Avoiding the Kodak Curse: Strategic Innovation for HR and EX

Introduction

Most companies I have worked with fall into two buckets those destined to follow Kodak and those obsessed with not doing so.

One of the many tools I use frequently from my toolbox for those companies not wanting to follow Kodak is the Business Model Canvas (BMC).

I love it for many reasons the main ones being it allows us to visualise as we build and tweak a strategy, product, experience or service drives transparency from the start and can be scaled from an organisational level right down to individual products, services and experience

Before I walk you through each section, it is important to note I supplement the business model with other approaches not discussed in this article, also my approach is a tweaked version of the original created by Alexander Osterwalder and Yves Pigneur because the majority of my works is working with companies who want to drive internal innovation across the business or who want to create new HR and EX (Employee Experience) people products.

Okay, let me walk you through each section of the BMC and highlight how I use it.

1. Customer Segments (Who)

The first section to tackle on the BMC is Customer Segments. These are the distinct groups of people or organizations your business/product aims to serve. By zooming in on the segments you can start to tailor your offering and efforts straight off the blocks. If you were Spotify for example here you would have podcasters, audiobook listeners, advertisers, content creators, and users. Tweaking this to internal people products I would look at different employee groups such as new hires, potential managers, remote workers, high potentials and individual functions such as HR R&D etc. Knowing your customer segments will ensure you are relevant and effective to them and also allow you to market better with the stuff that resonates.

The watch out here is sometimes it can lead to either over-segmenting which slows everything down or over-simplifying customer segments, an option here could be to use contextual and behavioural segmentation that provides real-time data and trends to drive deeper understanding.

2. Value Propositions (How)

Next up, is the Value Propositions and honestly this is a beast of a section and one that needs a dedicated post to itself. It is here where the mix of products, services and experiences that deliver value to your customer segments are mapped it is here where you add the benefit for the customer. Getting this airtight sets you apart from your competition as it’s uber-focused on addressing the specific needs and challenges of the customer/employee identified in the customer segment. It’s for this reason that whenever I design Employee Value Propositions (EVPs) using BMC is a stage I never miss.

Netflix for example may put existing video content libraries, exclusive content, 24/7 streaming, and cancel anytime. For HR and EX things like benefits, growth opportunities and so on would go here A thing often missed here especially when it comes to EVPs is often it’s never updated, this needs to be constantly updated and developed to align and exceed employees’ expectations.

In this section, I often like to challenge my stakeholder group to answer a simple question

• How do we create transient advantages over time?

Transient advantage is grown up language that asks how we stay competitive when the market we operate in is ever-changing and the thing that made us competitive this time won’t last forever (I’ll give you one of the answers is continuous innovation) Another question I ask when I workshop this with various groups is often

• Where is the customer?

Not on the canvas, but in the room to me it’s a massive blind spot if you don’t involve the customer in the creation process. For internal HR & EX products, it’s here where you can start to differentiate the offering to make you an employee of choice, when using this for people products and EX the one thing you have on tap here is your customer ie the employee so get them in the room okay let move to channels

3. Channels (How)

Channels are all about how to get your strategy/product to your customer, this can be a make or break selecting the right channels ensures your offering hits your specific customer, getting it wrong can often mean massive failure.

LEGO for example have an interesting approach they still have stores offering awesome experiences, but they also have an online store, as well as partnerships and licence relationships to create the LEGO movies we all love. For HR/EX W we can look at the internal platforms and methods we use to ship recognition, training and even internal comms as well as external in-person events. If this was a grad programme you would be hitting social media like TikTok as well as onsite at local schools, colleges and universities. You would also look at how you can support movement events such as PRIDE etc.

A potential blind spot here is overcommitting, more channels often means more resources, while some can get outsourced this opens the risk of inconsistencies across a omni channel experience. Just be mindful of how you are going to deliver consistency across all channels. Ask the group in this section

• Which of these are nice to have vs must-haves and which provide the most bang for the buck?

The only way to do that is to look at the cost-benefit for each channel, you also don’t want to be so fixed and tied into a channel that you can’t adapt to market conditions when they change. Image you went all in on Twitter… look at it now it’s a ghost town, and all the customers are on LinkedIn and TikTok.

The goal of these channels no matter internal or external is that they provide a seamless and consistent experience across all touchpoints of a customer journey

4. Customer Relationships (How)

At the heart of every strategy, product, service or experience is a relationship between you and the customer. This is all about the bonds and ties you have with your customer which over time drive loyalty.

HSBC or most banks for example will have different relationships with its customers through segmentation ie Personal, Business etc it will also have a very consistent experience no matter what branch you go in anywhere around the world. Their relationship with their customer is often built around protection and security ie protect my finances.

With the likes of Monzo and many others coming into this space and offering more self-serve, personalisation and more options on digital ways of support it is easy to see why certain customers prefer one over the other because they understand the personal relationship that type of customer needs. When it comes to employee experience having that relationship is no different this can often be done through impactful 121s and a modern employee listening strategy. One that builds strong trust-based relationships and continuous engagement and support from internal initiatives

A point often not discussed here is the cost and tension that comes with scalability and personalisation, for example, listening to 200 people at a start-up is much easier and less costly than listening to 10,000 employees at a large bank. Setting up feedback loops and identifying correct metrics can help with cost but also allow us to be more specific in building that customer relationship

5. Revenue Streams (How)

Revenue Streams in simple terms are how your business makes money and stays alive from each customer segment. These streams help us understand which segments bring in the most profitability and will allow us to tweak our pricing strategy. Often you can see this when products offer freemium with ads or premium etc. Having many streams helps de-risk the business the last thing we want to do is put all our eggs in one basket when it comes to just one stream because all it takes is for a market to change and that revenue stream you relied on disappears overnight.

When it comes to People products and employee experience I like to see revenue streams as benefits and rewards that help engage and motivate employees. These are specific to the employee groups and preferences and where they are in their employee journey and can adapt to external life changes. I like to provoke here a little and ask the group:

• If the employee were to pay the business to come to work what would they pay to have and why, how would they pay, and what would be currency?

Something I’ve noticed when using this with various clients is the group's awareness of the different approaches to pricing. Usually, before we get to this section, I would do an awareness piece on the different pricing models such as pay-per-user, freemium, bundle pricing, value pricing etc

6. Key Resources (What)

This is the bread and butter that is needed to make your business model, strategy or product work and deliver value to your customer. This focuses not only on setting it up but also on ensuring you have the resources to constantly deliver your value proposition. With Employee experience and HR, their model would have assets like people talent, data, technology and so on. For Uber, their key resource would be their tech platform, the network of drivers. Here we need to make sure that we have enough of the key resources to deliver and that we don’t have a shortage of them that can impact the solution… hello surge prices at Uber.

An important point to note is to make sure the key resources align with the strategic objectives of the business. Misalignment can lead to inefficiencies and strategic drift.

7. Key Activities (What)

Key Activities are the critical tasks that you must perform to make your business model work and continue ticking along. Airbnb, for example, focuses on platform maintenance, and customer service. From a people experience point of view, the key activities would be things like recruitment performance management, employee listening and engagement. There should always be a key focus on continuous improvement in key activities to maintain operational effectiveness and keep that competitive advantage this could be as simple as bringing in new technology and approaches or redesigning processes. It could also be as simple as setting up agile ways of working within the function or moving to a people-product approach

8. Key Partnerships (Who)

Key Partnerships are vital, similar to the bonds with our customers we should have similar bonds to our partners. Our partnerships are going to be folks that help our business model flourish. These are external suppliers and internal partners within different functions. What these partnerships often bring are skills and capabilities you don’t have. They also allow you to help scale and reduce risk if and when markets change. Amazon for example partners with 1000s of 3rd parties to allow them to sell their products on the platform. For Amazon, this bolsters their offering without needing to stock everything in their warehouses. For HR and EX, this is no different, their key partnerships would be with training providers, recruitment agencies tech vendors as well as offshore and nearshore partnerships. A key point to mention here is the partnership needed with internal folks, time and time again new strategies, products and experiences never see the light of day because someone didn’t build a partnership with someone in another function in the business. I created the DARE canvas to overcome this, a detailed breakdown of running the DARE workshop can be found in the Insightful Innovator

Often when I get to the section I try to provoke the thinking a little and ask the team to write out what I call a BRAD for each of their partnerships

• Benefits

• Risks

• Assumptions

• Dependencies

This helps the group frame their thinking on the risk associated with working with these partners and helps the team have a contingency plan should they need one if things start to sour or there is a public backlash against one of these partners

9. Cost Structure (What)

The final section of the BMC is Cost Structure, here is where we get down all the costs needed to operate your new business model. This allows you to get a feel of expenses and exposes by light the prices you need to have profitability. With EX this could cost relating to recruitment, training, benefits, tech and so on. Often when I get to this section in the past I have found that it exposes lots of unknown questions around how much things currently cost. To overcome this in the past I will often send out a pre-workshop a list of questions that I will need them to come armed with or I will ask them to extend the invite out to their wing person who knows the numbers as well as previously used cost models

Conclusion

Whether I am helping a client design a new innovative external offering or if I am helping an org connect their CX or EX together. I find when going through my design approach the Business Model Canvas is one of the few tools I find myself using time and time again.

When you strip it back its two strengths are it asks basic questions something I have written about time and time again but in a nutshell, it’s this

It’s also a great tool to allow a group to work more transparently and not get bogged down in Word documents and PowerPoint. When used correctly will help you align your strategy, and create new offerings to your internal and external customers.