The Promise and Pitfalls of Business Design

Dec 10, 2013 | Ideas, Ideas for Strategy, News & Updates, PurposeCORE

The favourite buzzword these days: Design thinking. And the biggest consultancy associated with its rise is IDEO, deemed the coolest consultancy in the world right now for everything associated with design and innovation. Top executives all over the world are now suddenly caught up with this frenzy of design thinking and business design; they all want to be part of the action of being seen as thinking out of the box. But just like any hot stock on the market, think carefully before adopting it or be prepared to get burnt.

Before we go any further, we like to say upfront that we believe in the power of design thinking and the process of business design, being practitioners ourselves. And we absolutely love the work of IDEO and so many other firms out there in this field. But what we can also clearly state is this: design thinking is not for every firm and not for every solution. And no method should ever claim to be the cure-all for the world’s ills. Given the hype around the topic, we feel that it is important to share some insights into how important it is, to establish the ground and conditions so as to profit from this method. The following approach is gleaned from our years of helping companies in Asia rethink their business models through business design.

Business Design requires a new process for ideation

For the uninitiated, business design is the process of creating a new business unit or experience by combining the hard skills of business and the soft skills of design to create a practical solution and yet unexpected user experiences. The smartphone category – as defined by Apple – through the iPhone, is a classic example of what happens when great business strategy and design comes together. Apple created an intuitive user-experience and executed a great business strategy through the app store with quality 3rd party developers and an unprecedented distribution model through the telco. The combination of a great business model and great design experiences are the distinctive marks of business design. Well, if the Apple case study is so well-known and obvious; if business design can get us business success, then why are so few companies profiting from the the process?

The answer lies in the way an idea is developed in most companies. In Asia, ideas are generally developed in a linear fashion, as in, it is usually sparked off by a single department perhaps the product or marketing department, then in order to gain support, it needs to bring this up to higher management to secure a budget before bringing in other departments. Along the way, as other departments come on board, they will add their own versions to it. This process requires a department as a champion and over time; it diminishes the focus on the idea itself, reducing it to a mere outcome that has to be seen as innovative but in fact has very little material impact on the business process hence limiting results. In this situation, if you attempt to use business design, you will achieve little impact. To profit from the situation, Asian companies need to value the process of concept development, invest more time in it to get better business results.

Tim Cook has repeatedly emphasised that only Apple can bring different talents together to create a product experience that is thoroughly reimagined and delivered.  From our experience, the harsh reality is, most organisations in Asia do not have the ability or the will to put different talents together to solve problems over a prolonged period of time. For business design to fulfil its potential, it requires a multi-dimensional view of the concept and problem from the very beginning. The concept development cannot be simply pushed down the line and has to be open to a variety of outcomes, and quite a number of them will be unexpected. It is akin to going on an adventure together, leveraging on the eyes of the other to build on each other’s ideas and insights. The latter will require teams to have trust in one another, built over time through failures and understanding. The reason why Apple was able to achieve the kind of breakthroughs that it did, had less to do with just ‘thinking different’; the teams working together had years of synergy so they had the maturity to ask difficult questions and the risk tolerance to pursue ground-breaking ideas. In other words, business design work best when teams have worked together for long, something like the teams at F1 races, you need faith in each other, the clarity of roles and purpose in order to achieve business breakthroughs.

The reason why so few companies profit from this approach is not due to the lack of ideas or business design as an approach. The real challenge is, how do you put in place a confident and comfortable team dynamics that appreciates the value of the other, that respects the expertise of the other? How do you get teams to realise the value of random conversations about life, aspirations, personal stories, things that may not have a direct relationship with the project, but yet, are so necessary to build trust and synergy in order to create an environment that will nurture and groom a transformative idea from the start to finish. This is when the CEO is key in acting as, not just as the sponsor of such a project, but as a protector and cheerleader of the initiative for a sustained period of time.

The prevalent status quo in most Asian organisations in terms of how the concept is developed and assigned a budget means that when companies do adopt business design as an approach, they tend to limit them to showcase projects like a better retail or service experience. These are mere trophies and will not go far in reshaping their industries like what Apple did for smartphones and the PC business.

Ways for Asian Companies to profit from this method

As you read this, you might feel discouraged because it seems almost impossible given the culture in your company. However, there is no other way to innovate unless people come together to look at a problem deeply and in unity with one another. Business design is an evolution of earlier innovation methods and whoever master it, nurtures a highly active environment for it first will profit the most. To use business design approaches is only common sense and is a necessary step for any business to move up the value-chain. But what we are advocating here, is realism and patience. Do not expect a quick-win just because you hired some brand name consultant to conduct a design-thinking workshop for you. If that were true, we would see an Apple-like disruption every other day. Fortunately this is not happening simply because it takes a lot of work to make it a transformative effort. For companies considering adopting business design, here are a few things you will have to consider beforehand:

1) Your industry is ripe for change and not because business design is cool

If you are in an industry where the following phrase, “We have always been doing things this way” is often repeated, and you have entrenched leaders who have sold their product in a similar way for the last ten years then it is really time to use business design to reimagine the industry. And if you realise this first on your own, then business design will be useful as a tool to help you get there. Business design achieves the greatest impact in industries that have not really thought differently about their business. Just look at how Apple has changed the phone business and how Tesla is challenging the auto industry in electric cars. There are lots of industries that are ripe for change in Asia, from the way we sell traditional furniture, tourism and even the way government deliver its services.

2) Your CEO believes and is interested in participating in the process

Business design, like any project about innovation, has risks and can fail. No consultant should ever claim that it is fail-proof because it is just not possible. Therefore, it is important for the CEO to learn about the process and be part of any idea development. We have found that when CEOs are involved in the development and testing phases, it makes it easier for the top management to understand why additional time is needed to allow the idea to live on. When the CEO participates in the process, he/she will realise the importance of redesigning the organisation in order to best maximise the benefits from business design in the future.

3) Your culture is ready to host the ‘seed’ of business design

Business design is a contagious process; once the right people are involved and are used to it, they will be able to reap more benefits out of it. For an organisation to profit more from this method, it is necessary to give different departments more opportunities to work together and develop ideas collectively. You will also discover that personal excellence matter less in a ‘design thinking’ environment as it is always a team effort. So remuneration policies, in addition to recognising the individual, must move towards rewarding teams with the best synergy and willpower to see an idea from the start to completion.

In our practice, we have this favourite phrase: “It took a lot of pain to invent the light bulb, therefore so long as we know why we are suffering, the journey is worth it.” Innovation requires clarity of purpose, the will to stay on course and the unity to make it happen. We may use different labels but the same old principles still apply; there are no shortcuts to great things.

Read the full article here.

This article is part of a weekly column called Shaping the World where Lawrence and Shiraz share insights and ideas about building innovative Asian Brands. It is published by one of the leading dailies in Sri Lanka, Ceylon Today.

Lawrence Chong is the CEO of Consulus, an innovation consultancy specializing in helping Asian companies transform their business models to rise up the value chain through business design, organisational development and designing new brand experiences. Consulus’ country representative in Sri Lanka is Shiraz Latiff who is also the CEO/Lead Consultant  of Hummingbird International, a regional knowledge house specializing in coaching, consulting & outsourcing through global partnerships & collaborations.

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Shape the World Summit 2024 will be held on June 21st at Jewel Changi Airport, with a closing keynote by Mr. Lim Boon Heng, Chairman of Temasek Holdings.

This year’s summit will launch groundbreaking initiatives such as AgriCORE for regenerative agriculture, DialogueCORE for inclusion resilience, and FamilyCORE for family-led foundation impacts.

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