Your business blueprint: Five essential elements to design a great business
To create a compelling business strategy, look beyond the typical business plan. Focus on five essential elements, and how they fit together, instead.
Good businesses get planned, but great businesses get designed. The difference is not just grammatical, but functional: Great businesses are not driven by a business plan, but by a business blueprint, a powerful story about how the pieces of a business will come together to achieve, sustain, and grow its competitive advantage.
The following framework is based on partnership and analysis of over 500 startups across 20+ industries in 10+ countries.
Five elements you need to design a great business
- A winning aspiration that aligns, inspires, and energises the stakeholders of the business. Key question: What measurable world are we setting out to create?
- A business strategy that describes how your business will differentiate from existing alternatives to achieve the winning aspiration. Key question: Who are our target audiences, and how are we going to win them over from competitors?
- A value proposition that lays out the products, services, and experiences needed to successfully bring the strategy to life. Key question: What user success stories do we need to make true through which features?
- An organisational design that tells you how you will design, deliver, and update the value proposition. Key question: Who is on the team and how will they connect with the right processes, technology, and partners?
- A financial narrative that addresses how you will sustain and grow the organisation. Key question: How will we monetise user interactions over the costs and investments of the business?
These five elements fit with each other to create a powerful, cohesive story about how your business will generate, exchange, and grow value for its stakeholders.
Bring together your five elements with four ‘fits’
While it’s crucial to identify the five elements as a first step, the strength of your business depends on the strength with which the elements fit together. Just like a chain, your business will be as strong as its weakest link.
So, once you’ve identified your five elements, you need to think about how they come together. To optimise the storytelling and performance of your business, focus on the following four ‘fits’.
The problem-solution fit focuses on how your 'who to serve' and 'how to win' decisions bring you closer to your winning aspiration. Does the repeated servicing of your value proposition to your target audiences bring you closer to the measurable world you want to create?
Key considerations: Are we solving the right problem for the right audience? How might we better position our business for success by polishing our 'who to serve' and 'how to win' choices?
Remember: Make sure you are always falling in love with the customer's problem, not your solution to it.
The product-market fit invites you to consider how your value proposition generates the necessary interest, engagement, and transactions from your customers. Product-market fit determines the precision with which your value proposition can materialise your strategy.
Key considerations: Are we reducing the right pain points or amplifying the right passion points for the audiences established in our strategy? How might we refine further by reducing more pain points or creating more passion points in our customer interactions?
Remember: Don’t try to create better versions of your products, try to create better versions of your users.
The market-maker fit measures the capacity of your organisational design to repeatedly create, launch, and scale the right value proposition to your audiences, as well as evolve it to anticipate changes in your customers’ needs, preferences, and behaviour.
Key considerations: Do we have the right talent? Are they sufficiently empowered by the processes, technology, and HR policies of our business? How might we better guide, connect, and empower our people through the right processes, technologies, and partnerships?
Remember: Agile systems are often quite fragile. Process can get in the way of success. Focus less on organising your talent and more on empowering them. Don’t set outputs (requirements) but outcomes (success criteria) and allow your teams the creative freedom to surprise you with how they achieve those outcomes.
While the market-maker fit determines whether your organisational design can deliver the right product to the right audience, the maker-profit fit measures whether those transactions are financially sustainable.
Key considerations: Can we monetise our value proposition over the cost and investments required to sustain and grow our organisational design? How might we monetise our value proposition in innovative ways to cover costs and investments while delivering better value than our competitors?
Remember: To tie this back to your winning aspiration, remember that revenue is like oxygen: You need oxygen, but oxygen is not what you are alive for!
Bring together your elements and fits to design your business blueprint
Most of the existing models to design a business focus too much on the individual blocks and too little on the strategic emergence that springs from their interplay. Business blueprints are powerful because they focus your attention on the self-reinforcing synergies between every piece of your business. By focusing on the quality of the 'fits' between your five essential elements, a business blueprint can enhance your insights, decisions, and ultimately, your bottom-line results.
Whether you are an aspiring entrepreneur trying to launch a start-up or an experienced intrapreneur pushing for innovation in an established corporation, the potential of your venture will be derived from the strength with which your business building blocks fit together.
A quick quality test for your business
Ask yourself, are you:
- Solving the right problem for the right audience (problem-solution fit)?
- Doing so with the right value proposition (product-market fit)?
- Can you consistently update your value proposition and bring it to market (market-maker fit)?
- Can you do so in a financially sound way (maker-profit fit)?
- And most importantly, are you constantly exploring new ways to strengthen those fits?
If you answered yes, then you are not only maximising your chances of success… you have also become a great business designer!
Need help building your business blueprint? Let's chat.