April 29, 2022

Mission Trumps The Business Model

Mission Trumps The Business Model

Mission Trumps The Business Model

April 29, 2022
April 29, 2022

Mission Trumps The Business Model

Mission Trumps The Business Model

Sometimes the best thing we can do is bust the business model in order to better fulfill the mission of an organization. Brantley, Dan, and Howard discuss principles that drive innovation and business model transformation.

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Audio Transcript

Every business has a model, but not all models are equal. In fact, many business models need to be busted up to better fulfill the mission of the organization. In this podcast Brantley, Dan, and Howard discuss principles that drive innovation and business model transformation.

Our Preeminent Partner

Brantley: In the last podcast we talked about evaluating partnerships, and how important it is to pick the right partner.

Howard: Yes, picking the right partner is very important — you must be aligned. However, even more important than that is knowing your ultimate partner, Jesus, chose you.

Brantley: So, why did Jesus choose us to be His partner?

Howard: Jesus chooses me, you, Dan, and our incredible producer Will because He loves us, and all those He chooses He chooses because He loves. Then he gives us a job to do — to love others and proclaim His Kingdom.

Dan: So it sounds like that guy, Jesus, has a good model for growing His business — the Kingdom.

Howard: He does! Before He ascended He told us to go and make disciples and this really brings us to today. We learn the perfect model that God uses to spread His word by loving people. God calls us to do business and work that keeps our ultimate purpose in mind all the time.

Defining The Business Model

Dan: With that in mind, remind us what a business model is.

Howard: There are a lot of debates about this. Ideally, when companies use them correctly, they are a set of tools or systems to facilitate the transfer of value between a company, investors, employees, suppliers, clients, etc. It’s to make sure there is a value exchange that works for everyone.

Brantley: Based on that definition, what’s an example of a business model in action?

Howard: Netflix is a good example. Netflix set up to stream without commercials the best video content there is. People paid a monthly premium for them to source and produce the best video streaming content available on the market with no ads. They set up systems and processes to do this — including passwords that people shared. Now, they are pivoting to include ads in their business model.

Brantley: Yeah, and they are tested to see how much people will pay.

Howard: Exactly, they’ve tested that, and testing is one of the principles.

Brantley: They tested it at the expense of their stock price, and it has cost them significantly.

Howard: It cost them. Now they have to pivot to ads because of that.

Broken Models

Brantley: Dan, in defining a business model, what’s the biggest problem you think that our models are facing today?

Dan: Howard hit on a big one with Netflix. People lack innovation, they get lazy. Netflix wasn’t planning for their stock plummet. Their change in the business model was a reaction to their stock price plummet. Netflix was founded on self-destruction. Originally they were a delivery service and they blew up that model to introduce streaming, and it changed the industry forever.

Howard: That is exactly how it is supposed to be. Innovation has to be done to continue the original mission because the environment is constantly changing.

Brantley: That’s hitting on what the value proposition is in the business model. I’ve been thinking about how key internal processes are structured to help deliver the value proposition. One of the problems I’ve seen is people bringing in prior experience with documented models that they think will work, and then forcing people into those models without considering whether the unique gifts of the people you work with actually fit into that model.

Dan: There are companies that want people who are not from the original industry to help them with their model because they are free thinkers. Hiring people who have experience in other industries helps deepen the perspective of the business. It totally opens up innovation.

Brantley: Yes, the problem comes when the model does not need to be changed — the value proposition is being delivered on — but small tweaks continue to be made to the internal process without any real tangible benefit. In my experience this really upsets people.

Howard: What model lasts?

Dan: None of them.

Howard: That’s right, none of the models last. The industrial revolution and the data revolution have blown up many business models. We cannot treat any one model as absolute. We care about fulfilling the mission, not the business model for the sake of the business model.

Twitter is another example. Recently, Elon Musk took over Twitter and he is shaking things up over there. Their model was beholden to the shareholders in the market, and Musk thought that was a bad model; so he made the company private.

Business Model Busting

Brantley: What we are hitting on here is that to innovate you sometimes have to bust up the original business model.

Howard: Absolutely, because when we hold the model as absolute we will reject innovation because “that’s not how this industry works”. We do not want to be constrained by this. The bible gives us support here in 1 John 2:15-16, “Do not love the world or the things of the world. If anyone loves the world, the love of the Father is not in him. For all that is in the world, sensual lust, enticement for the eyes, and a pretentious life, is not from the Father but is from the world.”

So first of all, if it's worldly, we have to hold it lightly. Business models are definitely worldly, but people sure are not. People live on forever, but business models will come and go.

Dyson is a case that changed how I thought about things because Dyson was fired by a company he founded. Then he found a better way to make vacuums. He had over 5,000 prototypes, but he never saw himself as the manufacturer, but when he wanted to pitch it to all the vacuum manufacturers they all told him no.

Dan: They told him no because the model was dependent upon bags.

Howard: They all said no because they were addicted to bags! When asked if all the rejection discouraged him he claimed that the rejection emboldened him because the rejections were for the wrong reasons. The poor reasons encouraged him to keep going.

Dan: Let’s think about Netflix for a second. Blockbuster came before Netflix. They were great. How many stores are left?

Brantley: One, it’s up in Washington.

Dan: One store because they refused to change. They always thought people would come in for a DVD. It’s a great example of how stubbornness can hurt your business.

Brantley: If you are “doing things because they’ve always been done this way”, we would challenge you to rethink that.

Advice From Others

Innovation is good and necessary, but the opposite of that is blind innovation — which is a problem. Proverbs 15:22 says, “plans fail for lack of counsel, but with an abundance of counselors they succeed”. This is a component of thinking through how to think in community. I’ve seen this work, and the company right now is an example. We are an e-commerce Amazon company. One of the things I think our CEO does really well is surrounding himself with other people who think in terms of being an Amazon first company. Amazon is a very unique ecosystem, and being connected with others who think in terms of that environment has been immensely helpful. Does this specific case resonate with you all?

Howard: It does from a learning and counsel standpoint. We need cultures of learning. The founder of Wellaco spends a lot of time learning from others and he wants the same for his employees. A culture of learning leads to incredible innovation when you see other models and ways of doing things.

Brantley: Do you have any examples of plans failing for lack of counsel?

Howard: I do — I’ve been around a long time. We were in a nontraditional lending place and the stock had just multiplied by 7 in the past 2 years and there was a race to go international because in our industry wall street was saying that the first to go international was going to be the winner. The investors were driving this so one of the executives of the company made a push to get into the Puerto Rican market. So we checked it our and gave him the market potential and it turns out that Alabama and Cleveland had more potential than Puerto Rico. Instead we spent a couple million dollars getting down to Puerto Rico and it didn’t work out. So sometimes when we let the business model, which in this case was driven by investors, dictate all our behavior, we forget the basics. It’s easy to get addicted to the stock run up and get caught in the trap of doing whatever it takes to continue making the stock go up. That’s an example.

Dan: Sometimes advice turns out to be terrible. How do we know the counsel we are seeking is wise and good?

Brantley: Yeah, so far in this podcast we have hit on a few principles. First, don’t be constrained by industry or worldly standards. Second, seek counsel from wise people of possibility. Dan, the answer to your question is actually the third principle. Which is to be guided by God’s word. Proverbs 14 says, “There is a way that appears to be right, but in the end it leads to death… So keep this book of law always on your lips. Meditate on it day and night so that you may be careful to do everything written in it, then you will be prosperous and successful.” How do we know? We know God’s word and we test it.

Dan: So, Howard, what’s an example of advice that appears wise but is revealed to be foolish in light of God’s word? How do you test that?

It’s About The People

Howard: I’m going to use another principle for this. One of the things God’s word is super clear about is it’s not about the money, it’s about the people. In 1 Timothy 6:9-10 Paul writes, “Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.” And, Luke 6:31 says, “Do to others what you would have them do to you.”

So there’s a guy named Bob Moore and his wife Charlee. Bob went to seminary and during seminary decided to start a grain company now called Bob’s Red Mill. They make all kinds of oats and delicious protein bars — I highly recommend trying their products. So while the product is good, here’s what you see in Bob’s story. He saw that if he wanted it for himself, he should want that for others. Ten years into the business literally burned down. Once it burned down, Bob did not want to rebuild, but he saw that the employees needed the work. So he decided to continue the business for them. Eventually, he gave his employees the whole company in an ESOP (Employee Stock Ownership Plan). The company makes over $100 million dollars in revenue annually, and he gave away all that to love and care for his employees. They give everyone in the company an opportunity to gain a level of ownership in the company — it’s a fantastic example.

Brantley: That example covers a lot of the principles we’ve been discussing. Dan, do you have an example where you’ve seen profit go before people and have a negative impact?

Dan: Several podcasts ago I talked about a company that I left while my wife was pregnant with our first child. I wanted more money and I got a new job just for the money. That was my only motivation. I didn't pray or seek wise counsel. Unbeknownst to me the culture was way off. It was deceptive — lots of underhanded deals. The culture was dead, everything was about the bottom line. People came to work with their heads down, no smiles, turnover rate was high, and I was gone at 11 months. I’m not a job hopper type person, but I just couldn't take it any more.

Brantley: That’s a great example individually and then jumping into a place that exalted profit.

Dan: I chased the money for myself and I ended up at a job where everyone was just chasing money.

Howard: It never works! When we put money first, it never works. How do you see that playing out, Brantley?

Brantley: Early on in my career I ran the books for the agency I worked for. For a while, knowing everyone's salary was easy because I was just the assistant in learning, but over time that grew into me seeing other people’s information and thinking I was better than them. I thought I should make more than them, and for me that way of thinking was death. It led to some of the hardest 6 months of my career. Over time, and this is my testimony in this, I removed that desire. Even my wife would say this is a time where my pride and values were based in what I was making rather than serving others.

Howard: If everyone needs to make more than the next guy, you get caught in a downward spiral. Now, many companies have to hire people that make more than the leadership just to keep the company going — coders and tech people especially.

We have to surrender what we make, but it can’t be surrendered by comparing it to what others make.

Our ultimate partner in business and life is Jesus. He died so we can live, and he goes to work with us every single day. This frees us to care more about the people we serve than what we make.

Resources

Business Model Busting For Good

Bob's Red Mill: Bob Moore

Dyson: James Dyson

Howard Graham
Howard Graham
Executive Director

Audio Transcript

Every business has a model, but not all models are equal. In fact, many business models need to be busted up to better fulfill the mission of the organization. In this podcast Brantley, Dan, and Howard discuss principles that drive innovation and business model transformation.

Our Preeminent Partner

Brantley: In the last podcast we talked about evaluating partnerships, and how important it is to pick the right partner.

Howard: Yes, picking the right partner is very important — you must be aligned. However, even more important than that is knowing your ultimate partner, Jesus, chose you.

Brantley: So, why did Jesus choose us to be His partner?

Howard: Jesus chooses me, you, Dan, and our incredible producer Will because He loves us, and all those He chooses He chooses because He loves. Then he gives us a job to do — to love others and proclaim His Kingdom.

Dan: So it sounds like that guy, Jesus, has a good model for growing His business — the Kingdom.

Howard: He does! Before He ascended He told us to go and make disciples and this really brings us to today. We learn the perfect model that God uses to spread His word by loving people. God calls us to do business and work that keeps our ultimate purpose in mind all the time.

Defining The Business Model

Dan: With that in mind, remind us what a business model is.

Howard: There are a lot of debates about this. Ideally, when companies use them correctly, they are a set of tools or systems to facilitate the transfer of value between a company, investors, employees, suppliers, clients, etc. It’s to make sure there is a value exchange that works for everyone.

Brantley: Based on that definition, what’s an example of a business model in action?

Howard: Netflix is a good example. Netflix set up to stream without commercials the best video content there is. People paid a monthly premium for them to source and produce the best video streaming content available on the market with no ads. They set up systems and processes to do this — including passwords that people shared. Now, they are pivoting to include ads in their business model.

Brantley: Yeah, and they are tested to see how much people will pay.

Howard: Exactly, they’ve tested that, and testing is one of the principles.

Brantley: They tested it at the expense of their stock price, and it has cost them significantly.

Howard: It cost them. Now they have to pivot to ads because of that.

Broken Models

Brantley: Dan, in defining a business model, what’s the biggest problem you think that our models are facing today?

Dan: Howard hit on a big one with Netflix. People lack innovation, they get lazy. Netflix wasn’t planning for their stock plummet. Their change in the business model was a reaction to their stock price plummet. Netflix was founded on self-destruction. Originally they were a delivery service and they blew up that model to introduce streaming, and it changed the industry forever.

Howard: That is exactly how it is supposed to be. Innovation has to be done to continue the original mission because the environment is constantly changing.

Brantley: That’s hitting on what the value proposition is in the business model. I’ve been thinking about how key internal processes are structured to help deliver the value proposition. One of the problems I’ve seen is people bringing in prior experience with documented models that they think will work, and then forcing people into those models without considering whether the unique gifts of the people you work with actually fit into that model.

Dan: There are companies that want people who are not from the original industry to help them with their model because they are free thinkers. Hiring people who have experience in other industries helps deepen the perspective of the business. It totally opens up innovation.

Brantley: Yes, the problem comes when the model does not need to be changed — the value proposition is being delivered on — but small tweaks continue to be made to the internal process without any real tangible benefit. In my experience this really upsets people.

Howard: What model lasts?

Dan: None of them.

Howard: That’s right, none of the models last. The industrial revolution and the data revolution have blown up many business models. We cannot treat any one model as absolute. We care about fulfilling the mission, not the business model for the sake of the business model.

Twitter is another example. Recently, Elon Musk took over Twitter and he is shaking things up over there. Their model was beholden to the shareholders in the market, and Musk thought that was a bad model; so he made the company private.

Business Model Busting

Brantley: What we are hitting on here is that to innovate you sometimes have to bust up the original business model.

Howard: Absolutely, because when we hold the model as absolute we will reject innovation because “that’s not how this industry works”. We do not want to be constrained by this. The bible gives us support here in 1 John 2:15-16, “Do not love the world or the things of the world. If anyone loves the world, the love of the Father is not in him. For all that is in the world, sensual lust, enticement for the eyes, and a pretentious life, is not from the Father but is from the world.”

So first of all, if it's worldly, we have to hold it lightly. Business models are definitely worldly, but people sure are not. People live on forever, but business models will come and go.

Dyson is a case that changed how I thought about things because Dyson was fired by a company he founded. Then he found a better way to make vacuums. He had over 5,000 prototypes, but he never saw himself as the manufacturer, but when he wanted to pitch it to all the vacuum manufacturers they all told him no.

Dan: They told him no because the model was dependent upon bags.

Howard: They all said no because they were addicted to bags! When asked if all the rejection discouraged him he claimed that the rejection emboldened him because the rejections were for the wrong reasons. The poor reasons encouraged him to keep going.

Dan: Let’s think about Netflix for a second. Blockbuster came before Netflix. They were great. How many stores are left?

Brantley: One, it’s up in Washington.

Dan: One store because they refused to change. They always thought people would come in for a DVD. It’s a great example of how stubbornness can hurt your business.

Brantley: If you are “doing things because they’ve always been done this way”, we would challenge you to rethink that.

Advice From Others

Innovation is good and necessary, but the opposite of that is blind innovation — which is a problem. Proverbs 15:22 says, “plans fail for lack of counsel, but with an abundance of counselors they succeed”. This is a component of thinking through how to think in community. I’ve seen this work, and the company right now is an example. We are an e-commerce Amazon company. One of the things I think our CEO does really well is surrounding himself with other people who think in terms of being an Amazon first company. Amazon is a very unique ecosystem, and being connected with others who think in terms of that environment has been immensely helpful. Does this specific case resonate with you all?

Howard: It does from a learning and counsel standpoint. We need cultures of learning. The founder of Wellaco spends a lot of time learning from others and he wants the same for his employees. A culture of learning leads to incredible innovation when you see other models and ways of doing things.

Brantley: Do you have any examples of plans failing for lack of counsel?

Howard: I do — I’ve been around a long time. We were in a nontraditional lending place and the stock had just multiplied by 7 in the past 2 years and there was a race to go international because in our industry wall street was saying that the first to go international was going to be the winner. The investors were driving this so one of the executives of the company made a push to get into the Puerto Rican market. So we checked it our and gave him the market potential and it turns out that Alabama and Cleveland had more potential than Puerto Rico. Instead we spent a couple million dollars getting down to Puerto Rico and it didn’t work out. So sometimes when we let the business model, which in this case was driven by investors, dictate all our behavior, we forget the basics. It’s easy to get addicted to the stock run up and get caught in the trap of doing whatever it takes to continue making the stock go up. That’s an example.

Dan: Sometimes advice turns out to be terrible. How do we know the counsel we are seeking is wise and good?

Brantley: Yeah, so far in this podcast we have hit on a few principles. First, don’t be constrained by industry or worldly standards. Second, seek counsel from wise people of possibility. Dan, the answer to your question is actually the third principle. Which is to be guided by God’s word. Proverbs 14 says, “There is a way that appears to be right, but in the end it leads to death… So keep this book of law always on your lips. Meditate on it day and night so that you may be careful to do everything written in it, then you will be prosperous and successful.” How do we know? We know God’s word and we test it.

Dan: So, Howard, what’s an example of advice that appears wise but is revealed to be foolish in light of God’s word? How do you test that?

It’s About The People

Howard: I’m going to use another principle for this. One of the things God’s word is super clear about is it’s not about the money, it’s about the people. In 1 Timothy 6:9-10 Paul writes, “Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.” And, Luke 6:31 says, “Do to others what you would have them do to you.”

So there’s a guy named Bob Moore and his wife Charlee. Bob went to seminary and during seminary decided to start a grain company now called Bob’s Red Mill. They make all kinds of oats and delicious protein bars — I highly recommend trying their products. So while the product is good, here’s what you see in Bob’s story. He saw that if he wanted it for himself, he should want that for others. Ten years into the business literally burned down. Once it burned down, Bob did not want to rebuild, but he saw that the employees needed the work. So he decided to continue the business for them. Eventually, he gave his employees the whole company in an ESOP (Employee Stock Ownership Plan). The company makes over $100 million dollars in revenue annually, and he gave away all that to love and care for his employees. They give everyone in the company an opportunity to gain a level of ownership in the company — it’s a fantastic example.

Brantley: That example covers a lot of the principles we’ve been discussing. Dan, do you have an example where you’ve seen profit go before people and have a negative impact?

Dan: Several podcasts ago I talked about a company that I left while my wife was pregnant with our first child. I wanted more money and I got a new job just for the money. That was my only motivation. I didn't pray or seek wise counsel. Unbeknownst to me the culture was way off. It was deceptive — lots of underhanded deals. The culture was dead, everything was about the bottom line. People came to work with their heads down, no smiles, turnover rate was high, and I was gone at 11 months. I’m not a job hopper type person, but I just couldn't take it any more.

Brantley: That’s a great example individually and then jumping into a place that exalted profit.

Dan: I chased the money for myself and I ended up at a job where everyone was just chasing money.

Howard: It never works! When we put money first, it never works. How do you see that playing out, Brantley?

Brantley: Early on in my career I ran the books for the agency I worked for. For a while, knowing everyone's salary was easy because I was just the assistant in learning, but over time that grew into me seeing other people’s information and thinking I was better than them. I thought I should make more than them, and for me that way of thinking was death. It led to some of the hardest 6 months of my career. Over time, and this is my testimony in this, I removed that desire. Even my wife would say this is a time where my pride and values were based in what I was making rather than serving others.

Howard: If everyone needs to make more than the next guy, you get caught in a downward spiral. Now, many companies have to hire people that make more than the leadership just to keep the company going — coders and tech people especially.

We have to surrender what we make, but it can’t be surrendered by comparing it to what others make.

Our ultimate partner in business and life is Jesus. He died so we can live, and he goes to work with us every single day. This frees us to care more about the people we serve than what we make.

Resources

Business Model Busting For Good

Bob's Red Mill: Bob Moore

Dyson: James Dyson

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