Sep 16

How do you ‘lean’ a business?

In these straightened times, its a great opportunity to review your business processes & establish the foundations for the future.

Never let a crisis go to waste. Rahm Emmanuel (via WSJ)

Lean means taking a fundamental look at your business & driving out waste. Some of these wastes will be obvious (work in progress, re-work, multiple sign off sheets, etc) some of the waste may be harder to identify. There are experts in “Lean” & 6 Sigma Black-Belts, these may work for you, but I would suggest that you begin with a strategic review of your purpose, then consider some systems process modelling that will show how well, or otherwise, you are working towards those strategic proposes. From there you can assign costs and added value to activities to help with cast flow forecasting.

Strategic Purpose

You need to have one.

I was lucky to spend some time with Michael Corbett (Product Box, @productbox) a couple of weeks ago using a fairly new method called the “Business Model Canvass“. We spent a couple of minutes talking about the canvass but it’s such a simple, visual method that we quickly started drawing ideas on the sheet and making connections. It was quite fun to be the ‘client’ and not to have to think too hard about the model but just concentrate on the process.

We looked at a business I was involved with and used the Canvass to work up a representation of the business model. The visual approach quickly distilled the Strategic Purpose (which I can waffle on about for ages) and encapsulated a clear  Value Proposition. The business was a good test of the canvass as it’s not a simple model of taking orders, fulfilling orders, rinse & repeat.

We spent quite a bit of time discussing the stakeholders (or customer segments), activities and relationships. This actually identified a critical Value Proposition that I was completely unaware of. It had certainly not been articulated before.

We also worked out most of the rest of the business model, though without much detail. By lunch time we’d 75% of the business model captured, though not in a form that you could have presented to a third party. However, in a dozen or so post-it notes we’d encapsulated most of a traditional business plan and produced a couple of very clear value propositions that, together with the key partners & customer segments, represented a pretty good Strategic Purpose.

Fleshing out the sketch

Michael then pulled out his trump card – he’d set up a Google Site specifically designed to capture the output from our Business Canvas session. This contained all our notes, diagrams, together with a whole load of background info on the canvass, process, and associated references. Basically, all the information necessary to take the insights gained from the business canvas exercise and turn them into an action plan.

Michael explained that, given that it contains all this information in one place, and that it relates to a new product (or service) that he calls it a ProductBox™. Normally we’d have been working on the Canvass as team of business owners / founders / exec’s prior to launching a new product or service, and the ProductBox is designed to keep that team-work going on line. I just happened to be working with Michael on my own.

After our meeting I logged in to my new ProductBox and took a look at the draft diagrams & notes. Because we’d spent the time drafting the original using paper and pens, it was very easy to start using the on-line diagrams. The associated notes helped to expand the short notes with more detail.

After a couple more hours I’d got quite a detailed business model described. I’d also explored some of the panes in the canvas in more detail and put in some background information and explanatory notes on how things related to each other. One of the drawbacks with simple visual representations is that you often lose critical details, having the Product Box with all the notes kept all those notes together with the canvass. Although I was working on this alone (with Michael keeping an eye on me) the package is a wiki so naturally collaborative if you’re in company with others.

After a couple of sessions I had sufficient detail that I would naturally start using something like IDEF0 to detail the business processes needed to make the canvass work. One feature of IDEF that I really like is the concept of layering processes through parent-child relationships, while the Canvass doesn’t force on you, I can see it being a great complement to other approaches (and the wiki design of the ProductBox would help here also).

The end result (even after a couple of sessions) was sufficiently detailed that I could use the canvas as a map of the business model to describe to others. It’s also a live document that can continue to grow as more contributions are posted.

Michael and I discussed the use of the canvass. I think it’s strength is as a planning tool that very quickly and visually allows people to discuss their business model (without lots of MBA mumbo-jumbo). At first I was a little frustrated at the lack of detail, but I’ve come round to appreciate the simplicity of the presentation framework. There’s a lot more detail under the surface and the Product Box that Michael set up allows for almost infinite details if that’s what floats your boat.

Should you Canvass your business?

What I liked was the holistic view of the business model, and the expressed statement about Value Proposition. Anyone thinking of pitching their business should take a look at this approach, and have a chat with Michael.

Thanks to Michael for his comments on an earlier draft of this post and for introducing me to the Business Canvass and ProductBox.

May 23

Social Media Systems (1)

(Update – swapped Sam’s live UStream embed for Michael’s recorded YouTube embed)
This is an expansion on my Brrism talk on Systems Theory and how it can be applied to social media (systems).

There are a couple of benefits of using something like systems theory when designing a social media system, plus a couple of drawbacks. Perhaps most importantly, it helps with the big picture before worrying about API calls, jscript vs php, etc. The main drawback is that is won’t tell you how to make your social media system actually grow and thrive.

If you’re interested in the history of systems theory, General Systems Theory, Bertalanffy, et al, then my previous post touched on that, plus there are good wikipedia pages to read (linked to in this sentence). This article will concentrate on the overview, the next article will introduce to a particular systems approach and I’ll conclude this mini-series with an example application.

What is a System?

The word ‘system’ has become somewhat diluted and it’s meaning confused. However, systems are relatively easy to spot and describe.

Patrick Coin, Feb 1996

Firstly a system has components. A ruler is not a measurement system, it’s just a straight bit of metal or plastic with some marks on it. A feather is not a flight system, it’s very well adapted to direct airflow, perhaps with display markings, certainly helps with insulation, but it’s not a system.

All those components are contained within a boundary. Sometimes that boundary is fairly obvious, like the Yellow-Bellied Sap-Sucker. Sometimes the boundaries are more arbitrary, this website might be considered a system but there’s no physical boundary. Ultimately, the boundary is where you want it to be, but should be relevant to the system you’re looking at. But remember, the wider the system the more complex, too tight and you might not have a system at all!

There is a theoretical construct called the closed system, in reality all systems are open. This means there are inputs and outputs that cross the boundary. What this stuff is that crosses the boundary will depend on the system. You might have information, raw materials, written articles, even abstract concepts like trust. The point is that stuff crosses the boundary and you can describe it.

There is an important caveat to all this stuff crossing the boundary, there has to be a transformation between the input and output. Otherwise you’ve got a pipe! A pipe is not a system.

A communications system is a system because although part of the input (your message) is hopefully the same as the output (your message), there is a pile of associated data about the sender and receiver that is transformed in moving your message to your recipient. There are also internal transformations of the input message through encoders, compressions algorithms, decoders, etc.

Systems are also in a hierarchy of systems that form their environment. My little Sap-Sucker lives in the rainforest that is its ecosystem, that is part of a wider global system, and so on. It also has a digestive system, neural system, and so on down the scale. Systems within systems.

And lastly, but most importantly, systems display something called emergent properties. In social systems this is the law of unintended consequences. Behaviours that arise from the interaction between all the components and sub-systems, variations in inputs, changes in the environment. The point being that you can’t define them all when you analyse the system.

So far, so mechanistic. How do we apply this to social media? More >>

If you’re interested in what was actually said in my talk, the video is up on Facebook (sorry, not on an embeddable site, will have to talk to Michael about that). Sam Downie (@samdownie) was streaming on UStream and the slides are on Slideshare.