270 Implementing Business Models in Organizations We’ve laid out the fundamentals of business model innovation, explained the dynamics of different patterns, and outlined tech- niques for inventing and designing models. Naturally there is much more to say about the implementation that is critical to a business model’s success. We’ve alr eady addressed the question of how to manage multiple business models (see p. 232). Now let’s turn to another aspect of implementation: turning your business model into a sustainable enterprise, or implementing it in an existing organization. To illus- trate, we’ve combined the Canvas with Jay Galbraith’s Star Model to suggest aspects of organizational design you may want to consider when executing a business model. Galbraith specifies five ar eas that should be aligned in an organi- zation: Strategy, Structure, Processes, Rewards, and People. We place the business model in the middle of the star as a “center of gravity” that holds the five areas together. Strategy Strategy drives the business model. Do you want to grow 20 percent in new market segments? Then that should be reflected in your business model in terms of new Customer Segments, Channels, or Key Activities. Structure The characteristics of a business model determine the optimal organizational structure for its execution. Does your business model call for a highly centralized or decentralized organizational structure? If you will implement the model in an established business, should the new operation be integrated or spun off (see p. 233)? Processes Each business model demands different processes. Operations run under a low-cost business model should be lean and highly automated. If the model calls for selling high-value machines, quality processes must be exceptionally rigorous. Rewards Different business models require different reward systems. A reward system must use appropriate incentives to motivate workers to do the right things. Does your model require a direct sales force to acquire new customers? Then your reward system should be highly performance oriented. Does your model depend heavily on customer satisfaction? Then your reward system must reflect that commitment. People Certain business models call for people with particular mindsets. For example, some business models call for particularly entrepreneurial mechanisms to bring products and services to market. Such models must give employees significant leeway, which means hiring proac- tive, but dependable, free-thinkers. bmgen_final.indd 270 6/15/10 6:01 PM