Entrepreneur Magazine reviews Business Model Generation (and of course it's favorable if I'm blogging on it right?).  While this may seem self-serving (and it is to a degree), it's more an acknowledgment to Alex and Yves for their vision, perseverance and application of a new business model to create a book on business models.  You can get the deluxe edition here or the portable edition here . Below is the review from Entrepreneur Mag: 

The new Business Model Generation book uses creative visuals to break down business models into nine building blocks.

By Jennifer Wang   |   Entrepreneur Magazine - April 2010

 

Don't let the title fool you. Business Model Generation is worthy of a place on your coffee table. The 288-page "handbook for visionaries, game changers and challengers" is filled with photography, artwork and trendy design.

Authors Alexander Osterwalder and Yves Pigneur use the creative visuals to explain how to break down business models into nine building blocks--elements such as partnerships, revenue streams and key resources--and how to re-imagine them to reflect the changing times.

"The lines between industries are blurring, and a lot of new models are emerging," says Osterwalder, an expert on business model design and innovation. "It's time for a better unit of analysis and a joint language to describe a process that every company goes through."

Business Model Generation doesn't just preach innovation, it puts it into practice: Osterwalder and Pigneur elicited insight for the book from more than 470 "co-creators" from 45 countries. Each paid a small sum--$24 to $243--to participate in the idea exchange, which partially financed the initial print run of 5,000 copies. The books sold out in eight weeks, and the project now funds itself.

The lesson? Says Osterwalder, "We demonstrated that even for an independently published book, you can think of an innovative business model to make it work."

 

Why is it so hard to Execute?

Ok, we all that, compared to execution, creating the strategic plan is cake.  So why is executing so darn hard?  I've decided to focus on this because it's such a huge issue and given our economic situation, it's even more critical (remember the adage, I'd rather have a B plan with A execution than an A plan with B execution?)

So why is this so hard - well, not sure how wired our brains are for execution in the first place.  As humans, we tend to focus on the here and now - the present - the crisis du jour, what's in front of us, the day to day.  It's harder to focus on the longer-term that is a bit less ‘tangible' and more ‘abstract'.  Let's face it, how many of us keep New Year's resolutions?  Perhaps it's just how we are.  But, that's no excuse is it!

In my experience at AT&T, a few startups I was involved in, and of course my terrific clients, lack of execution boils down to, yup, CULTURE! In looking back, there usually wasn't an Execution-Oriented Culture.  Why? There are lots of reasons but one I see a lot, as strange as this may sound, is a underlying lack of confidence that they can really execute - the rationale includes the lack of certain skills, lack of more information, lack of confidence the plan is right in the first place - second-guessing - mostly themselves vs. the outside world.  The "We don't have what it takes to make this happen" is usually based on no history or habit of execution.  Senior management doesn't have a good track record; there's no budget, money, resources (by the way, budget follows the strategy; now economic situations may change, and if so, then you need to revisit the strategies and tactics and change them for the changed world)

So how does cultural ‘deficit' happen? The usual ways.  There isn't clear ownership for execution overall and pieces and parts - and I'd bet that there isn't a clear sense of accountability in lots of areas in the organization, so why should this be different? Also, let's face it, people's natural tendancy is to resistance change (lots of research in this area).  In order to overcome this, get people involved, get their buy in - by participating in the planning, by management communicating (over and over and over) the need for the strategic direction and showing employees how they can help and support the plan and what it means for them.

What happens if you don't execute? Well, you know the rest.  The point is, while execution is hard, it's not impossible, it's not insurmountable and in fact it can become a habit that creates collaboration, increases teamwork, and in fact, increases innovation (no, that's not an oxymoron).  

What have you seen as the biggest obstacles to execution?

Well, Happy Thanksgiving - hope you all had a very blessed one!  and you can be thankful this is the last in the Execution series!

Let's face it - many many people have written tomes about performance management and incentive and I don't claim to be an expert on this - but at a higher level, it's pretty much common sense.  Whether we like it or not, the incentive plan integrated with great performance management processes are how we are motivated.  And this doesn't mean it's all money, you can incent and reward the intangibles - the innate desire of people to do something that is meaningful, that makes a difference in some way.

To build the culture you want, you've got to carefully think through your reward and incentive structure, and the underlying performance management process by which those will be assessed.  It's easy to think 1 type of incentive will achieve the behavior you want, but it may not when it plays out - inadvertantly, you may be incenting something other than what you intended. So

• Carefully and thoughtfully provide incentives to achieve the behaviors, and performance, you really want...and analyze periodically to make sure you are incenting the right things in the right ways
• Identify appropriate types and applications of "external" incentives - salary, bonus, promotions, flexible hours, vacation, ‘creative time', etc.
• Identify appropriate types and applications of "internal" incentives - autonomy, enjoyment of work, self-identification with outcomes, knowing one is making a difference

Good incentives are measurable (even if they're qualitative), tied to strategic long and short-term objectives, incorporate degrees of accomplishment and performance vs. all or nothing...and encourage accountability!

Just as it's critical to appropriately reward and incent, it's just as critical to remove non-performers.  As most of you know, a non-performer that is not addressed can easily demoralize a great team.  This also means that you must deal with confict and problems constructively - of all sorts.

This may mean assessing your appraisal process and specific individual objectives on a regular basis.  Just because the process worked for the last 20yrs doesn't mean it will work for the next 2! And if circumstances change in the business, you very well may need to adjust goals and objectives.  So as you're adjusting the strategic plan regularly, make sure those adjustments are reflected in people's objectives and measures.  Try to get everyone to be comfortable in being honest in analyzing performance and explaining any deviations from the plan by emphasizing application of learning instead of punishment.  This will help your people commit to their plans, buy in and support any changes or amendments in direction.  It will also help them understand what the company is trying to achieve and how they can contribute to success - the company's, their team's, and their own.

None of this is cast in stone - it's very malleable and ‘fuzzy' - that's what culture is - and that's why it's hard to create and sustain but easy to damage.  That's why it's got to be your top priority - because it drives everything else.  So spend as much time with/on/about your people as you do on budgeting, planning, customers....and best of luck!

We all need boundaries - we may not like them but we need them...just look at little kids - from birth on we need structure and boundaries and we need to know what they are.  Same with our people - how well do your people understand, truly know, what are their roles and responsibilities?  In my experience, very few companies have this down - and while some ambiguity is to be expected in certain roles and responsibilities, there needs to be some part that is clearly defined.  There are lots of ways to do this - job descriptions, responsibility matrices, etc....find one that works for your organization and do it.

Great leaders know themselves and their organizations very well - they are honest and truthful about ‘the good, the bad and the ugly.'  So here are a few keys:

• Get personally involved and committed to your people, and to your business - but first to your people!!! I've known some executive leaders that took this so to heart they wrote birthday, career anniversary cards, etc. and boy did that make a difference...and it wasn't rote, it was sincere, but you don't have to go to that level if it's not ‘you' -
• Be realistic - with yourself, with your team and people, and with the business
• Focus on a few key priorities that are, and can be, clearly understood by everyone - everyone!
• Establish and communite clear, understandable goals
• Follow Through!!!!! I can't stress this enough - it goes right to your credibility and commitment (if you're a parent, you know how important this is!)
• Reward those that "do" and give consequences to those that ‘don't'
• Grow your people's capabilities and competencies - train them, support them, give honest feedback
• Know yourself - be real, be genuine, be comfortable and honest with your strengths and your weaknesses, your blind spots, your ‘hot buttons' and how you deal with these
• Know if you are a roadblock, a speedbump, or an ‘accelerator' - do you give support, encouragement, energy or do you sap it away?

There are many ways to change an organization's culture, and there isn't any 1 right way - it all depends on your organization, history, leadership.  But there are some ‘templates' or tools you can use and adapt.

How do you start?

1.      Define the culture you'd like to see..this can include discussions on values, desired organizational reputation, type of people you want to be attracted to your organization, etc.

2.      Translate that into the behavior that will create and sustain that culture (and the behavior that won't!). 

3.      Methods to reinforce the culture - e.g., Leadership's behavior, "social peer pressure", feedback loops, reward and recognition, performance management, etc.

4.      Assess performance - if you are getting the results you want, keep doing #3 above and periodically review #1 & 2 as well - stay on top of this so you can catch leading indicators if there are issues arising, which, if they are, leads to...

5.      Root Cause/Effect Analysis - what are the root causes of not achieving the desired performance - and dig down, you may think it's a type of reward but why was that type of reward chosen, what is it really rewarding? Perhaps it's not really incenting the behavior you intended it to! Why is there resistance to change? What is the effect of this on the organization?  What are some solutions - who will do them, in what timeframe, etc.

6.      Identify what you need to change and how - do you need to change leadership? People? Performance management process/method? Structure?

7.      Implement solutions by communicating them very very well and very often, live it yourselves! Include and involve all levels of the organization and share improvement stories

8.      Celebrate - if you're on your way to the desired culture...and keep doing steps 3-8 over and over --