The term “design” is often used to describe a visual product – form, color, texture, layout or design activity. In other cases, the meaning of design goes beyond what a product looks like, but also about how it works and how it functions. In this article, we explore: How does design transform organizations and inspire innovation? Get ready to enter the world of innovation through design.
Today, companies are investing more in design. They do this not only to create more beautiful and functional products, but also to improve the way that value is created and delivered to users, which requires a culture of innovation and process to dominate design.
Here is the outline of the article:
- The maturity of the company’s internal design
- Why is design good for business?
- How does innovation happen?
- What does innovation in the design process look like in practice?
- 10 Steps to Driving Innovation Through Design
- Analyze market potential
- Business Essentials
The maturity of the company’s internal design
About 20 years ago, the Danish Design Centre proposed the Design Ladder. This model illustrates the different ways companies use design. They base the design ladder on a hypothesis that has been proven time and time again. In the early stages of development, higher returns are positively associated with emphasis on design methods. Therefore, design is in a more strategic position in the company’s overall business strategy.
Design Ladder at the Danish Design Centre
The design ladder consists of four steps:
Step 1: Non-design
Design is a potential part of a product development team, and this task is not done by trained designers. Team members’ perceptions of good functionality and aesthetics often determine the outcome, while users’ perceptions play little role in the process.
Step 2: Design for the Style
Many designers use the term “styling” to refer to this process. This task may be performed by a professional designer, but usually someone with another professional background will handle it.
Step 3: Design for the Process
Design does not imply the final look, but integrates the process of the early stages of its development. Economic viability, user needs, and pain points are all drivers for generating solutions. This system requires the participation and collaboration of product managers, product owners, business analysts, developers, marketing experts, researchers, and designers.
Step 4: Design for Strategy
Design experts work with company owners or management to rethink business models. They focus on the study of the design process related to the company’s business strategy and the expected market position in the future.
Why is design good for business?
Higher levels in the design ladder are associated with a positive impact on revenue. When introducing a new product or service, companies that systematically incorporate design into their processes have a higher chance of success in the marketplace because design provides contextual insight and helps define innovation opportunities and strategies.
How does innovation happen?
We found that true innovation occurs at the intersection of three factors:
- Business strategy (what the market thinks is feasible in a specific context and time point)
- Design (what are the needs of potential customers)
- Technical constraints (what the limits of technology make possible)
The following classic Venn diagram illustrates this intersection:
Classic Venn Diagram
The diagram shows that these three elements must come together to create a successful innovative design.
But how did this fusion happen? This is not purely accidental. Design stands for great ideas – it’s the driving force that combines technology, client needs and business goals.
What does innovation in the design process look like in practice?
We can manage business innovation as a structure in the design process and use it to stimulate innovation potential within the organization. However, this would make the design process unpredictable.
Also, it takes time. Damien Newman has created a design curve that visually characterizes the design process.
Damien Newman’s Design Curves
But don’t be discouraged, this result may provide a powerful new business model to secure your company’s future growth.
We’ve put together a step-by-step guide to help you understand how design drives business innovation. In this guide, we’ll focus on customer-driven innovation . Understanding your customers’ needs will help you align your value proposition, rethink your product or service, and ultimately build your overall business model around them.
10 Steps to Driving Innovation Through Design
1. Understand the challenge
First, at the beginning of the journey, understand why we need to innovate.
Typically, the need for business model innovation stems from one of the following goals:
- Market needs are currently met but not yet addressed.
- Bring new technologies, products or services to market.
- Improve, disrupt or transform current markets with better business models.
- Create a whole new market.
In this step, actively explore the company situation with stakeholders to discover different status quo and perspectives. Whatever the situation, start by understanding the challenges your company faces.
2. Know how your business works
In the second step, in order to realize value, better understand how your business works (if it doesn’t already exist, assume how it should work). Analyzing existing business models is fundamental to achieving successful innovation.
One of the most popular business models, the Business Model Canvas (BMC), visualizes nine essential elements of a company:
- customer group
- value proposition
- channel
- customer relations
- Source of income
- key activities
- core resources
- key partners
- cost structure
Strategyzer’s Business Model Canvas
In the UX studio, we recommend doing this step in a workshop with other team members, as other members may have different understandings. On Strategyzer, you can find useful information on “How do I fill out the BMC?” and, many useful tools.
3. Know the background and your position
After completing the BMC, understand the environment in which the business operates. Narrow it down, focus on the business environment, identify your competitors, then talk about trends, macroeconomics, and market forces.
Strategyzer’s Business Model Environment Canvas
Understanding the operating environment of future business models helps your team:
- Identify threats (eg: new competitors)
- Seize opportunities (eg: new technologies)
- Addressing constraints (eg: new rules)
You need to solve these problems and even turn them to your advantage. In this step, gathering and analyzing competitors in the relevant context is the most important activity.
4. Know your (potential) customers
After the third step, go deeper.
Identify all (potential) customer segments by filling out the BMC. Now choose your main customer segment and focus on that. To help you better in this process, first create a character. It gives your customer base a more understandable personality, and personas make customer characteristics more real and specific.
Persona Canvas for Design a Better Business
Next, create a hypothetical user journey map.
Again, hypothetical means you probably haven’t done research on it. Mapping the user journey will allow you and your team to understand how users experience your product or service and how you can better serve or even delight them.
User Journey Map for Design a Better Business
At this point, it’s easy to fall into the trap of believing that you know your customers well and don’t need to do fieldwork. Never do this, or you will make a terrible mistake. The best insights are obtained by combining real observations with interviews. We’ve written this guide for those who are unsure how to plan, conduct, and analyze interviews. It might help you.
The following questions should be answered in your research:
- What are our clients trying to do in their work or life?
- What are the pain points of our clients that prevent them from doing it before, during, and after work ?
- What happens when our clients get the job done ?
To integrate the insights you gain from interviews, use the Value Proposition Canvas. It will make you think differently about your customers, and what you offer.
Strategyzer’s Value Proposition Canvas
The Value Proposition Canvas consists of two parts:
- On the right, we have a customer profile. It helps clarify your understanding of key customer groups.
- On the left, we have a value graph. It helps describe how you intend to create value for your customers.
5. Focus on problems worth solving
Now you have a better understanding of what your customers are trying to do, their pain points and gains.
Next, prioritize them, which requires you to design a value proposition that addresses what customers really care about.
Arrange them in three columns:
- The most important work is at the top and the least important work is at the bottom.
- The most serious pain points are at the top, and the general pain points are at the bottom.
- The most important harvest is at the top, and the “better” harvest is at the bottom.
You should get something like this:
Strategyzer’s Value Proposition Design Process
6. Define your value proposition
Next, identify the value you want to create for your key customers: your value proposition. A great value proposition should focus on the customer’s most important jobs, pain points, and gains.
This is where the left part of the value proposition canvas comes into play. It will help you define (and you believe) how your product or service will help customers get their jobs done, relieve pain, and create rewards.
Ask yourself:
- What products and services do we (can) offer to enable our customers to do their most important work ?
- How can our products and services (can) help our customers relieve their worst pain ?
- How do our products and services (can) create the results and benefits our customers expect or desire ?
Strategyzer’s Value Proposition Design Process
Find the fit between the customer profile and the value map. When you do, your value proposition will excite customers. This only happens when you’re dealing with important work, relieving excruciating pain, and creating important gains that they care about.
7. Seek solutions
While we don’t yet have a clear definition of a value proposition, we have basic building blocks. We are able to quickly map multiple value propositions using the top-level perspective in the Value Proposition Canvas with the Ad-Lib below, don’t settle for just one – try to explore multiple directions.
Strategyzer’s Value Proposition Design Process
Next, translate the new value proposition into the form of products, features, services, processes, brand experiences, and more.
Please brainstorm with your team to identify possible solutions that you can offer your customers. But don’t stop there, try to describe the characteristics a product will have, the structure a service will have, etc. For digital products, look for features that directly relieve the user’s pain and help them get their job done.
8. Solution Prioritization
After the brainstorming session, you should have multiple solutions and ideas to prioritize. To learn how to do this, check out our article on feature prioritization techniques, which explains the process in more detail. Likewise, work on feature prioritization with the rest of the team in the workshop.
9. Solution Prototype
Next build a prototype to bring your idea to life.
Prototyping means building a quick and rough model of your idea to explore other options. Among the many prototyping techniques, start with a quick hand-drawn sketch. They will allow you to quickly explore completely different directions of the same idea before refining one specific direction. Then, go digital by building wireframes and interactive prototypes, which range from low-fidelity to high-fidelity.
10. Test the solution
Last but not least: Test your solution with real users in your potential target group. Conducting interviews and user testing can demonstrate whether users will use the solution you have in mind, and they will also provide you with many valuable insights on how to improve it.
Testing can be done at different levels of your business model, but keep an eye on the following:
- Your product or service prototype
- Characteristics of your value proposition
- The willingness of customers to try the product or service
Start improving your business model based on the user feedback and analysis you collect. You may realize that customers find your value proposition difficult to understand or products and services inconvenient to use. No matter what goes wrong, the process doesn’t end here.
Analyze market potential
At the end of the process, you may have a solid value proposition and desirable product or service. You still need to assess its market potential to determine the viability of the business model.
“Market Potential” means:
- Market size : number of potential customers and market value. This will give you insights into the sales potential of your products and services.
- Competitiveness : Measure market competition, determine where each competitor is in the market, and plan strategies to address them when the time comes.
- Customer segment : Determine the size of your main (potential) target segment and whether it is clearly segmented based on drivers such as demand, price sensitivity, etc.
These quantitative market insights will help you determine the strength of demand your product or service addresses, the size of your potential target group, what they are willing to pay for your solution, the threat of your competitors, and more.
Business Essentials
The success of any product or service ultimately depends on human motivation and behavior.
Technology enables innovation, but human-centred design plays a central role in a successful and long-term business strategy. Whether you’re just starting out or an established company, keep the following in action:
- Prepare for the future by continually reflecting on current business models and identifying ways to improve.
- Get to know your current or potential customers and find out what they want most and the biggest pain point your business might be able to solve.
- Align your value proposition to meet the most important needs of key customers.
- Come up with solutions that help your clients solve what they’re trying to accomplish and ease their headaches.
- Prototype : especially solutions that are easy to achieve and test them with real customers. Iterate based on the feedback you get.
