Using the Design Criteria Canvas as a Scorecard to evaluate Business Model options
Once you generate hundreds of different ideas for your business, how do you choose which ones to work on first? How can you make an informed choice? What are the tools you can use to help you? The design criteria canvas can be used as a score card with which to evaluate potential new business model options.
In any design process, you oscillate between generating options (divergent thinking) and choosing options (convergent thinking). This back-and-forth between divergent and convergent thinking led the British Design Council to their famous Double Diamond Design Process diagram — and it is one of the ingredients that we used to build the Double Loop. In the Double Loop, you can see divergent thinking show up in the Ideate, Understand, Validate and Prototype stages, and convergent thinking (mostly) in the Point Of View stage — where you make your decisions. The important thing to understand is that in a good design journey, you don’t mix diverging and converging. They require different mindsets, and the human brain is not well suited to be two mindsets at the same time.
Divergent thinking really requires a ‘yes and’ way of thinking, where anything is possible, and one idea leads to another. Judging the quality of ideas is not productive in this mindset, and it will seriously reduce the number of ideas you will produce if you look at each of them. Creating many options helps ensure that you explore also the possibilities that may lie out of your current perspective or comfort zone: this is where you can find new, disruptive ideas.
Convergent thinking is where you make your decisions and select among options. It makes sense to select in a way that is more or less objective, so it becomes hard to dismiss new ideas simply because they feel alien or too different. They should be evaluated on their merits. Below I describe a way of doing this using the Design Criteria as a scorecard.
Tools for Generating Options
When you are in the Ideate phase, you will definitely be using divergent thinking, using tools like the Creative Matrix, Wall Of Ideas, and other creativity inspiring tricks. In another blogpost I’ll describe this process in more detail.
The ideation phase can be a lot of fun and yield surprising new directions. And, if you do it right, you’ll end up with hundreds of ideas — some of which may be really interesting, while others are rubbish. There is simply no time to work on all of them, so how can you filter out the gems and prioritize where to spend your time?
Tools for Making Choices
The first step is to cluster your ideas. That helps you to see patterns in what you have created. How can you organize them? (Perhaps, doing this will show you some obvious gaps and combinations that you haven’t covered yet.) For each cluster, try to summarize what you came up with with 3–5 post its that describe a separate business idea. That should leave you with maybe 5–10 ideas that you think have the best chances for success. That is a good number to fill business model canvases for so the ideas are a bit more developed. Don’t spend too much time on each of them, it should take you around 15–20 minutes to sketch a business model canvas for an idea.
One way of doing that, that we described in the book, is to use the Innovation Matrix, to see if the ideas are potentially disruptive or simply incremental. This helps you to differentiate your business model ideas based on the value they will have for your business. But that is not the only axis on which to differentiate. There are more possibilities. That is where your Design Criteria canvas comes in.
Using the Design Criteria as a Scorecard
When you create (and update) your Design Criteria, they will contain the must haves, should haves, could haves, and won’t haves for your business, based on your vision, analysis of the content, team charter, and any other things you have learned along the way. The Design Criteria are the compass you take your decisions with. So when you want to evaluate a Business Model Option, you should definitely evaluate it against how well it fits the design criteria.
In the design criteria, you might see criteria that define what you and your team find non-negotiable in terms of:
- Finances and Revenue (perhaps your CEO gave a directive to look for at least a 50% increase in profitability, or a reduction in cost)
- Environmental impact (perhaps your team of founders wrote in the team charter that they want to be 100% renewable)
- Company size (perhaps you want to build a large company, or, in the opposite, find a way to increase scalability)
- Market (maybe you put in your vision that you want to be number one in your target market)
- Other non-negotiables you came up with in the Design Criteria (for instance you want to be known as a great place to work)
Let’s say we have 5 of them, as listed above. Let’s also say we have 5 business model options to evaluate. What we can do now is make a matrix, and give scores for each business model option. The business model with the highest score is the one that is most in line with the Design Criteria, and is the winner. That is the one you should work on first.
The trick to assign scores with your team is to make sure people can’t ‘cheat’ (wether by accident or on purpose) when filling it in. We used to do this by asking people to simply write scores between 1–5 for each business model and category, but then it’s easy to get scores that are not really significantly different, which makes it harder to choose. So, we made a different plan. If you have 5 models, you’ll also have 5 scores, 1–5. There are 5 categories in our example, so 5 categories to score. By giving each team member 5 sets of post its numbered 1–5 you can make sure each of them has the same impact on the end result.
Ask your team members to stick their voting post-its onto the matrix. For each category, for each business model, you need every team member to add one post-it with a score. It would be best if they would rank the business models 1–5 on each category. (If you want to check if you did it right, the totals for each category need to be the same, (5+4+3+2+1) x (nr of teammembers))
Now, we’ll average the scores. Add up the scores for each of the business models, and divide it by the number of categories. This is your average score. It should now be clear that there is one option that scores better than the rest.
Tip If you still got results that were too similar, replace all the 5 stickies by 10s and recalculate your result.
Using the Design Criteria Scorecard to evaluate your business model options makes sure that you and your team spend your energy on the right things and don’t waste time on endless discussions. Alternatively, when you only find options that are not aligned with the Design Criteria, or there is an option your team loves, but it does not match the criteria, you can take a hard look at your Design Criteria: maybe something needs to change.
Originally published at Design A Better Business.