The Essentials of Business Design
In future, corporate development will focus more on open, value-based design skills and opportunities than on managing self-contained systems. Working with a continuously open mindset and a strong focus on customer feedback, data and testing will add value in business projects.
In the disciplines and domains of developing digital products, engineering and services design knowledge is already widespread as good user interaction leads to a competitive advantage. But design principles do not only lead to better user experiences but also to effectiveness and risk reduction. This is where senior management comes in — step by step.
For experienced entrepreneurs their own organization is not a mechanical or linear system anymore. This old-fashioned mindset does not serve very well when it comes to enabling innovation and adopting new technologies. Hands-on approaches such as Design Thinking, sprint planning and co-creation are now making inroads into the business executive domain.
A different notion is needed: Business Design
To make it distinct from classic top down management approaches, the term Business Design helps to make it clear to everybody that this way of thinking and working is different from the waterfall style project management. At last, executives are aiming for higher achievements in value creation.
What is Business Design?
Business design is an innovative and focused method for creating, testing and improving products, services, processes and organizations with a human-centered approach. It applies the principles of Design Thinking to solve entrepreneurial tasks and challenges and combines innovation and creativity in interdisciplinary teamwork with an analytical perspective. Business design is a hands-on approach which continuously delivers value to organizations and customers. By continuously receiving external feedback it reduces the risk of bad developments. It enables agile and flexible growth, supports open and creative solution searches and improves customer and employee satisfaction by means of empowerment.
What does that mean for executives?
Managers should also do or support the following attitudes
- Think in phases, models and steps
- Think as designer
- Test and iterate
Think in phases, models and steps
The act of breaking down long-term initiatives and plans into small digestible pieces for all is the basic condition for the beginning of each business design project. This may not sound like anything new. But the difference is that in business design the ultimate goal is not to achieve sequential splits but to split your work into stand-alone and value-delivering chunks for your customers. In this way you can make sure that you do not lose your audience and that you take the necessary time to boost your learning curve.
Model-based work is another basic layer of your project work. There are dozens of different models in the design field which have different purposes: prototypes, ecosystem maps, customer journeys, analytical models (e.g. business calculations), causal diagrams and so on. There are lots of books on Design Thinking to give you a first idea about all the models that are currently in use.
Get synchronized: Setting the rules for integrated interaction with others (customers, stakeholders, project members) makes a clear difference right from the start. This enables you to ensure that everybody is moving in time with each other.
Think and work as a designer
In management you will find this critical phenomenon almost everywhere: We have been there, done that already — quick decision from the gut. Linear thinking or being driven by fast solutions may lead to inappropriate and insufficient actions in times of fast innovation. This shortfall in reflection is caused by bias and can be described as the so-called XY-problem.
Before asking for solution X, you should reflect upon what the problem Y really is. E.g. It may be trendy to invest in big data and data lakes, but do managers still remember what the original question was?
Albert Einstein “A clever person solves a problem. A wise person avoids it.”
Lateral thinking is in the DNA of designers. From the beginning, they ask critical questions about the problems, the desired solutions and think about lightweight and effective means. Lateral thinking results in a broader perception of the initial questions and often (but not always) leads to a better outcome for the client. It takes some practice and experience to make this approach work successfully on a daily basis.
Imagining and thinking in a visual way is also a key quality for designers. Starting with an initial mental model and then working with a pen and paper approach. But can that work for business and finance challenges as well? Sure it can!
In our daily project work drawing and refining mental models is a precondition for getting off to an effective start with an interdisciplinary and heterogenous team and avoids time consuming and eternal discussions about processes, wordings, situations and goals in teams. Drawing is part of every phase of our projects.
We even draw streams of revenue and cost allocations over time on our whiteboard to have first guesses from the team about profitability milestones and break-even-points before we even start using Excel at all.
Test and iterate
One important principle is having a positive attitude to testing and to getting feedback from your peers, customers and stakeholders. This means continuously improving your work right from the beginning. Due to our human bias we are all bad judges of our own design decisions and should take instant feedback into account as a valuable resource for innovation.
One requirement is, whenever possible, to systematically collect feedback based on data from an early stage. Designing the right test settings and evaluation is mission critical for each project and should not be started too late as the availability of candidates for your interviews could be a major stumbling block. B2B projects are much more sensitive to this point than B2C.
Applied Business Design
The procedures and tools for design thinking in business can be applied to a whole bunch of business challenges: product and service innovation, entering new markets, building up a trusted network of business partners, customer acquisition, integrating new technologies in business (such as artificial intelligence) or marketing relaunches.
These tools are highly valuable where the need to manage complex systems and wicked problems and to integrate different requirements is the main success criteria.
Example: A Business Development Project
For example: a business development project, such as developing a new product, can be split into 6 different phases:
- Need finding
- Customer Creation
- Building the organization
The major questions and contents in these steps are the following:
- Need Finding: The Companies‘ constant challenge
How do businesses set themselves apart in the perception of their clients and target groups? Where does potential lie untapped? What opportunities can innovative approaches to development, production and marketing open up to provide you with a firmer foothold in the market?
Increasingly, business development is all about need finding, value creation and innovation for customers. Empirical approaches and analyses help you to identify what is feasible, what makes sense for your customer and how you can successfully add value to shape the corporate future.
2. Ideation — Creativity as a mean to take a step ahead in competition
The world is full of undiscovered potential and the ability to innovate is a powerful driving force. In order to discover potential and develop it properly, you need independent and flexible thinking, proven methods and the experience to put yourself in the customer‘s shoes.
The systematic acquisition of customer knowledge and the analysis of decision factors is an important step in this direction.
3. Designing — Understanding good design as a success factor
A company’s products, services and communication must be tailored to the client and the value that the client expects. There are several areas that are business-critical: product and service design, user-friendliness and the customer’s experience, to name but a few.
What from an internal point of view may appear to be clear, may still leave your customers mystified. To facilitate speed and to reduce risks, concerted step by step development should therefore be carried out jointly with the stakeholders and the outcomes should be reviewed from the customer’s perspective.
4. Customer Creation — Turning the key with communication
Lack of market access is the biggest challenge many companies face as they strive for new business. If you are selling quality, your products and services must be positioned accordingly. The value they add must be communicated, and that means knowing which levers to activate.
You don’t market apps in the same way as apples. A thorough command of communication and the design of both B2B and B2C marketing channels are of crucial importance.
Branding projects and the creation of communication can also be regarded as a product development process in itself, where different aspects of business (such as long term goals, trust building, financial possibilities) must come together and, in the end, must fit into customer and organizational needs.
5. Scaling — Delivering agile growth and developing markets
With a new product, a solid first customer base has to be built. Getting yourself known in the market takes time and money. Yet in many cases, the best way to overtake the stampeding herd of competitors is to differentiate and leave the beaten paths of marketing.
Scaling up your business requires standardization and simplicity — as well as the ability to plug into different market networks. We often see the outcome ‒ a simple solution requires a lot of initial effort, but it pays off really fast.
6. Building the organisation — focusing processes on value added
To flourish and grow at a time when change is critical, businesses need agile processes, clear roles, the right resources, lean structures and good management. Business models as a whole must become more flexible and more modular.
All these aspects affect the way business is led and teams are organized. The right conditions for change must be put in place. In today’s digital era, change cannot be confined to individual silos: It will always affect the whole organization.
Business Design adds value to solving business challenges by bringing design skills and tools to work on corporate topics and projects.
In general, the management should be openminded for new and innovative ways of tackling known problems.
Business Design can be applied to a range of business questions, especially where the human factor plays a decisive role.
The positive aspects of applying Business Design:
- A positive attitude towards innovation makes the difference in a highly competitive world
- Empowerment of people in the domain of creativity leads to more motivation and effectiveness
- Iterative activities and testing leads to risk reduction
More about business design at www.designation.eu/en/business-design
Author: Christoph Nieberding
Evelyn Münster and Christoph Nieberding are managing partners at Designation, a Munich based design company for data products and business design.