Business Model Design is still seen as an anomaly by most business people I speak with. For some reason they can’t put the words “business model” and “design” in the same sentence. This post is to hopefully help business people visualize how Design Thinking can work at the business model level.
The below are based on a class I taught last fall at the Carnegie Mellon University, Integrated Innovation Institute. My students worked with a local entrepreneur who was developing a business around ride sharing and had a specific area of interest that was not fleshed out yet.
All of my consulting projects normally do not allow me to show deliverables but in this case I have been able to redact the important words in order to show the process. I will say this is only one version of a process I typically use. Each set of tools is used based on the results needed by my clients.
Step 1 – Preliminary Business Model Canvas
We started with a Business Model Canvas as a warm up to the students working with the client. They needed to get a detailed understanding of what the Founder was thinking so far. Visual Risk Assessment was used to understand risk areas. If you have not read about my Visual Risk Assessment method yet you can go to http://www.onebusinessdesign.com/blog/2015/6/29/tools-and-methods-001-visual-risk-assessment-for-business-model-canvas.
Here is the Preliminary Business Model Canvas:
Step 2 – SWOT Analysis
SWOT Analysis is a great tool as it gets all parties thinking not only about internal issues but also to get them to think externally. It is usually a short exercise, but an important one.
Here is the SWOT Analysis:
Step 3 - Customer Journey Map
Here is where we get to the heart of the matter. We visualize all parts of the user’s activities in the use of the future service, calling out questions the team discovers in the process and potential innovations that could make the experience more delightful. The students also felt this exercise gave them real insights into how the business model should change.
Here is the Customer Journey Map
Step 4 – Innovation Sectors
With the previous exercises done, the students and Founder worked together to look at a) how the business was planned to be developed, b) How the business could be run and finally c) how the business will be run. If you would like more information about Innovation Sectors go to http://www.onebusinessdesign.com/blog/2015/10/12/tools-methods-003-innovation-sectors
Here is the Innovation Sectors:
Step 5 – Final Business Model Canvas
As a final deliverable the group created a new Business Model Canvas, based on their learning and collaborative input. As you can see this Business Model Canvas is much cleaner and easier to work with. The Founder was happy and so were the students.
Here is the Final Business Model Canvas:
Some people ask why there are so many steps and how long does it take? For more information on the importance of Persistence and how it relates to this please go to http://www.onebusinessdesign.com/blog/2016/7/25/observation-007-design-thinking-let-the-science-begin-part-2. As to how long it takes. Normally one day.
I hope the above will help business people better visualize how “design” and “business model” do belong in the same sentence.