What is Business-Design and why does it matter.

This is the first note of what I hope will become a beautiful habit and communication Channel between me and the audience that supported me all these years in my quest to popularize the Business-Design practice.

It is inevitable. Every time I introduce myself and what I do, the same question seems to appear. What exactly is Business-Design, and why does it matter? Like any topic nowadays, there is a ton of content out there, so I decided to write this note to put in simple, plain English my interpretation of Business-Design.

1. What is it — What's it for — Why it matters

So here it is; it is more straightforward than you think despite the consultant's jargon or fancy graphics Business- Design can be explained as follow.

What is it?

Business-Design is a strategic approach to innovation that places the consumers at the center of the Company or Organization's strategies.

What's it for?

It is a framework to Discover and Implement the business's strategic objectives, satisfying unexpressed customer needs.

Why it matters?

This is the methodology used by companies and organizations defined as "Design-Driven," which allows them to grow (Revenues and Stakeholder returns) at nearly twice the rate of their industry counterparts.

Value of Design survey of 300 global companies, July 2018.

How can this help my Organization?

Business-Design (BXD) evolves the process of researching and defining "complex problems" of Design-Thinking, and combining—it with the consumer experience transforms it into innovation.

It operates at the junction of:

Design (Desirability)

• How can we create more desirable products, services, and experiences?

Technology (Feasibility),

• How can we work more effectively, efficiently, and experimentally?

Business (Viability).

• How can we discover and implement more profitable strategies and business models?

2. Are we ready for the revolution?

You might think that this is just the latest trend, an interesting and maybe even effective practice, but that almost certainly won’t apply to your organization.

“Yes, it is interesting and possibly works for these young Silicon Valley startups or tech companies but in the real world...The world of manufacturing, machinery, unions, and complex distribution channel. It almost certainly doesn’t work.”

Well, let me be brutally honest with you. Innovation is not for everyone. Growth is not for everyone. But you must be aware that Globalization, Technology, and constant Change are radically transforming the business models of each-and-every industry from manufacturing to services. Whether we like it or not. According to the WEF, by 2030, more than 1 Billion people will need to re-skill or may become redundant.

This demonstrates that the conventional management models, theories, and practices are swiftly becoming obsolete. We can’t ignore that the current state of the market is Volatile, Unpredictable, Complex, and Ambiguous.

Here is where Business-Design comes into play.

A new framework that takes into consideration the Complexity and Volatility of the market, the Ambiguity, and the Unpredictability of the Customers. Allowing the Business to generate agile and adaptable solutions—recognizing that people and change are the only constant.

3. The Business-Design Conundrum

At its core, Business-Design utilizes the pillars of Design Thinking (Human-Centered, Collaborative, Experimental); pairing it with the focus of Business Strategy (Value Creation, Business Modeling, Competitive environment, Value delivery).

We could say that Business-Design is a framework that utilizes Human-Centric, Data-Informed decisions to discover those Strategic Business Goals that Satisfy Unexpressed Human Needs.

Let me give you an example.

Let’s think of a low-cost Airline. (This is a very common example in literature, but I added a slight twist)

If we would go through the classic approach of asking our beloved passengers what would make their experience more satisfying, nine out ten will answer something like more legroom and better inflight service.

This is a very typical Business-Design conundrum. In this case, the Human-Needs (more room & better service) and Business needs (low operating costs & high volume passengers) here are conflicting.

From the business, perspective to keep fair prices low, the Airline company has to optimize the sitting so pack as many passengers as possible per flight and keep operating costs low so paid food & drinks and even minimal ground staff. (Forgive the oversimplification, but this you get the point)

From the customer perspective, this is not a pleasant experience for sure they like the low fare, but the luggage arrangement, lack of ground service, and no free snacks and drinks is not an ideal customer experience.

3.1 The wicked problems

So how can we solve this complex problem?

This is what we call a wicked problem; we can define a wicked problem as follows:

1. No clear solution The simple solution is not satisfactory. If we increase the confront and service, we decrease our profitability, so Airline is unhappy If we keep low fare but “low service” customer is dissatisfied.

2. Unforeseen outcome

Whatever we do, we are not 100% sure this yields the desired results. What if we slightly raise the fair and provide better service? Will this give us a competitive edge? What if we communicate clearly why our service is limited? Is this going to tame customer dissatisfaction? We are not sure.

3. Involves behavioral ChangeHow can we change the perception and behavior of customers not feeling frustrated and of Airline not risking bankruptcy?

4. Socially ComplexIs it a zero-sum game? Someone wins; someone loses. Is this the case? Is having one of the parties not completely satisfied the only solution? Is it fair to the Airline staff to be badly treated by passengers because they are frustrated?

5. Interdependent & Multi-casualThere isn’t one single solution that will fix the problem but rather a range of interconnected cause and effect loops.

That said, sorry for the digression. I felt it was an interesting point, back to our topic. In this case, we can use the Business-Design framework to reconcile these opposing forces.

3.2 Through the lenses of Business-Design

So how could we meet the strategic objectives of the business (Low cost) satisfying the unexpressed customer needs (Better service).

Let’s look at the problem through the Business-Design lenses.

1. DesirabilityTaking the customer perspective and trying to dig deeper into what they really want, the unexpressed needs are not more legroom (this was clearly expressed) is actually Being more comfortable.

2. FeasibilityWhat technological advancement can we bring to make this change and reduce friction as much as possible? We have a wide range of possibilities, from a super-efficient check-in and allocation of collateral services through Apps and strategic partnerships.

(If you want to discuss this point, I’ll love to read ear from you, or we can do a live stream. Let me know in the comments below)

To the most Disruptive solutions, let’s be wild and imagine a Standing seat configuration. This is a very extreme solution but would solve the problem. Technically It is feasible (some airlines are experimenting on this) but disruptive as it has to change rules and regulations radically—safety, heights, weight, etc.

3. ViabilityWill our crazy standing configuration be Viable? Absolutely! A standing seat probably won’t cost more than a regular seat—profitability wise we could possibly fit even more passengers or luggage. And the previous alternative of highly automating and digitalizing the process is also viable as we could discover alternative, more profitable business models.

Of course, if Elon doesn’t invent teleportation first. Then the entire airline industry is gone! That’s why speed is essential.

Here you go, an oversimplified but linear explanation of the Business-Design process. If you are asking yourself why we still don’t have such a solution, we still haven’t reached the market saturation of low-cost airlines that would drive such innovation. And BTW, this is just an example. Get over it. ;-).

4. Applying the Business-Design Framework

If you find the previous example way too far from your reality, here are five steps to start thinking as a Business-Designer in your organization.

1. Think like a Designer Act as an Entrepreneur

The fundamental difference between Business and Design is that Business is implemented while Design is discovered. The difference between something that is implemented vs. something that is designed is the expectation of the outcome. When something is implemented, the outcomes are known. When something is designed, the outcomes are unknown; it is the process that leads us to the solution. Don’t fixate on the status quo. Start looking for the solutions that are not obvious. There as several tools that you can use to do this I’ll cover them in future notes.

2. Design is for Desirability,

The Design lens is for Desirability. We are trying to answer the following question: How can we create more desirable products, services, and experiences?

Yes! Aesthetics, Function, Form, and all that goodness is definitely part of Desirability. But, there is a big But here. These are also the most ambiguous, culturally subjective elements of Desirability.

This is why in Business-Design, we focus primarily on discovering Unexpressed Needs. Solving problems people don’t know they have is universally appealing. Most of the time, though, a simple, elegant solution is what our customers want and need, which is the ultimate purpose of a proper design process—Research an unexpressed need and craft a simple, elegant solution that fulfills that need.

3. Technology is for Feasibility,

The Technology lens is for Feasibility. We are trying to answer the following question: How can we achieve our strategic goals more effectively, efficiently, and experimentally? How can we empower our people (customers and team) to achieve their goals better, faster, cheaper? This seems a mundane statement, but it is at the core of every Innovative strategy.

It is a simple question but a tough one to answer. Most organizations fail to objectively answer this question because, deep down, they know the answer. That their product, service, or experience is neither better, faster, nor cheaper. And they settle for the Good Enough to scrape by. Sorry for the tough love here.

4. Business is for Viability.

The Business lens is for Viability. We are trying to answer the following question: How can we achieve our strategic goals more effectively? How can we discover and implement more profitable strategies and business models? Viability is the ability of something to survive or live/work successfully. In some instances, the ability to self-sustain itself or recover. This is why in Business-Design, we focus more on implementing long-term strategies rather than short-term tactics.

5. Experimentation is key.

Intrinsically linked to the Business lens, experimentation is the ultimate frontier of Business-Design. I’ll use a product development reference here. The Minimum Viable Product (MVP) concept is an excellent practical reference to explain this point.

The launch of an MVP is a strategy we use to perform a fast and quantitative market testing of a product or product feature. The purpose of experimentation is to drastically reduce development risk eliminating any uncertainty, substituting guesswork with analytically informed decisions. Without a doubt, I can tell you that in my almost 20 years in the industry, this is one of the most overlooked and often poorly executed practices. Embracing experimentation is one of the most radical cultural changes that an organization can face.

5. Change and People are the only Constant

In our modern complex world, change is the only constant. No one knows exactly what the future is going to look like. No one. Literally, no one knows when the universe will decide to crank up the entropy dial. And when it does, it gets really loud! But I can tell you this much. Until there are people, there will be needs to fulfill. This is virtually an Infinite Demand.

If People can clearly identify and express their needs, they will try to find the cheapest, easiest, most convenient way to fulfill their needs. This is where fierce competition and price wars happen. Not a good place to be.

What will set us apart from the crowd and cut through all the noise is our ability to fulfill unexpressed customer needs. Solve problems they don’t yet know exist. This is the true essence of Business-Design and Innovation.

Business-Design is an essential practice that our organizations must adapt if they want to grow, become successful, and long-lived.

Is it easy? Absolutely not!

Is it a perfect bulletproof system? Far from it.

But it is so much better than the alternative of seeing our businesses or organization crumble right in front of our eyes or being in a constant status of anxiety, feeling powerless and out of control, wondering if we will survive next quarter. I’ll be frank with you. Sometimes our ventures will, and sometimes they won’t. But it should be something we are in control of.

I wrote a quote in my book that is still as valid today as it was when I wrote it.

Only when we are there, at the edge of uncertainty, pushing the boundaries of our own personal knowledge, only then will we find authentic development and true creative expression.

I believe that every Business Problem is a Design Problem as intrinsically is Human Problems.

When we master the process of Discovering new and more profitable business models, constantly changing and evolving, when we are equipped with the tools and techniques to effectively Implement our vision and identify those strategic objectives that will fulfill our customer’s unexpressed needs, we will be unstoppable and in absolute control of our organizations.

I’ll love to hear your thought on this note. Subscribe to the newsletter and drop me a line. And don’t forget always Inspire, Change and Disrupt.

— GLC