7.7 Balancing the Business Orientation with the Business Theme
Adopting the right Business Orientation should be supported by pursuing the right Business Theme—i.e., the area of customers’ needs that the company aims to fulfill.
The level of harmony between a Business Orientation and a Business Theme can be expressed using a BOT (Business Orientation/Theme) index:
First index number: Indicates the total share of all activities carried out within the most pursued or primary Business Orientation. (The share of each listed activity corresponds to its share in all used resources and/or obtained revenues. This share represents the “energy” of each activity, which can often be more intuitively felt than precisely measured.) This first index number represents Business Orientation cohesion. The higher the number, the more streamlined the company is in relation to its primary Business Orientation.
Last index number: Indicates the total share of all activities related to the most pursued or central Business Theme. This number represents Business Theme cohesion. The higher the number, the more the company focuses on serving its central Business Theme.
Middle index number: Represents the intersection of the central Business Theme and the primary Business Orientation. It shows the portion of the central Business Theme’s activities carried out within the primary Business Orientation.
The first two index numbers show how closely the primary Business Orientation and the central Business Theme support each other. The closer the second number is to the first, the more the primary Business Orientation and the central Business Theme reinforce one another.
Basically, there are several possible scenarios:
Low Business Orientation cohesion – for example, BOT = 35-35/100 (see Company 1 in the table)
This could be an IT company whose managers refer to their central Business Theme as “IT services.” Its main activities are:
1.1. Preparing, installing, and maintaining all kinds of basic hardware and software solutions for clients
1.2. Developing general software products for a particular customer segment
1.3. Reselling IT equipment through an online shop
1.4. Trading IT specialists like a commodity
Besides the unclear Business Orientation, this company also has a problem with defining its Business Themes. For instance, the main Business Theme of its second activity (making SW products for a particular market segment) clearly stands out from the notion of (basic) “IT Services”.
2) Low Business Theme cohesion – for example BOT = 100-30/30 (see company 2)
This occurs when there are too many different Business Themes. An example would be an online shop offering a wide variety of unrelated goods, making it difficult to maintain a unified marketing approach.
3) Low Business Orientation and low Business Theme cohesion – for example BOT = 30-0/26 (see the company 3)
The worst-case scenario arises when both Business Orientation cohesion and Business Theme cohesion are low.
4) Highest Business Orientation and highest Business Theme cohesion – BOT = 100/100 (see the company 4)
From a management perspective, the ideal situation is a 100-100 BOT index, meaning that all company activities serve just one Business Theme and are performed within a single Business Orientation. For example, consider an internet search engine whose initial activity—providing access to online information—is followed by additional initiatives to bring previously offline knowledge (e.g., maps, translators, and other tools and data) to the internet. All these activities align with a central Business Theme that could be described as “open access to open knowledge.”
Balancing the Business Theme with the Business Orientation must be supported by the company’s structure. While pursuing two Business Themes within a single business unit increases the risk of failure, developing them in separate organizational structures provides a better chance for progress and feasibility control.
Balancing the Business Theme with the Business Orientation also helps align the entire cognitive foundation of every business endeavor.
Since everything starts with people, the business components “Who / Why / How / What” can be prioritized as follows:
