Good business design is crucial. You just don't know it yet.

Sebastian Palus

Director, Business Design

10 min read

Business design (BD) might not be a strategy that’s been tried-and-tested by successful global companies for decades, but that doesn't make it any less useful in today’s business landscape. Not to be confused with business development, management consulting, or simply design itself, business design is about using customer-centric design methodologies, tools and frameworks to solve business challenges.

While business design may seem ambiguous in nature, it is key in helping companies achieve goals such as growth, successful strategy, effective business models, cost optimization, organization, and a quality user experience (UX).

 

Still, a number of companies are yet to understand just how valuable a strategy it can be in ensuring business success.

Companies are missing the third pillar of success: Viability

These days, the vast majority of modern companies have understood that in order to thrive, they need to nail the desirability and feasibility of their product or service. Desirability refers to the quality of the UX and its aesthetics, while feasibility indicates its technical capabilities.

However, there is a third pillar that is often missing and is causing the downfall of companies that ignore its importance. That third pillar is viability. Product viability is crucial to business success; it means setting viable goals that move companies towards their long-term objectives. For example, such goals might include revenue growth, a decrease in costs, or even entering new markets or process optimization. Let’s take a look at some real-life examples of companies that neglected the third pillar, and were unfortunately met with their fate.

Where have we seen this?

Video sharing service Vine shot to success after its debut in 2012, fulfilling the demand for short, snappy video content as mobile internet was speeding up and many brands were shifting towards short burst video content.

 

Unfortunately, while the company had achieved desirability and feasibility, it fell behind on sustaining the business viability of its product. Vine reacted too slowly to market developments, including the rise of Instagram and Snapchat, and never provided brands with the means to advertise on its platform. The company was even slow to offer sponsorship solutions in-app. And so began Vine’s demise: its owner Twitter pulled the plug on the service in 2016.

 

Design Inc. is another useful example of a failed company that neglected that all-important third pillar of business viability. Design Inc. was a design company on a mission to create a marketplace that helps companies and individuals find great designers. While the company had a lot of positive customer feedback on the platform itself, they were stuck without a good business model and found it impossible to capture revenue due to a “limited market to attack.”

 

RethinkDB had both a good idea and technical model with its open-source scalable database for the real-time web, the first of its kind. However, the company failed due to its venture into the market of open-source developer tools -- when software developers love building similar tools for free. So, while the product was good and in-demand, few people were willing to pay “more than the price of a Starbucks coffee” for a lifetime membership. 

 

Another reason for RethinkDB’s demise was measuring the wrong metrics. This is a crucial element of BD: Companies need to make sure they’re measuring the metrics that users actually care about. Instead of focusing on timely arrival or palpable speed, RethinkDB channeled its efforts into perfecting and measuring the correctness of the database, interface simplicity, and consistency -- which actually turned out to be metrics that users were willing to trade off.

Don’t be like these failed companies. Choose Business Design.

By prioritizing BD, these companies would have realized that their product or service was simply not viable, or they would have adjusted their strategy to make it viable. Strategizing in this way comes in large part from making use of design frameworks, tools, and methodologies, including Design Thinking, the business model canvas, Blue Ocean canvas, and value proposition canvas, amongst many others.

 

BD uses these frameworks to simultaneously put the customer at the center of the strategy while ensuring maximum possibility for revenue and growth. Business designers do this by testing out business model prototypes and collecting both quantitative and qualitative data from shareholders and users alike. 

 

And quality BD is more important now than ever, as it requires innovative thinking about where an industry is going in a rapidly changing digital landscape. For example, take a look at Netflix. The company started out by just renting DVDs, and is now the biggest subscription streaming service and a worldwide household name. This is because it limited the risk of failure by being prepared to change when its users needed it to.

 

Ultimately, business design is about analyzing what’s out there (be it messy qualitative data or quantitative metrics) to produce successful business outcomes. For companies, this will mean having their assumptions challenged by the insights they uncover. But this should be seen in a positive light: By constantly asking “Why?” and developing business models according to the answers they get, these companies can maximize their chances for success.

Challenge everything!
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