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Overuse of Business Models Limits Thinking.
By Kevin Dwyer
Thursday, 29th November 2012
 
I am a paradox, I love using models to communicate business concepts and ideas and yet I hate the overuse and misuse of business models to explain everything about every issue in a business - Let me explain.

Let's start with what I love. I love using my iPad to sort out my thoughts on what I have observed about an organisation by drawing a two dimensional matrix, a graph or a Venn diagram.

I come away from a meeting or a set of interviews or a workshop with an organisation and I will use an application I favour to draw what I think I observed. Many times, it is not so much what I cognitively observed, but more what I felt. Drawing helps me turn feelings into cognitive thought.

We have been researching for many years what makes for effective transformation projects. We know that communication and training have a big part to play and we know it is not as simple as just "communicate the change and offer people training". We know that the decision on what to communicate, to whom, when and by what means is very much a tactical decision with specific outcomes desired for each communication as part of an overall communication strategy. We know training decisions are similarly tactical in nature in successful transformations. Sorting out what the relationships are, caused me to draw this:

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Working with a very dynamic CEO who was very innovative and had a risk averse team caused me to draw this, to try to explain to myself what impact the relative innovative nature of a leader had on teams with different levels of capability of coping with change.

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At a workshop, the topic strayed on to what is necessary to have empowered employees and I drew this on a flip chart to explain what individuals need to feel, in order to be empowered:

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As you can see, I like using models to explain things. Then why do I hate the way models are used in business?

I can best explain, I think, using some examples.

Take a relatively easy model such as a SWOT analysis. Almost everyone knows that SWOT stands for Strengths, Weaknesses, Opportunities and Threats. I like the model itself, it is really useful. I am frustrated by the way I see it applied most of the time. People attend a workshop and brainstorm the internal strengths and weaknesses and external threats and opportunities and transform the data into a nice set of slides.

There they stop. They do not go on to determine what strengths they can utilise or weaknesses they need to address to take advantage of the opportunities. Nor do they determine what they need to do to ensure that they are prepared for the threats. The people who do this do not understand the SWOT model and use it superficially, for what I can see is no apparent benefit. So my first beef is the way models are used transparently with no real knowledge of their purpose, how to use them, and in what contexts they are useful and not useful.

Another issue I have with the way models are used is that within the one organisation, the interpretation of elements of the model are changed because people forget over time what the elements mean or, in some cases, are just reinterpreted to suit themselves. This is particularly so when it comes to models which are communicated as an acronym.

Google the term SMART in the context of goals.

I did, and this is what I got:
  • specific, measurable, achievable, results-focused, and time- bound
  • specific, measurable, attainable, relevant, time-bound
  • specific, meaningful, agreed upon, realistic, tangible.
Glen Hughes*researched over 400 books and came up with this set of statistics:
  • S = Specific was chosen by 92% of the books researched. Strategic comes in second, with 2%.
  • M = Measurable was chosen by 94% of the books researched. Motivational comes in second, with 2.6%.
  • T = Time-bound. Time-something was chosen by 90.5% of the books researched. Time-something included Time-bound, Time-based, Timed, Time-framed, Time-limited, Timely, Time-oriented, Time-specific, and more. Time-bound was the leader of the Time-somethings, with 36%. Trackable comes in second, with 6%.
  • A = Attainable or achievable, but they're synonyms. Together, they total 66% of the vote. Action-oriented is third, with 12%. 'Agreed' in fourth with 8%.
  • R is tough. The winner is Realistic with 56%. Relevant is second with 28%. The problem is that Realistic is the same as Attainable.
The consulting industry can't agree on what the acronym means. What does it mean then, when people glibly say "we need SMART goals?" The acronym no longer has meaning, as it could refer to any of the three combinations above. People lapse in short-hand acronyms which makes it sound like we have a standard approach to analysis, but in reality they do not.

Another issue I have is the inappropriate use of models or the overuse of models. Especially when people use multiple models to describe the one set of observations in the same context, in the hope that they will communicate more clearly. All they do is confuse people instead.

In a nutshell, why I object to and am frustrated by the use of models in business is that they tend to prevent people from thinking from first principles. People are seemingly mesmerised by the shape and colour of a diagram or seduced by the apparent simplicity of an acronym.

People do not take the time to read the background of the model and what the intention of its inventor was, so that they can understand the principles of the model. In doing so, they risk both misapplying the model and - even worse - not using the principles, in applying them to new thinking in a new context.

I use models a lot. I find them useful for pulling my thoughts together and for converting my feelings into thoughts. I'm not fond of them, however, being used as a substitute for thinking.

* smartashell.blogspot.com.au/2009/09/unified-definition-of-smart-goals.html

We welcome your comments.
Contact Kevin by email at kevin.dwyer@changefactory.com.au or via phone on +61 (0)408 508 490

www.changefactory.com.au
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