The case study “Can One Business Unit Have Two Revenue Models?” centers around a large company that is merging two business units, Siiquent and Teomik, that have different revenue models. Siiquent, lead by Isode, seeks profit from “biological and chemical compounds, test kits, and other consumables.” They provide these consumables for “a bit less than the fixed reimbursements the hospitals and labs got from insurers and the national health service,” which allowed Siiquent to be seen as a revenue generator for its customers. Siiquent focuses on being flexible, specifically “constantly seeking input from customers and adjusting its offerings to their wishes.” On the other hand, Teomik profits on “machines” instead of “stuff”, as Isode puts it. More specifically, Teomik targets scientists and big funders of genetic research who prioritize glory in prestigious scientific journals. Teomik could set the patented devices at a high price point, allowing them o earn fat margines on these instruments.
Imposing the structure of a single revenue model can have many benefits. First, from the exterior, customers and investors would better understand how the company works. It becomes clear what the values and approaches are and may help the teams appear unified and cohesive (ie everyone is on the same page). As mentioned in the case study, this is especially true for cases when Siiquent and Teomik’s customers overlapped. With two revenue models, customers can become confused “by the reps’ differing offers” which may lead them to seek other solutions and businesses that seem more ‘put together.’ On the other hand, having two models allows for flexibility and ease of pivoting. Markets can be unstable and have sudden shifts. With a flexible model they may be able to adapt quicker and better than competitors which can help them acquire and maintain more customers (and prevent drowning in an “old method” that may no longer work).
I would start by meeting each of the leads separately to better understand what they prioritize most, what their values are, etc to collect more information and better understand and empathize with both groups. I think this may be more favorable than a group conversation (ie with both of them) as ideas can get muddled and I may have less of a deep understanding of the two groups in this situation. Of course, during this entire process, I think it’s extremely valuable to be open-minded and transparent about my process, expected outcomes, etc. to further emphasize that I care and that this is a collaborative process. After information gathering, I’d try to look for similarities in values or better understand why the groups are as they are before having a group discussion with both heads. I think it could also be interesting to invite a kind of devil’s advocate person in a meeting who have good understanding of both perspectives to foster even more ideas. We’ll have a conversation about products and how they are impacted by different models, as well as customers and stakeholders. Given the way that Isode and Emanuel came with a united front, it seems like they are very receptive to discussions, compromises and having such a conversation in a respectful manner.
