Adaptive Strategies Blog

My friend Kay Plantes (see www.Plantescompany.com/blog) and I are working on a new workshop focused on understanding and using business models as a way to grow your business. One of the aspects of any business model is the underlying Profit Model and how it is used to drive strategy. Consider the following:

• Harley Davidson: do they sell a bike or a life style?
• Healthcare: They profit when people are sick. What if they profitted from healthy people?
• Twitter: I know what they do, but what are they selling?
• Panasonic Factory Automation: What if they sold “productivity” instead of equipment?
• Higher Education: They are built on “hours consumed.” What if they billed according to “knowledge in-use?”

Kay and I are interested in your “profit conundrums.” Please add to our list.

We are currently in very tough economic times and here is a basic question. Do you just have to “work harder” or is this a time to pause and rethink your basic business model and your relationship with your customers?

Take a look at Denny’s restaurants. This past Tuesday they gave away 2 million Grand Slam breakfasts. All told, it cost Denny’s about five million dollars to do this. You could be a cynic and call this a gimmick. Or you could think about Denny’s business model and consider the impact that this give-away had on their relationship with their target customers. Some will take it as a freebie; others will see a reason to be loyal to a company that bought them breakfast when they were out of work.

When your customers are hurting do you ignore them or do you see an opportunity to improve your relationshipwith them. Think about it.

A fellow I’ve never met (Alex Osterwald) is writing a book about a topic I like (business model innovation.) He wrote a blog asking if people were interested in helping him with the book by commenting on ideas and “book chunks.” I signed up — so did about 100 other folks from around the world — and the process is simply fascinating (and rich with ideas). Alex is young and techno-savvy, so this may seem natural to him. I’m not-so-young and about five years behind the techno-curve. This is eye-opening to me. The interesting thing is that my profile is pretty close to the age and techno-savviness of many CEOs. What are they missing?

Here’s your question. How could you use blogs and other social media to help you tackle problems you need solved?

Apple, a “computer company,” launched the iPod phenomenon by combining music and computers and consumer electronics. Sony, the icon of portable music in the 1980s and 1990s owned a computer company, a record company and a consumer electronics company. Why didn’t they see the potential that Apple saw?

What combinations of assets (skills, knowledge, products,etc) do you own that you should combine before a competitor does?