Great businesses don’t happen by accident, they delight their customers by design, they inspire their employees by design, and they create the future by design. Here’s a new way to design and test your business in plain and simple English — using the Business Design Canvas.
Before you read any further: this is an older version of the Scorecard, find the latest version by following the link to the Lean Business Scorecard which adds considerations for Sustainability and Responsibility.
The Lean Business Scorecard
The fastest-growing businesses in the world experiment on an industrial scale to demonstrate how Desirable, Viable…
For people who want to read about the old version, keep reading…
In his speech at the University of Pennsylvania, Thomas J. Watson Jr. — the president of IBM computers and one of Time Magazine’s most influential leaders of the 20th Century — sent the class of 1973 out into their lives with the idea that “Good design is good business”.
Watson Jr. had re-designed IBM with the help of Eliot Noyes, and together they created a corporate design program that would bring design values and principles to the entire organisation.
Noyes brought in Design Legends like Charles & Ray Eames, Eero Saarinen, Paul Rand and Isamu Noguchi to help make this happen and to ensure that every aspect of IBM served a need for both customers and colleagues alike.
This focus on design might have seemed surprising to many of the University of Pennsylvania students Watson Jr. spoke to that day. I can imagine that many of them had just spent 3 or 4 years studying Physics, English Literature or maybe Computer Science, and were seeking to make their mark on the world with their new-found knowledge and ground-breaking ideas. Then all of sudden, here was this person, who had gone from struggling with dyslexia during his school years — and being a party animal at university— to being an incredibly successful businessman, talking about how Design and “satisfying your customers” were the most important things in business.
I must admit that until I started my first business back in 2010, and it was my own money on the line, I hadn’t fully appreciated the importance of Design to creating a great business.
I could see that Design played an essential role in delighting customers, but using Design on the rest of the business? I hadn’t quite worked out what this meant, and anyway, I was nerding out about making digital things and coding stuff and was a year away from working at Google and getting heavily into the whole Lean Startup movement.
In fact, it wasn’t until I considered the mindset and values behind ways of working like Design Thinking, Agile and Lean Startup that it really hit me
When it comes to the creation of great business ideas, it’s really just an arms race of experimental Design applied to every aspect of the business.
Thinking like a Designer
Whoever can think like a Designer and apply Design to as many aspects of how they work and what they produce will inevitably be able to meet the needs of their customers and employees in better ways and less time.
So what does this mean in practice? How can this be learned?
Personally, I’ve learned a lot from the Service Design and Design Thinking community, especially from people like David J. Bland. I can thoroughly recommend his book Testing Business Ideas to help break down and test ideas in lots of different ways. It’s certainly provided me with a lot of food for thought for this article, especially his approach to Assumptions Mapping.
I’ve also drawn inspiration from the world of Agile in terms of how things like Epics are written and tested to make a Lean Business Case.
But, I have found that talking about doing lots of testing to build up confidence or writing business cases can appear at first sight to be quite daunting for some people. It’s not clear where the finish line is, just the kind of steps you might need to take to get there.
So, to help overcome this perception, I tried to break it down into a Design Canvas that speaks to the finish line and the levels of confidence you need.
I’m calling it the Business Design Canvas.
It uses plain English to help you articulate your business idea, and at the same time work out if you’ve actually designed something that is a good business. To help ground the thinking behind it, I’ve also put together a quick primer on Design Mindset and Values.
A Primer on Design Mindset and Values
The mindset behind Design is simple, I think of it this way…
Design is a mindset that helps you identify the needs of people and ensure that you meet their needs by design
It speaks to the connection you need to make with people and the exploratory nature of working out what they need and how you might address that need.
Much like the Agile mindset — which is supported by the values of the Agile manifesto, and the Agile principles — Design is supported by 3 values and — depending on who you talk to — a tonne of Design principles.
It’s these values that are the key thing to remember, and are, by far the most important aspects of Design, beyond the specific methods and practices.
Those Values are Desirability, Viability and Feasibility.
The 3 Design values, or “lenses” as I like to think of them, offer 3 perspectives on your ideas, and used regularly, can help you evaluate, test and strengthen your business ideas to find increasingly better ways to delight people.
First and foremost you need to be confident that you’re creating something Desirable — is your business idea something that you know (and have ample evidence for) that your customers want and need?
Next, you need to know if this is something that’s also commercially Viable — will your idea create a stream of value from your customers that can sustain a business over the long term, that makes more money than it costs?
Finally, is this something that is technically and operationally Feasible — Do you and your partners have the capabilities, operations and channels to offer products and services that will satisfy your customers?
We can explore these 3 values and how effectively you’ve designed them for your business idea in the Business Design Canvas.
The Business Design Canvas
The canvas is designed to be simple in principle but demanding in practice.
It’s simple because it just contains 3 statements, designed to be written in plain English, that speak to the Desirability, Viability and Feasibility of your business idea, with each statement containing a set of blank spaces that you can fill in to describe your idea.
It’s demanding because the trick to using it and coming up with a great design for your business is to build up evidence and insight to back up every part of each statement, and the scoring system at the bottom gives you a guide as to different levels of evidence.
Without evidence and insight, you are in fact not designing a business, but rather guessing what might be a good business and you risk making financial and emotional investments into something that runs a big risk of never giving you a return.
To build up the right evidence you need to go through a process of identifying what you have made assumptions about in your business idea, and then asking the right questions around each part of the Business Design Canvas.
Ask enough questions, and you can create a foundation of strong evidence and insight that will help you build confidence in your business idea and help you know whether you are focusing on the right opportunity for the right target audience and with the right solution.
[Note: For those familiar with the Business Model Canvas, you’ll recognise the component parts of it in the Business Design Canvas, but hopefully, you’ll see more of a flow and connection between the parts of the model that make it easier to understand and relate to. You may also notice lots of similarities with David J. Bland’s approach to testing business ideas which I’ve also drawn lots of ideas from].
To find the answers to questions around the Desirability, Viability and Feasibility of your business idea and assess your levels of confidence in each, I find it useful to stress-test the 3 statements about the idea to see how much evidence I have.
Remember that the stronger the evidence and insight you have for each of the 3 statements, the more confident you can be in the case for your idea.
To start, set out what you assume to be true about each part of the statement, it doesn’t matter if you’re wrong, or you lack evidence at this stage because you’ll be going through a process of discovery and testing to work out what’s true and what’s not.
The case for Desirability
The first and most important case to make is that something is Desirable.
If people don’t want something, by definition it’s never going to be viable and it doesn’t matter if it’s feasible, people simply won’t use it in the first place.
So to avoid wasting time and effort, I like to understand and have reliable evidence for the following to assess Desirability -
- Who the customer or target audience is
- What they are trying to achieve
- What’s getting in their way or challenging them
- How we plan to help them overcome that
- What that allows them to do that they couldn’t do before
I’m looking for reliable evidence because I want to able to make informed, insight-driven decisions around how I will be targeting and marketing to people, and how I will design the product or service to offer the most value to them, I don’t want to be making Leaps of Faith about this.
So, we use the following plain English statement in the Business Design Canvas as a way to articulate these dimensions.
We have evidence that [a group of people]
who are [trying to do something]
and are currently [facing some challenge]
that [by providing a product or service]
we can help them [do something they couldn’t do before]
Let’s look at an example for someone looking to test an idea around a “WonderFitKit” a special kind of test to help men in their 40s and 50s with diabetes to improve their circulation, health and general fitness levels.
Perhaps you can have a go now with your idea? Once you’ve written your example, evaluate each part of your idea against the scoring system.
Now reflect on what your biggest assumptions are.
What would have to be true for you to be confident?
The case for Viability
Once you have sufficient evidence that you’ve found a real problem or opportunity to address for a real group of people, you need to prove you can get paid enough to do it to actually have a commercially viable business on your hands.
The key dimensions I look at to assess the design of the business model are as follows
- Have we got a large enough group of people we can do business with?
- How much value will that group of people provide?
- What types of product or service are we offering?
- What does it cost us to offer that product or service?
- At what level of cost or scale do we break even?
The following construct is a useful way to articulate this.
We have evidence that [a large enough group of people]
are willing [to provide something of value to us]
in return for [providing a product or service]
which generates [some form of profit]
when [we operate at some level of cost and scale]
Here’s an example
Again, follow the same process of scoring how viable your idea is, and be honest — if you’re going to invest your time and money into this idea, you don’t want to trick yourself into doing it.
The case for Feasibility
I tend to consider Feasibility last because, in my experience, anything is possible, it just depends how much time and money you have, and that depends primarily on how desirable your idea is and how viable it is. That said, in some cases where your idea is particularly ambitious, you will need to assess this early, and work out how you can break your idea down into small slices that you can deliver early.
The key dimensions I look at to assess the capabilities and differentiators of my idea are -
- Who will help and support the creation, delivery and operation of my product or service?
- Are we set up to do this now, or do we need to borrow, build or buy something in to make it possible?
- What activities do we need to day-to-day?
- How are we going to target and do business with our customers?
- How are we going to play to win in this market?
[A special note here on the last point, which may be one of the trickiest to answer. To stand out from everyone else — especially if it’s a busy market you're heading into with lots of potential competitors — you will need something that gives you an unfair advantage, something that you can defend and that other’s will find hard to copy. This part is critical, but not before you establish the desirability of your idea].
For the final part of the canvas, this is the construct we use to establish how feasible an idea is -
We have evidence that [our organisation & partners]
are capable of [providing a product or service]
by [conducting this set of activities]
via these channels [that connect us to our customer]
which we can win by [doing something others can’t]
Here’s our final example.
Once you’ve written everything down, scored how confident you are and have considered what assumptions you need to test, it’s time to start testing your idea and building confidence that it has legs that you can run as a business.
You’ll want to test your ideas broadly and deeply, and test that you’re both right and not wrong. Keep testing with larger and larger groups of people, starting with small and low-cost tests, and building up in complexity and cost as you gain more and more confidence that you’ll get a return.
It’s always better to place lots of small bets and test the riskiest parts of your idea first, and only double down when you have evidence that something is proving to be reliable and repeatable.
Remember, the most expensive way to test an idea is to turn it into a business that is built around infrastructure or code, so make sure you design and test your idea before making this leap. You’ll thank yourself that you did.
Note: there is now an updated version of the Business Design Canvas
Start testing your idea now
You can download your own copy of the Business Design Canvas from this link and start testing your business idea.
Like this story? If so, please give a clap, it only takes a second!
Want to hear more from me? follow me with one click via @robinow.medium.com/follow