Apropos to yesterday’s post about non-profit business models is a piece by Saul Kaplan on the Harvard Business Review discussing how every organization that offers some sort of service needs a business model regardless of whether you are a non-profit, NGO, government entity or for profit business.
If you have never thought about your organization’s business model but figure it is about time you did, you may found Kaplan’s comments about the mutability of business models a little disheartening.
“If you ask any ten people in your organization how it creates, delivers, and captures, will the answers even be close?
If not, it’s probably because, in the industrial era when business models seldom changed and everyone played the game by the same set of well-understood industry and sector rules, it wasn’t as important to be explicit about business models. Business models were safely assumed and taken for granted.
That won’t work in the 21st century when all bets are off. Business models don’t last as long as they used to. New players are rapidly emerging, enabled by disruptive technology, refusing to play by industrial era rules. Business model innovators aren’t constrained by existing business models. Business model innovation is becoming the new strategic imperative for all organization leaders.”
He goes on to talk about the need for new, hybrid business models that blur the existing lines. I take some comfort in the fact that business models are currently a hot topic of discussion among various arts administration blogs. It means we are staying current with trends rather than following far behind.
One thing in particular I took away from Kaplan’s post was the importance of keeping involved in the conversation about business models given that existing lines of separation between profit and non profit are likely to become less distinct.
“Perhaps the most important reason for developing common business model language across public, private, non-profit, and for-profit sectors is that transforming our important social systems (including education, health care, energy, and entrepreneurship) will require networked business models that cut across sectors. We need new hybrid models that don’t fit cleanly into today’s convenient sector buckets. We already see for-profit social enterprises, non-profits with for-profit divisions, and for-profit companies with social missions. Traditional sector lines are blurring. We’re going to see every imaginable permutation and will have to get comfortable with more experimentation and ambiguity.”