There are more business designers today than ever before. Design thinking is winning over more and more people. The hypothesis is that business design is the medicine to the growing complexity of the business world; the way to find evidence and create opportunities; the approach to solving the root causes of problems.
In our experience, the combination of the words “business” and “design” still needs a position – a clarification of what it means. Over the past few years, we too in the Solita business design community have tried to answer this very same question:
- “For us, business design is a hybrid approach from the aforementioned two disciplines: top-level management consulting blended together with design tools and thinking.” – Blog, February 2019
- “Business Design combines different disciplines to form a coherent landscape for defining business in rapidly changing environments.” – Blog, September 2020
- “Our work is best described simply as people-oriented problem-solving.” – Blog, March 2021
In this blog, we will discuss what business design is in 2022 and share 3 business design power questions you can start using already today.
What is business design in 2022?
Business design has grown from the need to combine financial analysis with design practices such as service design. The reason for this need was and still is that creating value for the customer does not automatically mean that there is actual business value to capture. This is both the history and the core of business design today. Business design is about capturing business value.
Creating value for the customer does not always mean that there is business value to capture.
Business designers look at how value is created, how it can be captured and extracted on a business model level. Working on a business model level means that you need to have a holistic view on all relevant aspects of the business connected to the problem space. This is important since, for example, if we change the value proposition it will likely make our offering more attractive to a different group of customers, which might create a need for us to change the revenue logic and cost structure. So, when something changes, you need to look at how it changes the other things.
The purpose of a business design is to:
- Find the path to value – where does it come from and how can we get it out
- Drive value creation – what is the most valuable thing we can do
- Ensure value creation – is there evidence of actual business value
- Quantifying the value created – how much business value is created
- Value capture – what is the business model and profit mechanisms
In 2022 the business ecosystems are increasingly more complex; companies need both a holistic understanding and deep subject matter expertise to run impactful business development initiatives. This is where business design can bring high value by making sense of the connections, connecting silos, and supporting fruitful collaboration between different areas of expertise.
We also see that technology is continuously getting built deeper into the core of the business. This leads to strategic business opportunities increasingly more often being created or driven by technology and data. For a business designer this means that it will become harder and harder to do business design without enough understanding of these aspects. This is the key challenge for business design to stay relevant.
Technology is continuously getting built deeper into the core of the business. This is the key challenge for business design to stay relevant.
Business design on a more practical level
The definitions of business design often leave out the creative messy aspect of the approach. As a basic principle, in every project you need to first create a confusing mess – the clarity part comes later. The first phase, very familiar for design thinking, is a chaotic problem identification. The goal is to both understand the problem space and find multiple new perspectives. Professional business designers navigate this uncertainty by managing expectations of the people they are collaborating with. This is required, especially if the organisation is not familiar with design methodology.
Evidence-based experimentation is another key element in practise of business design. The created hypothesis are iterated on the basis of evidence. The evidence is gained through qualitative and quantitative insight, data analysis or by conducting “real-life” experiments in a controlled environment.
Business designers utilise iterative co-design methodology where the matter at hand is owned and worked on together. The inherent principle of business design is that it’s never first-time correct or done. It relies on the agile, hypotheses-driven, evidence-seeking process that keeps at heart an open-mind.
Also, business designers, use frameworks and best practices to bring clarity and structure to complex topics. The difference is that they are used more as a supporting library or comparison rather than a starting point for approaching a problem. The point is to avoid confirmation bias, which could easily happen if you fit gathered evidence into a readymade framework.
3 business design power questions for you to start using
- What needs to be true for X to happen?
- How can I create an experiment to test it?
- What is the potential business value we can capture? For example, what is the size of the targeted market.
Business design is strongest when combined with other expertise
Our experience is that business design is at its strongest when combined with other expertise. But this is also what often makes it hard to explain since you can easily mix or add in other aspect of design or consulting into your definition of business design.
Sticking to the core of business design being about capturing business value keeps clarity on what business design brings to the table. From there we can then expand by making combinations with other areas of expertise, for example:
- Service designers and business designers both use the same base methodology, which makes collaboration easy. The difference between these two is that service designers focus on customer value and business designers focus on business value. No customer value leads to no business value, but customer value does not always lead to business value.
- From a process excellence point of view, there is a direct connection to value extraction, meaning how the processes and structures support the business model. Collaboration between these two areas can be very fruitful as both have ingredients of system-thinking and look at problems and opportunities in a holistic way. Business design has a lot to offer in this area, when it comes to designing for example interfaces between processes, points of human interaction, driving end to end value creation and innovation.
- Working with technical capabilities and solutions business designers are often strong players at connecting business stakeholders with more technically skilled people. The reasons for this are that business designers talk business language and are also ensuring that what is being built creates business value. Being able to show the business value and making results tangible is useful in all settings involving organisational change and new things.
For a business designer the core of the work is always about capturing business value. No matter the context.
- Business design is about capturing business value
- Business design has grown from the need to combine financial analysis with design practices such as service design
- Business design is a holistic approach that works on the business model level
- Business design is a strong approach in complex business ecosystems and environments
- Business design is strongest when combined with other expertise and can bring high value by connecting silos and supporting collaboration between different areas of expertise
- The key challenge for business design in 2022 is technology being built deeper into the core of business
You should make it into a practice to ensure value capture and test solutions before large-scale implementations. Value capture should be ensured early on since it gets more expensive and difficult to change directions when you are invested.
Calculating a business case is not nearly enough. In 2022, you need business design.
Two not-to-miss events coming up after the Summer!
- Business design crash course – Join us with people from all industries for breakfast live at the Solita Stockholm office or via Stream. Learn more about how to reinvent the existing and create success in new innovations.
- Business Design Masterclass – Excellent theory and hands-on practice regarding tools, methods, and facilitation approaches on how to design and re-model your business. This is the third improved edition of our very much appreciated class, and we would love to see you there!