The  4  Bases  of  the  BUSINESS  MODEL  DIAMOND:  Why  Some  Businesses  Thrive  While  Others  Dive  by  Dr.  Rod  King  (rodkuhnhking@gmail.com)        

"The Business Model Diamond is the iPhone for business tools: a one-in-all

platform or interface for rapidly commercializing business ideas, conceptual

(R & D) solutions, and ambidextrous strategies."

Rod King

Nowadays, there is an explosion of tools in the business world. It is hard

for people to keep up with the proliferation of tools, most of which do not explicitly

relate to well-known tools such as Porter's Five Forces and Value Chain as well as

Kaplan & Norton's Balanced Scorecard and Strategy Maps. The result is a Tower of

Babel regarding tools: there is no common language or visual platform that

relates to all tools. The Business Model Diamond attempts to resolve this

problem especially in large organizations such as multinational corporations. The

Business Model Diamond also solves the perennial problem of poor or

inadequate commercialization of business ideas, conceptual (R&D)

Solutions, and ambidextrous strategies; this problem exists at all levels in the

world of entrepreneurship: in startups as well as small, medium, and large-scale

businesses.

From a high level, the Business Model Diamond consists of four main elements or "

fractal cards:"

• BANNER: consists of header with sub-topics of "Project/Organization" and "Job To

Get Done"; sometimes, the banner contains "desired ends" or topics such as

"Mission/Purpose/Vision/Values"

• PROBLEM (TRADE-OFF): usually consists of a proposed/validated customer

problem or Big Urgent Market Problem (BUMP)

• SOLUTION (STRATEGY): usually consists of topics of a conceptual solution or

hypothesis that is described by a statement of "Strategy," "Value Proposition" and

"Product/Service" as well as "Pain" and "Delight"

• BUSINESS MODEL ENGINE (PROJECT): consists of more detailed solution in

the form of three interdependent engines: Enterprise Engine (which creates

value); Customer Growth Engine (which creates demand and delivers value); Value

Capture Engine (which captures/shares value). A Business Model Engine

(Project) facilitates the commercialization of business ideas, conceptual (R & D)

solutions, and ambidextrous strategies using profitable and sustainable business

models.

A more granular view of the Business Model Diamond is shown below.

At the simplest level, the Business Model Diamond can be regarded as a visual

checklists that summarizes topics that should be covered when discovering and

solving customer problems. Such a visual checklist ensures that all the components

of a Business Model Engine are working and aligned to achieve an explicitly stated

Value Proposition and Strategy that eliminates the customer problems. Further, a

visual checklist for different business tools, frameworks, and

methodologies facilitates the identification of similarities and differences in tools

for business and customer problem solving as well as accelerates learning,

decision-making, and implementation of projects where team members use

multiple business tools and frameworks.

At a greater functional level and especially for Business Model Improvers and

Innovators, the Business Model Diamond can be regarded as a visual worksheet and

platform that can be used for holistically documenting, improving, innovating, and

testing the viability of business models. Past as well as present tools for business

model visualization can be unified using the meta-tool of the Business Model

Diamond.

Unique to the Business Model Diamond are its four (ICES) perspectives:

Investor, Customer, Enterprise, and Strategist Perspectives. The ICES

perspectives respectively relate to four questions: Why? Who? How?

What? Successful businesses constantly keep these four perspectives/questions in

focus while trying to find a positive dynamic balance that solves a validated Big

Urgent Market Problem (BUMP). In businesses that fail, the four perspectives are

either fragmented or misaligned while a critical customer problem remains

unsolved.

The Business Model Diamond can be directly related to classic tools such as in Six

Sigma Methodology, Supply Chain, Generic Strategies, Value Chain, SIPOC

Process, and Balanced Scorecard. As a visual problem solving tool, the Business

Model Diamond can be used to iteratively translate into reality any proposed or

given strategy such as on Martin Reeves et al's Strategy Palette or Canonical

Business Strategies (Differentiation/Low Cost (Disruption)/Blue Ocean Strategy).

Recent tools such as the BCG-Business Model Court, Business Model Canvas, and

Lean Canvas can also be derived from or translated into the framework of the

Business Model Diamond. Topics from the respective models are used to populate

boxes for the four perspectives.

In the Business Model Diamond below, the Build-Measure-Learn process of the

Lean Startup Method is directly mapped to the perspectives of the Business Model

Diamond. The iterative process of the Build-Measure-Learn loop provides a means

of using a Minimum Viable Product (MVP) to validate, reject, or pivot the

strategy for a Business Model Engine. Consequently, in the diagram

below Strategy, Business Modeling, and Execution/Experimentation

(Activities) are seamlessly integrated for the rapid commercialization of

business ideas.

Also, the Business Model Diamond can be used for projects in Discovery-Driven

Planning/Growth. The basic template or fractal card of the Business Model

Diamond, which can be used for each of the four perspectives, is shown below. Can

you think of business tools that can or cannot be related to the Business

Model Diamond? We'd certainly like to hear from you.

In conclusion, the Business Model Diamond is one of the tools that is ushering the

new paradigm of Unified Problem Solving and Strategic Management where

the ultimate objective is to provide a single tool or platform that can be used for all

activities of problem discovery and solution especially in business. Using a visual

platform for business tools can save a lot of time and money as

communication and decision-making costs are reduced to a minimum while

maximizing productivity and efficiency in discovering and solving customer

problems. Finally, the Business Model Diamond can be used as a visual project

planning and management tool for rapidly testing the viability of

innovative ideas, projects, and business models.

What do you think?

ONE MORE THING ... The Business Model Diamond relates to Porter's Five

Forces as well as Brandenburger & Nalebuff's Value Net as shown below:

NOTE: A PDF document of all the above visual templates can be obtained

from here: http://www.slideshare.net/RodKing/the-4-perspectives-of-the-business-

model-diamond-while-some-businesses-thrive-while-others-dive

Rod King, PhD

October 2015