Sei sulla pagina 1di 52

d.

MBA

The Ultimate
Business Design
Guide

Alen Faljic,
founder of d.MBA
www.d.mba
1 The Ultimate Business Design Guide
Why this guide?
Ever since I started working as a business designer, I received tons of
emails and LinkedIn messages. There are a lot of people interested in
what business design is and how they can become one.

I usually sent them a list of relevant articles and resources but I always
had a feeling none of them was really helpful to someone just starting.
So, I decided to put together something that would have helped me
early on and will hopefully help you too.

Before we dive into the topic, I’d just like to thank all fellow designers
and business designers who helped shape this guide: Trent Huon, John
Oswald, Jonas Kronlund, Henrik Hagedorn, Tsukasa Tanimoto, Andres
Vanryckeghem, Yves Vervoort, Charles Rainer Härtlein, David Schmidt,
and Franz Emprechtinger.

Table of contents

03 BUSINESS DESIGN 101

19 HOW BUSINESS DESIGNERS WORK

37 BECOMING A BUSINESS DESIGNER

2 The Ultimate Business Design Guide


Business design 101
WHAT IS BUSINESS DESIGN?

Business design is a relatively new discipline that lives in the intersection


between business and design. It was developed to complement the
growing relevance of design methodologies in the business world.

Design, as practiced in design agencies, is inherently customer-centric


and focuses on the desirability aspect of products and services. The
initial boom (and success) of design methods used in business was
fueled by this unique perspective.

However, companies leveraging design became increasingly aware that


desirability is not enough. If something is desirable it doesn’t necessarily
mean that it is good for business. Yes, we would all want more legroom
in an economy class (while paying the same price as today) but that
is not viable from a business perspective. More legroom means fewer
passengers. Fewer passengers mean that you need to raise the price
per passenger.

Soon, companies using design put more pressure on design teams and
design agencies to align their work with a business context. So, the
agencies and teams started hiring business-minded talent who would
help their teams think beyond desirability (and feasibility), adding the
viability component. And boom, the business design was born.

3 The Ultimate Business Design Guide


Since then, the business design has taken on a larger role. It is no longer
just a complementary discipline. It knows how to take the lead too. For
example, if a company is looking for a new business strategy, business
design can use customer-centric design methodologies to create
prototypes of this new strategy and test it.

This rather vague and evolving nature of business design has brought us
to a point where even business designers can’t agree on its definition.
There are many definitions out there but most of them are too narrow,
too broad, or simply wrong. They are not helpful to someone who is just
starting out in the field. And that frustrates me.

All impactful disciplines have started with a clear definition and


guidelines. Business Design is still lacking that. This guide is my attempt
to contribute to this topic and help shape the next iteration of business
design practices and set it on a better trajectory for future growth.

4 The Ultimate Business Design Guide


I remember when I had the first interview for a business design
internship at IDEO. I had no idea what it really was but I was too afraid
to ask. I just made up my own definition. Some months later, I finally had
enough courage to open this debate and figured out that others have a
problem defining it too.

If we are not aligned on what it is, how can we expect others to accept
it and start using it?

So, here is my attempt at defining it. After learning from business design
pioneers and practicing it myself for many years, my definition is the
following:

“Business design is an activity that uses design


methodologies, design mindset, and business tools to
solve business challenges.“

5 The Ultimate Business Design Guide


Let’s not gloss over this simplistic definition and let’s break it down.

Design Methodologies
The business design uses design methodologies, most notably design
thinking. Their power comes from a multidisciplinary approach, highly
iterative nature, use of abductive thinking and customer-centricity.

The most common mistakes business do when first utilizing design


thinking is putting together a homogeneous team. If a project team is
full of marketers, you can expect their lenses to completely dominate
the result. Design thinking works best when we put together a
heterogeneous team. For example, a research designer, a product
designer, a business designer, a service designer, etc.

Charles Rainer Härtlein, a fellow business designer, says that a great


way to build heterogeneous teams is including customers in a project
team. Charles recommends looking beyond the most obvious customers
(not just decision-makers). Look for the extreme and
lead customers.

This mixture ensures that we can look at the problem from different
perspectives. Is it desirable? Can we actually make it? Does it make
business sense?

Furthermore, design thinking uses abductive reasoning. Traditional


education mostly teaches inductive reasoning (from examples to rules)
and deductive reasoning (from rules to conclusions). Inductive and
deductive reasonings work well in well-defined environments. However,

6 The Ultimate Business Design Guide


business is far from a well-defined environment. We have incomplete
information in a highly complex system. Abductive thinking is actually
most suited for such situations. It is a combination of inductive and
deductive. It looks at an incomplete set of observations and helps create
the most likely explanations (hypotheses).

INDUCTIVE DEDUCTIVE ABDUCTIVE

Most business school programs teach inductive and deductive thinking.


They preach business theories and rules, which are applied to the business
world to find the best solution. However, the business world is inherently
ambiguous. Messy. Unpredictable. In many business situations, abductive
thinking is actually a much better tool than the typical deductive.

Finally, design methodologies are customer-centric. The starting point of


any challenge is customers. We start by talking to customers, learning
about their challenges, goals, pains, and their life. This helps us design a
solution that fits much better in the context of their life. Most companies
behave as if their product is at the center of a customers life. Well, my
life doesn’t revolve around my toothbrush. I just want it to do one thing
and I don’t want to spend more than a few seconds (maybe minutes)
choosing one.

7 The Ultimate Business Design Guide


I would add that business designers are not just customer-centric but
also stakeholder-centric. We do start with customers but we are equally
concerned about others involved in a business model.

Design Mindset
Business designers use a design mindset. This is often overlooked but
probably the most important ingredient in the whole recipe. As you’ve
seen in the design methodology section, the way we traditionally think
about the problem predetermines the result.

If we use deductive thinking, we will only explore a small subset of


possibilities. It’s like solving a puzzle, which has only one solution.
However, business challenges do not have just one outcome. The
solution can be outside the field (not in the puzzle at all). We need to
try out different things before committing to one version. As business
designers, we want to cast a wide net and look at as many options as
possible.

While we do use traditional business tools, we are creative in how we


do so. For example, before ever drawing a business model we would
talk to customers and all relevant stakeholders in our potential business
model. We wouldn’t just look at a spreadsheet to create the best
scenario.

We also wouldn’t use the Business Model Canvas to find the solution
(as there isn’t just one). We would create many extreme business model
scenarios and use them as prototypes to learn from customers, suppliers,
and other stakeholders.

8 The Ultimate Business Design Guide


Business Tools
Even though business designers use design methodologies, they still use
business tools.

There is a very long list of tools and I can’t list them all. Here is a list of
some of the most common and popular among business designers:

Porter’s Five Forces

PESTEL Analysis

Financial projections

Reverse income statement (Discovery Driven Planning)

Top-down and bottom-up business opportunity estimations

Growth-Share Matrix

Business Model Canvas

Sales funnels

Blue Ocean Canvas

Playing to Win

Organizational charts

Etc.

9 The Ultimate Business Design Guide


Porter’s Five Forces is a tool that helps analyze an industry and identify
opportunity areas for design challenges.

However, business designers use these tools differently than business


analysts and most entrepreneurs. As mentioned in the previous section,
we would use these tools not just to shape the solution but also as
prototypes.

10 The Ultimate Business Design Guide


Business Challenges
And now to the final component of our definition. For something to
be called a business design, a combination of design methodologies,
business tools, and a design mindset needs to be applied to a business
challenge.

I categorize business challenges into the following main groups:

growth (increasing revenue, getting more customers (sales),


increasing market share, pricing strategy, go-to-market, etc.),

strategy (finding a defensible position in the market, defining our


trade-off decisions),

business models (finding and improving how we create, deliver and


capture value),

cost optimization (optimizing our cost structure to improve


profitability),

organization (optimizing business processes, attracting talent,


defining incentives, designing organizational structure, etc.),

brand and UX (brand and UX are still 90% in the hands of brand/
service designers but the business design should have a say in it
with regards to positioning and implications to other business topics)

and product (defining a value proposition and product strategy).

Now that we defined business design, let’s also cast away some
misconceptions.

11 The Ultimate Business Design Guide


WHAT BUSINESS DESIGN IS NOT?

Business design is not management consulting.


Management consultants work on business challenges and use business
tools too but their methodologies and mindset are typically on the other
side of the spectrum. They are business-centric (i.e. profit-centric), they
avoid ambiguity (and hence thinking in extremes), stay very short in
the discovery phase (business designers enjoy it), and invest a lot of
resources in finding the single best answer. They use business tools and
deductive thinking.

Business design is much more comfortable with big hairy challenges


(e.g. what are most likely modes of transportation in 2030 and what
will their business model be). It is customer-centric, embraces ambiguity,
works in multidisciplinary teams with other designers, creates tangible
prototypes, and runs tests in the field to validate business and value
proposition hypotheses.

Typically, business designers are more involved in the implementation of


the solution. Through prototyping, they don’t launch just experiments but
also products and whole ventures. Business designers go beyond just
creating beautiful slides.

Management consultants usually get better results with well-defined


problems in well-established industries and with stable business
models. Especially on projects that deal with a bottom line optimization
(improving profitability) while business design deals much better with a
top of the line improvement (increasing revenue and finding
new opportunities).
12 The Ultimate Business Design Guide
Business design is not business development.
As per wikipedia, “business development entails tasks and processes
to develop and implement growth opportunities within and between
organizations.”

The business development function is typically more involved with the


sales perspective. Its purpose is to work on the challenge of growth and
product while the business design is much broader (business models,
strategies, processes, etc.).

The most fundamental difference is that business developers usually


don’t use design methodologies and design mindset.

Business design is not product management.


Yes, business design skills translate nicely to a product management
role. But that doesn’t mean that they are the same. The product
manager’s mandate is to create and execute a strategy around a
specific product. Moreover, they typically also manage a team that
builds a product.

Product managers are in charge of the whole lifecycle of a product


(range) - also including minor adaptations towards the end of the life
cycle - whereas business designers focus on new products or more
radical changes.

Business design is a much broader role. It does not look only at the
product strategy, but at business models, company-level strategy,

13 The Ultimate Business Design Guide


processes, organizational structures, etc. Typically, business designers
would not be managing a product team beyond the first or second
level prototype.

I would argue that most business designers don’t have the depth and
knowledge of all methodologies and processes (e.g. scrum) to manage
a product well. On the other hand, most product managers are semi-
fluent in the design methodologies.

Business design is not service design.


Service design and business design start with customer-centricity,
however, the business design goes beyond that. After business designers
figure out what customers want they also do research with all other
relevant stakeholders in the business model. I would say that business
design is stakeholder-centric and that the main stakeholder is
a customer.

Moreover, the business design differs from service design also in


focusing on viability and business aspects of service.

Business design is not just designing business models.


It is so much broader than that. Business design can tackle a wide
variety of business challenges. Reducing business design simply to
business models would be like saying that cooking is just the cleanup.
What about preparing ingredients, mixing them in the right ratios,
cooking them, etc.?

Business design is a holistic view of a business with a design mindset.

14 The Ultimate Business Design Guide


Business design is not about aesthetics.
Business design is not designing logos, business cards or websites.
Design in the business design term does not mean drawing a graphic,
an image or the visual design of an app. It means that we use
methodologies traditionally used by product designers to come up with
better products. So, the business design uses these same methodologies
but applies them to a wide array of business challenges.

Business design is not entrepreneurship.


While business design can definitely (and probably should) be
used when creating a startup, these two terms are not synonyms.
Entrepreneurs can use a completely different approach to building their
business. For example, they could be product-centric and start from a
technology or a product idea. Again, the business design is a (business)
problem-solving approach.

15 The Ultimate Business Design Guide


SIX MINDSETS THAT MAKE A BUSINESS DESIGNER,
BUSINESS DESIGNER

To truly explain what it takes to become a business designer, we have to


cover six really important mindsets that business designers have:
1 Start with Customers and Stakeholders - Business designers
start their work with customers in mind. Instead of doing competitor
research and looking at other limiting constraints, we start by talking
to customers and relevant stakeholders. We are fluent in conducting
customer/stakeholder interviews and using various prototypes to
uncover insights that will lead us to solution prototypes.

2 Think in Extremes - A traditional way to business problem solving


is quickly identifying the most likely scenarios and excluding
unviable solutions. Business designers embrace extremes. We create
extreme prototypes to uncover new ideas and provoke reactions
in testing. For example, when designing a new business model, a
business designer would try to combine elements that on paper do
not make sense just to see what else it could lead to.
3 Prototype to Learn - Business designers create prototypes not just
to prove their validity but also to learn. We launch products and
services to test business model designs. We create a fake-door test
to test the willingness to pay. We create financial projections and
business cases to validate the financial viability of a product. We
sketch product ideas that represent strategic trade-offs to inform
our strategic decisions. We design new processes and test them
with small teams for a limited timeframe. The variations of these
prototypes are endless.

16 The Ultimate Business Design Guide


4 Combine Qualitative and Quantitative Data - Anyone who
has gone through a traditional business school has noticed that
most problem solving happens through secondary research. Annual
reports, business cases, trend reports, etc. Business designers are
comfortable with messy qualitative data, which is mostly statistically
insignificant. However, when qualitative data is combined with some
macro-level data (e.g. industry size, target market, etc.), we can
create very sound hypotheses using abductive reasoning.
5 Embrace Small Data Sets - After conducting ten interviews, you
don’t get a statistically significant result. Business designers are
comfortable with small amounts of data that will lead the first round
of hypotheses, prototypes, and tests.
6 Think Visually - Business designers do not live and die by their
spreadsheets. We love to turn business data into visual tools that
help us find patterns, communicate learnings, create experiments,
and prototype our ideas. We are usually not masters of visual
communication but we can sketch our ideas or use graphs. For
example, when doing competitor research, a business analyst would
typically note all data points in a neatly organized spreadsheet.
However, business designers might look for seemingly disconnected
data, draw charts, graphs, business models of other companies,
and visualize their strategy. In the end, they would collect them on a
whiteboard and look for unusual patterns. opportunities).

17 The Ultimate Business Design Guide


18 The Ultimate Business Design Guide
How business
designers work
THE BUSINESS DESIGN PROCESS

This is what most of you have been waiting for. The process. But if you
carefully read the previous section, you know that the process is not the
main thing. I would even argue that there is no ultimate business design
process.

Each business designer can design their own process and adapt it,
depending on the challenge. But I know that this is not a helpful answer
so here is a business design process in its typical non-linear five stages.

EMPATHIZE
DEFINE IDEATE PROTOTYPE TEST
(AND E XPLORE)

Here is what business designers do in each of these stages.

19 The Ultimate Business Design Guide


Empathize (and Explore) - We begin with customer-centricity and
stakeholder-centricity. We want to understand what customers and
stakeholders are going through. What challenges do they face? How
big are these challenges? What alternatives are they using today? What
is their willingness to pay?
I added explore to this stage because business designers should not
only rely on qualitative data from customers but conduct desk research
on competitors and industry.

BUSINESS DESIGN ACTIVITIES TOOLS

Customer research Analogous Discussion guide Business


experiences Industry and trend Empathy Porter’s Five Forces,
analysis Competitor analysis Competitor Empathy Checklist
Strategic analysis Business model Blue Ocean Strategy Canvas
analysis Ecosystem Map

Define - After conducting research, we synthesize our learnings and


define the challenge. Remember that business design is well suited
for ambiguous challenges? They are so complex that you don’t know
what the real challenge is until you start the first phase of research. So,
after the empathy stage, we finally have enough insight to frame better
questions that will lead the rest of our process.

BUSINESS DESIGN ACTIVITIES* TOOLS

Anthropological (design) research Notes Marker Whiteboard


identifying patterns in the data
synthesizing research shaping
insights and related HMW questions
*not business design activities per se but rather
design activities

20 The Ultimate Business Design Guide


Ideate - After defining what we’ve learned, we start coming up with the
first ideas for our solution. We would typically have numerous HMW
questions for brainstorming sessions. After we’ve collected enough
ideas, we would cluster those into opportunity areas and prioritize them.
At the end of this stage, a project team would select the most promising
opportunity area as the focal point for the next stage.

BUSINESS DESIGN ACTIVITIES TOOLS

Prioritising opportunities Drafting Post-its Sharpies Blue Ocean


early strategic recommendations Strategy Canvas Business Model
Co-creating with users and Navigator Back of the envelope
stakeholders Modeling business Business Calculations
models Sizing opportunities.

In this phase, all these activities are done on


a very high-level (just a rough outline).

Prototype - In the prototype phase, we start designing the solution


to our challenge. Depending on the challenge, a business design
prototype could be anything from a new business process to a
completely new venture. Most common business design prototypes
are new business models, business strategy articulation, financial
projections, business processes, organizational charts, proposed metrics
framework, and pricing strategies.

BUSINESS DESIGN ACTIVITIES TOOLS

Shaping strategic documents Blue Ocean Strategy Canvas


(e.g. Playing to Win framework) Playing to Win Business Model
defining business models Canvas Business Model

21 The Ultimate Business Design Guide


Proposing organizational chart Navigator Organigrams Sales
and flows modeling sales funnels Funnels Financial Projection
creating top-down and bottom-up Spreadsheet
business cases

Test - In the final stage, business designers (and a whole project team)
launch experiments to learn. We set hypotheses and use prototypes to
get answers. A business designer is usually also involved in finding the
right metrics for each experiment and for finding benchmarks (to know if
our hypothesis is accepted or rejected).

BUSINESS DESIGN ACTIVITIES TOOLS

Road-mapping Shaping Design Metrics Canvas Project


experiments Defining metrics Roadmap Experiment Sheets
Launching experiments Sales Funnel Assumptions
Document

With experience, every designer creates his/her own version of this


process. It still follows the same principles but some details might get
shifted around. For example, ideation for me happens throughout the
project, not just in phase three. I love to start drafting business ideas
from the beginning. It helps me do better research.

I sometimes dive straight into prototyping if I know an industry or a


problem well. I found that running just one experiment helps me frame a
better research question for the empathy stage.

22 The Ultimate Business Design Guide


DO BUSINESS DESIGNERS WORK ALONE OR IN A TEAM?

Business designers work as an integrated part of the design or a


product team. There is no specific “handover” per se. As described in
the previous section, business designers bring their lense throughout the
project by asking business questions, translating the work of a team and
designing the business side of a project.

WHAT IS THE ROLE OF A BUSINESS DESIGNER


ON A PROJECT?

Tsukasa Tanimoto, a business designer based in Tokyo, wrote a really


good piece on this topic.
He concludes that the role of a business designer is to:
1 “frame, direct and/or inform the design process through a business
lens to ensure design solves business problems effectively.
2 translate design solutions into value and impact through a language
that business stakeholders are familiar with to prove design provides
solutions to business problems.

3 apply human-centered methodologies to strengthen business


and financial components of design work to create services and
products that are viable.”

I agree with Tsukasa’s outline. Here is my interpretation of these three


points and translated into the language of this guide.

Firstly, business designers must bring a business perspective to design

23 The Ultimate Business Design Guide


projects. While other designers work on user flows, user experience,
aesthetics, and features, business designers are on a project to frame
the whole project strategically.

For example, if a design team is working on product improvement for


a client, a business designer needs to understand the client’s business
strategy, state of the industry, biggest cost-drivers, and competitors
strategy. So, if you work with an affordable hotel chain you can talk to
your team about cost-drivers (location, staff, room size, amenities, etc.).
In the research, you might find that your potential customers do not care
about the room size but they really care about the mattress quality. This
is huge news because you know that room size is more expensive than
investing in better mattresses.

Secondly, business designers act as a bridge between traditional design


work (wireframes, product sketches, brand design, etc.) and business
stakeholders or clients.

To build this bridge, I have usually backed up our design decision with a
business rationale. For example, when we tried to argue for investing in
a certain product feature, I showed competitor research and explained
why others will struggle to keep up with us (i.e. copy us), giving us a
sustainable competitive advantage.

Finally, business designers also produce business design deliverables.


This may be a new business strategy, a new business model, process,
pricing, go-to-market plan, etc. This is the most tangible part of designers
work and the thing you would put in your portfolio.

24 The Ultimate Business Design Guide


HOW DO BUSINESS DESIGN CO-CREATION
WORKSHOPS LOOK LIKE?

As an integrated part of a team, business designers also organize co-


creation workshops. Typically, the purpose is either acquiring certain
data, widening a perspective, or making business decisions.

These workshops can take many shapes but they usually revolve around
a certain business tool. My most common tools/workshops were
Business Empathy, Blue Ocean Canvas, and Financial Planning. Let’s go
quickly through each of them.

Business Empathy
In the early stages of a project, we want our team to not exercise only
customer empathy but also business empathy. We want to find the
best balance between customer and business goals. Only then can we
expect a successful product.

Business Empathy is my made-up term for bringing the business lens


to the research phase. It covers two activities. First, asking business-
minded questions in customer interviews. Second, interviewing business
stakeholders to better understand their goals.

So, in the business empathy workshop, business designers work with


their team to add business-minded questions to the discussion guide.
This would typically cover areas such as:

How big is the pain of interviewee’s problem? How much time/


money are they spending on solving it right now?

25 The Ultimate Business Design Guide


Who is the decision-maker? Who will pay for the solution (and who
will use it)?

What trade-offs are customers willing to make for their solution?


(think about strategic trade-offs discusses later in the business design
prototypes section)

How and when would they ideally want to pay for the solution?
How are they paying for other similar solutions in their life?

etc.

Secondly, together with a team, you would define the most important
project’s stakeholders. Who is investing in it? Who will be affected?
Who could block a project? Who would benefit from it? Create a
shortlist and interview them too. In these interviews, you want to learn
four things:

Goals - what are their quarterly, yearly and long term goals

Their Challenges - what is blocking them in achieving those goals

KPIs - how are they measuring goals

Organization - how are they organized

If you do this well, you don’t only learn about business expectations.
You will also identify the vocabulary that you need to use in your project
deliverables in order to convince decision-makers.

26 The Ultimate Business Design Guide


Blue Ocean Workshop
Whenever you need to design a new business strategy, I would suggest
conducting a Blue Ocean Workshop. It will help you get valuable input
from your team and business leaders.

In essence, the Blue Ocean Strategy facilitates making strategic trade-


off decisions. We need to decide where we want to compete, who we
want to target, and what we will invest in.

Before trying this workshop, you should familiarize yourself with the
Blue Ocean Strategy. Best way to do that is by reading the Blue Ocean
Strategy book.

The basic tool we will use in this workshop is the Blue Ocean Canvas.
The workshops can be structured as follows:
define competing factors
(what companies in an industry invest in),

draw the dominants strategic groups lines


(what other strategic groups in the industry invest in),

and draw your blue ocean offer (by answering what competing
factors you will eliminate, reduce, raise, and introduce).

Financial Planning Workshop


Towards the end of the project, business designers sometimes prepare
a detailed financial plan. This covers projects’ estimated revenue and
costs, which helps us understand the size (and viability) of a business
opportunity. This exercise usually involves making many educated
27 The Ultimate Business Design Guide
assumptions so there is a high degree of uncertainty, which can be
reduced by bringing others into the process.

Prior to the “financial planning workshop”, business designers already


prepare the first version of a financial plan. In the session, we present
a prototype to get feedback from our team. Even if the rest of the team
is not business-minded they still have a really good feeling for certain
assumptions.

If a client/investor is involved in this workshop, we can provide certain


data that helps us hone the financial model. For example, when I
created a financial model for a new product that would need a team of
10 developers I could only guess how much they are paid. But my client
knew exactly the average cost of a developer so I after talking to him I
could plug in the exact number and decrease uncertainty in my model.

A QUICK TIP

For financial planning, I would suggest using the Discovery-Driven


Planning (DDP) instead of a regular business planning approach
because DDP helps us turn our assumptions into experiments (for the
final stage of the project).

HOW DO BUSINESS DESIGN PROTOTYPES LOOK LIKE?

Let’s get concrete. How does business designers’ work look like? Let’s
begin by looking at some business design prototypes.

For example, if we would be testing a product price, we could launch


various experiments to find an optimum point. We could rent a pop-up

28 The Ultimate Business Design Guide


store in a supermarket and offer price X today and price Y tomorrow.
If we have a digital product, we could simply launch an A/B test with
two different price points.

When I am testing strategy (business trade-off decisions), I create a


series of extreme trade-off decisions that I can test in user research. Let’s
go back to our hotel chain example. When testing the best strategy, I
would come up with a list of customer trade-off decisions:

Room size - Bed quality (would customers want a larger room or a


better bed?)

Hotel Location - Room size (do customers prefer larger rooms or


better location?)

Concierge service - Gym (do customers value concierge service


more than a gym?)

Etc.

29 The Ultimate Business Design Guide


I would present these extremes to interviewees and ask them to choose
between these options. This will tell me what I need to invest in and
what I can divest from (i.e. strategic choices).

A third prototype I love using is financial projections. Using the


Discovery Driven Planning, I can test the viability of our business
concept. I wrote more about it here. Below is a quick illustration of the
DDP in action.

Let’s say we would like to start a food truck. Following the DDP
principles, we would start with our goal for profitability. If our yearly
profit goal is $100.000, what needs to happen? Well, if our average
dish is priced at $5 and costs us $4 (including salary, rent, ingredients,
etc.) we need to sell 100.000 dishes in a year ($500.000 revenue
minus $400.000 costs). If we break this down even further, we would
need to sell 274 dishes per day (100.000/365 days). Assuming 10-
hour workdays, that would mean 27,4 dishes per hour. That sounds like
a lot for one food truck, right? But that is exactly why we use DDP. To
find out this early red flags.

This approach leads nicely to experiments. We don’t need to invest in a


business to find out if we can prepare 27,4 dishes per hour. We can do
that in our own kitchen.

30 The Ultimate Business Design Guide


HOW DO BUSINESS DESIGN DELIVERABLES LOOK LIKE?

These are too many deliverables for me to cover in this guide so here is
a short overview of the most common ones:
Competitor research - Who are we competing against?
Industry analysis - What role should we play in the industry
and why?
Ecosystem Map - How would the business model look like?
Revenue potential - How much can we expect from this project?
Business Strategy - How we compete against others?
Organizational charts and implications - What needs to change on
the organizational layer to execute on the vision?
Proposed metrics - How will we know if we are on the right track?
Timeline - How will we go about making it happen?
Go-to-Market-Strategy - How we plan to enter the market?
Suggested Pricing Plans - How and much would we charge
for a product?

Now, let’s have a look at three concrete examples.

Let’s begin with my favorite business model tool. An ecosystem map that
shows how our product or venture will actually work. It consists of four
building blocks:

Actors: Who is involved in creating, delivering and capturing value


(individuals, companies, partners, etc.)?

Flow of information: How is information flowing among actors?


What type of information?

31 The Ultimate Business Design Guide


Flow of goods: How is a product or service flowing from a provider
to a customer?

Flow of money: Who pays whom? How does money travel?

Below is the business model visualization for Netflix’s business model.


Ecosystem maps are not just great for presenting the result of our work
but also for our design process. By making it highly visual, we get better
ideas for new iterations and solutions.

Secondly, in most design projects we need to estimate business


impact. One way to do that is by doing top-down and bottom-up
revenue estimates. Here is an example, showing the bottom-up revenue
estimation for a bike shop based in Berlin.

32 The Ultimate Business Design Guide


Framing the challenge/deliverable

Showing the breakdown of our bottom-up calculation.

33 The Ultimate Business Design Guide


The final result of our estimation.

Further breakdown of our revenue estimation through a sales funnel.

34 The Ultimate Business Design Guide


Finally, certain projects require thorough competitor research that leads
to interesting insights, which guide our design work. I wrote more about
conducting competitor research here. In essence, we look for direct and
indirect competitors and analyze them from a business, a product, and a
customer perspective.

This is typically done in a spreadsheet. Here you can find my analysis of


the music streaming services (early 2018). This lead me to the following
insight.

The insight was later turned into a 2x2 matrix, which furthermore
confirmed my hunch that profitability could be achieved through
backward integration. There was a gap in the market.

Bigger companies (Spotify, Apple Music) work closely with record


labels. That makes sense because streaming services need to

35 The Ultimate Business Design Guide


collaborate with record labels in order to use music in apps. If, for
example, Spotify would try to create its own label that could irritate
music labels so that they would increase their royalties and hurt their
profitability even more.

This hypothesis was later tested as Spotify tried this exact strategy
(source).

36 The Ultimate Business Design Guide


Becoming a
business designer
HOW DO I BECOME A BUSINESS DESIGNER IF I HAVE A
DESIGN BACKGROUND?

As a designer, you are already fluent in the language and methods of


design. You have been part of qualitative research before, you’ve done
rapid prototyping with sketches, and have synthesized learnings from
your experiments.

To become a business designer, you need to become fluent in the


language of business. You need to understand what drives business
value, how executives think, how they make decisions, and master
business tools and frameworks.

The first struggle for designers is entering the world of endless


buzzwords. The business community is great at giving everything a
sophisticated name. Diminishing returns, negative cash flow cycle,
opportunity costs, etc. It is easy to get lost and feel incompetent.
Especially because most business books are written for business people
so some basic knowledge of business vocabulary is expected.

That’s why I have structured my open-source curriculum in three stages,


helping you ease your way into the world of business. This curriculum
covers the most important business books that introduce fundamental
business concepts.
37 The Ultimate Business Design Guide
START HERE

Blue Ocean Strategy, Expanded Edition:


How to Create Uncontested Market Space
and Make the Competition Irrelevant
by W. Chan Kim and Renee A. Mauborgne

BUY BOOK

The Personal MBA: Master the Art of Business


by Josh Kaufman

BUY BOOK

The Business Model Navigator:


55 Models That Will Revolutionise
Your Business
by Oliver Gassmann, Karolin Frankenberger, Michaela Csik

BUY BOOK

Lean Analytics: Use Data to Build a Better


Startup Faster (Lean Series)
by Alistair Croll, Benjamin Yoskovitz

BUY BOOK

38 The Ultimate Business Design Guide


THEN READ THESE

Hacking Growth: How Today’s Fastest-


Growing Companies Drive Breakout Success
by Morgan Brown, Sean Ellis

BUY BOOK

Business Model Generation: A Handbook


for Visionaries, Game Changers, and
Challengers
by Alexander Osterwalder and Yves Pigneur

BUY BOOK

Good Strategy Bad Strategy: The difference


and why it matter
by Al Ramadan, Dave Peterson, Christopher Lochhead,
and Kevin Maney

BUY BOOK

Play Bigger: How Rebels and Innovators Cre-


ate New Categories and Dominate Markets
by Alistair Croll, Benjamin Yoskovitz

BUY BOOK

39 The Ultimate Business Design Guide


FINISH WITH THESE

Playing to Win: How Strategy Really Works


by A. G. Lafley

BUY BOOK

Competitive Strategy: Techniques for


Analyzing Industries and Competitors
by Michael Porter

BUY BOOK

Discovery-Driven Growth: A Breakthrough


Process to Reduce Risk and Seize
Opportunity
by Rita Gunther McGrath, Ian C. Macmillan

BUY BOOK

Numbers Guide: Essentials of Business


Numeracy
by The Economist

BUY BOOK

40 The Ultimate Business Design Guide


This plan should bring you to 80% fluency in business understanding.
Now, we get to a bigger problem. Most managers hiring business
designers prefer to hire talent with deep business knowledge and teach
them design than the other way around.

So, if you really want to be a good candidate you should get some
experience working in business roles. That could be a business role in a
startup or working as a business analyst of a sort.

However, to get those roles, you need to start practicing your business
knowledge. Applying it to case studies and on projects. So, one thing
you can do in your current role is to put yourself in situations and
projects where you can bring a business (design) lense on projects and
try out different tools.

Here is a great tip by Jonas Kronlund on how to put yourself in situations


to bring your business design lense to projects: “Volunteer to do the
Powerpoints, which is the most despised and hated task within an
organization... Do the decks and do it well, which hopefully will put
an aspiring business designer in the midst of also strategy processes,
where there is surprisingly much room to leave a footprint. Become the
go-to point of crystallizing ideas!”

If you are looking for a sandbox to practice business knowledge, you


can also join us in the d.MBA to work on real-world examples. The
course was specifically designed for designers who want to become
fluent in business. The curriculum was not designed to make you a
business designer, but it will teach you the basics of business which are
expected of any business designer.
41 The Ultimate Business Design Guide
HOW DO I BECOME A BUSINESS DESIGNER IF I HAVE A
BUSINESS BACKGROUND?

With your business background, you are already fluent in the language
of business. You know what separates a winning business strategy from
the losing one, you have created a few financial projections in your
career, you have an overview of the most important business metrics,
and know-how to redesign a business model.

So, for you, it is not about learning new tools or new business
frameworks. You have to make a mindset shift or change the way you
approach problems.

This is harder than it sounds. It is not just about learning new skills, it is
about changing the way you think. Don’t shrug it off as an easy task. It
took me at least a year to grasp a design mindset.

My best recommendation would be to find a job (or project) where


you will work with very experienced designers. Look for a team that
has a very strong design process, some designers with 5+ years of
experience, and that work in multidisciplinary teams. Be ready to be
taken on a journey of the unknown, feeling stupid, and incompetent for
a year.

But it’s worth it. You will come out different on the other end.

The best place to start looking for such opportunities is design agencies
that look for candidates with the following roles: business design,
strategy designers, and venture architect/designer. Alternatively, look
42 The Ultimate Business Design Guide
for product companies that have a very strong design culture. This
usually means that one of the founders or senior executives will be a
designer.

I just want to underline again that attending a 5-day design thinking


workshop is not enough. I speak from experience. I’ve taken a course
on design thinking and I felt I knew the process. And I was right. I knew
the process but I did not have the mindset yet. It just takes more time to
immerse yourself in the topic, change your thinking models, and create
new habits.

Here is how I would put together a curriculum to turn you into


a business designer.

To tip your toe into the world of design, go through the


following books and courses:

Sprint: How to Solve Big Problems and Test New Ideas in Just Five
Days by Jake Knapp, John Zeratsky, and Braden Kowitz

The Design Thinking Playbook: Mindful Digital Transformation of


Teams, Products, Services, Businesses, and Ecosystems by Michael
Lewrick, Patrick Link, Larry Leifer

Change by Design, Revised and Updated: How Design Thinking


Transforms Organizations and Inspires Innovation by Tim Brown

IDEO U course: Hello Design Thinking

The Design of Business: Why Design Thinking is the Next


Competitive Advantage by Roger L. Martin

43 The Ultimate Business Design Guide


Immerse yourself fully:

Find a 3-6 month project or internship at a design agency or design


team

Take IDEO U course: Insights for Innovation

Read all Medium articles on IDEO’s Design Research Methods

Value Proposition Design: How to Create Products and Services


Customers Want by Alexander Osterwalder, Yves Pigneur, Gregory
Bernarda, Alan Smith, and Trish Papadakos

Discovery-Driven Growth: A Breakthrough Process to Reduce Risk


and Seize Opportunity by Rita Gunther McGrath, Ian C. Macmillan

Take IDEO U course: Designing a Business (a venture design course


that is based on business design mindset)

Polish your skills with these:

Designing with Data: Improving The User Experience With A/B


Testing by King, Rochelle

Articulating Design Decisions: Communicate with Stakeholders,


Keep Your Sanity, and Deliver the Best User Experience by Tom
Greever

On the web version of this guide, you can also find a list of schools that
offer business design programs.

44 The Ultimate Business Design Guide


DO I HAVE TO BE A CONSULTANT TO BE
A BUSINESS DESIGNER?

Not necessarily. For example, you can be a business designer and act
as an entrepreneur or intrapreneur. Business design is a problem-solving
approach, not a role.

However, it is easiest to start as a consultant because you can hone your


skills by applying them to different industries and challenges. Currently,
the best structure to learn business design is in design agencies. But that
may change in the future.

I hope that in the near future, more product companies will start
employing business designers to complement their teams. We might
see a stronger specialization of business design roles: business model
designers, strategy designers, pricing designers, process designers,
growth designers, etc. Actually, it is already happening in some pockets
of the industry.

ARE THERE ANY SPECIALIZATIONS WITHIN


THE BUSINESS DESIGN?

As the business design is still a young discipline we don’t have clear


specializations yet. But that might change in the future.

I recently spoke to John Oswald, a business design pioneer, who has


hired and lead around 100 business designers in his career. He told
me that he spotted five bigger patterns of talent in the business design
profession. He noticed that business designers can be categorized

45 The Ultimate Business Design Guide


into five larger groups:

Entrepreneurs / Product Owners - they know what needs to happen


to launch a great product, good at managing investors and teams
to implement things

Strategists - these designers know what strategic tools to use in what


context and how to talk business value

Storytellers - they are great at thinking through how a story will


engage an audience (using imagery, anecdotes, vulnerability) to
land significant points about the business change that needs to
happen

Account managers - they have good empathy and understanding of


an organization, identify different people’s agendas, how to tell a
story to different people

Culture Changers - good at inspiring and leading people to change


company culture

Some business designers are good at everything and some are more
focused.

These are not specializations per se but could develop into ones over
time. John also stressed that this list is probably not exhaustive. There
might be more patterns and profiles already (or there will be in the
future).

46 The Ultimate Business Design Guide


WHAT COMPANIES HIRE BUSINESS DESIGNERS?

As mentioned before, most companies hiring business designers today


are design agencies. Companies use different names for the role of a
business designer, which again shows how ill-defined this term has been
since its inception.

You can find the latest shortlist of companies hiring business designers
on guides online version under the same question “What companies
hire business designers?

HOW DOES A BUSINESS PORTFOLIO LOOK LIKE?

Most companies that hire business designers do not look for a portfolio.
However, you will significantly improve your chances of getting hired if
you have one because you can showcase your work and experience.

When I first got the interview for a business design internship, I was
asked to send in my portfolio. Of course, I had no idea what that was
supposed to look like. But I also didn’t dare to ask.

It is very uncommon for business graduates or business professionals


to have a portfolio. It’s just not something that is taught at a business
school or expected from applicants. However, in the design industry,
your portfolio is everything. That’s where you show your work.

So, I had a week to come up with my business design portfolio.


Needless to say, it wasn’t great but I got lucky. The business design
team was looking for someone with an entrepreneurial point of view

47 The Ultimate Business Design Guide


and interest in venture design.

Here, you can download my business design portfolio from 2013. I


know, it’s not great. Now, let’s talk about how it is supposed to look like.

I would suggest focusing on two to three projects and showing a


specific part of the process along with your deliverable. I would argue
that you don’t have to present the whole process. I would suggest
zooming in the most interesting challenge and present your solution. You
can follow this framework:

Challenge - explain why you were hired or tasked with this project;
mentioned a business goal and customer goals

Overall Approach - explain your process on one page (e.g.


describe stages, who was part of the team, how long it took, etc.)

The Main Insight(s) - what did you learn in customer interviews and
desk research that drove your solution

Deliverable - show your business design deliverable

Look under the question “How do business design deliverables look


like?” to see a few examples of deliverables that you could have in your
portfolio.

Another piece of advice. If you haven’t worked on business design


projects yet, just work on two or three speculative projects. Think about
business challenges that you like and turn them into speculative design.
Your portfolio is supposed to show your thinking process so even if
projects are not real client work, that is ok.
48 The Ultimate Business Design Guide
HOW DO YOU SELL BUSINESS DESIGN SERVICES?

I believe that business design should not be sold as an independent


service. The business design creates the most value when it is an
integrated part of a larger multidisciplinary design team.

If you are a business designer lone wolf, you will quickly be eaten by
other animals in the business kingdom. Most companies are so heavily
business-focused that just one designer (especially business designer)
does not have the power for impact.

As a business designer, you usually work as a bridge between more


tangible design (product, UI, service) and a strategic level. If you work
alone, you will miss that tangibility which will lead to lower quality of
prototypes, insights, and eventually final result.

So, what can you do?

If you are running a design agency, don’t sell business design work
independently. Add business designers to project teams. For example, if
you are running a design sprint, you don’t need to create a new format
or a product. Just add a business designer on the next sprint and charge
accordingly.

I’ve been involved in many projects that were sold without any
consideration of business design. Even though it sounds like no big
deal (“we will just add you on a project”), it makes a big difference.
If business designers are involved in the pitch process, they can help

49 The Ultimate Business Design Guide


shape the project so that a client has the right expectations and that a
project team has enough time to cover the viability aspect.

If you are a freelancer, make sure to look for projects where you can
collaborate with a client’s design team. They will understand your ideas,
help you build prototypes, visualize your deliverables, and you will
help them add a strategic perspective and translate their work into a
language that executives understand.

David Schmidt, a business design partner at United Peers, shared


another great tip for freelancers and agencies: “Nowadays, there
is a disconnect between company strategy (business goals) and
innovation/design initiatives. Business Design is the way to bridge and
solve this disconnect. Currently, there is a huge market in the follow up
of all the design/innovation initiatives in corporates and SMEs. Enter
there with a Business Design workshop to show what they are missing
and introduce yourself as a valuable team member (and then start
working closer with their design teams). As a Business Designer you
immediately add business value. So it will make sense for them to take
you onboard.”

50 The Ultimate Business Design Guide


What’s next for
the business design?
I believe we are still in the very early stages of the business design discipline.
Even though it developed in the early 2000s, we haven’t seen a rapid and
wide adoption yet.

I assume is that it took a very long time to get any momentum because it
started as an experiment and we were still figuring out what it is. Overall, I
see our evolution in three stages:
1 Formulation - A birth and early exploration of the business design. First
companies and design agencies start experimenting with the business
design. (2000-2020)

2 Popularization - A wider adoption of business design practices. Many


product companies start employing business designers (demand goes
up), the discipline gets recognition in the design industry (e.g. more
business designers are invited to design conferences). (2020-2025)

3 Specialization - Due to the increased popularity of business design,


we start seeing very concrete specializations of the business design
talent. New sub-disciplines emerge. (2025-onwards)

I would argue that now is a great time to get into the business design
discipline. The demand for talent and skills is likely to increase soon. This
guide should give you a few ideas where and how to start your journey. If
you have any further questions, leave a comment in the comment section or
join join the largest community of business designers on LinkedIn and ask
your questions there.
51 The Ultimate Business Design Guide
d.MBA

This guide is brought to you by the d.MBA, the world’s first on-
line MBA for Designers.

Join the waiting list for the next cohort:

go to www.d.mba