A story about Business Design
What it is and why it is needed
As a part of my studies at digital innovation school Hyper Island, I took the opportunity to have my internship at mobility company DMI (Digital Management Inc.), where I currently work as a Business Designer. One of my first internal projects was a brief research project about Business Design with the purpose to create awareness and understanding about the role and which responsibilities the role have within the software development industry.
This article is the result of that research and is based on personal experience, research, interviews with professionals from the industry and knowledge within DMI.
The business climate today
In order to understand the need for the Business Design role, we need to zoom out and take a look at today’s business climate. Innovation and technology were two of the areas that were highlighted as the most important for companies to develop in order to stay competitive according to a recent Forbes Insights report. In the report 400 CEOs, COOs, Presidents and Managing Directors were asked about the current business environment.
Mentioned in the same report is the trend of increased power amongst customers. Customer centricity has proved its importance over the last couple of years and corporations are now starting to see customer experience as one of the most important competitive advantages. In the article “What killed Michael Porter’s Monitor Group? The One Force That Really Matters” published on Forbes, author Steven Denning, Director of the Scrum Alliance and Amazon Affiliate, goes as far as claiming that in the current business environment the customer is the single dominant market force.
Based on this you would believe that innovation, technology and customer centricity is the magic sauce to success, but by zooming in on the software development industry we can see that this is not the case. Even though an app is innovative, works without buggs and has great user experience, 23% of the apps downloaded in 2016 was only used once during the first six months of ownership according to a report made by Localytics last year. Just because an app is well designed and has functionality that is appreciated by users, doesn’t necessarily mean that there is Product Market Fit. In other words, that there is a need on the market or that the solution itself is innovative enough to acquire its own user base.
If, except from innovation, technology and customer centricity, also product market fit and healthy monetisation models is considered, “the real magic sauce” is created. It’s this sauce that super-growth companies such as Uber and Airbnb have used in order to become what they are today.
Companies reaction to the business climate — the need that emerges
As mentioned one of the most important areas for companies to develop in order to stay competitive is technology. The use of technology to transform businesses is complex and creates a need for new competencies and working methods. This need is forcing software development companies to move from being application and deliverable-focused (producers) into being lean and outcome-focused (strategists and producers).
At DMI we recently experienced this when a vehicle manufacturing company reached out to us to design and build their new mobile application. Together with the client we managed to steer away from the “output-focused” app-creation engagement and found the bigger problem. We are currently helping them solve that problem and transform their business by creating a digital eco-system, where the mobile application itself only is one part of the eco-system.
It’s not about building an app anymore. It’s about finding the right problem and create a solution that benefits the end-user and achieves measurable business goals.
In a Customer Journey Pilot with a major Talent Development and Career Transition company we used Business Model Innovation and Customer Journey Mapping to create a deeper understanding of our client’s customers. Leveraging these insights enabled us to map out the most impactful opportunities (problems to solve) by considering the needs of the three major stakeholders: our client, their customers and the end-users.
The new team member
The two examples mentioned above are very different and more strategic compared to old-fashioned design and creation phases. Moving from deliverable and output focused engagements, where a UI-designer could be responsible for the complete design of an app, to a “find the right problem to solve”- approach naturally creates a need for new competencies within the design teams. When clients are in the process of using technology to transform their businesses, a role with business knowledge is needed. This role is called a Business Designer.
The Business Designer works with prototypes in a similar way a UX-designer does, but instead of prototyping wireframes and mock-ups the Business Designer prototypes business models and value propositions. The way of working is based on Design Thinking and lean UX methodolgies, which makes it easy for the Business Designer to work closely with, and be understood by, the other designers in the team. This creates the perfect environment for “the real magic sauce” to be created, where innovation, technology, customer centricity, product market fit and healthy monetisation models all are considered.
By treating value propositions and monetisation models as design-pieces they get built into the solution, rather than added on top of a solution that is already created. This approach creates viable solutions where the monetisation models is neatly integrated into the solution itself, resulting in improved customer experience.
What does the new team member bring to the team?
In the early stages of client projects a Business Designer focuses on innovation and finding new business opportunities. This is done through:
- Competitive Benchmarking (benchmark client towards its competitors and understand where its current market position is)
- Subject Matter Research, including interviews (create a deep understanding of the client, the industry in which they are acting and current pain points)
- Qualitative Analysis (analyse the data that has been collected in previous activities and make it tangible)
During the mid-part of a project the Business Designer’s focus lies on finding the opportunities with the highest impact to the business. This is done through:
- CO-creation sessions, business and customer stakeholders (work together with the users and decision-makers of the business to align on the opportunities)
- Opportunity Assessment (assess the opportunities, e.g. which create the most value for business and customers?)
- Concept Definition (decide on the concept together with the other designers in the team, e.g. which concept covers viability, desirability and feasibility?)
- Product Market Fit (based on user research, benchmarking, industry analysis and Business Model Innovation, e.g. which features should be included for the solution to be adopted and re-used by the customers?)
During the later part of a project, before launch, the Business Designer focuses on synthesising the insights from the earlier parts of the project in order to decide on:
- The Minimum Viable Product (understand which the solutions key features are and package them)
- The Go-To-Market Plan (decide on market, timing, price point, monetisation model, distribution model etc.)
Conclusion: Business Design today is as broad as it is important
Based on my research, Business Design today has a broad meaning.
We can see that professionals working as Business Strategists are gravitating towards design and Design Thinking approaches, as well as Creative Professionals gravitating towards using Design Thinking as an innovation framework on business focused engagements. The epi-center of this gravitation is what’s called Business Design and the fact that both the Business Strategy and Creative spaces are wide, makes Business Design a wide topic.
Design companies Fjord and IDEO are in the forefront of Business Design and have been a part of shaping the role into what it is today. They use a specific role called Business Designer which, similarly to us at DMI, seem to be involved in pre-decided parts of their client engagement process, where they use specific Business Design related tools. Other companies seem to have another approach, where Business Design melts into Service Design, and some Service Designers have the competency to “put on the Business Design hat” when needed.
Even though the Business Design framework is still quite blurry, it is clear that the chances of making a succesful project increases when a decided role is responsible for themes such as product market fit, monetisation models and Go-To-Market plans. Designers that can act as “business advocates” and work closely with the other designers to create desirable, feasible and viable solutions to the most important problems.
A big thanks to all of you for taking your time and supporting with your experience and expertise:
Alvaro Rojo Duran, Senior Business Designer, Fjord
Sophie Andersson, Service Designer, Transformator Design
Juho Kinnunen, Business Designer, Futurice
David Relan, Service Designer, Livework
Fia Mattson, Art Director (Enterprise), Foursquare