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Core Business Model Clarity Indicative For Project Success

Yahoo once again is in the news with the company’s restructuring and impending employee layoffs. The company is laying off 10% or more of its workforce and has plans for more restructures including divestitures. This action would give the indication that the company is still trying to figure out how they fit in the technology market. The real issue is Yahoo has no real identity of who they are in the industry. They are an organization that has lost its identity and is in confusion.

This is a big issue for some organizations and is a real issue for all improvement projects. Yahoo lacks a core business model. They do not have an essential reason why they exist to serve their customers. Successful companies have this core, like Google and Virgin. It goes beyond brand and product issues. Yahoo needs to answer this question “why would a person or organization buy from us verses anyone else?” That is the issue that Yahoo has not resolved and impacts their project success. This is why the company is in confusion.

All organization must have a core business model. Every aspect of the organization is directly tied to their core business model. Weather a new product is considered or an operational improvement project is proposed, the lack of definition will impact all success factors. If a company cannot find its core business model, how to operate from the customer perspective, they will not be successful with basic operations or improvement projects.

Leadership must understand their core business model for project success. Pay close attention to your organization. Make sure that it has a firm understanding of your organization’s core business model. The success of any improvement project depends on clear goals, objectives and defined outcomes. Without an understood core business model, it is next to impossible to define clear project improvement success factors. Yahoo is a clear example of high risk project failure with its lack of clarity.

To help put your project on firm a foundation, there are a few simple steps to validate its link to your organization’s core business model. Listed are three items to know if your project has core business model clarity:

  • Can your organization identify what type customer prefers your products or services distinctly?

  • Is your organization operation’s tied directly to why customers purchase your products or services?

  • Does your project have a clear connection to either operation tied to your core business model or strategy to further your organization’s core business model?

If you can answer each question with clarity and connection, then you will have a higher success factor. Hopefully your organization is well defined and does not have the organizational confusion that Yahoo has today. Clarity in your organization’s core business model will inherently drive overall success for your project and provide your organization with much higher understand and clarity in all initiatives.

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