Feat of clay: the business models you didn't learn about in school

Entrepreneur, Nov, 1998 by Mark Henricks

"I had to learn to say no," she says. "I honestly didn't understand that before. But somehow, with the modeling, these things became clear to me."

Haughton's epiphany occurred at an avant-garde workshop put on by Sonoma, California, management consulting firm Need To Know Inc. John Ward, the firm's owner and a designer who once owned a custom woodworking company, helps entrepreneurs understand their companies by sculpting clay representations of their markets, operations, finances and strategies.

He calls the technique "kinesthetic modeling" and says that working with their hands and minds together allows entrepreneurs to feel what they know in their guts. "The brain is overrated as the headquarters of everything," scoffs Ward, 54. "The reason this works is because it taps into the rest of the body."

OLDER THAN DIRT

Making business plans more visual isn't a new idea. Graphics have long been used to convey corporate strategies, and a few consultants have relied on drawing abstract images to help distill insights. Decades ago, L. Ron Hubbard used clay modeling as an aid in teaching his philosophy of Scientology.

Ward got the idea to make business plans out of clay two years ago while debating the need for written business plans with a workshop full of construction company owners. Ward finally suggested they might be more comfortable literally building a plan rather than writing one. "That sprung it," he recalls. "I realized I could tap into my art background to explore the way a business looks."

He hit on modeling clay as the medium to use because of its malleability, reflecting the diverse needs of young businesses. Trial runs got a good response, and Ward began offering workshops for around $1,200 per person.

Although Ward has worked with a team from one large utility company, he says it's primarily small-business owners who are drawn to the idea. "Only the most adventurous people are doing it," he explains.

Another explanation might be that entrepreneurs have difficulty with the traditional way of modeling business activities. "Most business plan models can't contain the kind of wild spirits entrepreneurs have," Ward says. "So they don't make plans; instead, they wing it."

MODELING METHODS

Need To Know workshop attendees work in groups of two to seven people. Ward briefs them on what they'll be doing, then has them model a few nonbusiness objects. Next, he asks participants to mold representations of their business functions, such as marketing or finance, as well as their customers, markets and overall strategy. "It's always useful to model an image of a customer and an image of the competition's product," Ward says.

One rule is to work fast. Participants have only three minutes to make each figure. Another key: communication. Ward helps participants assess what they've made, and participants comment on each other's work.

The results can be unsettling. "I actually created a framework that collapsed," admits John Williams, owner of The Sausalito Group, an 11-person marketing company in Sausalito, California. The apparent problem: It lacked a robust foundation - a failing Williams said had dogged him throughout his business career.

"I'd work on the big stuff and gloss over the details. It's been my downfall in the past," Williams confesses. With that fault revealed through modeling, he returned to his office and shored things up, obtaining the rights to some key intellectual property he needed, and generally rethought his business strategy.

After a day of modeling, Ward's clients paste photos of their work onto written notes and are coached on the best ways to think about the imagery until the next meeting. Over the following two weeks, they return for two half-day follow-ups. Says Ward, "The process is a constant back and forth between modeling imagery, looking at the imagery and talking about the meaning of it all."

DOWN AND DIRTY

Don't expect to leave a business modeling session with an itemized action plan. Modeling is helpful when a company needs to go in a new direction. It's good for spurring creative thinking, suggesting different solutions and getting people to break out of ruts. "If you're off-base," says Ward, "it paves the way for a breakthrough."

But while you may come up with broad insights, you're unlikely to be able to model the details of implementation. And your insight may not even be about business. "It's got nothing to do with solving a business problem," says Williams. "It's got more to do with understanding yourself. As a result of that, however, you can solve business problems better."

Modeling carries some risk. The biggest, Ward says, is that in modeling your business in front of others, your failings will become obvious to all. "It's incredibly accurate," Ward says. "People aren't able to fool the process."

THE SHAPE OF THINGS TO COME

Nobody's expecting the business schools of prominent universities to endow a chair in clay modeling. But Ward says it should be recognized as a legitimate tool for strategizing. "Business is a wide-open endeavor," he says. "You have to tap every resource you've got to make it work."