The most important ideas behind business design

Business design featured image

Design is definitely in demand. I’m sure that you’ve heard of some of the top design-driven companies, like Airbnb, Nike and Netflix, to name just a few. While it’s fantastic to hear how these companies turned to design in order to generate innovative solutions, there’s another side that a lot of designers miss. It’s not as sexy, but it’s just as important: design leaders at these companies look to business to drive value. That’s a huge takeaway!

Nowadays, it’s not enough to simply design a mobile app – you can’t sell this to the top companies. But if you are business-aware and base your design on company goals and strategic decisions… well, that’s what gets you noticed. That’s exactly what business design is all about!

If you’re wondering what business design actually is, or perhaps want to learn more about what makes it different and why it has such a bright future, read on and enjoy this introduction to its most important concepts.

Quick links:

What is business design?

Business design and abductive thinking

From design desirability to design viability

Customer-centric design vs stakeholder-centric design

A basic business design process

Customer and stakeholder research

Define and ideate

Think in extremes

Prototype and learn

Embrace small samples of qualitative data

Visualize your data

What’s it like to be a business designer?

What is business design?

Business design takes the tools of business thinkers, analysts and strategists, then combines them with design methodologies, design thinking and mindset in order to create a sustainable business. That’s how I see it, anyway. As it’s a fairly new field, there are quite a few different definitions scattered across the web.

Design methodologies got really popular in the business world over the last decade or so, especially design thinking. However, they were mostly focused on customer-centric product and service design, and not so much on holistic business development.

Given the popularity of design thinking, it was only a matter of time before a discipline like business design would emerge, reaping the combined benefits of business and design principles in order to develop and test business models and prototypes. A combination of design thinking, both agile and new, and more sophisticated tools resulted in a better, more structured and methodical way of dealing with projects.

Business design strives to transform a value proposition into real and sustainable business value. It’s goal is to ensure that everyone benefits from the solution in question – customers, the business and stakeholders alike.

Business design and abductive thinking

If you want to understand business design, you need to delve into abductive thinking, as this is the kind of thinking that business design uses the most.

Traditional education and business thinking usually works with inductive reasoning and deductive reasoning. Inductive reasoning leads from specific examples to rules. Deductive reasoning uses established rules to provide conclusions. They both work well in orderly environments, as long as there aren’t too many intangibles or surprises along the way. And that’s just the problem: the business world is chaotic, unpredictable and ever-changing.

Abductive thinking is much better suited for tackling modern business challenges. It observes, learns and then offers its best guess – the most likely explanation(s) – also known as hypotheses.

Abductive-deductive-inductive thinking

Let’s take a quick look at some of the challenges that a business designer might face:

  • Increasing market share
  • Finding a defensible position in the market
  • Improving how the company delivers and captures value
  • Improving profitability by optimizing the company’s cost structure
  • Defining a sustainable product strategy or an innovative business model

As you can see, these challenges can hardly be solved using only the ‘traditional’ means and ways of reasoning, particularly if you are a player in a well-established market. Deductive thinking will explore just a fraction of the possibilities, and all of them will be in line with what others have already done before you. It might even miss the best solution entirely if it’s outside of its scope.

As a business designer, you want to look at as many options as possible. You want to find that competitive advantage no matter where it is hiding. Because without something new, without something more, you’ll be forever playing catch-up.

That’s where abductive thinking comes in. It gives you permission to think in new ways. It allows you to observe, learn and understand first, after which you can develop a business model prototype (more on that later), evaluate it and identify the most critical assumptions.

That business model is in no way conclusive – it’s simply your best guess of what might work. You’ll test it, learn more and iterate accordingly.

That’s why abductive thinking is so important. It enables you to test new ideas, new tools and new products to see what works and what doesn’t.

Working this way is infinitely more exciting and leads to new solutions that give you a competitive edge in your industry.

From design desirability to design viability

Design is inherently customer-centric: it focuses on human needs and desires. Therefore, the desirability aspect of a product or service is its number-one priority. The initial popularity and success of design methods used in business were fueled by this unique perspective.

But, as many businesses have discovered, a desirable product doesn’t necessarily mean that it’s good for business as well.

Let me give you a slightly over-the-top example. 🙂 If asked, I’m sure that most people would like a jacuzzi in their hotel room, especially if it didn’t change the cost of the stay. So the desirability is absolutely there, but I don’t know any hotels that have installed a jacuzzi in each room (if you do, please let me know). Why? Because it’s not viable from a business perspective.

Over the last decade, many designers and design departments have struggled to achieve a return on investment with their designs. They just couldn’t commercialize their product or service in a way that would contribute to business growth or help with a sustainable business model.

The problem is that, no matter how much users seem to desire it, a product or service ends up being a huge expense with no return if they aren’t willing to pay for it.

The business design approach overcomes this problem by connecting desirability with business-model viability. It doesn’t just ask whether your users want the product, but also whether you can build an ecosystem around this solution – one that will deliver and capture value for your business and its customers.

It asks questions like:

  • How does our company produce the product or service? How do we create value?
  • Why does that generate value for the company?
  • Does our business model fit with the way that our customers want to use and pay for our solution?
  • Is the way that we build our solution and the way that we buy from our suppliers profitable?

In order to ensure that your solution is not only desirable but also viable, there’s another important thing that business design considers.

Customer-centric design vs stakeholder-centric design

Design methodologies are customer-centric. Every design process should start with user research – learning about the users’ challenges, goals, pains, and general lives. This helps us to design the best possible solution for our specific target user.

That’s a good thing, right? Sure, but it can also go too far. We mustn’t act like a horse with blinders that sees the user and only the user. There are other people to consider too.

That’s why business design isn’t just customer-centric, but also stakeholder-centric. Any stakeholder in your business model who can impact the final purchase decision has to be accounted for. You want to learn and acknowledge their needs in order to make the selling process as smooth as possible and avoid any potential bottlenecks.

The process might start with your company’s decision-makers who need to approve the design, then move on to the person who’ll be making the purchase decision (often not the user of the product). You must then think about the technician who’s going to service and repair your product (and can advise against it) and finally end with the actual user.

Considering all of these people is the difference between a neat product that you struggle to sell and an excellent product that helps you to create a sustainable business.

A basic business design process

The aim of a business design process is to create a business model prototype based on important assumptions, then test it and iterate it until you are confident that you have a solid basis for a sustainable business.

There isn’t a one-size-fits-all process, and every designer adapts it to their own needs and preferences. The process is not necessarily linear and many of its parts can be shifted around.

With that in mind, here are the most important building blocks of a business design process:

Customer and stakeholder research

Every project team should start by talking to customers and important stakeholders. Gain as many insights as possible and stay open-minded, as you don’t want to be thinking about constraints just yet.

Try to understand what challenges your customers and stakeholders face, how big these are, whether they are willing to pay for a new solution, what solution they are currently using, and so on.

I’ve written a whole guide on user research and I’m sure that you can use it for stakeholder research too.

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Define and ideate

Once you’ve finished your research, it’s time to clearly define the challenge(s) you’ve found. Use your business design research and insights to help you frame quality questions that will serve as your guidelines for the rest of the process.

Cluster your challenges and questions into opportunity areas and prioritize them. This should give you a solid foundation to start thinking about various ideas that you might want to test.

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Think in extremes

When ideating, don’t be afraid to think in extremes. That’s an important role of a business designer.

Try combining elements that might not make sense at first glance. That’s how you’ll uncover new ideas and provoke interesting reactions while testing. You might even learn something that will give you a competitive edge. Embrace the extremes and remember that your ideas and prototypes are far from conclusive. It’s only the beginning of product development. Allow yourself to experiment.

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Prototype and learn

Your prototype doesn’t have the sole purpose of verifying your idea: it’s also a learning tool. There are endless variations that you can use to test your hypotheses and see what happens with your ideas in the ‘real world’.

You can launch a simple service to test a business model, create fake-door tests to assess the willingness to pay, put together business cases to see if a product is financially viable, sketch out ideas that represent various trade-offs and see how stakeholders and customers react, and plenty more.

Whatever you’re doing, always remember to clarify what you’re testing and define the metrics.

Small samples of data

Embrace small samples of qualitative data

The beauty of abductive reasoning is that you can create very sound hypotheses if you combine some quantitative data with small sets of qualitative data acquired through interviews or testing. It’s enough to move your project forward to the next version of your prototype.

Visualize your data

Turn business data into visuals. This will help you to find patterns, communicate learnings, create experiments, and prototype your ideas. Even if you’re not a masterful UI or graphic designer, it’s enough to sketch some ideas and use graphs.

Don’t do it all in spreadsheets, as this won’t help you to uncover any unusual patterns. However, visualizing your findings and strategy might just help you to connect seemingly disconnected data.

With experience, you’ll create your own version of this process and move things around a bit, but the above principles are a solid start if you’re new to business design.

What’s it like to be a business designer?

Let’s see what working on a project looks like for a business designer.

While other designers work on user flows, user experience, aesthetics, and features, business designers bring a business perspective to the project and frame it strategically. They are a bridge between traditional design work and business stakeholders, and their work reflects that.

Business designers also produce business design deliverables. Here are some of the most common ones:

  • Business model map
  • Competition research
  • Revenue potential findings
  • Business strategy
  • Proposed metrics to stay on the right track
  • Go-to-market strategy
  • Suggested pricing plans

Deliverables are, of course, the most tangible part of a designer’s work – they’re the thing that you include in your portfolio.

Business designers usually work on projects that look like early-stage startups. There is something desirable and they want to make the solution economically viable.

Before the project can move forward, it requires proof of concept and a solid plan. That’s where business designers really shine.

Let’s say you’re working on a business idea for a food-delivery platform – one like Wolt. It’s a desirable service. Restaurants want to sell more food, while customers want the convenience of seeing all of their delivery options on the same webpage or app, as searching the web for menus can be a pain.

A business designer will consider the needs of restaurant owners, the people taking the delivery order (usually waiting staff), delivery personnel, and customers.

Before you create a prototype and test your strategy, you need to answer some important questions and discuss business trade-offs.

Is it better to start with an app or a website?

Will it be a subscription service or will you earn commission from each order through your platform?

Will you offer a phone number or only an online order form?

Will you provide your own delivery service that will pick up and deliver the food or not?

Are payments going to be card only, cash only or both?

Are you willing to guarantee a 1-hour-or-less delivery time or not?

These are just some of the questions that will affect your prototype.

You can discuss them with relevant stakeholders, or get creative and make some ad tests. Testing with different ads while emphasizing various benefits and features on each of them would be one way of assessing which ideas attract the most attention. You can even see which one gets the most sign-ups by creating a landing page for people who click on the ad.

Doing this might guide the creation of a prototype or two that would test simple platform models and features, as well as business models, for a short period of time. You can even test them with a few willing restaurants and see what happens once the prototype is live.

It’s all about creating an environment that allows you to see how stakeholders and customers would react to your new business or offer if it were already established. Testing and iterating in such an environment is how you gradually create a sustainable business.

And that’s it for now!

Business design is an exciting and complex area of design that’s definitely on the rise, and it’s something that I’ll probably be writing more about in the near future.

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👋 Oh hey,
I’m Romina.

Design strategy consultant. Founder of DesignStrategy.guide and NUEVA / design studio. Wife. Mother.

I am a Design Strategist who holds a Master of Business Administration. I have 15+ years of career experience in design work and consulting across both tech startups and several marquee tech unicorns such as Stellar.org, Outfit7, Databox, Xamarin, Chipolo, Singularity.NET, etc. I currently advise, coach and consult with companies on design strategy & management, visual design and user experience. My work has been published on Forbes, Hackernoon, Blockgeeks, Newsbtc, Bizjournals, and featured on Apple iTunes Store.

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