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Of Operating Models, Business Models and Strategy

I was talking earlier this week about the operating model changes that would be required to deliver a particular strategy, and someone (quite rightly) challenged me to be more clear on what I meant by operating model, and how it relates to other ideas like business model.

Andrew Campbell is as good an authority on the subject as any. He teaches Business Models on the Ashridge Executive Education course and is also the author of the book Operating Model Canvas (which I would highly recommend).

Handily he has also written a short and accessible article on Business Models and Operating Models.

In it, he confirms the conventional summary of an Operating Model as People, Processes and Technology. (He goes on to define an alternative which may be technically better but somehow seems less accessible.)

He refers also to Alex Osterwalder's book Business Model Canvas, which I would also highly recommend.

I think you could probably summarise:
  • Operating Model: How you operate.
  • Business Model: What you offer to Who and how you make money from it.
  • Strategy: Why this achieves your purpose.
See also:

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