Platt Perspective on Business and Technology

Business models, organizational models and the table of organization – a basic strategic and operational model

Posted in strategy and planning by Timothy Platt on September 14, 2011

I have recently been posting to a series: Connecting Everywhere and All the Time, and its Impact on Structure in Markets and Organizations (see Business Strategy and Operations, postings 187, 189 and 190), and I have been drawing on some points of distinction in that series that I see need to more fully clarify before I add in a Part 4.

• Citing Wikipedia, a business model “describes the rationale of how an organization creates, delivers, and captures value (economic, social, or other forms of value). The process of business model construction is part of business strategy.”
• In a broad sense, the business model provides a fairly complete description of the business, or at least of how the business is supposed to be organized and run, and this includes how that business is supposed to be structurally organized – what its organizational and operational structure should be like.
• I have been using the term business model, and have separately been using the term organizational structure and in that I draw a distinction between what the business should be doing and what it really is doing- and how it is actually organized and structured as some people in it develop work-arounds that do not show on the table of organization, and as others develop personal power centers that make that necessary. Ideally at least, the intended organizational structure is what you find in practice as well as in principle but that is not always the case.
• The table of organization basically outlines who reports to whom, and in organizing how different functional areas within a business are carried through on. This, in practice often delimits who does and even can communicate with whom, and both across and within lines on that organizational chart. And reality often means dotted lines and unofficial connections if the business is to actually function – ad hoc and unofficial work-arounds that can sole problems but that can create them too. Consider the potential for loss of control over confidential and sensitive information there, as a working example.

So when I write of optimizing systems in my series, as cited above, I do so with real world businesses in mind and not just idealized case study models as might be found in the professional literature. I write the series with real world ad hoc solutions and work-arounds firmly in mind.

• Operationally, deviations from the business model of an organization, as it would be laid out in a business plan only matter where and to the degree in which they have impact on operational and strategic planning and execution or on significant due diligence or risk remediation matters.
• In the long run and sometimes on a short time scale as well, a failure to know how your organization is actually, functionally set up and running can only lead to strategic disconnects and inefficiencies.
• So differences between intended and official, and real world and day to day do count and have impact. They make the organization that much less efficient and that much less competitive in its market space.

At the end of Part 3: finding the right organizational complexity balance, continued in my series I included the text “… business models and what you do, organizational models and how you organize to do that, and the table of organization and who does what in carrying all of this out.” This posting is about how they play out in practice and the need to keep planning and intentions, and execution in practice in effective alignment. And that is vital for making the approaches work that I outline in my series Connecting Everywhere and All the Time, and its Impact on Structure in Markets and Organizations (see Business Strategy and Operations.

You can find this and related postings in Business Strategy and Operations, and my series Connecting Everywhere and All the Time, and its Impact on Structure in Markets and Organizations both there and also in my directory Ubiquitous Computing and Communications – everywhere all the time.

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2 Responses

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  1. Amanda Seth said, on November 3, 2011 at 8:40 pm

    Organiztional objectives must be in line with business operations. This is effectively achieved by tools such as humanconcepts.

    • Timothy Platt said, on November 4, 2011 at 11:35 am

      Hi Amanda and thank you for your comment,

      First of all, you are completely correct in pointing out the value of well designed software in helping to manage, organize and visualize the organizational structure, and both for knowing where you are and for moving forward. I have never used HumanConcepts.com (http://www.humanconcepts.com) products but they have a very good reputation and a strong following in the form of an established customer base.

      Having noted that, I set aside this specific software solution to add some general considerations for using any business management software. And I add that while my following notes are couched in terms of software used to architect and manage business organization and the table of contents, the basic principles I would cite here apply to CRM software and every other business productivity or management software solution that you might consider pursuing.

      Every software package is an algorithmic implementation, and as such every software solution carries with it a set of basic, underlying assumptions that tend to simply be taken for granted. Effective, well designed business software is flexible and it covers a great deal of range as to applicability and fit. But it can be really important to know at least something of what the underlying assumptions are, as a matter of your own due diligence. I specifically note in that context that this review can help you to identify what for your business might be their blind spots. So do your homework on the company. Read their whitepapers and know where and how their software solutions are implemented, successfully or not.

      What types of businesses and other organizations use this software, and how do they match and differ from your organization? This may not matter as much for more routinely organized parts of your business. But this can become important for parts of your organization that directly connect into creating and supporting your unique value proposition, and particularly where a more novel organizational model for that part of the business might facilitate this. I have been drilling down into some of the details related to this in more recent postings on tables of organization, and also on the closely related issues of compensation package policy and getting the right people in the right chairs – some of this already live to the blog as of today’s writing and some is written and scheduled to go live in the following weeks so this is all a work in progress. And current and pending postings related to this will all be coming online at:

      • Business Strategy and Operations – 2, (https://plattperspective.wordpress.com/business-strategy-and-operations-%e2%80%93-2/) and
      • HR and Personnel. (https://plattperspective.wordpress.com/hr-and-personnel/)

      I would enjoy and appreciate your thoughts in feedback to some of that too.

      But to return more specifically to your comment, use these tools and you will gain a great deal of benefit from them but do so with your eyes open to their limitations too. And particularly if your business seeks to vigorously pursue and provide unique value propositions and/or blue ocean strategies those limitations are going to appear precisely where consistent, unexamined use of these tools holds the greatest potential impact – and if misapplied might lead to loss of potential.

      So run the software, fitting in your own data and then review the results, and with the same due diligence and risk remediation care that you would follow everywhere else in a well run business.

      Thanks again, Tim Platt


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