Holistic System Thinkers as well as Cyberneticians have long postulated the hypothesis that the structure of every living system or organization (including businesses) is the same and different. Yet, models to visualize this hypothesis are complex and difficult to understand, let alone apply in practical business situations. The Cybernetic (Living) System model of the emerging discipline of Business Model Cybernetics presents a simple and multidisciplinary visualization of how every living system or organization works and prospers. The above Cybernetic (Living) System model can be used to visualize, document, create, improve, and innovate on strategy as well as products, services, brands, and business models. The Goal of Business Model Cybernetics is to simply create, deliver, and share Awesome Customer Experiences (ACEs). http://goo.gl/h0Yz16

1.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
Living
System
Dashboard
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
SUPERSYSTEM
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)

2.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
(Tool/Org.;
Func@onality)
INPUT
(Ideas/
Resources)
OUTPUT
(Trade-­‐off/
Experience)
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
SUPERSYSTEM
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
Living
System
Dashboard

3.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
INPUT
(Ideas/
Resources)
Feedback(Strategy/TacIcs)
OUTPUT
(Trade-­‐off/
Experience)
+
-­‐
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
PROCESSOR
(Tool/Org.;
Func@onality)
SUPERSYSTEM
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
Living
System
Dashboard

4.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
INPUT
(Ideas/
Resources)
Learn
(Strategy/TacIcs)
OUTPUT
(Trade-­‐off/
Experience)
+
-­‐
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
PROCESSOR
(Tool/Org.;
Func@onality)
SUPERSYSTEM
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
“Fake
XP”/Build
Living
System
Dashboard
Test
XP/Measure

5.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
INPUT
(Ideas/
Resources)
Learn
(Strategy/TacIcs)
OUTPUT
(Trade-­‐off/
Experience)
+
-­‐
CUSTOMERS
SUPPLIERS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
NEW
ENTRANTS
(Startups)
PROCESSOR
(Tool/Org.;
Func@onality)
SUPERSYSTEM
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
Living
System
Dashboard
“Fake
XP”/Build
Test
XP/Measure

6.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
Learn
(Strategy/TacIcs)
INPUT
(Ideas/
Resources)
+
-­‐
OUTPUT
(Trade-­‐off/
Experience)
SUPPLIERS
CUSTOMERS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
NEW
ENTRANTS
(Startups)
PROCESSOR
(Tool/Org.;
Func@onality)
SUPERSYSTEM
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
Living
System
Dashboard
“Fake
XP”/Build
Test
XP/Measure

7.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Strategy/TacIcs)
INPUT
+
-­‐
OUTPUT
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
NEW
ENTRANTS
(Startups)
SUPERSYSTEM
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
Living
System
Dashboard
“Fake
XP”/Build
Test
XP/Measure

8.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Strategy/TacIcs)
INPUT
+
-­‐
OUTPUT
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
NEW
ENTRANTS
(Startups)
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
Living
System
Dashboard
“Fake
XP”/Build
Test
XP/Measure

9.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Strategy/TacIcs)
INPUT
+
-­‐
OUTPUT
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
NEW
ENTRANTS
(Startups)
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
Living
System
Dashboard
“Fake
XP”/Build
Test
XP/Measure

10.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Strategy/TacIcs)
INPUT
+
-­‐
OUTPUT
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
NEW
ENTRANTS
(Startups)
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
Living
System
Dashboard
“Fake
XP”/Build
Test
XP/Measure

11.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Strategy/TacIcs)
INPUT
+
-­‐
OUTPUT
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
NEW
ENTRANTS
(Startups)
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
Living
System
Dashboard
“Fake
XP”/Build
Test
XP/Measure

12.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
PROCESSOR
Learn
(Strategy/TacIcs)
INPUT
Present:
RED
OCEAN
+
-­‐
OUTPUT
NEW
ENTRANTS
(Startups)
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
(AWFUL
FINAL
RESULT/VISION/GOAL/FAILURE
CRITERIA)
Living
System
Dashboard
“Fake
XP”/Build
Test
XP/Measure

13.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Strategy/TacIcs)
INPUT
+
-­‐
OUTPUT
NEW
ENTRANTS
(Startups)
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
Future:
BLUE
OCEAN
Living
System
Dashboard
“Fake
XP”/Build
Test
XP/Measure

14. Legend
The
following
topics,
which
describe
elements
of
a
business
model
on
slides
7
to
13
are
obtained
from
the
book,
“Business
Model
Genera@on”
by
Alexander
Osterwalder
and
Yves
Pigneur.
q Key
Partners
(KP)
q Key
Resources
(KR)
q Key
Ac@vi@es
(KA)
q Value
Proposi@on
(VP)
q Channels
(CH)/Customer
Rela@onships
(CR)
q Customer
Segments
(CS)
q Cost
Structure
(C$)
q Revenue
Streams
(R$)
The
above
topics
are
also
visually
presented
on
the
Business
Model
Canvas
which
can
be
obtained
here:
h`p://www.businessmodelgenera@on.com/downloads/business_model_canvas_poster.pdf
PESTLIED
is
an
acronym
for
Poli@cal;
Economic;
Social;
Technological;
Legal;
Interna@onal;
Environmental;
Demographic

15. Axiom
of
Business
Model
Cyberne^cs
CUSTOMER
Hires
(Chooses)
OUTPUT
(Product/Service)
from
PROCESSOR
(Organiza@on/Tool)
In
Order
to
Achieve
SYSTEM’S
“Job
To
Get
Done”

16. Examples
1-­‐Minute
Living
System
Dashboard
(“Measure-­‐Learn-­‐Build
(MLB)”
Loop)

17. Startups
Enjoy
Great
Success
When
They
Discover
and
Solve
BUMPs:
(Big
Urgent
Market
Problems)
&
Deliver
ACEs
(Awesome
Customer
Experiences)

18. Measure
and
Disrupt
the
Trade-­‐off
of
Red
Ocean
(Exis^ng)
Compe^tors

19.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
for
Apple’s
iPod
Living
System
Dashboard
for
Apple’s
iPod
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Red
Ocean
DisrupIon
(ROD)
Strategy/TacIcs)
INPUT
Apple’s
System:
Listen
to
Music
+
-­‐
OUTPUT
NEW
ENTRANTS
(Startups)
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
“Insanely
Great
Customer
Experience”;
Extraordinary
Profitability
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
Digital
Music
Player
“Fake
XP”/Build
Test
XP/Measure

20.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
for
Cirque
du
Soleil
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Red
Ocean
DisrupIon
(ROD)
Strategy/TacIcs)
INPUT
Cirque
du
Soleil’s
System:
Experience
Live
Entertainment
+
-­‐
OUTPUT
NEW
ENTRANTS
(Startups)
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
Awesome
Customer
Experience,
Loyalty,
and
Profitability
Living
System
Dashboard
for
Cirque
du
Soleil
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
Circus-­‐
Theater
“Fake
XP”/Build
Test
XP/Measure

21.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
for
Southwest
Airlines
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Red
Ocean
DisrupIon
(ROD)
Strategy/TacIcs)
INPUT
Southwest
Airline’s
System:
Travel/Commute
(by
Air)
+
-­‐
OUTPUT
NEW
ENTRANTS
(Startups)
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
Awesome
Customer
Experience,
Loyalty,
and
Profitability
Living
System
Dashboard
for
Southwest
Airlines
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
Airline
Service
“Fake
XP”/Build
Test
XP/Measure

22.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
for
Zappos
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Red
Ocean
DisrupIon
(ROD)
Strategy/TacIcs)
INPUT
Zappos’
System:
Buy
Shoes
Online
+
-­‐
OUTPUT
NEW
ENTRANTS
(Startups)
KP
VP
KA
KR
CS
R$
C$
CH
CR
CUSTOMERS
SUPPLIERS
“Insanely
Great
Customer
Experience”;
Extraordinary
Profitability
Living
System
Dashboard
for
Zappos
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
eCommerce
Website
“Fake
XP”/Build
Test
XP/Measure

23. BONUS
Integra^on
of
Porter’s
5
Forces,
Generic
Strategies,
and
Value
Chain
Using
the
Living
System
Dashboard

24.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
BUSINESS
MODEL
CYBERNETICS
ENVIRONMENT
(IDEAL
FINAL
RESULT/VISION/GOAL/SUCCESS
CRITERIA)
PROCESSOR
Learn
(Strategy/TacIcs)
INPUT
+
-­‐
OUTPUT
CUSTOMERS
SUPPLIERS
IL
P
T
HR
FI
O
OL
MS
S
Profit
Margin
Simply
Create,
Deliver,
and
Share
Awesome
Customer
Experiences
(ACEs)
(IN)DIRECT
COMPETITORS
(Subs@tutes/Complements)
NEW
ENTRANTS
(Startups)
Living
System
Dashboard
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
“Fake
XP”/Build
Test
XP/Measure

25. Legend
The
following
topics,
which
describe
elements
of
a
business
model
on
slide
24
are
based
on
a
descrip@on
of
ac@vi@es
in
Michael
Porter’s
Value
Chain
Firm
infrastructure
Human
Resource
Management
Technology
Procurement
Inbound
Logis@cs
Opera@ons
Outbound
Logis@cs
Marke@ng
&
Sales
Service
IL
P
T
HR
FI
O
OL
MS
S

26.
COLLABORATORS
COMPETITORS
SUPPLIERS
CUSTOMERS
DifferenIaIon
of
inputs
Supplier
concentraIon
Importance
of
volume
and
speed
to
supplier
Cost
relaIve
to
total
purchases
Impacts
of
input
on
cost
&
differenIaIon
Forward
IntegraIon
Presence
of
subsItute
inputs
Backward
IntegraIon
RelaIve
price
performance
of
subsItutes
Switching
costs
Buyer
propensity
to
subsItute
Diversity
Fixed
costs/value
added
Brand
idenIty
Overcapacity
InformaIon
complexity
Entry
barriers
Product
differences
Product
differenIaIon
Buyer
concentraIon
IncenIves
for
decision-­‐makers
Price/
Volume/
Total
purchase
Impacts
of
quality/
performance
Switching
costs
Buyer
info’
Backward/Forward
IntegraIon
Buyer
profits
Access
to
distribuIon
Economies
of
scale
Capital
requirements
Government
policy
Exit
barriers
Channel/distributor
concentraIon
DifferenIaIon
of
channels/distributors
Backward
IntegraIon
Forward
IntegraIon
Cost
advantages
Trends/PaYerns
Tipping
point
Virality
ROI
Source:
Based
on
Porter,
M.
(1998)
Compe^^ve
Advantage.
New
York:
The
Free
Press.
Porter,
M.
(1998)
Compe^^ve
Strategy.
New
York:
The
Free
Press.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing
ENVIRONMENT
(INDUSTRY)
SYSTEM
(Chain
&
Hierarchy
of
Jobs
To
Get
Done)
BUSINESS
MODEL
CYBERNETICS
Checklist
for
Industry
Factors

27. Business
Model
Cyberne^cs
Is
About
Simply
Crea^ng,
Delivering,
and
Sharing
Awesome
Customer
Experiences
(ACEs)