A business model is essentially a business identity and a fundamental question in every canvas is on ‘who is going to be your paying customer’. Internally, organizations need to ask this question at different phases in regular intervals and interestingly, the answers vary each time. We make lot of assumptions about our customers and why they pay to consume our products and services. The underlying assumptions are a subject for continuous ratification and organizations become stagnant when they resist any changes to the assumptions.
Though there are many tools that aid in validating your assumptions on your customers, I strongly feel that design thinking is a simple and most efficient tool. Incorporating the concept of design thinking in every organizational process will help in orienting your strategy by identifying your customer and it also answers the question of why they are paying for your products/services. Design thinking revolves around the fundamental concept of customer centric strategy and continuous validation and correction of the assumptions.
1) Design thinking starts with Empathy which implies you are learning about your end customer and you think from their shoes on their real pain point and what matters to them.
2) Once you know about who they are, what they need and whether they are ready to consume to address those needs, you Define a point of view that is based on user needs and insights.
3) The rest of the phases in design thinking – Ideate -> Prototype -> Test is built on a customer centric foundation and that drives your organization around customer related experience.
As a real time case, at OptiSol, we incorporated this customer centric approach via our Prototype2Build (P2B) strategy where we help our clients by asking questions about their customers, the assumptions around their perceived needs and point of view. We build prototypes based on that and let them validate before getting into actual development. The empathy and ideation phase helps our clients in understanding their revenue generation options and the real theory behind the existence of their business.
Though Peter Drucker has highlighted this in his HBR article in 1994, it still stands true testing times:
“Every organization, whether a business or not, has a theory of the business. Indeed, a valid theory that is clear, consistent, and focused is extraordinarily powerful.”
In the modern times, this theory of business has to be customer centric and their experience with organization. It needs to be validated at regular intervals and Design thinking will be the best approach to accomplish this via an organization wide orientation.