Do You Really Understand Your Business?

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.     ~ Warren Buffett

This may be a bold statement, but I am willing to bet that very few members of a senior executive team can fully articulate their current business model.  In other words, the map that describes the key interactions and factors affecting how your organization delivers value to customers and turns effort and costs into profit.

Over the past 35 years of working with senior executive teams I have been appalled at how few fully understand their own business model.  They readily understand how their individual function works, but few understand the full business model.

And why is this important?  Because one of the first places to look for insights into effective strategy development and execution is the existing business model.  By mapping out the process of the current business model, then stepping back and looking at it critically (seeing the forest instead of the trees) it often happens that insights pop out.

For example, with one supplier of heavy truck components, after reviewing their current business model it became obvious to everyone that the organization was not spending enough time with their customers, treating them more like a transaction than an ongoing business partner.  The model also pointed out that plans for expanding into developing markets was hampered by lack of market intelligence.

Often we find that current business models have not kept up with either the changing global economy, shifts in technology, or customer evolution.  This insight is critical for the senior team to understand and debate. I am not suggesting that mapping out the current business model will lead to a radical change in how a company goes to market, but will certainly point out areas of weakness in the current operations that an improved strategy and more effective strategy execution can overcome.

You don’t have a real strategy if it doesn’t pass these two tests: that what you’re planning to do really matters to your existing and potential customers; and second, it differentiates you from your competition.    ~ Gary Hamel

Tight Lines . . .

John R Childress

About johnrchildress

John Childress is a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at or
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