Extended Business Model Canvas (OOP2021)

Organize around value is since 5.0 the new and probably most fundamental SAFe principle to thrive in the digital age.
To do so, you must talk about business value. You must understand how hard it is to get a tiny glimpse of it and find ways to let it emerge. This task is within business departments, already a tough one.

When you are in the digital transformation business, you are more likely to be within the IT silo. Evangelizing business value can end as a Don Quichote raid against adamant windmills.

At the core, there is the value stream. The value stream simplifies Porter’s value chain by only considering actions that add value and lets you see a stable connection from trigger to value. Even though passing through a whole value chain may take some time, it is happening now, and it is static, as the value stream does not change while generating value. Those value streams are the foundation of our civilization. They are on horizon one or within Zone One or in the Simple Quadrant of the Cynefin framework. We have our processes and good practices to tweak those. Real-world complex value streams are usually the result of decades of tweaking value streams. The model year upgrade for cars or smartphones is an embedded metamorphosis of current business value and less the evolution of new business value.
Those good practices and processes focus on identifying non-value-adding activities within operational value streams and reducing waste in general to improve flow.
The development value stream would benefit from more radical in-take and less boring new product configurations that have to cloak themselves as epics. The value stream is for itself, just not flexible enough to bend in new directions. For this, it needs development value streams as the hammer and anvil.

However, new Business Value yielding new Digital money is essential for smart, sustainable growth and to be able to thrive in the Digital Age.

To do so, you must have enough in your Zone Three to defend against attacks from the Chaotic Quadrant that may disrupt your business.

It is good advice to start transformation on the portfolio level and connect the company from the strategic exploration on the portfolio level down to tactical operation on the team level, but how do you achieve this?

It is good advice to take advantage of innovation riptides sweeping from team backlogs to the portfolio kanban, but how do you achieve this?

Which artifacts do you use to capture such a spectrum? Which artifacts have relevance on both portfolio and team levels?

The Business Model Canvas, which is quite popular in the startup scene, is a great way to estimate and communicate business value from the orbit, but what when you are not working in a startup on the runway?

My proposal is a slightly enhanced Business Model Canvas, that assures even more room for innovation, especially in more settled organizations with an established reporting culture.

The Extended Business Model Canvas (EBMC) links backlogs better to corporate strategy, considering the organizational operation. It keeps everybody in the same boat, and it helps Product Managers and POs to communicate better.

It will contribute to making the difference between programs and corporate strategy more visible.

This is how the Extended Business Model Canvas looks like

EBMC

It has two additional boxes with a significant impact:

  • Contribution to strategy
    This is a great tool to clarify how the idea aligns and adds to a coherent set of actions.
  • Technical Debt
    This helps to document the amount of instability that is about to be built into the system or has to be somehow managed.

You get an instrument to do stuff that is not aligned with the strategy. It is good to have a tool to allow tactical considerations to overrule strategy from time to time. However, it is crucial to track how far you deviate from the strategy.
You get an instrument to document the dirty hack level that will materialize as technical debt you do not want to be accountable for.

How to apply this? I am running EBMC workshops typically with 6 to 12 people. Use Simon Sinek’s Golden Circles as an ice breaker and then start to work with the canvas. Take a look at the session recording on how to do this. You will typically need three rounds with 2 to 3 hours, including breaks.

You can download the slides from Slideshare here.
You can view the recorded OOP2021 session on Youtube here.

Author: Kydroon

Explorer, Mad Scientist and Foodie

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