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Can we create an even better business model innovation by adopting even more design thinking?

I have been working with methods based on Discovery Driven Planning. It is essentially a framework for adapting plans according to what you discover in the real world. Methods like the business model canvas are deeply rooted in design thinking, but how do we add additional tools to create true business model design.

About design
Design thinking is about using the designer’s approach to solving problems and developing new design. A ‘Great Design’ is characterized by a deep understanding of the user, creative resolution of tensions, collaborative prototyping, and continuous modification and enhancement of ideas and solutions.

Within the last few years, business thinking and tools have been affected by design thinking. A great example of this is the business model canvas. I have to admit I am a great fan of this. It is based on a paradigm with focus on a collaborative and iterative style of work; it is a very visual and hands on tool.

Problem
It is beneficial to use even more design thinking in business model innovation. Traditional business strategy is rooted in deductive thinking, selecting among predetermined alternatives. Yet with the surroundings changing faster than we anticipate, there is a growing need for methods that can generate new alternatives instead of just choosing between options. Just think of the way the internet is challenging a range of business models. Take the example of Skype, which became highly profitable using a business model that most traditional business people did not believe in. This model did not evolve from a careful analysis of existing options, but was entirely designed as new.

There is a growing need for solutions like this, and adopting even more ‘design thinking’ might help us do just that

Roger Martin from the Rotman School of Management is one of the pioneers in this field. In his book, the design of business, he describes design thinking for business as consisting of three parts

1. Deep and holistic user understanding
2. Visualization of new possibilities, prototyping and refining
3. The creation of new activity system to bring the nascent idea to reality and profitable operation.

The Business model canvas works with part 2 – Visualization of new possibilities, prototyping and refining the possibilities. As I see it, there is a need for more methods and tools for part 3 and part 1. Working with clients on business model innovation, I have felt this need, especially for bringing the new models effectively into the world.

Solution
As an answer to this need, I have started using Discovery Driven Planning for the implementation and I am currently looking into finding good methods for creating deep and holistic understanding.

Discovery Driven Planning
Randy Komisar is a partner in the venture capital firm Kleiner Perkins Caufield & Byers and co-author of the book ‘Getting to plan B. In a talk with a group of the early stage start ups they had backed, he asked how many had abandoned their original business model for another, the answer was two thirds! These were initial plans that were good enough for them to get funding from the VC

This goes to show that the initial plan rarely works out, or as Field Marshall Helmuth Carl Bernard von Moltke said “No battle plan ever survives contact with the enemy”

The book “Getting to Plan B”, as well as the underlying framework, discovery driven planning, is a way to create a plan that changes according to discoveries of the real world.

The concept was originally put forth by Rita Gunther McGrath in her 1995 Harvard Business Review article “Discovery Driven Planning”

Personally I am currently experimenting with different ways of implementing this idea. based on inspiration from places such as “Getting to Plan B” and “Discovery Driven Growth” by Rita.
I am working towards developing one or more templates in the style of The Grove.

Deep user understanding
In design, it is common to use ethnographic research to create deep and holistic user understanding. When designing business models, the understanding must go beyond the user, to having a deep and holistic understanding of all the elements of the business model.

Creating the foundation for business design through qualitative ethnographic research is being used in places such as The Rotman School of Management. I am currently looking for tools and best practices to best adapt this to business model design.

I firmly believe that deep personal understanding can help create better business models. How do we best create this understanding or surface what is already there?
Do you have any best practices for creating this understanding?

What do you think?
What do you think; do you see a similar need? And, what have you done to meet it?

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2. Business Model Innovation
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4. A Business Model for a Better World - Ebook Draft
5. Prototyping freemium - new tool