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)

Gnomes Planß

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.

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Point everything in the same direction

It’s no secret that modern enterprises have grown scarily complex in the digital age. But are they more complex than they need to be? Many of the best approaches favour simplicity because it cuts through the noise and offers clarity. Assigning a single metric (“One Metric That Matters”) for a set period of time can be a powerful antidote to organisational confusion and is a powerful message that clarity is valued over more content.


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Amongst the excitement of digital, product scalability risks are being forgotten

Digital excitement continues to gather speed. Ground breaking offerings across IaaS, PaaS, SaaS are being released in rapid succession with opportunities to optimise the existing and break into the new. Capitalising on these hyper-specialised offerings is viewed as one of the cornerstones of achieving the Digital Holy Grail, with benefits across customer experience, product growth and global customer reach. However, there is good evidence that a careful product strategy needs alignment with product. There is a growing trend of poor practices and conflating product scalability with the cloud infrastructure scalability. Although products can be flexibly scaled it does not mean they will be without strong intentional design. In reality a huge challenge is maintaining strong discipline and tight synchronisation between sales, product and engineering in order to maintain a system that keeps cost per unit low.

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Transformation and the net you see the world through

Transformation is one of those overused words that now mean everything and nothing at the same time. The term is more often borrowed to fit the place of an event that is usually less visionary. On reality TV we have the personality transformation, the body transformation, the style transformation. But beyond the glorious 5 minute reveal, how much of the long, grinding process of true change are shown? The wheels of change move far too slowly for a 30 minute time slot.

The Reality TV version in an organisation can mean: building a digital app, new role titles, or a paragraph in the annual report.

But for “Digital Transformation” to be successful teams need to opt for the vision that Eric Reis details in The Startup Way.

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School of Life - Emotional Intelligence Workshop

The School of Life uses a unique combination of lenses from which we can understand the world. Originally founded by author Alain De Botton, the school applied ideas taken from ideas from areas such as philosophy, psychology and culture to provide education in the form of books, courses and other media. Check out their YouTube channel for an introduction.

I recently attended an Emotional Intelligence workshop in London that covers 3 of the education modules: How to Develop Self Knowledge, How to Be Sociable & The Meaning of Life. This was a really worthwhile day and that is already paying dividends. I’ve just started reading the accompanying book An Emotional Education The experience of the day was fantastic with a great group of students and knowledgable teacher.

I’ve written up some notes that form as memory aids for some of the interesting ideas of the day. These are primarily intended to be a reminder for those familiar with the content. But it may be enough to get the general idea of the types of things covered.

Most of the theory, concepts are freely online at The Book of Life. E.g. Self Knowledge & Sociability.

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