Business design as a means to acheive sustainability and abundance
The level of concern about the environment is reaching new heights. It is increasingly clear that the future will be characterised by resilient decentralised networks as we meet this challenge. These are networks of information and data, networks of renewable energy production and consumption, and networks of automated logistics. The imminent convergence of the Internet, Smart Grid and Smart City technologies will undoubtedly significantly change our lives (see European Union Smart Cities). The promise of this convergence (popularised by Jeremy Rifkin as the "Third Industrial Revolution") can be likened to how the internet delivered cheap and ‘on-demand’ information exchange to billions of people. Smart Grid and Smart Cities will provide low-cost energy exchange and transportation logistics across the globe.
These technologies and the distributed manufacturing and operational technologies they enable (e.g. robotics, 3D printing, drone delivery, VR, AI) are already impacting the way businesses need to think about their structure and operations. However, the “digital transformation journey” that is the current focus of many organisations is just the beginning of something that will ultimately lead to the need for a complete re-think of business and operations.
Business models that are distributed and decentralised by nature usually depend on networks of partners, collaborators, and supply networks to deliver services to customers. It is not unreasonable to expect that businesses that are explicitly designed as decentralised networks of semi-autonomous hubs within a convergent environment will have the following advantages:
Greater ability to respond to local market demand or supply changes
Greater reliability of customer service due to greater resilience in the face of disruptive local events
Lower ecological footprint by leveraging circular sustainable economies, local sourcing and greater ability to provide local production or maintenance and repair of products (rather than replace and discard)
Greater ability to sustainably deliver low margin, high volume quality products and services.
The near future will be about designing your business to leverage the things that the Internet, Smart Grid and Smart Cities technologies allow businesses to do well (e.g. collaboration at distance, localised delivery, quick establishment of global reach, responsiveness to local conditions, reduce operational overheads). Add to this the speed at which the Internet, Smart Grid, Smart Cities and related technologies and platforms are progressing, and you have what amounts to a business paradigm shift.
THE BUSINESS DESIGN PROBLEM SPACE
We argue that Business Design is a key element in achieving a globally sustainable future. The approach we use at FromHereOn provides a useful framework for thinking about the design of business for that future.
Business Design as an emergent discipline exists to deliver resilient organisations that are designed to adapt and thrive in a rapidly changing landscape. Given current global social and environmental trends, there is no challenge more important for contemporary business leaders to understand.
The term ‘Business Design’ gets used to mean two distinctly different but related things – ‘using design within a business’, or it can mean ‘designing a business’. The first is concerned with applying a design process to solving a particular business problem, the second is concerned with applying a holistic co-design process to a business in its entirety. It is the second meaning that we focus on here.
Leading a business is a juggling act to balance risks, opportunities, financial capacity and operational capability. It goes without saying that designing a business is no small undertaking. Business design is concerned with identifying the purpose and ambition of a business, relevant business models, its customers, products and services, marketing, operating models, use of resources, the roadmap to implement it and ability to execute change. It requires that business designers have:
the appropriate knowledge set, experience, skills and techniques to work across business strategy, marketing, business modelling, product and service design, operating models and technology.
a way to represent a business, its components, and the impact of change to any of these across the business (the Business Model Canvas is a great example of a tool that illustrates the necessary components of a business).
a design process that is comprehensive in its approach but flexible enough to change or pivot as the priority of problems to be solved changes with the evolving business concept or design.
With changes in technology and the availability of information, the ability to re-design business ‘on the fly’ becomes increasingly important, and potentially your primary point of differentiation in the marketplace.
THE DESIGN APPROACH
At its heart business design is an iterative ‘ideate-prototype-test-refine’ human-centred design process. Business Design encompasses the design disciplines of Service Design, Systems Thinking, Circular Economy and Enterprise Architecture.
The starting point for any business design initiative is always seeking to understand the people that are involved in and impacted by the business. The primary interest in people is to understand their ambition. A business is ultimately a group of people brought together to achieve a common purpose. Determining what this common purpose is and the relationship that individuals (i.e., customers and employees) have to it is a first crucial step in designing a business.
At FromHereOn we use the Business Design Method to represent the logical sequencing of discrete design activities that are involved in designing a business from beginning to end.
The centre about which all other process elements ultimately revolve is the process of Business Model Design. This design process brings together the relevant aspects from the Purpose, Value and Service Design activities. These core design activities determine the parameters for the subsequent design of Operating Model and associated portfolios of resources.
WHY DOES IT MATTER?
Business Design is a human-centred practice. The process also seeks to build a common language with business stakeholders so they can co-design desirable, viable and feasible products and services holistically. Business Design is concerned with designing profitable businesses that leverage waste or by-products, use renewable energy sources, achieve net-zero impact on the environment and treat customers, employees and society in general with respect. These social and environmental considerations do represent tangible business value, too (e.g. the rise of social enterprise over the last decade).
At FromHereOn, we use collaborative human-centred design processes involving both employees and customers with many of our clients (across business, government and not-for-profit sectors) to enable them to design digital and technology strategies, blockchain networks, as well as the business and operating models.
We’re resolute in our opinion that the art of designing businesses that are fit for purpose in the 21st century is one of the most important contributions that can be made to promoting a world in which great things are achieved through the intelligent use of resources, realising true sustainability and abundance.
This is a journey that involves us all and we welcome your thoughts.