Good Business Design is Good Business

In 1972, the former CEO of IBM, John Watson, Jr., famously said “Good design is good business.” While this adage continues to ring true—as validated by companies such as Apple, Starbucks, and Disney—we believe that it’s time to add a new twist. Good business design is good business. We have found that bringing a design thinking mindset to business transformation combats three recurring obstacles to the success of the transformation: lack of shared vision, myopic framing of transformation opportunities, and scarce organizational buy-in and adoption. In this blog, we’ll explore how you can apply a design thinking-led approach to address these obstacles.

Obstacle 1: Lack of shared vision and anticipated business outcomes

The challenge: How does your vision translate to value for customers?

Successful transformations begin with strong visions. Strong visions paint a picture of the better future we are trying to achieve (where we are going), indicate how the organization will serve customers differently (how we will create value), and provide guidelines for employee actions (how we will get there together).

We often ask our clients to depict—with words or drawings—how their vision will manifest itself for their customers. The simple act of asking a group of senior leaders to draw the future state that they want to create for their customers can be extremely powerful. It can quickly surface misalignment and drive powerful conversations about which customers the organization is (or should be) serving and what capabilities are necessary to deliver the vision. When we draw, we not only engage different parts of our brain, but it taps into our innate storytelling instincts—complete with actors, action, and results. When the stories that senior leaders tell don’t feel complimentary or don’t fit into a larger shared narrative, then we know more work is needed.

By anchoring on desired customer outcomes, we drive powerful conversations about customer groups, their needs, and our ability to show up in new value-creating ways. Leaders who have worked through this activity have admitted they interpret their vision differently when they dissect it through the perspective of their customers. Often, this realization inspires them to rethink or refine their vision.

Obstacle 2: Myopic framing of transformation opportunities

The challenge: How could you organize your capabilities to deliver your customer value promise?

Vision should determine strategy. Strategy should determine structure. Structure should determine data and technology—not the other way around. Often, organizations seek to achieve a new vision with new technology, but with an old structure. Organizations at the beginning of a transformation need to spend time understanding if their current structure will enable them to achieve their vision and unlock new transformative value. Many businesses have legacy P&L structures aligned to product lines or acquisitions. Transformation design questions the validity of those structures and seeks to understand how new value can be unlocked with different structures.

In the design thinking approach, there is an intentional cadence of divergent and convergent thinking. You diverge to identify possibilities and alternatives. You converge to identify what is feasible, desirable, and viable. Lack of divergence constrains your range of options and may lead you to the most obvious or incremental answer. As part of our design approach to transformation, we challenge senior leaders to construct multiple operating models optimized for different strategic imperatives. For example, how would your organization look if your future value proposition were focused solely on speed? How about if it focused only on quality, innovation, or cost leadership? Polarizing the organization brings new ways of structuring and running the business to light. Of course, not all are feasible (or profitable), but the divergent process uncovers hypotheses for value creation that haven’t previously been identified.

Obstacle 3: Scarce organizational buy-in and adoption

The challenge: How will you engage your teams to lead the transformation?

Transformations are uncomfortable. They expose weaknesses and complex problems. Leaders may be tempted to define the solutions in isolation, map out all the details, and then simply present them out to their organization. Instead, we urge you to do the opposite. Engage employees at all levels of the organization in the co-creation process. Not only will this give them more ownership in the solution, they might have new or better knowledge and ideas that could make the solution stronger.

An approach that works beautifully for involving key stakeholders is to infuse core agile principles into the way you lead the transformation. To do this, we typically recommend running sprints that are two or three weeks long.

  • Sprint one: Discovery and current state – we uncover key customer themes, stakeholder insights, and current state operating models to look at the organization through different lenses.
  • Sprint two: Explore – we diverge and take leadership through multiple operating model alternatives and prototypes and converge on the desired state.
  • Sprint three: Test – we test hypotheses generated in the second sprint for value with smaller cross-functional tiger teams.

During each sprint, hold daily stand-ups and targeted work sessions. Sprints typically culminate in a cross-functional workshop that includes key senior leaders. They conclude with a retrospective and planning for the next sprint. This way of working lends itself well to transformation design because it prioritizes directional value over exact value and continuously pushes leaders to involve their teams in shaping transformation initiatives.

Transformation presents an opportunity to fundamentally rethink how a business or a function delivers value to its customers. A design-led approach enables targeted exploration that leads to new value creation opportunities and establishes early alignment, buy-in, and collaboration. If you are struggling with transformation or thinking about kicking off a new effort, consider your approach and ask how a design-led approach may unlock new opportunities for your organization.