In a historical moment like the one we are experiencing, unique in its exceptionality and in the impact it will have on the world economy, it is paramount to ask ourselves this question, now more than ever.

I take my cue from a book that will be released in these days entitled "The Invincible Company" published by the Swiss consulting firm Strategyzer, to focus on questioning the business model on which a company is based.

Ignoring customers' needs is the main reason why start-ups fail. Today we all have to feel like start-ups, and we have to question and redesign our business model, just like a startupper would.

In recent months, Abraham Maslow's "hierarchy of values" has been overturned. Security needs (health, employment, physical safety) have taken over at the expense of physiological needs. Furthermore, the needs of belonging (friendship, love) have also increased in importance. Studies show that the crisis caused by the new coronavirus will lead to the development of sectors linked to the sale of pets, because there will be a profound change in the relationship with one's own body, people will lose their jobs and a feeling of loneliness will arise. The psychological factor will be decisive at this stage.

For these reasons, a company's business model must be a navigation tool dynamic and non-static, versatile and non-rigid, modifiable and not paralyzed.

You need to put your business model in place and redesign the boundaries of your company. In this way you are able to better read the current events and take countermeasures, perhaps defining new business segments and then identifying new revenue streams.

Questioning your business model means asking yourself at least three questions:

1.         Have my client's needs changed?

2.         Am I able, based on my skills, to cope with the change?

3.         Should I do it?

For those who are familiar with the Business Model Canvas, these are the three macro-areas on which the nine-box template was designed by its creator Alexander Osterwalder about fifteen years ago.

New normal business model

The first question concerns the right side of the canvas (segments, relationship and channels), the second question corresponds mostly to the building blocks on the left of the model (activities, resources and partners), while the third question concerns the two boxes at the base of the Osterwalder tool, i.e. the cost structure and the different revenue lines.

But what do I start to check first? Is there a priority question, to be addressed immediately?

It would be appropriate to start with the market desirability rate of my value proposition (right side of the canvas). Not forgetting the first cause of start-up failure, I would wonder if the structure of my clients' needs has changed and how.

As a traveller would do, I would start to explore the new needs, problems, desires of the current customer segments.

This leads to analysing the problem (then go into “problem space”, as it is called by design thinking lovers), then move on to the solution (“solution space”) and finally, consequently, change the business model. In jargon we talk about "fit" (alignment or adaptation) of your value offer (and therefore of your business model) to the new needs of the customer.

Modifying or redesigning one's own value proposition may not mean, unfortunately, having an immediate monetary return (even if this is desirable for the support of the company's organizational structure). Redefining the value proposition, instead, means working on elements that differentiate you from your competitors, but it also means having the ability to listen and therefore the ability to understand.

Of course, starting on the left side of the canvas is not wrong. This historical moment leads to taking advantage of the opportunity of reconversion. This is what Armani did, for example, by starting to produce disposable gowns or Calzedonia (an Italian company who operates in fashion retail sector) that has been converted to produce masks.

The key is to adapt what you do and/or what you have for a new customer segment.

Taking inspiration from the martial art Aikido, which wants to understand nature and identify the individual with nature, in business model canvas you can consider the individual as the company and nature as the market.

In fact, aikido aims at the "correct victory" which consists in the conquest of the "mastery of oneself", made possible only by a deep knowledge of one's inner nature.

Aikido wants to affirm that, in order to change the world, it is first necessary to change oneself.
This means that, if one really wants to acquire the ability to master the attack coming from a potential adversary exactly at the moment and circumstance of his appearance (in Zen Buddhism we would say: here and now), it is necessary to have previously acquired the ability to fully govern oneself. Therefore, understanding what our offer of services and/or products is, what our key resources and activities are, and then adapting them to the ever-changing markets, could be a very good and enlightening keystone.

Beyond the two methodological approaches described above, the disruptive element is to design a culture of innovation and transformation within the company.

If we do not invest in innovation (understood as mindset and cultural change) and, as far as possible, in research and development, every attempt at transformation will be in vain and every challenge will be lost.

New Normal is a term born in the business and economic world that refers to the economic and financial conditions following the financial crisis of 2007-2008 and the consequences of the global recession in the period 2008-2012. The use of this term is coming back in a disruptive way following the events related to Covid-19.

That's why talking about New Normal Business Model Canvas is not so wrong.

Outlining a scenario of profound change in mental and economic patterns is something we should get used to in the near future.

 

Read New Normal Business Model #2 - Channels and customer relationship

Read New Normal Business Model #3 – Key activities and key resources, are they equally important factors?

 

Luca Pulli - Business designer – Partner RSM