Henry Chesbrough once lamented that business model is nobody’s job. That is changing now. Presumably after his assertion that “the most importance, effective and disruptive innovations are often the result of new business model, not new products or technologies”, many companies are learning to cope up with designing and innovating business models to keep up with competition. The job of designing new business models is now entrusted to all C-level officers.
1. Chairman/ President of the Board of Directors: The chair is responsible for drafting business concept, policy, vision & mission, goals & objectives in consultation with the senior management comprising C-level officers. He must articulate the value proposition after assessing the internal and external environment. The chair is the beacon of light and patron for designing new business model. Hence, he functions as friend, guide and philosopher to the senior management
2. Chief Executive Officer: The CEO is necessarily the team leader whose job is to define the value proposition in practical terms involving segmented markets, competitive strategy and identification of chief players in the value network comprising production and sale of a line of products. He must be squarely guided by what Peter F Drucker said about business: “The purpose of business is to create a customer”. Undoubtedly, his prime concern is to satisfy customer needs and wants which he seeks to obtain by chalking out a business model. To do that, he ropes-in his colleagues who are chiefs of operations, marketing, finance and information who by nature and training should display the same level of enthusiasm as he does
3. Chief Operations Officer: After corralling the services of human resource, supply, logistics and admin departments, the COO is tasked to identify and evaluate the supply chain along with core competencies within and the partner network outside. This helps him to design the three components in the value creation segment namely key activities, key resources and key partners
4. Chief Marketing Officer: Value delivery is his key forte. The components under this area include customer segments, distribution and delivery channels and the hallowed aspect of customer relationship. Thoroughness of identification and analysis being the chief trait of the COO, he would be in action from the time designing business model is flagged on. In fact he is the one who is most concerned with the customer and he is the one who is the bread winner
5. Chief Financial Officer: Inevitably the COO is saddled with tending the house of finance, a most difficult task to do in any business. In the case of Blue Nile Diamond and Jewellery there has been constant turnover of CFOs whose stint is invariably cut short. This does not mean that the CFOs there are not competent; simply they cannot cope up with the demands of the particular business model that was employed in Blue Nile. In every business model the CFO has unenviable tasks of assessing the cost structure in creating value in its perspective and balance with revenue stream generated from income mechanism. More than that, he has to make sufficient margin to keep the business oiled in all its wheels and return attractive dividends to owners/shareholders. CFO is never spared to mend finance alone. He has to do the thankless job of charting the strategic course; handle risk management; and top of it he is often called upon to act for the CEO when the latter is on holiday or under pressure of work
6. Chief Information Officer: While Chairman downward to the C-level officers described until now are concerned with business model and its logic at the strategic level, CIO is a different kettle of fish. He is given responsibility to identify and draw the activities indicated in a business model as process flow charts. Using systems theory, computer logic along with communication and information network, the CIO does what we call as process design at the operational level. Activities and decisions taken at various points in the conduct of business generally conform to the process design introduced and implemented by the CIO.
Muthu Ashraff
Business Adviser
Mobile : +94 777 265677
E-mail : cosmicgems@gmail.com
Web : http://www.cosmicgemslanka.com
Blog : http://cosmicgemslanka.com/blog/
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