Page 276 -

Implementing Business Models in Organizations

We’ve laid out the fundamentals of business model innovation, Processes
explained the dynamics of different patterns, and outlined tech- Each business model demands different processes. Operations
niques for inventing and designing models. Naturally there is much run under a low-cost business model should be lean and highly
more to say about the implementation that is critical to a business automated. If the model calls for selling high-value machines, quality
model’s success. processes must be exceptionally rigorous.
We’ve already addressed the question of how to manage multiple
business models (see p. 232). Now let’s turn to another aspect of Rewards
implementation: turning your business model into a sustainable Different business models require different reward systems. A reward
enterprise, or implementing it in an existing organization. To illus- system must use appropriate incentives to motivate workers to do
trate, we’ve combined the Canvas with Jay Galbraith’s Star Model to the right things. Does your model require a direct sales force to
suggest aspects of organizational design you may want to consider acquire new customers? Then your reward system should be highly
when executing a business model. performance oriented. Does your model depend heavily on customer
Galbraith specifies five areas that should be aligned in an organi- satisfaction? Then your reward system must reflect that commitment.
zation: Strategy, Structure, Processes, Rewards, and People. We place
270 the business model in the middle of the star as a “center of gravity” People
that holds the five areas together. Certain business models call for people with particular mindsets. For
example, some business models call for particularly entrepreneurial
Strategy mechanisms to bring products and services to market. Such models
Strategy drives the business model. Do you want to grow 20 percent must give employees significant leeway, which means hiring proac-
in new market segments? Then that should be reflected in your tive, but dependable, free-thinkers.
business model in terms of new Customer Segments, Channels, or
Key Activities.

Structure
The characteristics of a business model determine the optimal
organizational structure for its execution. Does your business model
call for a highly centralized or decentralized organizational structure?
If you will implement the model in an established business, should
the new operation be integrated or spun off (see p. 233)?

!"#$%&'(%)*+(%,,---.93 /012013---/431-67