d.MBA The Ultimate Business Design Guide

The Ultimate Business Design Guide 1

Alen Faljic, founder of d.MBAwww.d.mba

The Ultimate Business Design Guide

d.MBA


03 BUSINESS DESIGN 101

19 HOW BUSINESS DESIGNERS WORK

37 BECOMING A BUSINESS DESIGNER

Table of contents

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.


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.

Business design 101


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.


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.“


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

Design MethodologiesThe 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,

https://www.linkedin.com/in/charles-rainer-h%C3%A4rtlein/


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).

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.

INDUCTIVE DEDUCTIVE ABDUCTIVE


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 MindsetBusiness 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.


Business ToolsEven 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.


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.


Business ChallengesAnd 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.


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).


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,


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.


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.


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:

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.

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.

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.

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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.

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.

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).

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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.

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

How business designers work

EMPATHIZE (AND E XPLORE)

DEFINE IDEATE PROTOTYPE TEST


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.

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

Customer research Analogous experiences Industry and trend analysis Competitor analysis Strategic analysis Business model analysis

Discussion guide Business Empathy Porter’s Five Forces, Competitor Empathy Checklist Blue Ocean Strategy Canvas Ecosystem Map

BUSINESS DESIGN ACTIVITIES* TOOLS

Anthropological (design) research identifying patterns in the data synthesizing research shaping

insights and related HMW questions

Notes Marker Whiteboard

*not business design activities per se but rather design activities


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.

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.


Prioritising opportunities Drafting early strategic recommendations Co-creating with users and

stakeholders Modeling business models Sizing opportunities.

In this phase, all these activities are done on a very high-level (just a rough outline).

Post-its Sharpies Blue Ocean Strategy Canvas Business Model Navigator Back of the envelope Business Calculations


Shaping strategic documents (e.g. Playing to Win framework) defining business models

Blue Ocean Strategy Canvas Playing to Win Business Model Canvas Business Model

https://hbr.org/2012/09/the-secret-phrase-top-innovato

https://hbr.org/2012/09/the-secret-phrase-top-innovato


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).

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.


Proposing organizational chart and flows modeling sales funnels creating top-down and bottom-up

business cases

Road-mapping Shaping experiments Defining metrics Launching experiments

Navigator Organigrams Sales Funnels Financial Projection Spreadsheet

Design Metrics Canvas Project Roadmap Experiment Sheets Sales Funnel Assumptions

Document


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:

“frame, direct and/or inform the design process through a business lens to ensure design solves business problems effectively.

translate design solutions into value and impact through a language that business stakeholders are familiar with to prove design provides solutions to business problems.

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

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https://medium.com/spotless-says/what-is-business-design-58d849eaefef


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.


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 EmpathyIn 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?


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.


Blue Ocean WorkshopWhenever 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 WorkshopTowards 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

https://www.amazon.com/Blue-Ocean-Strategy-Expanded-Uncontested/dp/1625274491/ref=sr_1_3?keywords=blue+ocean+strategy&qid=1562407654&s=gateway&sr=8-3

https://www.amazon.com/Blue-Ocean-Strategy-Expanded-Uncontested/dp/1625274491/ref=sr_1_3?keywords=blue+ocean+strategy&qid=1562407654&s=gateway&sr=8-3

https://www.blueoceanstrategy.com/tools/strategy-canvas/


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

https://hbr.org/1995/07/discovery-driven-planning



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.


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.


https://www.beyondusers.com/7-things-every-designer-should-know-about-business#prototyping-with-numbers


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?


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.


Framing the challenge/deliverable

Showing the breakdown of our bottom-up calculation.


The final result of our estimation.

Further breakdown of our revenue estimation through a sales funnel.


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

https://www.beyondusers.com/7-things-every-designer-should-know-about-business#competitor-analysis

https://docs.google.com/spreadsheets/d/1Ys56wjWSco3v8gq_lg3cM7ejXPMt2PueZSmxDMJNEZk/edit?usp=sharing

https://www.investopedia.com/terms/b/backwardintegration.asp


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).

https://www.ft.com/content/f1b27624-6e68-11e8-92d3-6c13e5c92914


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.

Becoming a business designer


START HERE

Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevantby W. Chan Kim and Renee A. Mauborgne

BUY BOOK

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

https://www.amazon.com/Blue-Ocean-Strategy-Expanded-Uncontested/dp/1625274491/ref=sr_1_2?crid=1CATMMM1ANQAU&keywords=blue+ocean+strategy+book&qid=1563350211

https://www.amazon.com/Personal-MBA-Master-Art-Business/dp/1591845572/ref=sr_1_1?keywords=the+personal+mba&qid=1563350251&s=books&sr=1-1

https://www.amazon.com/Business-Model-Navigator-Models-Revolutionise/dp/1292065818/ref=sr_1_2?keywords=The+Business+Model+Navigator&qid=1563350289&s=gateway&sr=8-2

https://www.amazon.com/Lean-Analytics-Better-Startup-Faster/dp/1449335675/ref=sr_1_3?keywords=Lean+Analytics&qid=1563350301&s=gateway&sr=8-3


THEN READ THESE

Hacking Growth: How Today’s Fastest-Growing Companies Drive Breakout Successby Morgan Brown, Sean Ellis

BUY BOOK

BUY BOOK

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengersby Alexander Osterwalder and Yves Pigneur

BUY BOOK

Good Strategy Bad Strategy: The difference and why it matterby 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

https://www.amazon.com/Hacking-Growth-Fastest-Growing-Companies-Breakout/dp/045149721X/ref=sr_1_3?keywords=Hacking+Growth&qid=1563350320&s=gateway&sr=8-3

https://www.amazon.com/Business-Model-Generation-Visionaries-Challengers/dp/0470876417/ref=sr_1_3?keywords=Business+Model+Generation&qid=1563350337&s=gateway&sr=8-3

https://www.amazon.com/Good-Strategy-Bad-Difference-Matters/dp/0307886239/ref=sr_1_1?keywords=Good+Strategy+%2F+Bad+Strategy&qid=1563350350&s=gateway&sr=8-1

https://www.amazon.com/Play-Bigger-Innovators-Categories-Dominate/dp/0349411360/ref=sr_1_2?crid=2WNWWGZ9SZLYN&keywords=play+bigger&qid=1562410039&s=gateway&sprefix=play+bigger%2Caps%2C216&sr=8-2


FINISH WITH THESE

Playing to Win: How Strategy Really Worksby A. G. Lafley

BUY BOOK

BUY BOOK

Competitive Strategy: Techniques for Analyzing Industries and Competitorsby Michael Porter

BUY BOOK

Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunityby Rita Gunther McGrath, Ian C. Macmillan

BUY BOOK

Numbers Guide: Essentials of Business Numeracy by The Economist

https://www.amazon.com/Playing-Win-Strategy-Really-Works/dp/142218739X/ref=sr_1_2?keywords=playing+to+win&qid=1563350371&s=gateway&sr=8-2

https://www.amazon.com/Competitive-Strategy-Techniques-Industries-Competitors/dp/0684841487/ref=sr_1_1?keywords=michael+porter&qid=1563350496&s=gateway&sr=8-1

https://www.amazon.com/Discovery-Driven-Growth-Breakthrough-Process-Opportunity/dp/1591396859/ref=sr_1_1?keywords=Discovery-Driven+Growth&qid=1563350513&s=gateway&sr=8-1

https://www.amazon.com/Economist-Numbers-Guide-6th-Essentials/dp/1610393953/ref=sr_1_1?keywords=Numbers+Guide&qid=1563350531&s=gateway&sr=8-1


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.

https://www.linkedin.com/in/jonaskronlund/

http://www.d.mba


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


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

https://www.amazon.com/Sprint-Solve-Problems-Test-Ideas/dp/150112174X/ref=sr_1_3?keywords=Sprint&qid=1563350552&s=gateway&sr=8-3

https://www.amazon.com/Design-Thinking-Playbook-Transformation-Businesses/dp/1119467470/ref=sr_1_1?keywords=The+Design+Thinking+Playbook&qid=1563350564&s=gateway&sr=8-1

https://www.amazon.com/Change-Design-Revised-Updated-Organizations/dp/0062856626/ref=sr_1_1?keywords=Change+by+Design&qid=1563350577&s=gateway&sr=8-1

https://www.ideou.com/products/hello-design-thinking

https://www.amazon.com/Design-Business-Thinking-Competitive-Advantage/dp/1422177807/ref=sr_1_3?keywords=the+design+of+business&qid=1563184261&s=gateway&sr=8-3


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.

https://www.ideou.com/products/insights-for-innovation

https://medium.com/design-research-methods

https://www.amazon.com/Value-Proposition-Design-Customers-Strategyzer/dp/1118968050/ref=sr_1_2?keywords=Value+Proposition+Design&qid=1563350647&s=gateway&sr=8-2

https://www.amazon.com/Discovery-Driven-Growth-Breakthrough-Process-Opportunity/dp/1591396859/ref=sr_1_1?keywords=Discovery-Driven+Growth&qid=1563350513&s=gateway&sr=8-1

https://www.ideou.com/products/designing-a-business?utm_expid=.rM1g31VOS9Wy5hWPriMfKw.0&utm_referrer=https%3A%2F%2Fwww.ideou.com%2F

https://www.amazon.com/Designing-Data-Improving-Experience-Testing/dp/1449334830/ref=sr_1_2?keywords=Designing+with+Data&qid=1563350718&s=gateway&sr=8-2

https://www.amazon.com/Articulating-Design-Decisions-Communicate-Stakeholders/dp/1491921560/ref=sr_1_1?keywords=Articulating+Design+Decisions&qid=1563350730&s=gateway&sr=8-1

https://www.beyondusers.com/guides/what-is-business-design-guide#becoming-business-designer


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


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).


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

https://www.beyondusers.com/guides/what-is-business-design-guide#hiring-business-designers


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.

https://static1.squarespace.com/static/5a5331d3b1ffb6ca7203df4e/t/5d2ed8455b592c00017ce4e2/1563351195660/Portfolio_of_business_designs-Alen_Faljic.pdf


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


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.”


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:

Formulation - A birth and early exploration of the business design. First companies and design agencies start experimenting with the business design. (2000-2020)

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)

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.

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d.MBA The Ultimate Business Design Guide

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