An existing business model is ported to a new industry (such as Razor and Blade to the coffee industry).Major advantages: other companies serve as blueprints and their mistakes can be avoided, enabling you to become an innovation leader in your industry.Major challenge: leaving enough room for experimentation and adaptation. Here, avoid the temptation to copy and paste.

Strategy 1 for new business model ideas. Transfer

Transfer and combine two business models.Especially innovative companies can even use three business models simultaneously (for example, Nestlé uses the Razor and Blade, Lock-In and Direct Selling patterns for Nespresso).Major advantage: synergies decrease the likelihood that competitors will imitate your business model.Major challenge: planning and execution become more complex.

Strategy 2 for new business model ideas. Combine

A company uses a successful business model for another product range (for example, from Nestlé Nespresso to Nestlé Special.T and Nestlé BabyNes).Only the most innovative businesses can pull this off.Major advantages: ability to capitalise on experiences and synergies; manageable risk.Major challenge: balancing change and stability

Strategy 3 for new business model ideas. Leverage

<ul><li class="ql-align-justify">Who is your customer and which customer segments do you mainly serve?</li><li class="ql-align-justify">Who are your most important customers?</li><li class="ql-align-justify">Who are other important stakeholders that need to be considered?</li><li class="ql-align-justify">What kinds of relationships do your customers expect and how do you maintain them?</li><li class="ql-align-justify">Who influences your customers (opinion leaders, stakeholders, users)?</li><li class="ql-align-justify">Do different departments address the same customer segments differently?</li><li class="ql-align-justify">What distribution channels do you use to serve your customers?</li><li class="ql-align-justify">What actors are behind your customers? Will the same people be here for the next ten years?</li></ul>

WHO? (customers)

<ul><li class="ql-align-justify">What do you offer to the customer?</li><li class="ql-align-justify">What customer problems do you solve and what needs do you meet?</li><li class="ql-align-justify">What are the products and services you put in place to accomplish this?</li><li class="ql-align-justify">What is the perceived customer value? (Usually this is not the same thing as a product or service’s technical specifications.)</li><li class="ql-align-justify">What value or benefit do you create for customers? How do you communicate it?</li><li class="ql-align-justify">How do your offerings differ from those of your competitors? What alternatives do customers have?</li><li class="ql-align-justify">Does your current business model meet your customers’ needs fully?</li></ul>

WHAT? (value proposition)

<ul><li class="ql-align-justify">How is the value proposition created?</li><li class="ql-align-justify">What key resources are behind your offerings and value proposition (e.g. physical, labour, financial resources, intellectual property)?</li><li class="ql-align-justify">What competencies and key activities do you need?</li><li class="ql-align-justify">Does your value chain make full use of your core competencies?</li><li class="ql-align-justify">Who are your most important partners? What is their relation to your business and what do they bring you?</li><li class="ql-align-justify">Who are your most important suppliers and what do they contribute?</li></ul>

HOW? (value chain)

<ul><li class="ql-align-justify">Why does the business model generate profits?</li><li class="ql-align-justify">What are your main sources of income?</li><li class="ql-align-justify">How is the income generated? What are customers willing to pay for?</li><li class="ql-align-justify">What are your main costs and the most significant cost drivers?</li><li class="ql-align-justify">What are the main financial risks in your current revenue model?</li></ul>

VALUE? (profit mechanism)

<ol><li class="ql-align-justify">Social media. </li><li class="ql-align-justify">Sharing community. </li><li class="ql-align-justify"> Freemium and add-ons. </li><li class="ql-align-justify">Digitally reloaded products. </li><li class="ql-align-justify">Integrated digital and physical experience.</li><li class="ql-align-justify">Big data.</li><li class="ql-align-justify">Gamification.</li><li class="ql-align-justify"> Digital identification.</li><li class="ql-align-justify"> Digital platforms.</li><li class="ql-align-justify">Peer-to-peer transactions and smart contracting.</li></ol>

Technology trends that have
triggered new business models

<ul><li class="ql-align-justify">Knowledge society : In mature societies, the basic needs are disproportionately highly satisfied. As a result, topics concerning the individual fulfilment of a person are becoming increasingly important.</li><li class="ql-align-justify">Networks and connectedness : The decline in transport and communication costs is bringing the world together as never before. The Internet, in particular, is giving our society an opportunity to discover itself in a new way.</li><li class="ql-align-justify">Centralisation: Urbanisation will continue at a faster pace, not only in the wealthy countries but the poorer ones too.</li></ul>

Business models that deliver the right
answer to social megatrends (1-3)

<ul><li class="ql-align-justify">Cocooning: In a globalised world, people are looking for a respite from hectic environments and closed societies.</li><li class="ql-align-justify">Resource shortages : The supply of resources will reach its limits – the current CO2 and global warming discussions are only the beginning.</li><li class="ql-align-justify">Pursuit for identity : In our pluralistic society, individuals will continue to seek uniqueness.</li></ul>

Business models that deliver the right
answer to social megatrends (4-6)

<ul><li class="ql-align-justify">Security : Natural catastrophes, terrorism and political uncertainties will continue to trigger the need for security.</li><li class="ql-align-justify">Self-administration : As a backlash to globalisation, in some areas decentralisation and local issues are gaining renewed importance and adherence.</li><li class="ql-align-justify">Demographic change: In contrast to the BRIC countries, the wealthy industrial nations are facing higher average ages and declining birth rates.</li></ul>

Business models that deliver the right
answer to social megatrends (7-9)

<ol><li class="ql-align-justify">Who are the relevant actors in your business model?</li><li class="ql-align-justify">What are their needs and what factors influence them?</li><li class="ql-align-justify">How have they changed over time?</li><li class="ql-align-justify">What does this imply for your business model?</li><li class="ql-align-justify">Will changes in the competitive environment create opportunities for a new business model? If so, which one(s)?</li></ol>

Checklist for actor and influencing factor analysis (Part 1)

<ol><li class="ql-align-justify">What, if any, significant business model innovations have occurred in your industry in the past? What were the catalysts of change?</li><li class="ql-align-justify">What technologies currently influence your business model</li><li class="ql-align-justify">How are technologies changing? What will technologies look like in three, five, seven or ten years?</li><li class="ql-align-justify">How are future technologies affecting your business model</li><li class="ql-align-justify">What trends in your ecosystem are relevant to you?</li><li class="ql-align-justify">How do these trends affect the various actors in your business model?</li><li class="ql-align-justify">Do they tend to amplify or minimise the weaknesses and strengths of your business model?</li></ol>

Checklist for actor and influencing factor analysis (Part 2)

Customers may wind up paying a hefty premium for extra features (VALUE), which may cover additional attributes, accompanying services, product extensions, or even individual customization of the product.They are free to choose whether they want to customize their product according to their individual preferences or prefer to disregard superfluous extras (WHAT).Customers may end up paying more for the final product than they would have for similar competing products because they chose additional optional features (WHAT).

Add-On: Additional Charge for Extras

The Add-On business model is especially well suited for hard-to-segment markets, where customer preferences often diverge vastly. Simply dividing products into different levels or versions is insufficient; and no optimal value proposition can be guaranteed for a large number of customers.The Add-On pattern can also work well in the B2B context, when multiple decision makers are involved. The Add-On pattern can be used to help certain technologies and accessories break through to the market. Often this requires add-ons to be cross-subsidised.

When and how to apply Add-On

<ul><li class="ql-align-justify">Can we provide a basic product to which customers can be price sensitive and then add on services?</li><li class="ql-align-justify">Can we lock our customers in so that they will buy the Add-On products from us?</li></ul>

Add-on. Some questions to ask

In the Affiliation business model, the company’s focus lies in supporting other parties to market products in order to benefit from successful transactions. With this, the company gains access to a diversified customer base without additional sales and marketing efforts. Affiliates usually operate on the basis of some form of pay-per-sale or pay-per-display system, and generally online.

Affiliation: Your success is my success

A strong ecosystem and passionate customers are a prerequisite for this pattern. Affiliation with partners enables companies to offer superior joint-value propositions. Affiliation works well because it generally leads to a win–win situation for all the parties involved. Merchants can drive traffic to their business and only incur costs once these efforts translate into actual sales. At the same time, the customers or other merchants who are funnelling the traffic are enticed by financial rewards. Choose Affiliation if you know what kinds of customers you want to attract.

When and how to apply Affiliation

<ul><li class="ql-align-justify">Can we capitalise on new customers and retain them in the long run?</li><li class="ql-align-justify">How do we choose the best possible partners for our affiliate network? </li><li class="ql-align-justify">What competencies can we offer our partners to create a superior joint value proposition?</li><li class="ql-align-justify">How can we create customer loyalty to our ecosystem?</li><li class="ql-align-justify">How do we handle backlash from customers if our partners do not deliver on their service?</li></ul>

Affiliation. Some questions to ask

Aikido refers to products or services that are radically different from the industry standard (WHAT?). In company terms, this means that it seeks to occupy a position that is diametrically opposed to that of its competitors, obviating the need for direct confrontation with them (VALUE?).Aikido principle is a form of differentiation, but a very provocative one. Differentiation factors that have been taken for granted in an industry are eliminated and completely new ones are created.

Aikido. Convert competitors’ strengths to
weaknesses

The Aikido pattern is very seductive, but it requires a lot of courage. If you want to use your competitors’ strengths to turn the business upside down, you really need to think outside the box. This pattern can work in any industry. You must be careful to heed any signs that you’re no longer on the right path. There might be some very good reasons why your competitors’ way of doing things is working so well for them. Market checks are always important, but when applying Aikido, they are crucial.

When and how to apply Aikido

<ul><li class="ql-align-justify">Do we have a lead customer who will follow us into the fray if we adopt the Aikido pattern?</li><li class="ql-align-justify">Is this lead customer representative of the target market, or so visionary that others are unlikely to follow suit?</li><li class="ql-align-justify">Can we overcome all the obstacles we meet in order to change the rules of the game?</li></ul>

Aikido. Some questions to ask

The Auction business model is based on the price of a product is not determined by the vendor alone, but buyers actively influence the final price of the goods. Finding a price starts with a potential buyer bidding a certain amount based on his/her willingness to pay. When the auction is over, the customer who has made the highest bid is committed to purchasing the product. The chief advantage is that they never have to spend more than they can afford or are willing to pay (WHAT?). The advantage for the vendor is that products can be allocated more efficiently across the market (VALUE?).

Auction. Going once, going twice... sold!

The Auction pattern’s allure and potential lie in its flexibility and vast possibilities for implementation. You can either offer your own products, or create a marketplace for sellers and buyers available to all sorts of products (think of eBay) or targeted towards niche products. In general, the Auction business model is highly scalable and can serve millions of users around the clock. These users invariably benefit from the network effect this scenario creates. The pattern works well if an auction creates more transparency for standardised products, such as C-parts or raw material.

When and how to apply Auction

<ul><li class="ql-align-justify">How can we achieve a unique selling proposition that will allow us to steal customers from the big established players, such as eBay and Alibaba?</li><li class="ql-align-justify">Can we generate high reach for market players?</li><li class="ql-align-justify">How do we maintain a competitive advantage in a highly competitive landscape?</li><li class="ql-align-justify">How can we ramp up the number of market players quickly and efficiently?</li><li class="ql-align-justify">How can we uphold our reputation and certify that transactions are completed correctly?</li></ul>

Auction. Some questions to ask

A strong business model is the bedrock to business success. But all too often we fail to adapt, clinging to outdated models that are no longer delivering the results we need. The brains behind The Business Model Navigator have discovered that just 55 business models are responsible for 90% of the world's most successful businesses. These 55 models – from the Add-On model used by Ryanair to the Subscription model used by Spotify – provide the blueprints you need to revolutionise your business and drive powerful change. As well as providing a practical framework for adapting and innovating your business model, this book also includes each of the 55 models in a quick-read format that covers:<ul> <li>What it is </li><li>Who invented it and who uses it now </li><li>When and how to apply it</li></ul> “An excellent toolkit for developing your business model.” Dr Heinz Derenbach, CEO, Bosch Software Innovations

entrepreneurship

Entrepreneurship

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Business

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Product & Design

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Software Engineering

Oliver Gassmann

Karolin Frankenberger

Michaela Csik

The Business Model Navigator

Invention is the precursor to innovation. Invention is the process of exploring a hypothesis or prototyping a new idea, while innovation translates an invention into a solution that is adopted at scale.

Don`t confuse invention with innovation

Without an effective innovation process, there is no innovation or new and improved product or service, no market adoption, no revenue or impact. It’s also important to understand that at any given time in your teams and organizations, many will be thinking that innovation is a new ‘thing’, while others will be thinking it’s a ‘process’.

Demystifying Innovation

<ul><li>Problem diagnosis skills: To effectively solve problems, you must first learn how to diagnose, define, and frame the right problems</li><li>Navigating complexity skills: Today’s and tomorrow’s leaders need to develop the ability to deal with complexity and ambiguity and learn to adapt to changing needs of customers, contexts and climates.</li><li>Communication skills: Those who have the willingness and courage to communicate their thoughts and ask more questions and solicit ideas from their team will prevail.</li><li>Innovation-readiness: Those who are open to new experiences, accept failure as pre-condition.</li></ul>

New and Evolved leadership skills

<ul><li>First stage: initiating a project based on a problem hypothesis, creating a project (design) brief, and developing a research plan to investigate the assumed problem.</li><li>Second stage: investigating and validating the needs associated with the problem hypothesis.</li><li>Third stage: integrate insights and ideas into prototypes, frame and reframe the problem to solve, and test prototypes with external and internal stakeholders.</li><li>Fourth stage: designing, testing and implementing final prototypes, and then designing and delivering a solution to the problem</li></ul>

Four stages of Design-driven innovation

<ol><li>Strategic Design: design principles and practices to guide strategy development and implementation towards innovative outcomes. </li><li>Business Model Design: designing or redesigning of an organization’s or division’s business model to create value and prosper.</li><li>Employee Experience Design (EXD): design methods to designing programmes and experiences that employees desire. </li><li>Service Design: design principles and methods to service planning, development and implementation.</li><li>Customer Experience Design (CXD): marketing principles and design methods to designing product/service experiences</li></ol>

Business Design practices

<ul><li>What are we designing? (R&D, Sales, Marketing, HR, Management and Finance)</li><li>Who are we designing for? (Marketing and HR=customer facing)</li><li>Why are we designing? (Strategy and CEO)</li><li>How will we design it? (Production/Operations and Finance)</li><li>How will we know if we succeeded? (Management and Finance)</li></ul>

Examples of design-as-process activities

<ul><li>Product/Service: changing what you do or offer (e.g. mobile phone, OXO Company - Good Grip series)</li><li>Position/Market: changing who consumes it (e.g. new user)</li><li>Process: changing how you do it (e.g. Lean, Six Sigma, etc.)</li><li>Paradigm: changing why it matters and what value it creates (e.g. platform (iTunes) and organizational culture (fat or decentralized)</li></ul>

Four basic types of designed business innovations

If you strip away the perceived complexities and barriers from over-engineered internal systems and fear of failure, innovation is fundamentally a communication process.It concerns most people and their social systems intersecting with technological infrastructures and economic forces, to make decisions on the design and development and adoption of new ideas.

Innovation as communication process

Design-driven innovation demands an exploratory and combinatory mindset, one that blends critical thinking with strategic thinking, and curiosity and empathy with analysis and creative synthesis. The design mindset generates the seeing of unarticulated needs and patterns, and that triggers ideas and models for improvement that may be sketched or developed.

Human-Centred Design Mindsets

Innovativeness is the capacity and willingness to actively participate in the learning activities of the innovation process. It’s like a journey. It involves thinking (head), doing (hands/body) and refecting (soul). Innovativeness as a learned trait is an important indicator of one’s level of innovation-readiness and innovative capacity. It is mindset-dependent, but transcends roles, functions and job titles.

 Innovativeness

<ul><li>Communication skills: first listen and observe, and then speak, write, and interact effectively with others.</li><li>Perspective-taking skills: take on someone else's point of view when thinking and acting.</li><li>Analytical and critical thinking: analyze (processing data and facts into information), evaluate (questioning bias and interpretation), and conclude (converging on a decision or statement).</li><li>Strategic thinking: analyze critical factors and macro variables, and to synthesize information into an intent or vision for a course of action.</li><li>Creative problem-solving: think creatively about a problem</li></ul>

The key competencies associated with a design mindset and innovativeness

Human-centered design efforts require that all participants engage explicitly in divergent and convergent thinking practice. Divergent thinking involves generating many ideas or choices. Convergent thinking involves narrowing or choosing a single idea or choice.Divergent thinking spans creative, generative and imaginative thinking modes, while convergent thinking spans analytical, critical and logical thinking modes.When combined, these thinking modes help flex your mental muscles and push individual and team-based boundaries towards design-driven mindsets and innovative capacity-building.

Divergent and Convergent thinking practice

Successful projects result from effective communication, enabled by a well-articulated project brief. A brief is a document that outlines key information, a plan, and a process relating to a project. A clear brief aligns team members and stakeholders, reduces confining objectives, and enables strategic decision-making. Innovation instructors create challenge briefs. To facilitate an effective project-based learning experience, a business challenge brief is used. The challenge brief outlines an open-ended driving question or business challenge that invites investigation and resolution.

Challenge briefs

<ul><li>Problem hypothesis: summarizes a situational or contextual analysis of the proposed problem and target end-user population. </li><li>Stakeholder map: key individuals or groups that have a stake in, directly influence, or are impacted by the assumed problem.</li><li>Stakeholder motivations: the goal-oriented drivers behind human decision-making and action</li><li>Target end-user population: a group that shares similar characteristics and is an intended audience for product, service, or process design research.</li><li>Project team schedule: who will lead which task on which day and over what timeframe.</li><li>References and sources</li></ul>

Key elements of innovation design brief

<ul><li>Problem hypothesis: </li></ul>What problem(s) are you trying to solve? (as a problem hypothesis)? What customer problem(s) are you trying to address? (as needs)?<ul><li>Stakeholder map:</li></ul>Who is most interested in solving this problem? Who is most influential in solving this problem?<ul><li>Stakeholder motivations: </li></ul>Why does this problem matter? What is the internal stakeholder motivation to start the project and solve the problem? What is the external stakeholder motivation to resolve the need?

Guiding Questions (part 1)

<ul><li>Target end-user population:</li></ul>Who is our intended customer/end-user for this problem/challenge? Why do they buy? Where are they located?<ul><li>Project team schedule:</li></ul> Who will participate in the innovation project? What is the timeline? Provide details of team members and associated tasks, activities (be feasible and realistic).

Guiding Questions (part 2)

<ul><li>Aim: to generate confrmatory insight from structured datasets</li><li>Deductive methods: survey, questionnaire, poll and lab experiment</li><li>Inquiry: seeks to answer tangible ‘what is’ or ‘what was’ queries: e.g. ‘how much’, ‘how many’, ‘where’ and ‘when’</li><li>Value: numbers-driven decision-making</li><li>Output: transactional data patterns, statistics and broad segment-level trends.</li></ul>

Quantitative research

<ul><li>Aim: to generate exploratory insight from unstructured datasets</li><li>Abductive methods: interview, focus group and observational or feld research</li><li>Inquiry: seeks to answer narrative ‘what, how and why’ or ‘what if’ queries below ‘where’ and ‘when’</li><li>Value: needs-driven decision-making</li><li>Output: narrative data patterns, latent needs and niche population-based insights</li></ul>

Qualitative research

Primary research involves direct engagement with the intended end-user or research subject population. (observation, interviews, focus groups, online chat rooms, questionnaires and surveys)Secondary research involves reviewing and analyzing information from primary research activities. (document analysis of print or digital media reports, whitepapers, and industry reports)Tertiary research involves referencing or citing summaries of completed analyses sourced from third-party primary and secondary research. (industry reports, mass media published articles, Wikipedia, etc)

Qualitative research data is often referred to as unstructured, narrative, or ‘thick description’ data

Thick data complements the more popular ‘big data’ (collected from large data samples), and when combined, they offer a complete view of the problem space in terms of what it is, how it occurs, and why it exists.For organizations, big data offers quantifiable evidence from a broad sample size for informed decision-making. Alternatively, thick data offers qualitative evidence from a very small sample size, shifting the dataset from scale (macro trend) to uniqueness of experience (micro meaning) based on human motivations and choices.

Big Data with Thick Data

<ul><li>Big data is a combination of structured and semi-structured data collected by organizations that can be mined for information, machine learning, and predictive modeling.</li><li>Big data draws broad patterns from massive amounts of data from large end-user or customer samples</li><li>Big data is used for informed decision-making to improve operations, customer service, marketing campaigns, generate revenue models, and proft-oriented strategies</li><li>Big data aims to answer ‘what’ happened or happens based on transactional events</li></ul>

Big data

<ul><li>Thick data is unstructured data in the form of thick description or narratives, that is mined for insights on human behaviour</li><li>Thick data draws deep human-centred patterns from small end-user or customer samples</li><li>Thick data is used for insightful decision-making to better understand people, their contexts, motivations and behaviour, and to design desirable products, services and impactful strategies</li><li>Thick data aims to answer the ‘why’ behind what consumers do or think</li></ul>

Thick data

Aim: to generate information from quantifying patterns; to identify expected behavior; and validate problem hypothesis (prescriptive)Methods: survey; questionnaire; focus group; interviews (scripted, closed)Output: seeks to answer the ‘what’ from a research questionValue: data-driven decision-makingExample: Net Promoter Score (customer recommendation)

Needs analysis

Aim: to generate meaning from stories, collect data (natural language), discover patterns of meaning and behavior, and develop insights (iterative)Methods: observational research and empathy interviews (guided, open-ended)Output: seeks to answer the ‘what, how and why’ of a research questionValue: insight-driven decision-makingExample: Latent Need Discovery (customer pain points)

Need finding

<ul><li>Observations: Both ‘facts’ and ‘interpretations’. Facts describe a situation or object as explicitly seen or heard. Interpretations describe a situation that is judged based on tacit knowledge of a similar context.</li><li>Findings: ‘Summarized facts’ that propose common meanings or themes refecting the facts, based on patterns and/or bias.</li><li>Insights: Synthesized interpretations of the facts, findings, and patterns refecting a deeper understanding of the people and situation or context</li></ul>

Need finding research (and analysis) aims to generate

An observation as fact is information that is observed to be true. Facts are verifable data that we all see and which can be quantifed. For example, we can verify that a smartphone is rectangular-shaped, broccoli is a source of iron, or that 600,000 people attended an event.

Observation as fact

An observation can also be an interpretation, a source of narrative data based on personal beliefs or prior experience.For example, we believe that broccoli is a healthy food choice, or that we attended the biggest event of the year

Observation as interpretation

Qualitative data can be verified through quantifiable measures, such as noting repeating patterns of similar behaviour within a context.For example, many people choose to add broccoli to their meal for its taste as well as for its added nutrients.And you may conclude the concert you’re at is well attended based on scanning the venue, the long lineups to the bathroom, and the merchandise being sold out.

Qualitative data can be verified through quantifiable measures

Lean Research plan: outlines the design research efforts necessary to discover the needs lurking below the surface problem. Prompts: How will you investigate the problem or user need? Where will you observe and interview your target customer/end-user in your research?Research Methods, Objectives and Outputs: outlines the desk and qualitative research methods that will be used to investigate the problem space to discover needs. Each method will have an objective and an expressed output.

Creating a Lean Field Research Plan

Place: Find a comfortable spot that allows for observation from a distance. With a notebook in hand, write notes on how people arrive and leave. If possible, use a camera or smart phone to capture objects and specifc locations.People: Observe with fresh eyes. Take notes on what you see (as facts), and what you interpret (as interpretations). If possible, use a camera or smartphone to take images.Patterns: While observing and taking notes and photos, look for patterns of behaviour shared across different types of people, objects and/or specifc locations.

Preparing for Field-Based Research

People: the demographics, roles, behavioural traits, and quantity of people in the selected environment.Objects: the items people are interacting with, including furniture, devices, machines, appliances, tools, etc.Environments: the visual observations about the place and space (i.e. architecture), lighting, furniture, temperature, atmosphere, etc.Messages: the words and language overheard, and the environmental messages or signage.Services: the organization’s offers (as services) which the target population is interacting with, within the selected feld study context.

POEMS framework

<ul><li>A need is something that is necessary; a critical tension with a present state</li><li>Need owners focus on the present state, since it is something that is essential or very important; wanted or required</li><li>A need requires immediate action, since it demands satisfaction or resolution</li><li>Needs can be diffcult to detect. Unlike a problem, a need is something that may kill you if you don’t address it. For example, protecting your bare feet in the snow to avoid frostbite is a need</li></ul>

Needs

<ul><li>A problem is an issue; a tension between the present, and a desired future state</li><li>Problem owners focus on the desired state since it involves resolving issues associated with goals, values and preferences</li><li>A problem may or may not be solved, based on priorities and the type of unsatisfed needs</li><li>A problem is surfaced as something that costs time, money or energy. The solution must be an improvement over simply living with the problem. For example, a problem is that you want new boots for use in the snow</li></ul>

Problems

Sift through observed facts: Take time individually to sift through your own data and highlight some key observations as facts. . Identify each key fact as one datum and add to a data sorting board (e.g. physical or digital whiteboard).   ‘I enjoy grocery shopping as an escape from the busy household’Sift through interpreted facts: Sift individually through the interpreted facts, which are also called assumptions. These usually combine one’s personal experience or tacit knowledge of what was seen or heard, and are important contributions to the data set.

Data Sorting: Sift, Sort and Label (Step 1/3)

<ol><li>Sort both observed and interpreted facts: Sorting involves moving the key data points into thematic groups based on themes and/or patterns that are observed individually and as a team.</li><li>Label facts into themes: Labelling involves questioning each theme or pattern that you have surfaced and sorted, which are supported by both facts and interpretations.</li></ol>

Data Sorting: Sift, Sort and Label (Step 2-3/3)

<ul><li>We observed that some customers combine their food shopping with personal ‘me time’.</li><li>We learned that some customers view the grocery store as an escape from their daily routine, where they can spend time listening to their favourite playlist or podcast, while also getting food for their family.</li><li>We infer that remote working grocery shoppers need an escape from their busy lives, and want an experience that combines a mini getaway with practical meal planning.</li></ul>

Вraw insight from your investigation efforts (Example)

Once the teams have generated a few problem statements, each member should vote on one problem statement that best refects the needs discovered from the data analysis process.It’s recommended that teams employ the technique of dotmocracy, where each member of the team has two votes. Each member selects their top two statements. The statement with the most votes is selected and proceeds to a round of peer or stakeholder feedback.

Setting up the feedback loop for the problem statements.

Framing is the process of defining an issue, problem, or context that influences how it’s perceived and evaluated.Framing is important in explaining or making sense of an issue, context, or problem and is influenced by personal narratives and conceptual metaphors.This framing effect is a well-researched cognitive bias in decision-making, and its effectiveness depends heavily on how the issue, problem, or question is presented.

What is Framing?

How we frame the question is critical in solving problems that seek divergent, novel and innovative solutions.The most effective way to overcome this cognitive bias is to frame the question or problem differently and seek out individuals with different perspectives. This strategy is all about reframing, a process of identifying and then changing the way an issue, problem or situation is viewed. The reframing effect enables biases and perceptions to be challenged and potentially changed.

“Business Design is like therapy for your business”— Starbucks executive

This textbook aims to guide, instruct and inspire the next generation of innovation designers, managers and leaders. Building upon an evidence-based innovation development process, it introduces, explains and provides visual models and case examples of what Business Design is, how it is applied across sectors and organizations, and its impact on decision-making and value creation. Students will read and analyze design-led innovation business cases from across the globe, discover multi-disciplinary strategies (from marketing to anthropology) and practice applying a designer’s toolkit to find, frame, and solve business problems in contemporary ways. Throughout the book, students will break down the process of innovation and move from initiation to implementation, engage in iterative feedback loops, and develop concrete plans for personal and professional collaboration and workplace application. For MBA and senior undergraduate students, this book offers a step-by-step and comprehensive reference guide to creative problem framing and solving – inside and beyond the classroom. It integrates marketing principles and management frameworks, with anthropological and design methods reflecting the diverse and in-demand skills vital to tomorrow’s workforce. For instructors, this book offers a way to confidently engage learners in the realm of design practices and strategies relevant to business decision-making. The pedagogical framework, along with a comprehensive suite of techniques and templates, offers both novice and experienced teachers a step-by-step reference guide that facilitates skills development in creative problem framing and solving.

Angèle M. Beausoleil

Business Design Thinking and Doing

<ol><li class="ql-align-justify">Weaknesses of style, and it is notoriously difficult for a person who has completed the formal part of his education to change his writing style.</li><li class="ql-align-justify">Structure of the document: If a person's writing is unclear, it is most likely because the ordering of the ideas conflicts with the capability of a reader's mind to process them.</li></ol>

The reasons why most people fail to write clearly

There is a limit to the number of ideas you can comprehend at any one time.The mind cannot hold more than about seven items in its short-term memory at any one time. Some minds can hold as many as nine items, while others can hold only five. A convenient number is three, but of course the easiest number is one.

The Magical Number Seven

All mental processes (e.g., thinking, remembering, and problem solving) apparently utilize this grouping and summarizing process, so that the information in a person's mind might be thought of as being organized into one giant conglomeration of related pyramids.If you think about communicating to that mind, you can see that the problem is ensuring that what you say will fit somewhere into the existing pyramids.

The Need to State the Logic

The vertical relationship serves marvelously to help capture the reader's attention. It permits you to set up a question/answer dialogue that will pull him with great interest through your reasoning.What you put into each box in the pyranmid structure is an idea. An idea is a statement that raises a question in the reader's mind because you are telling him something he does not know.The way to ensure total reader attention, therefore, is to refrain from raising any questions in the reader's n1ind before you are ready to answer then1.

The Vertical Relationship

Fill in the top box1. What Subject are you discussing?2. What Question are you answering in the reader's mind about the Subject"?3 What is the Answer? Match the Answer to the introduction4. What is the Situation?5. What is the Complication?2. Do the Ouestion and Answer still fol!ow? Find the key line6. What New Ouestion is raised by the Answer·"?7. Will you answer it deductively or inductively?7. If inductively, what is your plural noun? Structure the support points8. Repeat the Question/Answer process at this levei.

The Top-Down Approach

You can work out the ideas from the bottom up by following a 3-step process.1. List all the points you think you want to make.2. Work out the relationships between them.3. Draw conclusions.

The Bottom-Up Approach

The key characteristic of all opening Situation sentences is that they anchor you in a specific time and place, and thus establish the base for a story to come. You begin writing the Situation by making a statement about the subject with which you know the reader will agree, because you are telling him something that he knows to be, or will accept as, true. If you find you don't want to begin by making a statement about the subject, then either you have the wrong subject, or you're starting in the wrong place to discuss it.

Where Do You Start the Situation?

Using the previously established truth about the subject as its starting point, the Complication goes on to tell what happened next in the story that inevitably leads to a Question.<ul><li class="ql-align-justify">Have a task to perform - Something stops us from performing that task - What should we do?</li><li class="ql-align-justify">Have a problem - Know the solution - How do we implement the solution?</li><li class="ql-align-justify">Have a problem - A solution has been suggested - Is it the right solution? </li><li class="ql-align-justify">Took an action - Action didn't work - Why not? </li></ul>

What's a Complication?

Part 1: The pyramid principle: logic in writing -- 1. Why a pyramid structure? -- 2. The substructures within the pyramid -- 3. How to build a pyramid structure -- 4. Fine points of introductions -- 5. Deduction and induction: the difference -- 6. How to highlight the structure -- Part 2: The pyramid principle: logic in thinking -- 7. Questioning the order of a grouping -- 8. Questioning the problem-solving process -- 9. Questioning the summary statement -- 10. Putting it into readable words.

personaldevelopment

Personal Development

writing

Reading & Writing

Barbara Minto

The Pyramid Principle

A service, simply put, is simply something that helps someone to do something. The parts of a service might be provided by a number of different organisations but, to a user, a service is one continuous set of actions towards that end goal, regardless of who is providing it.

What is a service?

The only person who gets to decide what the service is, is the person who has the goal they need to achieve – and that’s your user. It’s your job to orchestrate all of the pieces of this service in as seamless a journey as possible, even if you don’t provide the whole service yourself.

Orchestration of service

The service must be able to be found by a user with no prior knowledge of the task they set out to do. For example, someone who wants to ‘learn to drive’ must be able to find their way to ‘get a driving licence’ as part of that service unaided.

Principle 1. A good service is easy to find

Where your user starts will depend on how much they’re already aware of what services might be available to meet their needs. Your job is to make sure that they can get from this goal to the service you provide, without having to resort to support.

Good services are verbs. Bad services are nouns

Without understanding what our users are trying to achieve, and reinterpreting our services in language that our users can understand, we often place users in a situation where, to find something, they need to know exactly what they’re looking for.The less you know about the situation you’re in, the support available to you or what you should do, the harder you will find this search. Needless to say, even the most patient people wilt at the prospect of this almost impossible task.

Understanding what users trying to achieve

Rather than using the words your organisation uses to describe the tasks it has completed, try to find out some of the words your user would use to describe what they’re trying to achieve.<ol><li>Avoid legal or technical language</li><li>Describe a task, not a technology</li><li>Don’t use acronyms</li></ol>

Nouns are for experts. Verbs are for everyone

The purpose of the service must be clear to users at the start of using the service. That means a user with no prior knowledge must understand what the service will do for them and how it will work.

Principle 2. A good service clearly explains its purpose

Purpose of your service =what your service does +why it does it +how it does it +who it’s for

Purpose of your service

Clearly express what the service tangibly does for your user. Be factual, avoid marketing promises. Stick to the functionality.What outcome will it achieve for the user?

What does the service do?

Sometimes how your service works is almost as important as what it does.Who is able to use it?How is it paid for?Is it a subscription or a one-off purchase?How quickly can you do the thing you’re offering?What is it about the way your service works that makes it quicker or more convenient for your users than any other?Are there any other benefits to your service besides basic convenience?Is your service sustainable or funded/made in a way that benefits society at large?

How does the service work?

This will probably be obvious to your user if you express what the service does and how it does it well enough, but you’ll also need to explain that it’s not possible to use the service to users who aren’t eligible or suitable for the service so that they can be moved out of the journey as soon as possible.

Who is the service for?

Possibly the most crucial of all: make sure you explain to your users why your service exists and what outcome it will achieve, both personally for the user and for society.Clearly communicate this to users – through things like the service name, description and even the interface of how it works.

Why does the service exist?

A good service must clearly explain what is needed from the user to complete the service and what that user can expect from the service provider in return. This includes things like how long something will take to complete, how much it will cost or if there are restrictions on the types of people who can use the service.How long something will take to complete, how much it will cost, whether they will be contacted and what else they might need to do after using your service are all things that a user needs to know to make a decision about whether or not to use your service.

Principle 3. A good service sets the expectations a user has of it

Whether that effect is big or small, knowing what to expect helps people to plan and take control of their situation. It gives them power – and in some cases the ability to make another choice if what you’re offering isn’t going to work for them.Most people base their expectations on past experiences, so if another company in another country has done something, the likelihood is someone is going to expect the same of you at some point.

Tell users what to expect

Universal expectations. These are the things about your service that are fundamental to what you’re delivering and are universal to almost all users because other similar services work in the same way.Assumed expectations. When someone doesn’t know what to expect, then an assumption usually takes its place. These are usually assumptions that are easier or more convenient for the user. Outlier expectations. These are the things that only some users might expect, based on a previous experience of a similar service elsewhere, and can very often be based on a better experience a user have had.

Three types of expectation

You won’t need to explain universal expectations to users when they sign up to your service. You will need to monitor these closely, though, because if any universal expectations aren’t met at any point, they will have the most severe effect on your user.Assumed expectations are  the things that are the most important to explain upfront to your users, because although they’re obvious to you, they won’t be to your users unless they’re experts.Outlier expectations. You won’t need to consider them in your service now, but you do need to watch out in the future.

How to ‘manage’ expectations

Services in the internet age are not only defined by the user who’s looking for them but composed of ‘small pieces loosely joined’

Service design is a rapidly growing area of interest in design and business management. There are a lot of books on how to get started, but this is the first book that describes what a "good" service is and how to design one. This book lays out the essential principles for building services that work well for users. Demystifying what we mean by a "good" and "bad" service and describing the common elements within all services that mean they either work for users or don't. A practical book for practitioners and non-practitioners alike interested in better service delivery, this book is the definitive new guide to designing services that work for users.

The Business Model Navigator

Business Design Thinking and Doing

The Pyramid Principle

Good Services

Building Software Platforms. A guide to SaaS transition with AWS

Hanna Serednytska