Human-Centred Design & the Business Model Canvas

What’s the best way to show how Human-Centred Design (aka Design Thinking)
methods could be applied to the Business Model Canvas?
First, I looked at whether certain HCD methods could be spatially mapped onto the
canvas.

by the LUMA Institute
https://www.luma-institute.com/
As there are hundreds of HCD methods, I looked at the subset of methods that the LUMA
Institute included in its framework, which has edited the world of design thinking
methods into 36 of the most useful ones, organised into 3 top-level categories: Looking,
Understanding, and Making.

I used the 1-page Business Model Canvas from Alexander Osterwalder and Yves Pigneur’s
book on Business Model Generation, which organised the 9 elements comprising a
business model into a 1-page canvas showing relationships between the elements (Value
Proposition, Customers, Customer Relationships, Channels, Revenue Streams, Key
Activities, Key Resources, Key Partners, and Costs).
by Osterwalder and Pigneur
http://businessmodelgeneration.com/canvas/bmc

Then I tried to see whether the HCD methods could be mapped onto the canvas….

The LUMA HCD taxonomy is meant to be more like a periodic table of elements -
some elements combine nicely with other elements to give you a useful compound.
Thus if you try to map an element on its own, it’s not particularly useful because you
lose sight of the relationships among the methods and the value of the ‘output’ or
objective you’re trying to achieve by using the methods in combination. That's why
it’s best to arrange the methods into method sets that can be applied to a particular
problem or situation.

But what challenge can we apply on the Business Model Canvas?
What about applying the methods to tackle challenges within a specific building block
of the BMC, such as the Customer Segment?
According to Osterwalder and Pigneur understanding customers is critical because it
informs choices we'll make on the Value Proposition, Channel, Customer Relationship
and Revenue Streams.

Thus, the challenge I focused on was understanding the customer
perspective in order to inform choices about Value Propositions, Channels,
Customer Relationships and Revenue Streams.

To tackle this challenge, I selected a number of HCD methods and arranged them
in a sample sequence, organised by 4 top level objectives:
• Identify Customer Segments
• Under their Needs
• Analyse & Humanise
• Prioritise

First, we need to identify the (right) Customer Segments.

Stakeholder Mapping is a method for diagramming the network of people who
have influence on, or are affected by, a product, service or system. It’s a great tool
for visualising the different roles and relationships within a system (e.g., a project,
a programme of work, etc.). We can use this to not only identify the different
types of customers who would be interested in the Value Proposition, but also
help identify potential Key Partners and Key Resources
Gather an interdisciplinary team and create a
stakeholder map to understand:
• Who the different stakeholders are and how they
relate to one another
• Of the stakeholders who are customers, who has the
most influence
• Who is most likely to buy your value propositionA way of diagramming the
network of people who have a
stake in a given system.

Next, we need to understand the customers' needs.

Contextual Inquiry is one of the best methods to understand customer
needs as it involves interviewing AND observing people in their real
environments, which is the best way to see unmet needs as well as
articulated problems.
Find representative customers and conduct a
contextual inquiry to understand:
• The jobs they need to get done and how your
offering could help
• The problems they encounter with current
solutions, and how they ‘hack’ their environment to
make things work better for them
• What their daily routine is like, whom they
interacting with, in what contexts, to what purpose
• What triggers them to search for, buy and use a new
product or service
An approach to interviewing
and observing people in their
own environment.

If it’s not feasible to conduct a contextual inquiry, or if you want to deepen
your understanding of customers even more, you could do Walk-a-Mile-
Immersion (WAMI), in which you place yourself in the customer’s shoes and
see things for their perspective. It’s also one of the best methods for building
empathy for customers.
Identify a few key jobs your customers want to
accomplish. Try to replicate their experience by using
the tools they use, in the environments of use, and
working under constraints they face to understand:
• What it feels like to do the jobs your customers do
• The problems they encounter with current
solutions
A way of building empathy for
people through first-hand
experience.

If you've developed your Value Proposition (VP) to the point where you know
the different features you could include, and have a rough idea of costs for
implementing and supporting those features, then you could conduct Buy-a-
Feature with customers to understand what they value, and what trade-offs
they make when considering the costs and benefits of different features.
Find representative customers and give them fake
money or tokens that they can spend on different
features. Ask them to think aloud about what
features they want to buy to find out:
• Which features are more important and why
• Whether the cost of the features relates to the
perceived value they provide (are some seen as
overpriced and others as good deal?)
• Trade-off decisions and rationalisations
A game in which people use
artificial money to express
trade-off decisions

Or, if your VP is still being formulated, you could conduct a What's on Your Radar to
understand the relative importance of problems (or solutions) to your customers.
Find representative customers have them place topics
on the radar diagram according to degree of
importance to them. Ask them to explain their
mapping to understand which topics are more
important and why.
An exercise in which people
plot items according to
personal significance.

With all that rich data and insights from the Customer Research, we need to
analyse it in such a way that we don't lose the human element. Numbers and
statistics don't let us understand our customers' needs and motivations and how
they might respond to changes in the Value Proposition, Channel, Customer
Relationship and Revenue streams. Thus we need tools that help us visualise
customer needs so that we can make better design decisions and communicate
those need more effectively to others.

If you’ve conducted a Contextual Inquiry, you can analyse the data from those
interviews and observations to create Persona Profiles. Personas bring the data to
life and remind your team about the different types of needs and attitudes that
customers have, so that you’re less likely to create something based on
assumptions of what you think customers want.
Create 3 to 5 personas who:
• Capture key attitudes and behaviours of customers
in a respectful, believable way
• Enable your team empathise with the persona’s
problems and needs
• Empower you team to use them as tools to guide
decision making about Value Propositions,
Channels, Customer Relationship, and Revenue
Streams
An informed summary of the
mindset, needs and goals
typically held by key
stakeholders.

If you’ve conducted a Contextual Inquiry or a Walk-a-Mile-Immersion, you can create
an Experience Diagram to show the path through a task as well as the positive
experiences and breakpoints, which highlight areas that your VP could address.
Create an experience map of the customers’
experience to show:
• An overview of the current state (actions, tools,
actors, decision points, emotional journey,
customer touchpoints)
• Critical breakpoints (areas where you can improve
the experience)
A way of mapping a person’s
journey through a set of
circumstances or tasks.

You can quickly codify the data you’ve collected by conducting a Rose, Thorn, Bud
analysis. Positive experiences are coded as Roses (on a pink sticky notes), Negatives as
Thorns (on a blue sticky notes) and Opportunities as Buds (on green sticky notes).
Conduct a Rose, Thorn, Bud on the data you’ve
collected to identify:
• Positives (to maintain or improve upon, Negatives
(to reduce or eliminate), and Opportunities
(potential to differentiate)
You could conduct an RTB on an Experience Diagram,
or with notes from a Contextual Inquiry or Walk-a-
Mile-Immersion.
A way of mapping a person’s
journey through a set of
circumstances or tasks.

Because you have limited resources (people, money) and time, you probably won’t be
able to implement all the features or changes to your BMC that you’d like to, based on
what you’ve learned from understanding and analysing customer needs. Thus, you
need a way to prioritise.

Prioritisation can be tricky because people often conflate two criteria: the importance of
an issue and the effort required to address the issue. The Importance/Difficulty matrix
pulls those criteria apart, allowing us rank the relative importance of problems (or
needs) against the cost (or difficulty) of making and delivering different solutions (or
features.
Gather an interdisciplinary team to rank the
needs/opportunities in terms of perceived
importance to the customer segment and degree to
which your current Value Proposition meets the
needs, in order to identify the areas of:
• Core Alignment (important customer needs that
will be met your Value Proposition)
• Pivot Points (important customer needs that will
not be met by current Value Proposition)
• Considerations (less important customer needs that
your Value Proposition will meet)
• Luxuries/Distractions (less important customer
needs that your Value Proposition won’t meet)
A quad chart for plotting
items by relative importance
and difficulty.

I've adapted the Importance/Difficulty matrix so that you can use it to sense-check a
Value Proposition (and 'pivot' if warranted). It can be used to rank customer needs in
terms of relative importance (from the customers' point of view--which problems/needs
are more important) and the degree to which the (currently envisioned) Value
Proposition meets those needs. The matrix can help prioritise or re-direct effort to areas
of High-Importance, and de-escalate lower importance ones.

I’ve labelled the quadrants according to the relationship of the Customer Needs to the
Value Proposition. High importance needs that the VP is meeting to high degree are
considered Core Alignment needs, meaning that effort should be directed towards
ensuring that the VP continues to meet them.

Less Important needs that the VP is meeting to a high degree are Considerations (i.e.,
depending on the degree of effort needed to implement them should be considered but
not to the detriment of the Core Alignment areas).

Low Importance needs that the VP is not meeting or only partially meeting, are
Luxuries. It’s probably not worth the effort to adjust the VP to meet the lower priority
needs.

High Importance needs that the VP is not meeting or only partially meeting, are Pivot
Points (opportunities to adjust the VP). The Pivot Points represent important customer
needs that will not be fully met by your current Value Proposition—thus it’s worth
exploring what it would take to pivot the VP to meet these important customer needs.

Of course there are many other methods that could be used to tackle the challenge,
depending on knowns, unknowns, timelines, budgets and many other factors. This was
just an initial effort to see how I could map some HCD methods to the BMC.
Any (constructive) feedback or suggestions are welcome!

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Human-Centred Design & the Business Model Canvas

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