Business Design is the most important skill of the future. We need its unique approach to create sustainable business models in a world of fast changes. Business Design helps us to understand the context of our businesses, develop new business models and test them quickly.
But what do Business Designers actually do — and how can you become one?
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During my time at Service Innovation Labs I have hired and mentored many different Business Designers and interviewed even more. As a consequence I gained a clear picture of what it takes to be an extraordinary Business Designer.
The multi-layered structure of successful Business Design
The requirements for a successful Business Designer have three levels: mindset, skills and tools.
Fig. 1 — The mindset forms the basis for a successful Business Designer. On that rest the skills he acquired and the tools he uses.
The mindset defines how a person approaches a task at hand.You can assess the mindset with questions like: How do you think? How do you approach a problem? Which mental models do you apply?
Building on that, certain skills are needed to successfully complete the tasks that a Business Designer has to perform. This includes innovation strategy, business model design, storytelling and more. It answers questions like: What do you know?What theories are you accustomed with? Which books do you read?
Complementary to that are tools. They are what Business Designers use every day toput their skills and mindset into action. Examples are the business model canvas, pricing strategies, and marketing funnels. To find out about these you ask a Business Designer: How do you work? What are the methods you use? What are the most important tools or frameworks for your work?
My series starts with a description of the mindset of a Business Designer. I will elaborate on skills and tools in article two and three of this series— for updates, follow me on medium or join my mailing list.
How do you think? The mindset of a Business Designer
The mindset makes the difference between a great Business Designer and an average one, as the latter only uses the Business Design tools without a deeper understanding. However, this mindset is hard to learn quickly, instead it is usually learned from a range of past experiences.
Next, I list the concepts that are second nature to excellent Business Designers.
For Business Designers it is not enough to be analytical thinkers —they also need to be creative.
Business Designers at our company usually come from a quantitative background (e.g. business, mathematics, or psychology). They are very strong in analyzing problems and excel at convergent thinking, helping them making choices and reducing the number of possible solutions.
Fig. 2 — The double diamond shows the four phases of the design process that you apply to get from a first question and problem to the prototype of a solution. In the process diverging and converging thinking alternate.
In addition to that, though, Business Designers need to adopt the explorative and creative mind-set of a designer.They need to apply divergent thinking to create new, innovative, and even unintuitive solutions. As I have a quantitative background, learning this mindset has been the most difficult part of Business Design because it is furthest from the way I usually approach problems. For a designer it is the other way around: they are used to think divergingly and create a lot of different options.
Business schools do very well at training their graduates to identify problems and solve them analytically. In contrast, in the early phases of a design project you have to widen the scope and explore the problem space without knowing where you will end up. A Business Designer needs to adopt and balance both approaches: applying analytical thinking while embracing and welcoming the uncertainty.
Fig. 3 — The innovation process moves from the concrete and analytical research to the more abstract synthesis. The findings are used to generate a concept that is used to create a concrete prototype that can be tested.
If you also have an analytical background, it will take practice in creative projects and trying out different approaches to learn this mindset. You might give it a try at your next assignment by not approaching it directly, but take a step back and take time to figure out the underlying problem. Then come up with wild ideas how to solve that problem and narrow your solutions down only from there.
Service Design by Andy Polaine gives a good overview over the field and its concepts.
A Business Designer tests her assumptions as early as possible and learns from the insights.
One of the core methodologies of Business Designers is the concept that Eric Ries popularized as Lean Startup (it shares ideas with the PDCA method). A Business Designer follows the iterative build-measure-learn cycle. She identifies assumptions about the innovation and formulates hypotheses. Subsequently, she prioritizes them to identify the most critical assumptions and tests them in the market and with potential customers. She makes sure to build prototypes and gets feedback early. She draws insights from the customer reactions and they feed into the next cycle of the next prototype.
Before starting your next project, think about how to test the underlying assumptions and build a quick prototype to evaluate them. Get feedback on your ideas from real customers within a day.
An innovation must provide real customer value to be relevant in the market.
To think about a business model is to think about how to create, deliver and capture value. To create value, a good Business Designer needs to understand the users just as well as the systems around them. He must find out about the customer needs as much as he can. He knows about the power of customer research and builds empathy with the user to design a compelling and focused value proposition. He works together with user researchers to test hypotheses that are relevant to the business model.
Include the customer perspective in your next project. Leave the office to talk to people, pick up the phone, or shadow your sales personnel. Make sure you understand the needs of the user and make it a high priority to fulfill them.
A Business Designer gets things done.
She is pragmatic and finishes the task at hand. She tends towards doing and testing instead of over-analyzing. She rather starts a quick test and iterates on the results. She always has the business impact in mind and believes in the good old pareto-principle(20% of the effort produces 80% of the outcome). She is hands-on and wins every marshmellow challenge. She knows how to handle productivity frameworks and values good ideas over politics. She thinks out of the box and finds solutions in unexpected places.
For a day, give yourself half of the time that you planned to take for each task and jump to the next thing on your priority list instead. Look back after a day and evaluate the impact that you made.
“Nobody wants to steal your perfect idea. It is 1% idea and 99% execution.” — a #startupcookie
A Business Designer stays up to date on trends and changes.
Innovation often is a result of a clever recombination of existing ideas. Therefore, a Business Designer needs a broad understanding of different industries and business models. He scans the market and follows current trends. He is very good at asking questions and at listening. He is open to new experiences and makes connections to previous knowledge. He constantly tries to make sense of the world around him.
Look up relevant topics for your project or industry on meetup.com and join a group of like-minded people in your area. You will get a quick deep dive into a topic and a fresh perspective.
“Stay hungry, stay foolish.” — Steve Jobs
Business Designers are team players.
Innovation happens at the intersection of business, design and technology. In order to bring great ideas forward, Business Designers work together with service designers, software developers and other professionals. They understand the strengths of a broad range of disciplines and know how to collaborate with them.
In addition to that, Business Designers know how to manage stakeholders. They understand their motivation and goals and know how to align them.
Apply your user-centric mindset to your stakeholders and interview or shadow them to find out about their aims.
For an introduction to the feasibilty part read on product management in Build Better Products.
How do you achieve a Business Design mindset?
We have learned six different concepts that form the Business Design mindset. The best way to master them is to get firsthand experience in an environment that values this mindset. You will find it for example in digital consultancies, design agencies and startups.
Use this to start as an intrapreneur in your own organisation: Whether you are an entry-level analyst that wants to try out a different approach, or you are an executive manager who wants to change the working of your organisation to adapt to digital challenges, start with some of the concepts and create tangible results. If you are successful, people will approach you and ask how you made this happen. Starting from there you can introduce more and more of these concepts.
The Business Design mindset includes designer approach, Lean Startup, user focus, entrepreneurship, curiosity, and collaboration.
A Business Designer uses these concepts to understand threats to an existing business, to spot new opportunities and to come up with novel ideas. At the same time, he is able to implement new concepts and test and iterate them to generate customer value. Thereby he creates sustainable business models.
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