Business Model Canvas: A Type Of Alignment Diagram

In my presentation at Euro IA 2010 in Paris, I proposed the term “alignment diagrams” to refer to the class of documents currently found in design practice that do a similar thing: they visually align multiple facets of customer behavior with business activity in a single graphical overview. Here’s my presentation:

Together with Paul Kahn, I published an article outlining alignment diagrams in more detail. See “Locating Value with Alignment Diagrams” [pdf] (Parsons Journal of Information Mapping 3/2, April 2011).

Examples of alignment diagrams include customer journey maps, mental model diagrams, and service blueprints. These are often employed by practioners in creative design disciplines to conceive of better products and services.

But ultimately an effective use of alignment diagrams can have a strategic impact on the business. “Use your design thinking skills and ability to map out complex, abstract concepts to inform the business,” I urged the audience in my presentation. Or, consider what Paul and I wrote:

The alignment technique supports the increasing importance of design disciplines in business success.Alignment diagrams, then, can potentially help information architects, user experience professionals, and service designers have a greater impact on the direction of final business solutions.

I’d now like to put another example into the alignment diagram bucket: the “business model canvas” (BMC). Developed by Alexander Osterwalder, the BMC is a tool for helping business owners and stakeholders discover and prototype different ways to make profit. How to use it is outlined in the best-selling book Business Model Generation. There’s also a series of tools available online as well as an iPad app for the BMC.

Here’s the BMC (click to enlarge):

When presenting this, Alexander talks about the “front stage” and “back stage” sides of a business model. The front stage is all the customer-facing elements of a business. The back stage refers to the internal business processes. This division is reflected in the canvas:

• Front stage elements include: customers, relationship, channels and revenue (the right half of the canvas)
• Back stage includes: partners, key activities, key resources and cost (the left half of the canvas)

Right in the middle is “value” or the offering.

The business model canvas, then, is primarily set up to capture both customer aspects and business concerns in order to create value for both sides–in other words an alignment diagram. Compare to what Paul and I write:

It is the system of visual alignment that distinguishes this type of diagram. By aligning the user’s experiences with the business offers the diagram identifies and highlights the intersections where value can be located.

The BMC reflects such a system of visual alignment.

However, unlike other examples of alignment diagrams I mentioned above, the BMC is a tool and not a deliverable. It’s blank at first and used to brainstorm. Sure, you could use it to capture an existing business model. But it’s real value is letting business stakeholders explore alternatives on paper. Still, we can refer to a BMC as a type of alignment diagram.

—

Join My Workshop On Alignment Diagrams:

I’ll be giving a half-day workshop at the Euro IA 2011 conference in Prague this September on alignment diagrams. We’ll be focusing customer journey maps and mental models (but not business model canvases).

See my description of the workshop on this blog.

Registration is open online as well. 

—