Business Design as the core to secure business viability - Why Business Design fails

We’ve noticed something rather curious about the state of Business Design. While it’s supposed to bridge the gap between Service Design and business strategy work, it seems to rarely achieve its full potential. But what’s missing to make the equation work? We see that while companies are often able to define and deliver customer benefits, too little effort is paid on business value capture.

We see Business Design as the art of ensuring long-term business viability. Business Design combines a customer-centric approach to innovation with strategic analysis and financial modeling to enable sustainable value creation for customers and the business.

Designing for growth is a relevant topic for many of our clients across industries. For some it is a question of finding new growth areas in a saturated business landscape and for others it is a question of responding to changing market conditions and industry disruption. Many companies have launched innovation accelerators to find new growth opportunities, but are struggling to generate true business impact.

Based on our experience, there are a couple of typical reasons why the benefits of Business Design are not realized:

1. Differences between Service Design and Business Design are not understood. As a consequence, the definition and role of Business Design is unclear for the organization.
    
2. A clear process, methodologies and tools have not been established. Business design combines the best practices from Management Consulting and Service Design, but strategic thinking is often underrepresented.
    
3. Teams involved in Business Design do not have all the required resources and competences in place. Organizations often have unbalanced competences highlighting either business strategy and future foresight, design thinking and customer understanding, or technological opportunities and existing capabilities.

These challenges manifest themselves for example as an insufficient understanding of business value capture, tendency to start considerations from technological opportunities instead of customer problems, or lack of understanding of execution feasibility during the Business Design process.

We believe that more extensive use of Business Design practices and tools including business strategy, customer-centric design and capability assessment will help companies deliver significant business impact through innovation and new business development activities.

Business – Can we deliver business impact?

Business Design is about proving business viability. Ensuring business viability requires strategic direction, market understanding, business model definition, and business opportunity size and business case definition. In the business design process strategic analysis is done in a systematic but agile manner, where business understanding is constantly iterated based on learnings received.

Customer – Can we create customer value?

There is no business that can achieve its full potential without understanding who their customers are and what their problems are. Today when customer expectations are shifting rapidly, Business Design must be driven by human needs, always deciphering a customer’s pain points, needs and expectations. With the help of Service Design principles and methodologies, continuous dialogue with customers can be ensured through the design process.

Capabilities – Are we able to deliver and operate?

Understanding how the business works and what the customer wants means nothing for a business without the ability to execute the ideas in a commercially viable way. And to do this, you need to identify the capabilities needed (be it technical or non-technical) and find resources with the right capabilities. In an effective Business Design approach execution feasibility is continuously assessed taking into account technology, people (competences and resources) and operational capabilities.

We believe that Business Design enables companies to deliver real business impact when companies learn to use the three lenses of business, design and capability in a balanced way. If you want to hear more about our approach to Business Design and how we have helped our clients, we are happy to share our experiences. Also, remember to follow our latest thinking around Business Design, and other fascinating topics, through our blog.

Authors

Antti Maunula, Head of Digital & Strategy, BearingPoint Finland
Sami Loikala, Head of Customer Experience and Design, BearingPoint Finland
Jani Ristimäki, Manager, BearingPoint Digital & Strategy
Max Knuts, Consultant, BearingPoint Digital & Strategy