Business Strategy and Lego Pieces

Thoughts on Excellence Free E-Newsletter Series
Volume 17, Issue No. 7a
November 1, 2018

By Dan Coughlin

 

My nephews, Bob and John, are amazing with Lego pieces. Every time I go to their house they have built some amazing new creation. Sometimes they follow step-by-step instructions and sometimes they just build whatever comes to mind. Either way I’m amazed every time by their end result.

Recently I learned the term “business architecture” from Seth Godin in his course, The Bootstrapper’s Workshop. He explained that there are different approaches that entrepreneurs can deploy to earn an income. Some deliver the product or service, some bring people together who want to be together, some organize different types of workers, and some people own an asset that can be sold.

Combining these two thoughts (Lego pieces and business architecture) helped me greatly. I could see a new way of looking at business strategy.

Simplifying the Idea of Business Strategy

For a long time I’ve thought that the word strategy is the most complicated and confusing word in all of business. I believe if you read fifty books on strategy you will get fifty different definitions. And oftentimes they are worded in a way that is almost indecipherable.

However, I can visualize Lego pieces and how they can be assembled to build different creations. There are 2,350 different Lego elements that come in 52 different colors. You can build a lot of different things with that much variety.

And now I can see how organizations can use different pieces of business architecture to intentionally build different types of businesses.

So here is my definition of a business strategy.

A business strategy defines the business you are in and what your organization does to generate value for customers.

The “what your organization does” part consists of the pieces of your business architecture.

10 Pieces of Business Architecture

Here are ten ways that a company can produce value for customers and be paid for it:

  1. The Deliverer – delivers the product or service to the cwustomer.
  2. The Maintainer – maintains the quality of the product or service.
  3. The Insurer – insures the product or service for the customer and replaces it when needed.
  4. The Gatherer – gathers people together who want to be together.
  5. The Organizer – organizes different types of talented people to deliver the work that has been paid for.
  6. The Creator – creates the product or service.
  7. The Repeater – repeats the creation of the product or service.
  8. The Entertainer – entertains customers.
  9. The Connector – connects buyers and sellers.
  10. The Doer – does the work for the customer.

You can come up with more, but ten ways are enough to make my point.

Become familiar with what they mean. Start by thinking of an example of each of these business architectural pieces. Here’s what comes to my mind:

  • The Deliverer – pizza delivery guy
  • The Maintainer – plumber fixes the sink
  • The Insurer – Office Max insures that the printer will be fixed or replaced
  • The Gatherer – a conference meeting planner
  • The Organizer – the contractor who assembles the workers to finish a basement
  • The Creator – the author of a book
  • The Repeater – a franchisee who replicates a restaurant
  • The Entertainer – a comic doing a stand-up routine
  • The Connector – real estate broker introducing buyers to sellers
  • The Doer – the cleaning person who cleans up your house

Analyze Famous Businesses Using Business Architecture

Now describe the strategy of a famous business by defining the business they are in and the pieces of Business Architecture they use.

  • Amazon is a retail business that primarily combines The Organizer, The Deliverer, and The Connector.
  • Google is an information and advertising business that primarily combines The Organizer, The Deliverer, and The Connector.
  • The Walt Disney Company is a family entertainment business that primarily combines The Creator, The Entertainer, and The Gatherer.
  • McDonald’s is a quick-service restaurant business that primarily combines The Repeater, The Organizer, and The Doer.

Notice that these two things (defining the business you are in and selecting pieces of business architecture) allows you to create an infinite number of different business.

Now you try it. Think of an existing organization, define the business it is in, and the different pieces of business architecture it uses. There are no perfect answers. I just want you to think about organizations in terms of the business they are in and the different ways that they produce value for customers.

Intentionally State Your Business Strategy

Now it’s time to think about your business. I want you to fill in the blanks:

We are in the ___ business that primarily combines ___ .

You can fill in the first blank with the business you think you are in today, but you can also fill it in with the business you want to be in going forward. The choice of how you define the business you are in is tremendously important. It will affect your decisions that impact every part of your business.

Once you’ve defined the business you are in, then decide on which pieces of business architecture you are going to primarily use.

For example, I’m in the performance improvement business that primarily combines The Creator and The Deliverer. Going forward, I could intentionally add The Gatherer to my business strategy.

Step back right now and really think.

What business do you want to be in?

What pieces of business architecture will you combine together to produce value for your customers?

Play with this for a while. You might just develop a breakthrough insight for the future of your business.