DESIGN A
BETTER BUSINESS
DESIGN A
BETTER BUSINESS
NEW TOOLS, SKILLS, AND MINDSET FOR STRATEGY AND INNOVATION
Written by Patrick van der Pijl, Justin Lokitz, and Lisa Kay Solomon
Designed by Maarten van Lieshout and Erik van der Pluijm
Cover and interior design by Erik van der Pluijm & Maarten van Lieshout
This book is printed on acid-free paper. 
Copyright © 2016 by John Wiley & Sons, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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ISBN 9781119272113 (pbk); ISBN 9781119272120 (ebk); ISBN 9781119272137 (ebk)
Printed in the United States of America
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Does this page make you feel uncertain or freak you out? 
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CONTENTS |
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INTRODUCTIONDesign a better business and the double loop |
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PREPAREPrepare your team, your environment, and how you work |
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POINT OF VIEWBe a rebel, develop your vision, create design criteria |
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UNDERSTANDUnderstand your customer, context, and business |
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IDEATELearn to ideate, expand your ideas, and select ideas |
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PROTOTYPEBring ideas to life, sketch, and make prototypes |
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VALIDATEFind the riskiest assumption, experiment, and pivot |
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SCALEWhen and how to scale; Investment Readiness Level |
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APPENDIX Index, the team, and acknowledgments |
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CHAPTERS
CASE STUDIES
TOOLS
CORE SKILLS DESIGNERS HACKS VISUALSSTEVE BLANK
SERIAL ENTREPRENEUR, AUTHOR, LECTURER
p243
DOROTHY HILL
VP OF STRATEGY, ING BANK
p63
ROB FITZPATRICK
AUTHOR, THE MOM TEST
p89
TOOL ICON LEGEND
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PERSONAL This tool requires personality. |
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TANGIBLE This tool helps you build something. |
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GENERATE OPTIONS This tool helps you to create options. |
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CREATE FOCUS This tool helps you to decide and select. |
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NORMAL SESSION Normal work session. |
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PRESSURE COOKER High-intensity session. |
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TEAM SIZE Small or large team sizes. |
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REVISIT How often do you need to revisit this? |
We’ve designed this book with you in mind! Unlike most books, this one can be read in several ways.
For one, you can read this cover to cover. The chapters build on each other. You can also scan for things that interest you, like new tools and skills. Additionally, we’ve included fast passes in this chapter (page 22) in case there is something specific you want to learn about right now.
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The world around you – and your business – is filled with uncertainty. But within that uncertainty exist innumerable opportunities to design (or redesign) game-changing businesses. These opportunities are there for the taking, if you know how to look for them.
The world has changed. Not only are consumer habits, technologies, and other trends uprooting once-thriving businesses, entire markets are shifting and emerging out of the uncertainty and unpredictable nature of today’s network economy. Interestingly (and infuriatingly to some), many of the companies leading the charge – and the change – did not exist two decades ago. It’s not that these new players are just lucky or employ smarter, more capable people. So, how is it that they’ve found gold in some of the most unlikely places? In a word: design.
Design is fundamentally about enhancing the way you look at the world. It’s a learnable, repeatable, disciplined process that anyone can use to create unique and qualified value. Design is not about throwing away the processes and tools you have. In fact, quite the opposite is true. Just as design has enabled countless upstarts to create new business models and markets, design will also help you decide when to use what tools in order to learn something new, persuade others to take a different course, and at the end of the day, make better (business) decisions.
Most of all, design is about creating the conditions by which businesses thrive, grow, and evolve in the face of uncertainty and change. As such, better businesses are ones that approach problems in a new, systematic way, focusing more on doing rather than on planning and prediction. Better businesses marry design and strategy to harness opportunity in order to drive growth and change in a world that is uncertain and unpredictable.
This book will provide you with new tools, skills, and a mindset to harness opportunities born of uncertainty in order to design a better business. We’ve included tons of real-world examples of people who have mastered the fundamentals of design, as well as case studies of companies that have created change using design as the underlying foundation for decision making. And, just as design is a repeatable process, this book is meant not only to guide you on your design journey, but also to provide an ongoing reference to help you scale the design beyond one project or product to an entire company. 
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Design is quickly becoming one of those words like “innovation.” It has different meanings to different people. It can be a noun, an adjective, and a verb. Design is ultimately an empowering approach of looking at the world and igniting new possibilities to make it better.
Design is both a process and a mindset. It’s an intentional set of practices to unlock new, sustainable value from change and uncertainty. It allows individuals and organizations to be more flexible and resilient in the face of constant change. Unfortunately, the flip side of design is where we often find ourselves: scrambling when unforeseen change happens to us.
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The good news is that you are already a designer, at least some of the time. Every time you intentionally develop strategy or make a decision based on insight, you are acting as a designer. The not-so-good news is that many of the tools that you have probably been using to help make those decisions are likely not as useful as they once were, at least not on their own. So, what do designers do and what tools do they use that help them make better decisions?
The key to design – and design tools – is that it is an iterative process by which designers, like you, start with a point of view, go out and observe the world to inform that point of view, create options that may address the opportunities you see, validate those options, and execute the ones that best address the opportunities. Most important, designers never focus on simply scaling the execution of the chosen option. Design is continuous and iterative; it’s built to deal with ambiguity and change in a long-term way.
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Observing customers to understand them will give you fresh insights into their needs. You must ask the right questions to get the answers you seek.
Working visually helps you to see the bigger picture, gain clarity on complex topics, create a visual anchor for your strategic conversations, and engage with your audience.
Gather different insights by working together. Connecting the brains in the room and in your market will enable you to uncover hidden opportunities.
Stories have a clear beginning and end, and most likely they have heroes your audience can connect with. Cool stories stick. Cool stories will be told by others. Cool stories spread.
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Just start. Don’t try to build the final product. Don’t add features that don’t solve real problems.
Every little iteration and trial will net tons of useful new insights – things you wouldn’t have learned if you just started building. Reality is different than what you assume.
Except for change, there is no such thing as certainty in business. Accept this and harness opportunities from uncertainty.
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So, now you’re a designer who’s been imbued with the goal of designing a better business. What does a better business look like? And, how would one go about designing a better business?
Many existing, established businesses, especially non-startup businesses, focus solely on getting products to market while reducing costs and increasing margins. In these businesses, strategy is executed in a linear way: prepare; execute. What’s often missing in this story is the customer on the other side of the transaction, as well as the person designing and developing products and services to satisfy some need for the customer.
POINT OF VIEW P46
Designers, on the other hand, are always thinking about the customer. They approach people and problems from a particular perspective, one informed by design-specific tools like ideation, prototyping, and validation. They use human-centered tools, skills, and a mindset to search for, design, and execute new value propositions and business models based on what they’ve learned. Designers do this continually, iterating constantly to uncover opportunities within the fog of uncertainty.
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In this book, you’ll find the designer’s journey represented in a new way. Your point of view is at the center of the design process, which is always influenced and informed through understanding, ideation, prototyping, and validation. This process is iterative and cyclical.
So, what’s a better business? A better business is one that puts the person at the center and connects design tools, practices, and processes.
UNDERSTAND P82
IDEATE P124
PROTOTYPE P152
VALIDATE P180
There’s a continuous search for new customers, value propositions, and business models – with business execution and scale. As a designer, it’s your job to make this connection. It’s your job to consider and test new options for business sustainability and growth (by design). It’s your job to consider the person you’re designing for, which will inform your own unique point of view.
To do this you must employ a design rigor – using your new tools, skills, and mindset – to guide business decisions and outcomes rather than solely driving day-to-day (business as usual) execution.
In doing so, your options for the future will become much clearer; as a designer, you will unequivocally begin to see opportunities within the fog of uncertainty.
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The double loop is founded on a simple observation: every project, product, company, change, or idea starts with a point of view. It might be based on fact. It might be based on assumptions. Whatever your point of view, using it to create lasting change requires work and a movement toward the goal line.
The double loop takes your point of view into account, while adding rigor and continuity to the design process. This means that your point of view is always informed by understanding and that that understanding will spark new ideas, further enhancing your point of view. These ideas are prototyped and validated to test and measure their effectiveness. This, in turn, further informs your point of view and enables you to execute your ideas successfully.
Every design journey also has a beginning and . . . a goal. In the case of this design journey, the beginning starts with preparation, at the left of the design loop. Preparing yourself, your team, your environment, and the tools you’ll use is essential for your successful journey. At the right of the design loop is the goal: scale. In this book, scale refers to two things. First, we talk about scaling the execution of your idea or change; this begins with your point of view. Second, we talk about scaling the design process. This is, after all, a book about designing better businesses. Design is at the core. And it is design that is meant to scale.
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As a designer, your first mission is simply to step out of the box you’re in and observe the world and your customers in their natural states. Don’t come at this with preconceived notions about what your customers are trying to achieve or how the world is ordered. Just watch and listen.
The first tool comes from skills we already possess – observation. When was the last time you stepped back and just watched and listened to your customers? Try it. We’re sure you’ll learn something new.
As you’re watching and listening, start to look for patterns as well as interesting, unexpected actions, events, or occurrences. These create fodder for anecdotes that you can use to draw your manager or other team members into the human stories behind your products. If you’ve never used actual customer anecdotes and stories in a presentation, we can tell you that you’re in for a great surprise.
All people like stories and will be more interested and invested than they would if they were presented with only data. In fact, in the next chapter you’ll find a tool specifically meant to help you design stories to deliver the impact you’re looking for.
As you become comfortable simply watching and listening to your customers, it’s time to start using some new tools – design tools. Rest assured, you do not have to stop, nor should you stop using the tools that you’re comfortable with. In fact, just as you cannot hope to change your company overnight, it’s very unlikely you’ll get everyone to believe your current tools are obsolete; and they’re probably not. Instead, just as you might employ a new set of tools to work on a project at home, start to add a few new design tools to your belt (you wouldn’t use a screwdriver to measure a wall, would you?!).
First, employ observational tools. These include tools that help you capture people’s wants, needs, pains, and ambitions. You might also add to your belt tools for questioning and problem framing. After all, you can’t expect to learn everything about your customers by simply watching them. Beyond observational tools, other design tools include ideation tools, prototyping, and validation tools, as well as decision-making tools. These concepts might be quite familiar to other people on your team who have been designing for a while. But, no matter. We’ve included a variety of incredibly useful tools in this book to help you take business design to the next level.
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As you become more comfortable using some of these tools, you’ll no doubt notice that your old tools are becoming auxiliary or backups. You might even couple your old tools with your new (designer) tools to complement each other. For instance, you can use market data to bolster the anecdotes you gather in the field. Imagine the possibilities! The key here is that you start small and slowly develop mastery of the new tools and practices that at first may feel uncomfortable to wield. Don’t worry, after you’ve used your designer tools a few times, they will become easier and more comfortable to use. And, through your new design-colored glasses, we are confident that you will begin to see the world in a whole new light.
Where accountants, doctors, and surgeons are trained to use tools, business people are well trained for operations. They think they can innovate, but they lack the right skills and tools to do so.
Whereas Apple and Amazon continuously reinvent their business models and are successful in doing so, other companies are helpless. Their traditional corporate structures conflict with design processes and innovation. It is in nobody’s P&L so they just don’t care. Sure, companies innovate their products. But they have a hard time going beyond product innovation and traditional R&D.
Nowadays an increasing number of business schools are teaching business model innovation as well as the tools for design and innovation. But we are still very much at the start.
I am excited to learn more about how others develop and use tools for design, innovation, and strategy as the new drivers of business.
Alexander Osterwalder
Co-founder Strategyzer, Lead Author of Business Model Generation and Value Proposition Design
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PREPARE YOUR TEAM
PREPARE YOUR ENVIRONMENT
PREPARE HOW YOU WORK
INTRO EVERY JOURNEY STARTS WITH PREPARATION
PREPARE YOUR TEAM
PREPARE YOUR ENVIRONMENT
SKILL MASTER FACILITATION
SKILL MANAGING ENERGY
TOOL PREPARE HOW YOU WORK (TOGETHER)
TOOL SCREENPLAYS
TOOL TEAM CHARTER
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Whether you’re about to go on a journey of exploration to understand your customer or design new business models for your future, preparation is key. You wouldn’t go into battle without preparing first. Likewise, you’ll need to prepare before launching a design (or redesign) initiative.
The design process requires preparation in order for it to run well. You must prepare to observe and understand your customers, business, and context. You must prepare to ideate, prototype, and validate. What this boils down to is that to set yourself and your team up for success, you must prepare your team for the journey ahead, prepare your environment for the work that will ensue, and prepare your tools so that you’ll get the best results from everyone.
The design process may be different from many of the other processes you’re used to. For one, it is not really linear; it’s cyclical and iterative. It’s about embracing uncertainty. Not everything can be planned or controlled. It is also a full-contact team sport. Teams that take the time to prepare often enjoy much better results and outcomes. Design also requires physical space to work in. And not just people hunched over computers. The people designing the better business will need space to ideate, prototype, and validate. It also requires that you employ new tools, which also necessitate preparation in order to achieve the best results. Last but not least, design requires that you get used to a new way of working and a new project structure. It’s not about planning. It’s about maximizing the chance of a positive outcome and empowering others to make real change. There are things you can control and things you can’t. Set yourself and your team up for success by controlling what you can; don’t leave things up to chance.
Babe Ruth, the famous American baseball player, once said, “The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.” The same can be said about designing great businesses: the best businesses are the products of great teams.
That said, not just any team will do. A team that will generate the most useful ideas from its key findings, and that will most thoroughly prototype and validate those ideas, is made up of a diverse group of unusual suspects (think the A-Team, not Friends). They will find diamonds in the rough where no one else has. They will challenge each other. And, by virtue of their diversity, they will bring with them a network of other people and resources that will come in handy when it’s time to get down and dirty.
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TIP! Not just any team will do. The people on your design team must want to be there. Otherwise, they’ll push for business as usual.
When it comes to big hairy questions or initiatives, most of us are unwilling to take a leap and try something new to achieve the outcome we dream of. In order to do this, we need a rebel. A rebel is someone who is willing to stand up and announce that the time has come to take a new approach to solving a problem or answering a question. This person has the ability to carve out time and broker for resources for the design journey. The rebel is the one who will persist and ensure that you’re able to try something new before going back to the old way of doing things.
By now you’re aware that design is not linear. It is an iterative process in which you will constantly need to refer to artifacts that have been developed along the way. Carting these around the office and sticking them on different walls every other day not only is it a pain in the neck, but it also reduces the time you have to actually design. This reduces overall productivity. Having a “war room” where the team can get together and see progress will boost productivity and efficiency tremendously.
Tools like the screenplay – introduced later in this chapter – will help you design your meetings (or design sprints) to maximize your time together. Visual artifacts like the customer journey and Business Model Canvas will help your team hold more focused strategic conversations. Taking the time to think through how you’ll use these tools will help you maximize their value. It’s not hard work – but it’s essential.
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Think big, but be willing to start small! Most people approach big projects and new processes by seeking commitment from the board or an executive committee. This is fine and may work in some cases. Design doesn’t require a certain outcome. Instead, it’s about the journey, the findings you obtain along the way, and the options you generate and validate. With that in mind, here are some ways others have started their design journeys.
Of course, you could also start big and go straight to the board. If you decide to take that route, ask for a budget to train your team in design thinking for strategy and innovation. Whether or not there is an appetite for design in your organization, your colleagues will certainly develop skills and take journeys that deliver better business results, however small or incremental.
EVERY JOURNEY STARTS WITH PREPARATION
Change starts with a spark. Something in the world shifts, and someone reacts to that shift. Whether it’s for yourself or your company, to start your design journey, you’ll need a reason to take the journey in the first place.
Business as usual doesn’t leave much room for design process if you don’t have ambassadors on your side. Socialize your idea with a few potential ambassadors. If you get them on board, your journey will be a whole lot smoother.
Design is not a journey to be taken alone. Success in design comes when a team of people are in it together and are collectively compelled to see the process through. You’ll need varying points of view, skills, and a good network to tap into. Build your team with this in mind and you can’t go wrong.
Organize a targeted (not generic) training course or bring in a thought leader to help ignite interest in business model innovation or strategy design. Courses and master classes are great ways to learn new ways of working while becoming familiar with a new set of tools, skills, and mindsets. Oftentimes you’ll learn about other organizations that have employed design successfully. Use this insight to evaluate where and how you might further introduce design into your organization.
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Organize a design workshop focused on business model innovation or strategy to immerse yourself in the design process and determine where the goal is for you and your team to co-create a concrete deliverable. This could be the design of a vision, a business model, or a value proposition for a new concept.
Pick one of your existing products or services that’s struggling to generate revenue (or profit). Run a workshop with a diverse team to generate new business model ideas.
Get out of the building and talk to customers to understand what matters to them. What do they say? What do they think? Present your findings to others in your organization.
Preparing for a small team is one thing. Preparing for a large company is quite another.
So how do you best prepare for an innovation journey as an established company? We asked organizations like 3M, Lufthansa, SAP, ING Bank, MasterCard, GE, Philips, and Toyota how they have been nurturing and supporting cultures of innovation and design thinking. They shared their findings during a summit in New York, February 2015.
Their biggest takeaway: in order to prepare for innovation and design thinking, it is an absolute must that companies identify champion users of design tools, such as the Business Model Canvas, the vision canvas, and other human-centered tools. The champions, or ambassadors, must be proficient in the “lean” approach to design and development and carry with them a designer’s mindset at all times. No problem is too big or too small for these ambassadors.
When your goal is to scale design throughout your organization, it’s essential to find and train more than one ambassador. In fact, you’ll need to create an army of ambassadors who are familiar with and passionate about the new ways of working. They need to adopt and help spread design approaches to business by doing more than they talk.
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You won’t win a soccer match with 11 strikers or a football match with only quarterbacks. The same holds for business. Whether you’re trying to win in sports or in business, it’s crucial to employ players with varying skills (and superpowers) – the team needs to be multidisciplinary.
Don’t forget to have fun together! Hey! Who brought the drone to the party?!
Unusual suspects: that new graduate you just hired; a high-energy up-and-comer; or someone young, with interesting ideas, that you think of as an idealist.
Sales and marketing gurus who know the customer.
A strategist or product manager who always has the North Star in mind.
Kickass visual facilitators to drive the project forward, harnessing all of the energy.
Lateral thinkers, mavericks and rebels, hackers, developers, and designers.
An executive sponsor takes responsibility when things get tough.
Ambassadors and fans to increase engagement.
The ideal team will be able to cover a wide range of tasks. Need someone to write a proposal? Add that person to the team. How about someone to design a pitch deck? And maybe we need a coder . . . You get the picture.
The more viewpoints the team brings to the table, the more options that team will be able to generate. There is no one single right solution in any design, business or otherwise.
If every team member has the same exact life experiences, skills, knowledge, and viewpoints, the range of options they will zero in on is incredibly narrow. To avoid that, intentionally design your team to include people from different departments – and with different skills levels, backgrounds, cultures, and mindsets.
When you look at a business card, what do you see under the name of the person? Likely a title, and that title is very likely not that person’s role.
Roles describe the responsibilities that someone takes on, either formally or informally, as part of the team. They play a central part in getting things done. Roles, not titles, are critical to your success. It is important that each team member take ownership of the design, both while working on the design and when it comes to pitching ideas to other stakeholders. Designing the right roles helps team members understand how and where they can best contribute to the end result. The roles people play on your design team will vary from ambassadors to sales, and from visual thinkers to engineers.
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Just as you’ll intentionally design who’s on the team, you also need to design the roles people play on that team. When your team doesn’t know the plays, you can’t score a touchdown.
When considering your design team, it’s essential that you assemble the right people, with the right attitudes, at the right time. You’ll need this team for design workshops, brainstorming, and fieldwork: when you need to get out of the office to understand what your customers want, need, and do. You’ll need to assemble a team to design and produce prototypes.
