Rethinking Government’s Business Model

Rethinking government’s business model is as critical to innovation as is technology modernization. Agencies use technology to deliver better value to customers. But technology can drive organizational change in unexpected ways. Business model change is central to doing something different to get a better result.

A business model is the way an organization is structured and operates to deliver value to its customers. Government typically organizes hierarchically around programs which deliver benefits to an eligible customer. Roles, responsibilities, authority, communication, decision making, implementation – most things people do to deliver a benefit to a customer are organized around a program, within a hierarchy. Mission support offices also organize hierarchically and run their own programs, pinned to the mission programs.

If you’re a manager or team member responsible for figuring out what to do differently to deliver better value to a customer, ask questions about these business model components to see what unthinking and rethinking are called for.

• Target Customer

I’ve blogged about the customer in Innovate From Where You Are, Start with These Questions, and Drucker’s Five Questions. The key is to hold conversation to update the organization’s thinking about the customer. If the customer has changed, everything else changes, too. It’s OK if you focus on your primary customer, but don’t overlook supplemental customers.

• Value Proposition

You know why your program was created and what it delivers to meet program objectives. Ask questions about your customer’s emerging needs to realign products and services to the customer. A great deal can be done with existing authority, and the exercise will give you evidence if you need to argue for additional authority.

• Supply Chain

Your organization has a “way” of delivering products or services to customers. Could be directly in the form of benefits checks. Could be less direct through research, standard or best practices development, or implementation by different government or partner organizations. The intersection of your customers, your value proposition, and your value chain will allow you to rethink ways that are faster, smarter, cheaper or better for the customer and the organization.

• Value Chain

Your supply chain connects you to your customer. Your value chain connects the people, processes, and tools that create customer value. Examine how your organization does this to look for ways to rethink and improve. This is especially important if your customer or value proposition have changed. You might have supplemental customers in the value chain, so this is a good place to connect those dots.

• Resources

Organizations draw on many resources to meet the mission – knowledge, skill, time, attention, technology, funds – and have resource models for each. Use what you learn about your customer, your value proposition, and other business model components to update your resource models to support innovation. A lot of what makes innovation stick in an organization is in those models.

Rethinking government’s business model is as critical to innovation as is technology modernization. Business model conversations will keep your organization connected to your customers. They’ll also make sure business objectives lead technology, not chase it.