Business model innovation is, it's, it's kind of the Holy Grail of the innovation space, because most studies will prove that when you, when you change your business model in a positive way that, that ultimately gives you the, the greatest bump in profitability and the, the greatest overall success. If you contrast business model innovation with traditional product development traditional product development, when you're, when you're looking to improve a service or looking to improve a, a product, you have a known quantity and you, you have some obvious areas where you might extend it. The frontiers of business model innovation are, haven't been tread as frequently as, as the new, new product innovation, so you, you don't have as many clear pathways from there. but, but it ultimately will result in a, a bigger impact on your customer. So we'll use a lot of frameworks that stretch thinking from a single activity set to a larger activity set. So it's not just about boarding the plane, but the whole experience of buying your ticket all the way through exiting. When you're focusing on a, a larger activity set like that you, you might find newer and better hypotheses to generate. So a, a typical way that, that people think about business innovation is through the value chain. We can look down stream and we can look up stream, and, and innovation can happen at any point. One of the things that we, we teach in design school is less about a value chain and more about the idea of an ecosystem. The idea of an ecosystem is, there is this web of partners available both for you, as an organization, to work with, but also, that offer different choices for your customer, your customer's customer, and the eventual user. And when you start to look at business models through the idea of an ecosystem, once again that, it's a little bit more complex. you can start to see some, some very fascinating, some very fascinating things start to happen in terms of, in terms of how you might implement a new business model innovation. Particularly in terms of who you actually partner with. Collaboration is becoming more and more critical for a design team. One of the biggest failure modes in hypothesis generation is a lack of diverse input when you're creating your hypotheses. So if it's just you and your team, who are all have the same education, all have the same point of view, all live in the same neighborhood. If, if you're the ones who are generating these hypotheses, even if you try to be creative, there're still going to be in somewhat of a limited set. So when you start to collaborate with a, a larger group, a larger part of the organization, you start to have ideas that you never would have had before. Organizations tend to be idea rich, and with, within them there are pockets of, pockets of individuals who have great ideas that you need to make sure you leverage to, to bring those up to the surface. Listening is one of the critical skills that we, we try to teach designers. it's important both in terms of collaboration but also in, in, you know, researching the users for whom we're designing. The old joke is that a lawyer will not ask you a question that he or she does not already know the answer to. It's just the opposite for designers. We only ask questions where really, we have no idea. You know, where, we want to be like sponges, and just sort of collect from from the people that we're working with. It all goes back to one of the core approaches that we have, which is the ethnographic interview. ethnographic interviews are very different than the typical business interview. The ethnographic approach is one where we only ask open-ended questions. And those questions we, we don't know the answer to, and we let the, the actual individual interviewee lead the conversation. And, it's through this practice I think that our, our students and designers become very good listeners, because you no longer are there to sort of establish yourself as the expert. But rather you put yourself in the, the role of someone learning. Inefficiency and ambiguity are both conditions of the design process. There has to be time for reflection and disagreement. And these are, these are core to, great new big ideas, but reflection and disagreement are the things that make [LAUGH] processes inefficient. And it's important to have time within, within your process just to take a step back and look at, what did we create? Where are the connections that we're not seeing? Can we, can we bring these two things together in ways that we hadn't thought of before? I mean that, that's really where great ideas come from. You also have to have time for disagreement, because good design thinking is about bringing very different points of view together, so that you have that diverse set of inputs. You know, if you want efficiency you get everybody who thinks the same way and they'll [LAUGH] get to a decision quickly, and that, that works, you know, 80% of the time. But for that, that 20% of the time where you, you need something very disruptive, very innovative, very creative, you're going to have to put up with a little bit more of the ambiguity. That's ultimately what a, a successful leader will be able to do is, you know, understand there are some projects that can follow this very linear straightforward approach. But others that require a little bit more of a, an open mind, and a little bit more creativity.
