projects, things like understanding steps and stages, being clear on outputs, identifying potential bottlenecks, involving users early and testing things out.)
So make sure you get the benefits rather than the burdens. Be glad not SAD.
It is not just models and tools – I have seen fully blown IT systems become the end rather than the means of a business activity.
My focus is on business development and in a number of clients I have seen the focus shift to keeping the bid management and assessment system populated or the CRM system up to date rather than where it should be – generating sales.
The organisation fails to see where the true problems lie when these are outside the scope of the monitoring system or model. This myopia is extremely dangerous.
This inability to focus outside the recording system leads to the organisation investing further in the refinement of the system which clearly does not deliver the desired results. SAD indeed.
The solution – always keep a helicopter eye on your business.
enstraPeter Franklin
June 10, 2011 at 11:06 am
Thanks Peter. I hadn’t thought about IT systems.
But you are right – the same point often applies.
I also like your myopia point, where the systems dominates over the sales.
Mike Barnato
June 10, 2011 at 2:49 pm
A (The?) problem with methods and tools is a misunderstanding of what they are and how they should be used. Too often they are confused with the real world itself, wwhich is always more complex than any model made to describe it. When used as devices to explore the real world to gain an understanding (preferably taken from a variety of stakeholder perspectives)of how it works and its problematical issues, models and tools can be very powerful. Too often, however, they are used as surrogates for the real world and practitioners try to constrain the real world to fit their models – always failing, of course.
Professor Peter Checkland saw through this problem when developing his Soft Systems Methodology. Unfortunatley the subtle mindset change needed to apply it effectively is not appreciated by practitioners who cling to the engineering based approaches that have far so long failed in the management and organisational change arena.
Roger Elvin
June 11, 2011 at 1:00 pm
Thanks Roger for this interesting comment..
Mike Barnato
June 12, 2011 at 10:10 am
Mick Breare comments elsewhere.
I agree with Mike in as much as they can be the end rather than the means, sometimes obtaining ‘the badge’ and forgetting the journey – In my experience of business improvement, the issues I notice most is that meaningful success depends on:
Understanding, commitment and drive from the top
Using the model (or models) that best fits the organisation and its culture
Using good techniques to involve staff
Identifying champions to help drive forward
Being objective and realistic
Using well tried and flexible model(s)
Knowing when support is needed from outside the organisation
I admit to being an Excellence Model zealot so lastly, please see the following – http://www.bqf.org.uk http://www.efqm.org
•Thanks Mick – I like the seven success factors that you mention.
I also like the “obtaining the badge” phrase.
The Excellence Model can be helpful, but it can also be SAD. I worked with an organisation that had high ratings under the model but was demonstrably failing.
Mike Barnato
June 12, 2011 at 4:13 pm
Christopher Vaughan writes elsewhere. I really want to say sad or even structured analytical and distressing. Truth is everyone needs a good guide.
Mike Barnato
June 12, 2011 at 4:15 pm
A comment received by Steve Kerzman. Interesting Q. My own view is that business models/tools, depending on precisely what you include in that definition, are sometimes both unavoidable and indispensible……for example, acting as the integrating / coordinating framework in a large and complex M&A PMI situation.
However, Peter is quite correct in that one always needs to be able to see the forrest for the trees and avoid analysis paralysis or having the model/tool become the end in itself…..sadly, neither is all that uncommon.
My maxim in this area is that one needs to use these things ‘intelligently’ (as opposed to religiously, blindly, heavy-handedly, inappropriately, etc)…..as that is often what separates good experiences of using models/tools from bad ones. As they say, a gun is neither good nor evil….that conotation is down to the person using it.
Thanks Steve. I take a wide definition of tools and models to include IT implementation (Peter refers to this), simple checklists, project plans etc.
I like your “intelligent use” phrase (as opposed to “religiously, blindly, heavy-handedly, inappropriately”). To which I would add ” superficially, arrogantly and (lack of) actionally.
Mike Barnato
June 12, 2011 at 4:21 pm
Rachel Cornish writes elsewhere.
And Mike how about adding ‘creatively’, ‘inventively ‘ to this list as tools or frameworks can be a great way of focusing outside the box and dreaming different ideas. Essential for creative marketing where being first to use new opportunities is so beneficial.
Also ‘evolving’ as even if you wish to remain the same, your market is likely to be changing so your model must keep changing,
Thanks Rachel. I agree. So we now have Intelligent, inventive and creative use. As contrasted with their use arrogantly, (lack of) actionally, blindly, heavy handedly, inappropriately, religiously, superficially.
Mike Barnato
June 13, 2011 at 6:29 pm
Ciaran Walsh commented:
Models are maps and the map is not the territory; models capture only the obvious and ignore knowledge of the nuances necessary for implementation. For example, Asimov’s New/Existing Markets -New/Existing Products excludes the alternative of New Distribution methods, which maybe just as viable as products and markets.
http://www.ciaran-walsh.co.uk
Thanks Ciaran. I like the point about nuances necessary for implementation. I suspect that these are often about circumstances, culture and context. Although your example suggests a gap?
Mike Barnato
June 13, 2011 at 6:30 pm
Roger Elvin has further commented:
I agree that context, culture and circumstances matter and are important components of models but the key point I want to make is about the way models are used. The problem I am trying to highlight is that change practice should not try to re-engineer the real world to try to make it function in the image of the model. A model is not a perfect ideal of reality!! It is simply a simplified picture of some aspect of reality that can be used as an aid to understanding about how the real world ticks. Models are tools for analysis not design.
Changing the subject, I agree with you that ‘stages of growth’ models such as the Excellence Model (if I correctly recall what that is) can be SAD. The example of my most recent experience is from the NHS – World Class Commissioning (WCC). I can see little correllation between WCC ranking and actual organisational competence. I don’t accept that a complex, systemic issue such as organisational competence can be translated meaningfully into a reduced table of factors.
Mike Barnato
June 14, 2011 at 5:20 pm
Thanks Roger. I am struck by your phrase that models are tools for analysis not design!
I was interested in your comment about World Class Commissioning and lack of correlation with organisational competence. That’s not something I know much about.
But I have certainly found in other fields that action and process is confused with achievement and competence. For example a high ranking is given for risk management because there is a risk matrix. (Even though it has never been really used.) Is that the kind of thing that applies in WCC?
Mike Barnato
June 14, 2011 at 5:29 pm
Ciaran Walsh has further commented:
Hi Mike & others – apologies for saying ‘Asimov’ rather than Ansoff. A book retailer on the High Street has the same market and product as Amazon. The Ansoff gap is in the distribution technology, which is just as powerful a strategy as product and market.
Mike Barnato • Thanks Ciaran for this clarification and example which is very clear.
Mike Barnato
June 16, 2011 at 12:28 pm
hartley Millar has commented elsewhere.
Models do indeed abstract from unnecessary detail. But which details are unnecessary is often the question. And the selection of which aspects to model and which to dismiss as irrelevant is the key skill of good consultants.
In practice a model can be very useful as a probe to see if you have understood things properly. If the people who know how the business works find that your model is unrealistic, then you have a useful pointer to there being significant-but-overlooked details somewhere and you usually have to go and find them.
I have also often used models (quantified ones) to help managers make up their mind what they really think or really want. If they don’t like what the model comes up with, then they need to think about which of the inputs they want to change (or add).
Taking an off the shelf model and expecting it to be helpful without testing against the organisation’s real-life situation seems to me to be completely misconceived – or worse.
Mike Barnato • Thanks Hartley. I like the points about:
Which details to (in)exclude.
Models as a probe to test understanding.
Quantified models to test implications.
Mike Barnato
June 17, 2011 at 9:25 am
Martin Johnson writes elsewhere: I think most of the people who would benefit most from model type discussions would not ‘get’ the theoretical language used to debate this point!
I say keep it simple and provide a framework and just enough of a prompt to get people thinking models- then introduce the more complex parts of the model in their language.
Mike Barnato • Thanks Martin. I was interested in your comment because it wasn’t my intention to use theoretical language! Or too much jargon! Perhaps I have become SAD!
Mike Barnato
June 20, 2011 at 10:58 am
Kathy Strong has written elsewhere: When my colleague and I were building training models (over three years) for improved performance, we studied what was working (champions), studied what was not (below average) and stripped out what was the same and had no effect on performance. These models were tested prior to national implementation. Am I being too simplistic to suggest that maybe a similar process could be used for systems? Could our real challenge be to simplify over complicated models? Many years ago, Dr. Deepak Chopra influenced my career without really meaning to. He said that he could never understand why he had to study a dead body in order to become a doctor. I guess that approach has remained with me in my work as a Productivity Specialist. In my experience with systems implementation, the human factor is the most unpredictable element (often not taken into account) in change models.
. Mike Barnato • Thanks Kathy. I take your point about the unpredictability of people. And I like the dead body point. Pulsebeats are more useful than post mortems?
Some models are over complicated as you say. But are some too simple, in that they reflect the fashion of the moment?
Mike Barnato
June 21, 2011 at 2:49 pm
Kathy Strong replied elsewhere: Thanks for comment Mike. Dr Chopra was referring to ‘healthy and recovered’ bodies and I was referring to models that have a documented record of success. Yes to both ‘too simplistic’ and ‘over complicated’. Essentially we are looking for what works. In my years of working with and for companies, I have drawn on many excellent business models. I guess the advantage of being a senior is that I have kissed a lot of frogs and very seldom found my prince! Talking business models of course
I heard a lovely story about a plumber who was called out to an emergency. He hammered a nail into the appropriate spot and the owner got a very high bill for his five minute job. Owner, really annoyed by this excessive fee challenged him to which he replied. Locating leak – £10 (or similar), knowing where to hammer the nail – £500 ! I guess as Consultants, we ought to know where to hammer the nail
Mike Barnato • Thanks Kathy. I loved your frog and plumber examples. The first reminded me of the change management analogy. (The frog is in a beaker of water. It’s being heated. It falls asleep. Because it is pleasantly warm. It fails to recognise the change. And is boiled alive.) The second is a good example of charging for results, not time? Although if the only tool you have is a hammer, do most problems look like a nail!?
Mike Barnato
June 24, 2011 at 8:21 am
Judith Wainwright comments: I wonder is this partly about what we seek to achieve as consultants – solve problems or give the client the understanding and tools to avoid the problem arising again and / or fix variations of it when it does? The plumber hammering the nail can do the former but to do the latter he needs to explain the design of he water system, principles of how it works and how to manage / maintain it (not just what works and what doesn’t but why). That sounds suspiciously like a model to me. Some clients just want you to solve the problem and some want their organisation to learn from experience – maybe our job is to appreciate this and act accordingly. As it happens I do have a plumber who does the latter – but he is pretty unusual and can drive us mad on occasions
Mike Barnato • Thanks Judith. You raise the point: Are we using tools to improve results and solve problems OR to improve client capabilities and learning? I guess it will vary and sometimes will be both. But it’s a good point that I hadn’t considered.
Judith & Kathy: Back to plumbers..In Kathy’s example, there is a variation. The client says. “£500 for 5 minutes work is outrageous. It’s more than I charge as a brain surgeon!” To which the plumber replies. “Yes, it’s more than I used to charge!”.
Mike Barnato
June 24, 2011 at 8:22 am
Heather Matheson writes elswhere: They can be both! They can exist just to make a Consultant sound like they have a solution to something complex that you couldn’t possibly understand without them or they can help streamline thinking; identifying a process or model that helps to manage a particular situation, task or culture. Certainly, I have evidence of models and tools taking managers forward and helping them take a more strategic view of the operations they are responsible for. This is not a simple question – it’s more about the business model or tool being relevant to the situation that it is being applied to. Please don’t write them off! Relevance is the key.
Mike Barnato • Hi Heather
Thanks for a helpful (and relevant!) comment!
Mike Barnato
June 24, 2011 at 8:27 am
Katy Strong replies elsewhere:
Thanks Mike, that is helpful. My memory cells are not as sharp as they used to be but hopefully the point I was looking to make was clear.
Mike’s comment ‘if the only tool we have is a hammer, do most problems look like a nail?’ I’m curious, what if we became solution and results focussed – looking for what works and what is right (in performance in my case), what would happen? Would we see the world as Pollyanna did or would we discover just how many varied and growth promoting solutions we could find?
Thanks Kathy. Your point was clear. My feeling is that what works and what is right will vary according to circumstances, context and culture. The temptation is to apply whatever tool is fashionable or whatever functional specialism, regardless. A long time ago when I was with a global accounting based consultancy we used to joke that a client would approach us with a problem of poor profitability. If they first met the marketing partner they got a marketing solution. If they first met the strategy partner, a strategy solution and so on..
Mike Barnato
June 27, 2011 at 3:56 pm