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Why Designers Need to Learn about Business

The difference between Service Design and Business Design explained
 

What is the difference between a Business Designer and a Service Designer anyhow? Isn’t it the same? What do you do that we don’t? an agitated colleague asked me recently. She is a Service Designer. She has an interest in Business Design and wants to learn more. But she still gets confused about the difference. With this article we will try to clarify.

Business Meets Design

The search interest in Service Design and Business Design illustrates the fact that the first is more known in the design community. They share a similar approach but are distinct in their focus and tools. We will look at the biggest differences between the two.

In a later article we will discuss the distinction between Business Design and business analysis.

Business Design vs. Service Design

Service Design cares about user experience. The focus is on user-friendliness and the desirability of the product. But this is not enough. Imagine a team building a great user experience for a very popular product, but without a business model.

Without Business Design there is no viability and the company will eventually go bankcrupt. Signs for a lack of business sense are

  • lack of market overview: competition and positioning,
  • unprofitable business model,
  • arbitrary pricing,
  • over-optimistic marketing,
  • disregard of company assets, and
  • an unclear strategy.

Business Design focuses on creating, delivering and capturing value. It is concerned about the tangible benefits that are delivered to customers and partners. And it puts a price tag on these benefits.

Business Designers and Service Designers look at innovation from different perspectives. Here we summarize the differences in seven categories:

Business model vs. service concept

What is the focus of analysis? A Service Designer looks at the integration of all product features and supporting functions in a service concept or blueprint. The Business Designer looks at the business model and where value creation happens.

Solid business vs. delightful user experience

What are we striving for? A Service Designer wants to create the best user experience while the Business Designer wants to create a sustainable business. They have to work together to achieve both.

Company strategy vs. product roadmap

How do we plan? A Service Designer plans the product roadmap to know what to work on and coordinate with other stakeholders. A Business Designer thinks about the company’s overall strategy and organisation. A financial plan quantifies the assumptions

Customer vs. user persona

Who are we designing for? While the focus of the designer is the user and he creates a user persona to understand their needs, the Business Designer focuses on the customer because this will be the person that pays for the value created. Especially in B2B user and customer are rarely the same person.

Market research vs. interviews

How do we do research? A Service Designer employs user interviews and other qualitative methods to find out about the user’s needs. A Business Designer looks at the market, competition and industry trends.

Marketing funnel vs. customer journey

How do we look at the users experience? The Service Designer looks at the Customer journey to understand how the user persona experiences the product. He tries to make the user’s journey as frictionless as possible. The Business Designer defines a sales or marketing funnel that understands in detail the buying decision process and thinks about the necessary actions in each step to make the product or service successful.

Revenue vs. engagement

What do we measure? A Service Designer will draw satisfaction from a proven engagement of the user with the service. A Business Designer measures his success in monetary revenue and profits.

Shared Approaches

In practice the boundaries between the two professions are not so strict and Service Designer take over Business Design tasks and vice versa. Especially the way they approach problems is very similar.

Focus on the Problem

Both invest time in thoroughly understanding — or even defining — a problem before they try to find a solution. They work together to define a value proposition that makes the users happy and also have a sustainable business model.

Run Experiments

Business and Service Designers frame assumptions that they carefully test. Both build MVPs (minimum viable products) to validate their hypothesis and run experiments before they spend more resources on a high definition product.

Conclusion

We need both Business Design and Service Design. Service Designers should know about business and learn the basics, while Business Designers need to understand the importance of user experience. Compared to more traditional professions they spend more time on identifying the problem and validating assumptions. They have a bias to action over analysis.

Of course, the two are part of the whole innovation triangle: you also need tech and execution to get your product into the market.

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Originally published on medium.

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