Rethinking the relationship between business model and projects

When starting any new project, most industry portfolio, programme and project management guides advise people to tailor or adapt to suit their environment. However, implementation of any new strategy objectives should translate to changing the current business model, or part thereof, to some extent to improve organisational performance.

A business model describes the rationale of how an organization creates, delivers and captures value for its customers¹. That is, the business model acts as the operating model for any new strategy to be implemented through programmes and projects. Sometimes these changes are minor and at other times they require a whole business model transmogrification, particularly with the adoption of digitalisation.

By rethinking the relationship between business model and project, organizations can muse over if the project should fit within an imperfect business model design, or should the business model design change to better enable strategy implementation through programmes and projects? The burning platform being that the Strategy Implementation Institute found in 2020 that only 52% organizations achieve two-thirds of their own strategic objectives.

To this point, the Strategy Implementation Body of Knowledge (SIBoK)² is the only guide in the world to advise - as part of its Strategy Implementation Roadmap - to continuously adapt the business model design to support project implementation rather than the project adapt to it. The Galbraith Star Model³ can be used to great effect to base design choices about potential business model changes that better support strategy implementation through programmes and projects.

The Galbraith Star Model™ structures the business model into five unique design choices. They are:

• Strategy, which determines organizational direction and objectives to be achieved in the financial year. It helps to show strategic contribution from any investment in strategy implementation.
• Structure, which determines the location of decision-making power and authority within the organization. However, within a project, this is about delegated authority and management by exception.
• Processes, which have to do with the flow of information; they are the means of responding to information technologies.
• Rewards and reward systems, which influence the motivation of people to perform and implement strategy objectives.
• Policies relating to people (human resource policies), which influence and frequently define the people’s mindsets and behaviours to proactively support strategy implementation. 

Any business model is essentially a series of key decisions that collectively determine how an organization operates and executes new strategic objectives. As such, organizations should view any improvements to the business model as changes to those strategic decisions: what your offerings will be, when decisions are made, who makes them and, most importantly, why. Like Simon Sinek says, “the Why explains the purpose, cause and belief that inspires an organisation to do what they do – and it’s not about profit.”⁴

Successful changes along these dimensions enable organizations to move from the simple provision of products or services towards a digital environment of projects as ecosystems and platforms, where multiple customer problems are resolved at once. For example, how Netflix systematically resolved rental late fees, store manager suggestions, and introduced the ability to watch and download content on demand on any device.

It can be argued that digital transformation is not about technology; fundamentally it’s about change⁵ to the business model. It’s not a matter of if, but a question of when and how? Like Robin Speculand says “You don’t want a digital strategy. You want a strategy for the digital world.”⁶ Accordingly, to thrive in a growing digital environment, organizations will need to reinvent themselves and subsequently change their business model design that best supports strategy execution. A key question to consider is “What are you willing to do to execute your organisation’s strategy”?