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Business analysis helps in designing competitive advantage

BA as problem solvers
Applying design thinking makes us better business analysts
20 July 2016
Business design
BUSINESS DESIGNER WANTED!
28 September 2016

Inevitable change

Change is important for any organization. Without change, organizations would likely lose their competitive advantage over time. We have seen companies that have had a very difficult time after neglecting signals from the fast-paced outside world and not adapting. Here are two examples: Kodak neglected digital photography; and Blackberry didn’t take touch screen technology too seriously. I believe you can find more examples, can’t you? Both companies in my examples lost their leading position when their competitors started to take over their market share with innovative products; products that were better aligned to what customers expected.

The value is in the eye of the beholder

As the world around us evolves, customer needs change. This creates demand for new types of products/services and opens up new opportunities for organizations to meet those needs. If not, the quote “change or die” comes into its own right. According to Forbes, even in this tough situation, organizations often struggle to understand their market, competitors, and customer preferences. A common mistake is self-orientation: thinking and acting from the organization’s perspective. Organizations think they know how the customer can be helped and what the customer problem really is. There is, however, a danger to this approach. Tim Brown in his book “Change by Design” rightly states that those who simply generalize from their own standards and expectations will limit the field of opportunity. If organizations want to deliver value to their customers, they have to understand what value really means to their customers, how the customers feel, and what problems they have. Remember: the value is in the eye of the beholder.

Create competitive advantage

Whether there is a match between the value created by the organization and the value expected by the customer is in the eyes of the customer. Many organizations decide to go for value co-creation instead of value creation to ensure they meet the customer needs, but this is a topic for separate discussion.

Latent needs

There is also another side to this story. You may say that customers often do not know what they need. Henry Ford put this nicely in his quote:

If I’d asked customers what they wanted, they would have said “a faster horse”.

Discovering latent needs

It is true that our customers will rarely be able to tell us what they want. Courses on requirements elicitation include the question “What do you want?” as a no-no for an interview with a customer. The answers we get are often: “I don’t know” or “Tell me what is possible”. They point us nowhere. Be honest: it is a big challenge to identify latent needs; needs that may be acute but that people may not be able to articulate. Let us use an example: when Apple introduced the iPad, nobody asked for it. It was a very disruptive product. Gartner didn’t know how to classify “this thing” in their market research, because the market for tablets did not exist at that time. Since 2011 Gartner has introduced a new market for tablet computers. This was only six years ago. Can you imagine your life without a tablet now?

Important role for Business Analysts in defining competitive advantage

In this journey for any organization to embrace change, to create value for the customers and to achieve greater competitive advantage lies an important role for Business Analysts (BAs). With our toolbox full of techniques and approaches, domain knowledge and interpersonal skills, we can contribute to helping organizations to uncover (latent) customer needs. These needs can then be translated into new products and/or services of value to the customers. We contribute to making change happen.

Organizations such as the International Institute of Business Analysis, International Requirements Engineering Board, and British Computer Society provide great resources on relevant tools and techniques that can be useful for BA professionals.

Tips for discovering latent needs

In the Business Analyst toolbox there are techniques for discovering latent needs. Having a conversation with stakeholders is certainly not a bad idea. Interviews can facilitate gaining better understanding of what is needed (despite the critique from Henry Ford in his quote). To make them more effective consider the following:

-ask the right questions to get valuable answers

-be thorough in your questions and give sufficient follow-up to the answers; pay attention to body language

-interpret the answers thoughtfully – read between the lines – to collect reliable information.

Additionally, design thinking offers us some useful tips on discovering the latent needs. Here are two tips you can use straightaway:

TIP 1: Observe

Actual behaviours can provide us with invaluable clues about customers’ unmet needs. Anthropologists prove that observation lies in quality, not quantity. So you do not need to have a huge group to observe. What matters is picking up the right people to observe, this will make the difference.

How to start? You can simply start observing your stakeholders who are directly affected by the change. Give yourself time. Make notes. See whether you discover something new from their behaviours.

In the Netherlands the medical university Radboundumc sends its students to a museum to look at art. The hypothesis is that by looking at art (and being tested about what they saw afterwards) young doctors improve their observational skills, skills that are essential to establish a good diagnosis for their patients.

TIP 2: Show empathy = stand in the shoes of others

To deepen your observational skills you can use empathy. Tim Brown explains that empathy is the mental habit of seeing the world through the eyes of others, understanding the world through their experiences, and feeling the world through their emotions. When we use empathy in our observations we can get many insights. Based on problems people experience we can help design products and services that will improve their lives.

How to start? There is a simple way: you can ask your stakeholders clarifying questions up-front or during the observation depending on what kind of observation technique you use. Try to understand their world, why do they think the way they do? Be truly interested in the other person and a problem/challenge he or she experiences. Ask for more explanation. Collect your findings in an empathy map.

Here is a story to somehow illustrate that. Not long ago I listened to a Dutch radio programme where two presenters discussed the differences between ATM usage in the Netherlands and in Belgium. The observable difference is in how an ATM returns money and a bank card. In the Netherlands you firstly receive your bank card back and then cash is released. In Belgium it is the other way around: you get your money first and then the bank card. This was illogical to the Dutch presenters because from their point of view the Belgium approach leads to a dangerous situation when you can pick up your cash and forget to take back your bank card. After making some jokes, they called a Belgian bank to check why this difference exists. It was quite interesting to hear the reaction of the Belgian bank worker. She was also very surprised that the Dutch use ATMs so strangely: “So you only use an ATM to withdraw money?” she asked. Apparently ATMs in Belgium are used for other bank transactions (paying bills, etc.) and in that situation it is inconvenient to put the card in and out after withdrawing money, so the bank card stays in the ATM until all bank operations are finished. In the Netherlands ATMs are only used to withdraw money, hence the different sequence of releasing cash and bank cards. This simple example shows how important it is to understand each other’s point of view, without judging the situation. Showing empathy is a simple way of building bridges between different viewpoints.

Understanding others

Conclusion

As Business Analysts we are involved in change initiatives in our organizations. We contribute to defining and delivering new products and services that are (hopefully) of value to our customers. What the value is can be judged by the customers.  It is our task to understand what they really need, and some of these needs have to be discovered. Two aspects of design thinking – observations and empathy – can help us in discovering these latent needs and at the end create competitive advantage for our organizations. You can start using both in your projects straightaway. Try them in your project and share whether these tips help you improve things you are working on! It would be great to hear back from you. Take care!