Chapter 2

Business Models 101: Creating, Delivering, and Capturing Value

I will never forget the kickoff meeting of a project I led back in 1995 while a partner at the consulting firm Accenture to help the pharmaceutical company G.D. Searle & Co. improve its competitive market position. Richard De Schutter had been named the company's CEO that year and he wanted us to work with his new leadership team to break down long-standing functional silos within the organization. At our very first team meeting, De Schutter declared that the official language of the project was going to be English. He said “consultantese” was not permissible! Imagine our dilemma when we were told we couldn't speak in our native tongue or rely on jargon that only consultants can understand. And so “plain speak” became the project team mantra. De Schutter's admonition has stuck with me over the years. However tempting it is to revert to speaking consultantese, using understandable language is essential to advancing new ideas and compelling action. I have been in too many meetings over the years about business models and business model innovation where participants’ eyes glaze over due to overly academic language and frameworks. If, as this book asserts, business model innovation is the new strategic imperative for all leaders, we must start by getting below the buzzwords. So in plain English, what the heck is a business model?

A business model is a story about how an organization creates, delivers, and captures ...

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