The Problem with Underpants Business Models
One of our clients was implementing an AI initiative. The MD of the business unit invested heavily but further down the line, was becoming impatient on the initiative outcomes. He was focusing on concepts like revenue, optimisation, entering new markets. What he was hearing about was, AI, cloud and training models. An ongoing joke developed that this product was based on the “Underpants Business Model”. In the Southpark episode, Gnomes draw a blank when trying to connect their fervent activities with profit. (The 30th episode)
The problem with Underpants Business Models
These gnomes may sound ludicrous, but how many of these Underpants projects have we all been involved in? Companies are simply not great at setting a clear vision and communicating this to employees and partners. This counts for overarching visions (e.g. Vision statements) as well the interpretation of the vision on a contextual micro-level. There is a huge cost to not setting a clear vision, including:
- Wasting technology investment. Tech is fast, vast and any lack of clarity flows through to a sub-optimal “Frankensteinesque” product.
- It hinders experimentation. Without clarity, there can be no useful metrics on the intended arrival point and there are weak feedback loops. This can breed Zombie Projects rather than a portfolio of rapid, incremental products.
- It destroys employee engagement. At a time when attracting and retaining talent is key, a lack of vision makes every day a Sisyphean task. Sisyphus was condemned by the gods to push a bolder up and hill continuously without any end point. People need to see their efforts making an impact to the result and an endpoint.
Setting a vision
In the very first instance you need to know what game you are in. This can be confusing in the current context. Are you in:
- EXPLORATION MODE: searching for new features, products, markets or business models? Or are you in:
- EXPLOITATION MODE: taking something that already works well and optimising it for competitive benefit.
An EXPLOIT vision could involve focusing on cost optimisation, faster speed to market, growing sales. EXPLORE required activities involved in finding a new product, market or meeting an unmet need.