Your Company Needs A Business Overview Diagram
An overview diagram is an illustration of a company’s business model and internal workings. It offers a common view from which different teams can come together to discuss business design, improvement & change. Without it a company lacks direction, effective planning and efficient resource prioritisation. If your business doesn’t have one, then read this short article and get drafting one.
Ever felt confused in meetings with people talking IT stacks and enterprise data warehouses? Ever heard names like Oracle and Zendesk bandied about but never fully understanding their role in making the business work? Ever heard about order to cash and billing platforms but never understood the detail?
If you’ve answered yes you’re not alone. There are managers out there bluffing their way through complex strategy and operational meetings. Many feel overwhelmed with the complexity that is the business back-end.
Many senior leaders couldn’t sit you down and sketch out their operating model. Some couldn’t tell you the systems, tools and processes the business needs to operate. Few can articulate how components within their business work together. Many couldn’t identify whether their business model is unification, replication, coordination or diversification.
Some leaders are trying to make strategic decisions without having a clear business overview.
So, what is a business overview diagram?
It shows a company’s operation on a single page. No mean feat you’ll agree, but worthwhile for those involved in strategy and business improvement.
The diagram consists of the following information:
- Company purpose — a simple statement outlining why the company exists.
- Company strategy — a set of pillars that outlines what it wants to achieve and how it intends to achieve it.
- Customers — the customers it intends to target.
- Capabilities — the tasks and skills the business needs to succeed.
- Business units — the teams that handle various capabilities i.e. sales, marketing or customer service.
- Processes — the processes undertaken by the company or customer to achieve an outcome.
- Partners — outsourcing partners who help on a strategic, co-sourcing or transactional basis.
- Systems — technology used by employees or customers i.e. CRM, internal portals or customer interfaces.
- Databases — repositories and technology used to store, maintain and present data.
So why is it important?
- It provides a common language and visual aid for teams with varying levels of business understanding. Not everyone understands the business back-end. It encourages a meeting of minds across the business.
- It speeds up discussion and debate. It helps employees avoid bluffing or becoming lost in complex conversations.
- It provides managers with a simple template to show infrastructure change over time. It’s great for showing business ‘as is’ and horizon ‘to be’.
- It helps employees understand the customer experience and the business back-end. It’s great for showing where different systems and processes play their part.
- It’s great for planning. It can help businesses understand any capability, process or technology gaps they might have.
Can my business do without one?
Yes but not without increasing waste, inefficiency and duplicated effort across your business.
Companies that lack an overview diagram tend to be inefficient, inflexible and uncoordinated. Decision making tends to be slower and less assured. Leaders and managers often feel they lack the necessary information.
Without a common language and visual aid teams fail to understand each other’s domain. They talk to peers in a language other colleagues outside their team can’t understand. Discussions are only half understood, decisions marred in assumptions and misinterpretation.
Without an overview diagram business units and teams often make conflicting decisions. They fail to look over the fence at what others are doing. Local teams without a ‘global view’ often push for local IT applications. They fail to appreciate the need for a single modular IT stack. They often circumnavigate IT altogether and pursue their own system and tooling plans.
An overview diagram is like a jigsaw. Made up of important pieces that only make sense when seen as a whole. Having a single company overview is essential for the complex businesses of today.
So how do I build one?
Like most business models or diagrams there’s no ‘one size fits all’ approach. You can add to your diagram as you see fit. Many businesses like to keep it simple and use maps to outline IT stacks. Others add company objectives, targets and metrics. Some like to have extra diagrams that focus on individual customer journeys.
How you design your diagram depends on why you need it and how you intend to use it. We’ve seen diagrams used to push for greater investment in IT by showing gaps. We’ve seen clients develop diagrams showing how a company will evolve over time.
You can colour code your diagrams to show various important factors. You might want to show the split between built vs. bought technology. You might want to show the operational split between in-house and outsource. It might be that you want a map showing local vs. global IT or new technology vs. legacy.
You should aim to update your diagrams regularly. They need to be accurate and reflect the business as it changes. As a planning tool it’s important to centralise ownership to better manage version control.
Creating a business overview diagram is a cathartic exercise. Done in a collaborative environment it’s a great way to bring managers and leaders together. Defining the diagram will take time and effort but the benefits it will bring are worth it.
At Strategy Activist we love helping to craft business overview diagrams. We’ve seen how effective they can be. To learn more visit us at www.strategyactivist.com