dMBA Ultimateguide v1
dMBA Ultimateguide v1
MBA
The Ultimate
Business Design
Guide
Alen Faljic,
founder of d.MBA
beyondusers.com
1 The Ultimate Business Design Guide
Table of contents
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.
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 (best one to date is this one by the
Rotman School of Management) 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.
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:
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.
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?
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.
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.
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:
PESTEL Analysis
Financial projections
Growth-Share Matrix
Sales funnels
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.
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.
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)
Now that we defined business design, let’s also cast away some
misconceptions.
Business design is a much broader role. It does not look only at the
product strategy, but at business models, company-level strategy,
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 but not masters in the design methodologies.
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 five stages.
EMPATHIZE
DEFINE IDEATE PROTOTYPE TEST
(AND E XPLORE)
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).
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.
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.
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
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.
Before trying this workshop, you should familiarize yourself with the Blue
Ocean Strategy. Best way to do that is by reading the 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),
and draw your blue ocean offer (by answering what competing
factors you will eliminate, reduce, raise, and introduce).
A QUICK TIP
Let’s get concrete. How does business designers’ work look like? Let’s
begin by looking at some business design prototypes.
Etc.
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.
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?
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:
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.
This hypothesis was later tested as Spotify tried this exact strategy
(source).
BUY BOOK
BUY BOOK
BUY BOOK
BUY BOOK
BUY BOOK
BUY BOOK
BUY BOOK
BUY BOOK
BUY BOOK
BUY BOOK
BUY BOOK
BUY BOOK
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.
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.
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.
Sprint: How to Solve Big Problems and Test New Ideas in Just Five
Days by Jake Knapp, John Zeratsky, and Braden Kowitz
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.
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.
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).
You can find the latest shortlist of companies hiring business designers
on guide’s original link under the same question “What companies hire
business designers?
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.
Challenge - explain why you were hired or tasked with this project;
mentioned a business goal and customer goals
The Main Insight(s) - what did you learn in customer interviews and
desk research that drove your solution
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.
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
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.