Business Model Health Check

Why should you conduct a business model health check?

A Business Health Check is essential to kickstarting and maintaining business model innovation in established companies. Performing a Health Check on your company will help you not only understand opportunities for growth, but also help you stay ahead of disruptions, and identify the right time to reconfigure your business model before growth declines.

What is a Business Health Check?

A Business Health Check is a series of questions to ask of your company to understand where there are weaknesses and potential for improvement and innovation.

How can you perform a Business Model Health Check?

Download and print copies of the Business Health Check Questionnaire for each member of your team. Together with your team, go through the questions and fill in your answers to understand where opportunities for improvement lie in your company.

1. Communication:

1. Questions to answer:

   • Have you communicated internally about what your value proposition is?
   • Are your stakeholders and your team in agreement about the value proposition?
   • Have you completed a Business Model Canvas or Lean Canvas and shared it with your team?

2. Did you answer to any of the questions with 1, 2, or three (disagree to highly disagree)? Define actions you can take to come to a consensus on what your business model is.

2. Inconsistencies:

Using the Business Model Canvas or Lean Canvas, evaluate whether or not the different elements of your model support or contradict one another.

1. Questions to answer:

   • Are your key activities lined up with your key resources?
   • Are the customer channels truly fitting the customers?
   • Do you capture all the value you create, which is fairly rare, or at least enough of it?
   • Are different elements of the business model reinforcing each other and are the value creation and capture aligned?

2. Define actions to work against inconsistencies you detected.

   • How could you change your business model? Or how could you as a team come up with alternatives?

3. Industry maturity and competition:

1. Questions to answer:

   • Where are you in this cycle? If you wait for declining sales to take action, it is already too late.

2. Is your business in the maturity or decline phase? Be prepared and start with new business model research before your industry sector becomes too mature and saturated. Define action you and your team are going to take, in order to come up with the new business model.

4. Technological discontinuities:

Monitor for potentially disruptive technologies and incorporate and adapt before new technologies take over.

1. Questions to answer

   • What technologies is your business models relying on?
   • What are technologies competing with them?
   • What emerging technologies are able to fulfill the same value proposition, even if not profitable yet?

2. Define your path forward. For each technology, decide whether you want to monitor them passively or integrate capabilities to adopt them. What are your next actions in each case?

What’s up next?

A business model health check is never completely finished, but it should be a continuous topic for your team to return to. Schedule the actions you decided for and implement them into your task list. Repeat the health check regularly.