Business Models- 'South Park' Style
By Diana L. Mirakaj
One of the finest satires of poor business planning comes from none other than South Park, the animated foul-mouth comedy series set in the high plains of suburban Denver. Created by Trey Parker and Matt Stone, the show mocks a full range of social, political, sexual and religious issues through the prepubescent, bathroom-humor–obsessed characters of Kyle, Stan, Kenny and Cartman.
In one of its takeoffs on business, the South Park boys learned about corporate operations and profits from “underpants gnomes.” If you don’t recall the episode, or have never watched the show, trust me—it’s worth watching.
Struggling to complete a school assignment about business and profit, the boys are constantly distracted by a classmate, Tweak, an overcaffeinated son of a coffee shop owner. Tweak complains about gnomes sneaking into his room at night to steal his underwear.
The boys dismiss Tweak’s wild story, only later to discover that underpants gnomes are real and, surprisingly, they know about business. In fact, their stealing of little boys’ underpants is an enterprise activity.
Desperate to understand the inner workings of a corporation and how they make money, the boys ask the underpants gnomes for help. The gnomes are only too happy to reveal their secrets—a three-part plan:
Phase 1: Collect underpants.
Phase 3: Profit.
The boys don’t get it and probe further. Gnomes working on a giant pile of pilfered underwear go back and forth about how phase 1 is collecting underpants and phase 3 is profit, but they never explain phase 2.
Of course, phase 2 is execution—what they do with the underpants to add value to some customer, which then leads to revenue and profit. What Parker and Stone tapped into in the episode is something business leaders encounter everyday: ideas that, without a sound business plan, are merely ideas.
Breaking the Rules
Parker and Stone know a lot about this problem, since they have broken the conventional rules about animation production to create South Park. While popular animated series such as The Simpsons and Family Guy take months to produce a single show, each episode of South Park is written and produced in one week. More amazing, Parker and Stone—who remain the creative geniuses behind the show—often don’t start conceptualizing the content for the next show until after the last installment airs.
That kind of a schedule for a labor-intensive product such as animation can be stressful, but it matches their business model: Make the product as fresh and relevant as possible. Authenticity trumps all else in this model. And it works. South Park is not only a huge moneymaker; it’s also a critically acclaimed production.
Just as the underpants gnomes revel in their vacant business model, entrepreneurs and corporate executives alike love to indulge in the enjoyable distraction known as explaining their business model. It was the diversion of the dot-com era and fodder for endless venture capitalist pitches in boardrooms across the country in the late 1990s.
Everyone was drawing models on napkins, but no one was executing. Everything looked pretty, but nothing was practical. It may be considered the fun part of business, but, in reality, it’s the most serious of all the matters before anyone embarking on launching a company of any kind.
Creating and implementing a business model successfully is real work. Playtime is over.
In essence, the technology-driven transformation of today’s business environment puts a premium on the model we adopt. Not only are entirely new business models possible, they are necessary for survival. And they must be designed so that they can morph into something new on the fly when the environment changes.
The magic of South Park is that Parker and Stone can create shows as events happen, while animation rivals must trail popular culture. The magic of companies such as Google and Apple is that their business models are flexible and adaptable enough to change with evolving economic conditions.
That level of adaptability is provided in strategic enterprise architecture (SEA), which includes the management capabilities necessary to design an enterprise from business, process, application, data and infrastructure perspectives. It consists of the business architecture (business strategies, operating models and processes) and technology architecture (applications, data and infrastructure) scenarios.
The Operational Blueprint
Every structure in the world—from a single-family home in New York City to the 2012 Olympic Stadium in London—starts with a set of plans and instructions known as blueprints. No one would start constructing a new home with the roof first—not just because it’s illogical, but because the blueprints would instruct the contractor to begin with the foundation and build up.
A house is a suitable analogy for the blueprints behind an SEA, since no structure or strategic architecture is built by just one person. A series of specialists collaborate and cooperate in building even the simplest of structures. The same principle holds true for the enterprise executive, who should use an SEA as a blueprint to marshal domain experts—each of whom will have a different idea on how to build and execute operational blueprints with various options and scenarios—onto the same page, the same blueprint.
Enterprise executives shouldn’t underestimate the work involved in producing a comprehensive SEA and supporting portfolios. They are difficult endeavors, but only with this knowledge can decision-makers really understand what’s going on and what needs to be done in their organizations. With this knowledge, enterprise executives can begin to lay out scenarios of the future and build the appropriate models needed to arrive at that destination. They can select the best scenario based on evidence and information, as opposed to instinct or desire.
Once the current business model is understood, executives can begin to create the business scenario models that form the basis for end-to-end impact analysis, with each scenario representing an alternative for accomplishing the firm’s goals. The structured and visual nature of models makes it easy for the team to compare those scenarios and eventually combine the best of each. That equates to what’s best for operational efficiency, strategic objectives and overall financial performance.
As the South Park crew realized, phase 2 is what matters the most in every business model because it’s always about execution.
Diana L. Mirakaj is chief marketing officer at BTM Corporation, a management solutions provider based in Stamford, Conn., and a co-author of The Power of Convergence. Her experience gives her a singular perspective on the connection between business strategy and the value of technology. © 2012 BTM Corporation