Business Model Design / Customer Engagement / CX / Design Thinking / Facilitated Workshops / Ideas / innovation / Systems / Value / Value Proposition Design

Business Design: Why People Do Business With You

Why people want to work with you

Are you an entrepreneur?  Intrepreneur?  Do you run your own business or lead a department inside a large business?  No matter what you do, there are three things you need:

  • a compelling reason why someone would want to work with you (your value)
  • a well-organized structure that makes it easy to deliver your value
  • a blueprint for consistent execution ensuring great customer experience

These three things are the essence of what we call Business Design.  Many organizations agonize over the minute design details of their product or service offerings – their value proposition – but don’t stop to do the same with their business strategy.  Your value proposition provides a great reason why someone should work with you.  You should put as much time and care into the design of how you go to market as you put into what you bring to market.

Customers are at the heart of a well-designed business

Unless you’re first to market with an amazing product innovation or run the biggest, baddest platform connecting people and services, you’re in the customer relationship business where ease of doing business and customer experience of doing business with you will be the most important determinants of your success.

Customers will do business with you when you offer them:

  • a compelling means to overcome the challenges they face doing their work and
  • enable them to create and seize new opportunities as a result

Organizing to deliver value

Congratulations!  You’ve listened to your customers and shown that you can help them to overcome challenges and pivot towards growth.  In other words, you’ve proven your value to them.  The next three things will help you deliver that value.  You have to:

  • figure out how to reach your market consistently
  • how to build and maintain your customer relationships and be easy to work with
  • how to earn revenue

This is where effective business model design becomes critical.  A successful business is one with more revenue than cost.  This is the most basic business metric there is.  All metrics are impossible to measure if the object being measured hasn’t been clearly defined at the outset.  And that’s the most basic business design issue there is.

One of the biggest challenges we observe in businesses or departments is overcoming a lack of design.  In fact, we’ve seen more businesses continue to spend and hire their way around a flaw than take the time to take stock and re-design their business model, even though avoiding change takes considerably more money and time.

Designing a business model

Designing a business model is actually quite straight forward.  You need to put in place the right channels to bring your value to your customers in order to earn revenue.  You have to balance that with efficient use of resources, activities and partners, which are the primary costs you’ll incur.  With Strategyzer’s Business Model Canvas you can plot all of that out on one page.  (No more need for endless business plans!)  Even the most complex sale, solution or value proposition can be delivered if time and care is taken when designing with the business model canvas.  The canvas is a compelling expression of the process of design-thinking, a process which unleashes a very significant amount of creative thinking when dealing with challenges.

Of course there other elements at play: from the culture of your organization, to understanding your actual market and customer profiles, to over-reaching on scope without connecting all the dots that are needed to make your business or program viable.  Sometimes you have to do a lot of untangling before you can start developing a focused strategy.

The design-thinking process  helps overcome many of these challenges in a short period of time.  There are five stages – empathy, ideation, definition, prototyping and testing.  The process is designed to overcome some of the biggest obstacles – including ego, established view points and time constraints – while unleashing creative confidence and enabling rapid prototyping and testing of feasible ideas that create value.  Using this process, you can develop viable solutions and opportunities in rapid time.

The business model canvas is compelling hereafter.  It lays out simply the structure your business or program needs to deliver that value and earn the revenue or metric you require.  The canvas is one key to enabling value delivery.  The other is having a game-plan for bringing your value, your business model and the types of work you do together.

The game plan

Design is always going to be constrained by your ability to deliver.  Every time you build a program or a business, you are bound by design constraints or ‘economies of scope’.  The game-plan is literally a map of what work needs to be done and by whom in order to deliver.  It helps to keep everyone’s eyes on the goal, reduces the amount of unknown work and speeds up time to market.  All good things.  At the core of the game-plan is a direct and unambiguous relationship between the focus of the business – its definition – and its metrics.

We like to use a logical model that takes into account the focused inputs and activities required to deliver the required, measurable outcomes.  The brand – aka your perceived ability to deliver value – determines what skills your teams should have because they, in turn, deliver the products and services that should be easy for customers to access and use.  Each piece is designed with awareness of the other.  There are no orphan processes or projects here!  We live by the mantra that the “whole is greater than the sum of individual parts.”  That mantra follows through how we deliver value to the customer through all of our channels: communications, sales and distribution.  Lose sight of one part of the mechanism for long and soon all the others will start rattling and veering off course.

The irony of this article: design is visual

Most current design tool sets are visually based because it’s quite difficult to outline holistic thinking in text.  Brian Solis tells a great story about how he had to re-write and re-fund his bestselling book ‘X’ on the intersection of design and business because he realized early on that a standard narrative format just wouldn’t work.  (X is great by the way and Brian is on top of the business design game).  This is because design isn’t a classic planning construct.  Design is contextual and experience counts significantly in any design scenario.  Experience allows the business designer to be flexible and flow with the nuances of a given situation because they can balance the client’s perspective, a designer’s toolbox and preferably many years of practitioner’s experience rising to meet business challenges and opportunities.  Text doesn’t really support that (unless you’re writing a novel) because it’s too rigid, but post-it’s and whiteboards and napkins do.  So if someone asks you, “what is business design?”, tell them:

“Business design is the compelling reason why someone would want to work with you, supported by a structure that makes you easy to work with.”

Then whip out pencil and paper quickly and get sketching.

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