ROUNDMAP™ is an integrated framework to assess, design, manage, align, and optimize business ventures ─ by identifying new revenue streams, by assessing current revenue streams and business models, by eliminating gaps and barriers, and by boosting the front-line operation.
3.1 - THE ULTIMATE LEVEL OF TRUTH
Research confirms that the employee-customer interaction that occurs during each customer lifecycle is at the core of a successful business operation. It is the ONLY level at which a company is able to identify opportunities (and threaths) and capture enough value with which to offset the cost of value creation and delivery. We, therefore, call this level The Ultimate Level of Truth™.
Furthermore, studies confirm that an integrative approach toward the customer development process leads to a substantially better commercial performance (up to 765%; Kotter and Heskett, 2011). However, research also confirms that teams within organizations have become extremely disconnected. This is exceedingly harmful to the execution of the business strategy, as idenfied by creators of the Balanced Scorecard, while it also undermines the prospect of offering seamless, personalized, and meaningful customer experiences.
Obviously, a firm also needs to have the right products and services in place, address the right audience with the right messages, using the right channels while making sure the operation is truly up to the task to serve customers’ needs with poise.
3.2 - THE SILO SYNDROME
What is keeping most companies from reaching a level of excellence is the degree of fragmention due to specialization ─ leading to mental and functional silos, tunnel vision, internal competition, and even turf wars. These negative effects tend to obstruct the creation and delivery of significant value while frustrating customer experiences; ultimately deteriorating commercial performance.
When you start with a fragmented leadership team, leading to separate groups, each rooted in their own values, beliefs, symbols, and taxonomies, the execution of the business strategy will undoubtedly be crippled. If additionally, departments hoard relevant customer data, reluctant to share it with others, the mission could be at grave risk.
We’ve identified several ways to break down the silo-mentality, such as the introduction of customer round tables, appointing cross-functional liaisons, build cross-functional teams, defining inciting rallying goals and objectives, and so on.
3.3 - ROUNDMAP DEFINITION
The name ROUNDMAP™ is a portmanteau of two words: roadMAP and ROUNDtrip.
ROUNDMAP
An integrative approach toward sustainable business growth.
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ROADMAP
A pathway toward a unified execution of the strategy.
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ROUNDTRIP
The lifecycle dynamics that forge strong customer bonds.
While ROUNDMAP™ addresses both the business map (roadmap) as well as the customer lifecycle (roundtrip), to drive growth, other frameworks are mostly cost-oriented. To increase operating income both aspects ─ cost and performance ─ should be considered.
3.4 - SYSTEMS DYNAMICS
ROUNDMAP™ is designed from an approach known as systems theory, an interdisciplinary study of systems: ‘A system is a cohesive conglomeration of interrelated and interdependent parts, whether natural or human-made. Every system is bounded by space and time, influenced by its environment, defined by its structure and purpose, and expressed through its functioning. A system may be more than the sum of its parts if it expresses synergy or emergent behavior.’
To explain the systems dynamics ─ the aspect of systems theory as a method to understand the dynamic behavior of complex systems ─ that are relevant to venture design we’ve created a flowchart, the ROUNDMAP™ Business Roadmap (see PDF for more info). A business roadmap is a high-level plan, defining an overarching strategic objective and caputuring the major steps planned for achieving that objective, as well as a communication tool that helps communicate the business’s strategy.
For instance, Customer Dynamics is a theory on company-customer relationships that describes the ongoing interchange of information and transactions between customers and organizations. It goes beyond the transactional nature of the interaction to look at emotions, intent, and desires. It views interactions as a chain of events rather than single-point occurrences.
3.5 - BUSINESS ROADMAP
Next to the four Carousels and the Business Model Matrix™, the Business Venture Roadmap, or Business Roadmap for comfort, will assist managers to plan, organize, control, and lead the business, while allowing agile development teams to discover new opportunities for growth.
The Business Roadmap is the linear aspect (roadmap) of the framework, matching the cyclical aspects (round trips) of the Carousels.
3.6 - STAGES
To (re-)design a business venture, or to consider multiple business ventures and to determine the gaps between (current and new) business ventures, Edwin Korver has developed an intelligent Business Roadmap as part of the ROUNDMAP™ framework.
The ROUNDMAP™ Business Roadmap consists of five stages:
STAGE 1 – DISCOVER
(NEW) VENTURE ─ Q: What is your dream about? What is your hypothesis? Did you validate the product/market fit?
STAGE 2 – DESIGN
BASE PLAN ─ Q: What are the key components? What is your value proposition? What is your key differentiation?
GAME PLAN ─ Q: What is your production strategy? Who are your key partners? What is your go-to-market strategy?
STAGE 3 – DEVELOP
ACTION PLAN ─ Q: What resources and capabilities are needed? What is your marketing strategy?
STAGE 4 – DIRECT
OUTCOMES ─ Q: What are your key performance indicators? What do they tell you?
RESULTS ─ Q: What economies of scale/scope work in your favor? What share have you obtained?
STAGE 5 – DISPENSE
RETURNS ─ Q: Have you reached your aspired goals? Is your mission still aligned with your vision?
3.7 - STEPS
Let’s look in more detail and discuss the ROUNDMAP™ Business Roadmap step-by-step:
STAGE 1 – DISCOVER
The VENTURE stage is our first step ─ as we could have learned from Steve Blank’s first book, The Four Steps to the Epiphany: Successful Strategies for Products that Win ─ indicating that we should follow a four step process, referred to as Customer Development, to increase the likelihood of launching successful products and avoiding common pitfalls ─ customer discovery, customer validation, customer creation, and company building.
The last part of Blank’s four step process ─ company building ─ is the our next step, the BASE PLAN.
If the Customer Development Method does not apply to your situation, you may skip this stage and start from stage 2, the BASE PLAN.
STAGE 2 – DESIGN
The BASE PLAN describes the principles of the business venture and looks at three aspects:
ORGANIZATIONAL DYNAMICS ─ Culture Line ─ Q: What do we intent to achieve, how and why?
BUSINESS MODEL ─ Added Value Line ─ Q: What’s our business model and go-to-market strategy?
BEHAVIORAL DYNAMICS ─ Trend Line ─ Q: What are the trends in customer buying behavior?
The output acts as the starting points for the GAME PLAN:
OPERATING MODEL ─ Business Line ─ Q: What products, material, and suppliers are key to our business model?
REVENUE MODEL ─ Customer Line ─ Q: What’s our distribution model and customer strategy?
STAGE 3 – DEVELOP
Next, the output of the GAME PLAN needs to be fed into the ACTION PLAN:
BUSINESS DYNAMICS ─ Operating Line ─ Q: What’s needed to create and deliver value?
CUSTOMER DYNAMICS ─ Front Line ─ Q: What’s needed to develop the customer lifecycle?
MARKET DYNAMICS ─ Activation Line ─ Q; What’s needed to influence customer behavior?
STAGE 4 – DIRECT
Now that we’ve designed the business venture, we’ll need to measure the OUTCOMES:
BUSINESS PERFORMANCE ─ Business Intelligence ─ Q: What’s the cost per unit?
CUSTOMER PERFORMANCE ─ Customer Intelligence ─ Q: What’s the margin per customer?
MARKET PERFORMANCE ─ Market Intelligence ─ Q: What’s our share of the market?
Next, we’ll need to determine the RESULTS:
OPERATING RESULTS ─ Expenses line ─ Q: What’s the total and distribution of the expenses?
COMMERCIAL RESULTS ─ Revenue line ─ Q: What’s the total and distribution of the revenue?
STAGE 5 – DISPENSE
And finally, what are the RETURNS:
RETURN ON VENTURE ─ Bottom line ─ Q: What’s result of the entire business venture?
P.s.: The activities in the ACTION PLAN are aligned with Porter’s Value Chain Theory. The arrangement of the dynamics in the ACTION PLAN makes it easy to consider the SWOT-model (Strengths, Weaknesses, Opportunities and Threats), as well as the Backstage and Onstage Competitive Advantages relevant to defensible differentiation.
3.8 - CANVAS
We will soon provide a printable and online canvas that will allow you to perform a ROUNDMAP™ Business Roadmap exercise.
3.9 - VALUE HUB THEORY
Napoleon Hill wrote in Think And Grow Rich that to achieve our goals, i.e., to get things flowing, we need (to create) a value differential. You may have noticed the +/- signs in the scheme above. We use it to explain where the ‘value differentials’ reside.
Imagine that your efforts to create value ‘charge’ your Business Dynamics. If you can find a customer in the market with a need for that value, the potential for a value differential may emerge. However, to inspire a customer to buy you’ll need them to be close enough for a spark to cross over ─ don’t ‘touch’ because touchpoints are merely a figure of speech. After all, you don’t want their hair to look funny.
Since the activities involved in discovering, acquiring, serving, and retaining customers are so distant from running an operating line, the Customer Dynamics act as a go between of the Business Dynamics.
3.10 - DIFFERENT VIEWPOINTS
The three dynamics of the ROUNDMAP™ ACTION PLAN also provides us with different viewpoints. For instance, we may aspire a large share of the total addressable market (TAM), however, without a capable operating line to service the target market and an assertive frontline operation to obtain (SOM) it, we’re likely to get disappointed. Or, we may assume that we’re in full control of our brand’s identity, however, the image of the brand will ultimately be determined by (all of our interactions with) our customers.
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