1. What is business
For product manager recruitment, "understanding business" has become a necessary skill, but what is business?
The meaning of "business" is relatively broad, and the popular interpretation is the affairs that need to be handled in various industries. The business model of the entire company is a business, and an approval process of the company is also a business.
So here we divide the business into two categories: business model and process specification.
The tricks for a company to survive in the entire industry are called the business model, and the details of each link in the operation of the business model are called the process specification, business model + process specification = business.
2. What is understanding business
1. Understand the business model
There is a popular saying in the business model: sell products to consumers through channels in a reasonable way to make profits. For example, the main business model of a bank is credit. Let us analyze the business model of a bank according to the above definition.
Products: Loan products, short-term loans, long-term loans, rental loans, car loans, consumer loans, etc.
Method: customized for customers, general type, etc.
Channels: Cooperate with real estate companies to promote mortgage services, and 4S stores to promote car loan products. (Real estate sales companies and 4S stores become channels)
Consumers: capital demanders, house buyers, and car buyers.
Profit: Interest.
2. Understand the process specification
The process specification refers to the professional skills that each position must master in the specific operation process of the above services.
Take the above-mentioned bank as an example, such as an example of buying a car with a mortgage. The reference process is shown in the figure below. Each step requires professional processes and specifications, which are also called business.
3. Summary Understand the business
So what we usually say about understanding the business actually includes two aspects, understanding the business model and understanding the process specification.
Business model: focus on the business process and business model in the company's commercial field. For example: banking, securities, real estate development, second-hand housing intermediaries, etc.;
process specification: focusing on
the business process of a certain operating link within the company. For example: purchasing, marketing, finance, etc.
What we mean by understanding business is actually understanding specific business fields + specific business operation processes. The sustainable development of a company is the operation of the organization of all employees, each with its own expertise and dedication, as the saying goes, each performs his duties and fulfills his responsibilities.
Business models and process specifications each have their own breadth and depth. The degree of mastery and ability distribution of each person must be different. The business knowledge system of a front-line operator and the CEO must be different. As shown below:
Most people's body of business knowledge is somewhere between the curve and the two axes (red dot).
This requires, as a product manager, to grasp and choose between the two dimensions of the business based on actual product needs. If you are proficient, congratulations, you can chat and laugh with Jobs and Zhang Xiaolong.
Three, understand the business method
Now we know that understanding business = understanding business model + understanding process specification. So how to understand the business model and process specification?
Learning a subject of knowledge requires a professional methodology, and the concepts and techniques used in this methodology are collectively referred to as tools.
1. Business model toolbox recommendation
Business model analysis is a very standardized industry. For example, we often hear about the "big four", PricewaterhouseCoopers (PwC), Deloitte (DTT), KPMG (KPMG), and Ernst & Young (EY). Each has its own methodology to analyze and design business models.
Of course, these are extremely professional routines, and it is already a considerable cost for product managers to master their methodologies.
IBM, BCG, McKinsey, etc. also have excellent toolboxes for their consulting experts to use. Here are three analysis tools.
(1) Business Model Canvas
The business model canvas is a tool to help us sort out the business model. It is mainly explained through 9 modules. As shown below. You can write the specific corresponding content of the company in the block diagram (Figure 2).
(2) Six elements of Wei and Zhu
(3) McKinsey 7S model
The generation of the company's core value is divided into seven aspects, including structure, system, style, employees, skills, strategy, and common values.
Among them, strategy, structure, and system are the hardware for the successful business model of an enterprise, while style, personnel, skills and common values are the software for the business development of the enterprise.
The above three are very commonly used and easy-to-use toolboxes. The specific operation details cannot be explained in an article. You can find corresponding books and materials on the Internet to learn.
Query and retrieval ability is one of the core competencies that product managers must have. For query and retrieval skills, please refer to my previous article "For product managers, reading ability and tool operation are very important!" ".
For product managers, understanding the business model must not stop at the level of mastering some grand analysis frameworks. If this is the case, it is no different from various "international situation strategy experts" and "big chess players" on the Internet. The role of product managers in mastering business model analysis tools is to be able to position products from the business of large companies.
Of course, this is very important for a product director. As a person in charge of a specific product, being able to master the big picture while being able to refine a certain field is an essential ability for survival and development.
2. Classification of process specifications
The first essential to understand process specifications is to be familiar with business goals and business processes. Because the business has the generality of its industry and the particularity of the company.
For example, accounting, the accounting industry itself has some statutory standards, and the country regularly updates accounting standards.
However, each industry and company has some specific constraints and regulations. The accounting of a real estate company and the accounting of an Internet company must have different business processes.
So any business process must abide by three factors:
Industry rules: the rules of the company's industry, such as finance, real estate, retail;
company system: at different stages and scales of company development, more effective company systems will be chosen to adapt to company development;
professional standards: such as accounting standards, procurement standards, marketing standards There will be corresponding rules and regulations for publicity and so on.
Understanding the process specification is to locate the product target on the basis of mastering the above three points. What are the demands of the product in terms of efficiency improvement, safety, management and control, and value-added? To master the process specification is to search for information and consult industry experts.
Four. Summary
To summarize the above content:
Business = business model + process specification
We call the tricks of a company's survival in the entire industry a business model, and the details of each link in the operation of a business model we call a process specification.
To understand the business model, you can use models such as the business model canvas, the six elements of Wei and Zhu, and the McKinsey 7S model.
To understand process norms, you can start with industry rules, professional standards, and company systems, collect search data, and consult industry experts.
Personally summarized business knowledge system:
Human business practice path:
This article does not introduce what the business of a specific industry is, but the purpose is to share a set of operational methods to master the "business".