What is the purpose of Business Models in an organization?

The purpose of Business Models in an organization is fundamentally tied to aligning the organization around its strategic vision. A Business Model serves as a blueprint that defines how a company creates, delivers, and captures value. It encapsulates an organization's core activities, resources, value propositions, customer segments, and revenue streams, which all directly relate to the strategic direction and goals of the organization.

By having a clear Business Model, organizations can ensure that all parts of the enterprise work together effectively towards common objectives, fostering coherence and understanding among various stakeholders. This alignment is crucial for guiding decision-making, resource allocation, and operational effectiveness, all of which support achieving the organization’s strategic vision.

In contrast, documenting operational procedures focuses on the "how" of processes rather than the strategic alignment. Tracking project milestones pertains to managing specific projects and does not influence the broader organizational strategy. Evaluating employee performance is an internal human resource function that, while important, does not directly relate to the overall strategy or the alignment of the organization with its business objectives. Thus, the emphasis on the strategic alignment makes the connection to the Business Model clear and essential.