It is time to take a look at the report card of our design for business organization, management and strategy. After half a century of quality movement, brand management, marketing and category management, globalization, customer service automation and organizational design fine-tuning, we should have a pretty good of idea of what is working and what is not. As a result of all sub-optimization efforts over past decades, we begin to see the impact on the whole system.
The idea is that optimizing the outcome for a subsystem will in general not optimize the outcome for the system as a whole. Some products, brands, businesses are better at the expense of other things. This intrinsic difficulty may degenerate into the “tragedy of the commons”: the exhaustion of shared resources because of competition between the subsystems. This is exactly what had been happening in different business units and functions including product design, marketing, operations and sales/channel management. The principle of sub-optimization states that sub-optimization in general does not lead to global optimization, and as whole businesses and societies are far worse. Here comes Design Thinking.
Design Thinking allows us to to rethink, re-imagine and reset the game. I am not saying every company needs to make radical changes in its core business itself, and a lot of instances the case for change becomes desperately obvious – as in the case of Blockbuster, it came too late.
Business model redesign is driven by of strategic innovation (to play a new game). This means complete or partial transformation—of the organization, its core offerings, structure, systems, culture and capabilities—to create, deliver and capture value at the new way not in a sub-systems level.
Business model transformation may include a strategic decisions to move up-market or down-market or sideways along the value chain or shift from products to services or solutions when the pace of commoditization continues to accelerate or the industry boundaries is opening up for new entrants. The idea is to apply visual sense making as part of the Design Thinking tool kit to re-imagine new value ecosystem and value chain reconfigurations.
Visual thinking can play a very vital part in the business design process. The key to successfully design a capital-efficient business model is to visually identifying assets, risks, and cash flows by their distinct risk characteristics and then visually modeling them and retaining only those that are central to how a company creates value.
Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.