I interviewed Rod King who discussed Supply Chain Design: From The Business Model Canvas to the Supply Chain Canvas.
Today we're speaking with Dr. Rod King who is the author of 'Business Model Canvas: A Good Tool with Bad Instructions' and we're going to talk about Supply Chain Design: From The Business Model Canvas to the Supply Chain Canvas. So Dr. Rod can you tell us what your book is about?
My book – “Business Model Canvas: A Good Tool with Bad Instructions?”– takes a critical and deep look at the popular tool of the Business Model Canvas. Also my book provides a simple but multilevel mapping framework that enables entrepreneurs to save lots of time, money, and energy while they discover and solve business model (supply chain) problems not only in private and public sectors but also in non-profit organizations. In short, the book shows how the Business Model Canvas can be upgraded for use as a tool for Universal Pain Discovery & Solving, that is, as a platform for rapidly discovering and solving pain in every domain. Also, the book proposes the use of novel visual tools such as the Business Model Strip and POKER Canvas that facilitate business model (supply chain) improvement and innovation in environments with multiple stakeholders and trade-offs. Further, the book provides a universal visual language that uses one line (rather than a tessellated canvas of 9 building blocks) to represent a “pipe” business model or business model with a single customer segment. Finally, the book provides a universal problem-solving heuristic of the Pain-Plan-Do-Review (PPDR) or learning cycle to guide effective and efficient use of business modeling tools such as the Business Model Canvas, Mission Model Canvas, and Lean Canvas.
What are the deficiencies inherent in the Business Model Canvas which you address in your book?
My book highlights the Business Model Canvas’s “12 handicaps” that lead to significant waste of resources as well as slower application in business model (supply chain) improvement and innovation projects. Of the 12 handicaps, it’s important to note the following disadvantages of the Business Model Canvas
1. The Business Model Canvas is a static block diagram (without an inherent process or a visual heuristic for iterative problem solving):
The Business Model Canvas is typically presented as a set of 9 building blocks that describe a business model. However, the 9 building blocks are not directly related to the four phases of a pain solving (learning) cycle. Consequently, the Business Model Canvas tends to be used as a one-shot list for visually documenting the parts of a static business model. The dynamic aspect of continuously resolving trade-offs or solving problems in a business model is not emphasized.
2. Business Model Canvas is optimized for a single stakeholder (Customer):
The network of relationships between the 9 building blocks of a Business Model Canvas is non-obvious. For a single category of customers or “pipe” business model, a Business Model Canvas can be easily read and understood. However, for two or more categories of customers such as in a double- or multisided platform (supply chain), the logic of a Business Model Diagram becomes unwieldy, inaccurate, and difficult to understand. In short, scalable block diagramming of a Business Model Canvas is limited especially when illustrating platforms such as in multisided business models (Uber; Airbnb; Apple (iPhone); Google (Search)), government, and non-profit organizations.
3. Business Model Canvas deals with profit-focused impacts (while ignoring social and environmental trade-offs):
The original nine blocks of the Business Model Canvas can be used to show how an enterprise creates and delivers a value proposition in order to capture profit. The emphasis of the Business Model Canvas is on documenting financial trade-off (revenue streams; cost structure) and in particular the metric of profit. Blocks do not exist for documenting social and environmental impacts or trade-offs. Thus, the original topics of a Business Model Canvas cannot be used to describe social business models as well as environmental (sustainability) models. Also, Michael Porter’s concept of Shared Value or the Triple Bottom Line (Profit-People-Planet) framework cannot be directly applied on a classic Business Model Canvas. Overcoming this handicap has led to the development of bespoke canvases such as the Mission Model Canvas and Social (Business) Model Canvas.
4. Few business tools can be directly and visually integrated with the Business Model Canvas
The system or problem solving theory, which governs the organization of building blocks on the Business Model Canvas, is non-obvious.Many uses of the Business Model Canvas are therefore superficial. Also, it is difficult to link existing business tools with the building blocks of the Business Model Canvas. For instance, there is weak integration between the Build-Measure-Learn loop of the Lean Startup Method and the structure of building blocks on the Business Model Canvas. The Six Sigma process of DMAIC cannot be directly linked to the granular building blocks of the Business Model Canvas. In practice, use of the Business Model Canvas is relegated to a scorecard for documenting the status of a business model rather than as a set of dynamic blocks for continuously resolving emergent pains or trade-offs of a business model. When properly structured, the Business Model Canvas can be used as a platform where many existing business tools become “plugins” or “apps” for solving many and varied problems in business.
How can your book be used by supply chain executives or entrepreneurs in this industry?
One of the biggest handicaps of the Business Model Canvas is the absence of an equivalent linear representation of a business model in the form of a line diagram or chain such as in the “Business Model Strip.” In other words, no equivalent line diagram – except for the Business Model Strip – exists for scalably representing a business model or supply chain. Supply chain networks are difficult to represent using the block diagram and notation system of the Business Model Canvas.
In contrast, the tools of the Business Model Strip and POKER Canvas, which are featured in my book, can be used to simply, visually, and comprehensively document, analyze, design, and manage supply chains (“pipes”) as well as networks (“platforms”). My book introduces the four generic elements of any business model, value chain, or supply chain: Value Creator (VC); Output (O); Value Recipient (VR); Feedback (F). These four generic elements can be decomposed into the topics of the nine building blocks of a Business Model Canvas. Using a Business Model Strip, a supply chain can be visualized as a sense-and-respond or cybernetic system that involves interaction between the four aforementioned elements with a view to eliminating trade-offs.
The attachment shows an application of the concept of the Business Model Strip to illustrate a Supply Chain Canvas which visualizes a “fractal supply chain” as a series of business models or “self-similar supply chains.” The Supply Chain Canvas seamlessly integrates ideas of Supply Chain Analysis, Design, and Management with those of Business Model Improvement and Innovation. Consequently, Supply Chain Practitioners can use a Supply Chain Canvas to rapidly and collaboratively map, analyze, and design supply chains as well as business models of any complexity and in any domain.
About Rod King
Rod King, Ph.D.
AUTHOR of "Business Model Canvas: A Good Tool With Bad Instructions?"; CONSULTANT on Business Model Hacking (BMH)