The BMC as a Tool for Internal Alignment
Using the canvas with all internal units
We’ve been working with the business model canvas for years. From business ideas to promising startups to large corporations, we’ve guided teams in designing their own canvas in order to illustrate how their business is or will operate in the marketplace. We even teach an entrepreneurship class specifically on business model design at Özyeğin University. But it is only recently that we’ve started utilizing the canvas with multiple departments within a corporation, bringing out new and challenging synergies.
The Business Model Canvas (BMC) makes sense to get a macro-view of a corporation. You can even take it a step further and break it down to incorporate different models for different business units. But does it work with internal units, cost centers without a defined customer segment?
Internal units adopt other units as their customers, then examine the products & services paired with unique values they are offering to those other units. Channels to reach those units are just as relevant, along with Key Activities and Resources to deliver those values. Finally, Partners takes on a whole new meaning as you link all the units’ business models together.
Consider HR’s summarized business model below…
- Customer Segments: the upper management team, heads of each department, plus all employees
- Value Proposition:
- Upper Management: building a strong corporate culture, measuring and improving employee performance and motivation
- Department Heads: recruiting and retaining qualified team members
- All Employees: supportive and healthy work culture, opportunities for improvement and career advancement
- Channels / Relationships: emails, reports, company events, meetings, Linkedin, etc.
- Key Activities: new candidate recruiting, performance evaluation, advanced skill training
- Key Resources: performance monitoring software, e-learning platform
Key Partners: IT, Marketing
As you can see, all the other units are dependent on HR to deliver its value proposition in order to deliver value to its customers. On the same token, HR is dependent on other internal units (i.e. IT and Marketing) in order to deliver its own value proposition. The BMC allows each unit, whether revenue-generating or not, to illustrate how they are contributing to each other’s values and to the company-wide values being delivered to external customers.
Try it in your own company to help employees understand their own contributions and the contributions of others. Then lay out all the canvases side-by-side to explore the linkages between all the units across the company, while potentially discovering new synergies along the way.
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