Posts Tagged ‘business model innovation’

Design Thinking, Divergent Thinking

Friday, October 10th, 2008

I have been wanting to post about the recent piece in the New York Times. It’s a brief article, but quickly gets to the heart of something seemingly being discussed everywhere for the last couple of years, the concept of design thinking. Reading the article made me recall the image above, which is a quick sketch done by Charles Eames to visually help him to explain design, and that was shown in the 1969 Louvre Show, “What is Design.” I like that we are still investigating what this means nearly thirty forty years later (1969 is my birth year, I was in denial…).

In the article I was excited to see Tim Brown of IDEO bring up the relationship between design thinking and divergence. He goes into more detail on design thinking as one of many approaches to problem solving, to business, on his own blog, which is aptly titled . This is what we are talking about, after all, and this is from where the value for business in design thinking emanates, this idea of divergence or divergent thinking. I was discussing this with a friend of mine who is an architect, and he proclaimed that this is how architects have been talking for awhile. Oh, really? Talking, probably, but acting on… not so much. In the article Brown goes on to say:

“Most business processes are about making choices from a set of existing alternatives. Clearly, if all your competition is doing the same, then differentiation is tough. In order to innovate, we have to have new alternatives and new solutions to problems, and that is what design can do.”

This, however, is not what you are seeing in the business of architecture. Nor have you seen this for a very, very long time. Sure, there are architects who embody this approach to their business and some of them are very, very successful. But as an industry, as a group, this hardly applies to the way that architects think. We have hardly seen the business model of architecture, or its approach to design, change in any significant way for decades, other than to see its influence in building culture be consistently reduced by other, smarter, more aggresive industries. The truth hurts, but this is where the opportunity for architecture clearly lies, on putting action to his words and actually applying divergent thinking to the architecture business model and making a determined effort to focus on innovation.

This post is a milestone for schneiderism, it being the 300th post since launch in July of 2007.

Business Model Thinking

Sunday, July 6th, 2008

There are several components of varying complexity that make up any business. It is the quality of these components, and their unique combination (hopefully), that provide businesses with a competitive advantage in the marketplace. From the investment side, understanding the quality of an enterprise is very much tied to understanding the business model of that enterprise, and how it contrasts to its competitors - what advantages that business model creates for the business in the marketplace, and how those advantages will scale over time. Additionally, there is tremendous value in understanding at a deep level that the framework of a given business model gives an edge as companies survey the competitive landscape for strategic risk, and the opportunities inherent to that risk. It is common for businesses to take a very haphazard approach to analyzing, understanding, and building the foundation of their own business model, it is also common for businesses to miss the opportunity of conducting the same analysis of their competitors. This oversight with regards to understanding their own context in the marketplace is most likely due to myth of complexity as it relates to “putting the pieces together” and taking a hard look at the constituent components of the business in question.

I was excited to find the slideshow above, and the , by . Alex has put forth a model for analyzing, understanding, designing, and contrasting business models that is easy, straightforward, and, I believe, incredibly valuable. He provides detail for what actually makes up a business model . There is a lot of writing in business pubs right now about business model reinvention and business model innovation due to the nature of the economy and the competitive environment of different industries. This is all good, but often what is missing are the practical matters of creating an effective baseline from which to engage in exercises and experiments into innovation and reinvention. I believe that Alex succinctly provides us the tools for creating this baseline in a way that is quickly revealing of problems and opportunities, and tied to creating understanding.

Take a moment to review the slideshow and then read Alex’s at his blog Business Model Design and Innovation.