This talks is focused on Balancing Business + Usage + Technology to deliver compelling solutions to customer problems. The session introduced a model for product management, service design, and product lifecycle development. It was shared at Product Camp Twin Cities.
These are the three fundamental perspectives on a solution, platform, or product. A product lacking any of these three main perspectives is not likely to be successful in the market, except by chance. And, not just any combination of B, U, and T will do. The definition of success must be inclusive of the company’s vision, mission, core business strengths, and brand identity.
Throughout this tutorial, you will see terms in bold and italics. This indicates that the terms are being used in the specific context described on the slide, and the terms apply to that context alone. The Three-Circle Model creates clarity in language by partitioning terms into a specific location in the model.
The terms on this page are defined in later slides where each circle is considered in greater depth.
The picture of the model on the previous slide looks simple, but there is richness to the model well beyond that initial view. The Three-Circle Model provides an extensive vocabulary and taxonomy for discussing system design and development. The Three-Circle Model can even be called a systems development ontology for both for-profit and (with just a bit of translation) non-profit systems.
The Three-Circle Model is not intended to apply directly to an organization or company, but rather the systems those entities produce. Because of this system focus, the model is methods-agnostic. While it has some powerful and useful implications for the system life cycle, it does not prescribe the methods, practices, or process used to create the system. Thus it can be applied to traditional sequential development, agile and lean development, and various hybrids and combinations.
Any natural language is an imperfect expression system, since all lack the mathematical operators and mechanisms for proof of more formal structures. A natural language’s strength and weakness is its expressivity. But, by constraining natural language even to a mild degree, much greater precision and clarity can be achieved without resorting to more difficult formal conventions.
The Three-Circle Model provides common definitions of many terms, restricts their use to specific circumstances, and imposes particular conceptual models such as cycles and flows. In return, communication becomes clearer among individuals and teams.
Because the human eye enjoys symmetry, the model is shown with all three circles having equal diameter. But this would rarely be the right approach on a given project, since each product has a unique set of challenges and characteristics that mean B, U, or T might need to be emphasized more or less than the other perspectives. In some cases, one circle may predominate on average. For example, a service organization may find that U is typically the primary focus, with support from B and T. This is valid, so long as the other perspectives are fulfilled to at least the minimum degree to create success.
Business in this context relates to all economic aspects of the system life cycle. This means that B includes the economic aspects of interdisciplinary concerns. For example, marketing is concerned with both economics and users’ conceptual models, and production is concerned with both economics and the system’s implementation. These interdisciplinary aspects will be a central topic of the section on two-circle overlaps later in this tutorial.
Value networks are made up of all the stakeholders for a given system and how they are connected via exchange of value. It is an update of the older concept of value chain, since in most cases value exchange is occurs in ways far more complex than a linear chain.
The definitions of the abbreviations on this slide:
TAM: Total Available Market
ASP: Average Selling Price
MSS: Market Segment Share
ROI: Return on Investment
NPV: Net Present Value
The list of examples under the terms Affordable, Marketable, and Profitable is clearly not exhaustive; you can probably add several good examples from your specific product domain, which makes for a good exercise.
Each circle contains a flow to go with its primary viewpoint. The economic viewpoint pairs with the flow of investment. A company’s mission informs and guides establishment of strategies. Progress against these strategies is measured via objectives, against which investments are made. These investments create results, and those results have broader effects on the organization and its strategies. But these effects also influence the evolution of the company’s mission, so the flow of investment is circular rather than linear.
The flows share a common structure, made of points (with non-italicized labels) and the areas between (with italicized labels). The points are just that – more fixed, stable, and concrete. The regions, strategy and effect in this slide, are more nebulous and less concrete.
Historically, strategy has often been considered to be an optimizing pre-commitment to various courses of action. For example, generals meeting before a battle to discuss the potential actions of an adversary, and the best actions in response to each. More recently, strategy has been recognized as a way to establish and exert control over some future period. How far a strategy can extend effectively is determined by the nature of the business environment, its rate and depth of change, and similar factors. See Foresight, Strategy, and Complexity at http://www.santafe.edu/research/publications/workingpapers/95-12-106.pdf for a deeper discussion of these concepts.
In this way of thinking about strategy, a company’s strategy transforms the company’s mission into an attempt at control over the company’s environment, workforce, and relationships. The effects of strategy are varied in type, scope, and timing. Some effects are intended and anticipated, others are exactly the opposite. Some effects are immediate, others delayed.
The Cynefin framework of David Snowden also provides a useful taxonomy of cause and effect that can be applied to methods related to strategy. See http://cognitive-edge.com.
It is well-known within requirements engineering that without a good description of how a system will be used, it is impossible to validate the system requirements properly. Understanding usage, and how the end user conceives of that usage, is one key to a successful project.
The usage perspective addresses the conceptual viewpoint of the system, including the conceptual models (a.k.a. mental models) that users create around the usage of any given system. Names such as “internet appliance” and “smart phone” are examples of the conceptual models that underlie those products. “Cloud” computing also speaks to the underlying conceptual model for distributed data, computing, and analytic services.
The usage perspective provides essential data for technologists, allowing evaluation of various architectures and capabilities as good or bad (this evaluation is also performed according to the business-related information in the B circle). In this light, data on usage is as important to consider as data on profitability and cost.
It is the users’ conceptual models that are the focus here; a user must not need an accurate model of the system’s architecture in order to use it effectively. Designers, engineers, and others who differ in background, personality, and other dimensions from the end user are likely to have conceptual models quite different from the users’ models.
As was the case in the B circle, the examples below Desirable, Useful, Usable are not intended to be an exhaustive list.
The usage circle contains the flow of user experience, often shortened to just experience in common use.
User experience is defined within the Three-Circle Model as the thoughts, attitudes, emotions, and perceptions of an individual before, during, and after use of a system. This is very similar to other existing definitions of the term. See, for example, the international standard on ergonomics of human system interaction, ISO 9241-210.
System use is goal directed. People own a product because they seek to use it to achieve one or more goals. Even the owner of a beautiful painting seeks to enjoy it. Experience is related to multiple, diverse goals for system use. For example, if your primary goal in owning a car is to drive to work, there are other factors (and associated goals) at work in your choice of product, including comfort, style, amenities, and even class membership. These attributes are related to the experience of driving to work rather than the task of driving to work.
Human values drive needs & wants, which in turn cause us to set goals for using a product. The experience of use leads to some level of satisfaction (or dissatisfaction). Users then assess experience qualities, and these in turn can influence human values. One excellent example of this is in the area of online security, where people have become much more willing to let devices monitor their location, usage patterns, and related data than they were only a decade ago.
Technology is commonly defined as the result of applying scientific knowledge for specific purposes, which is consistent with the term’s use in the Three-Circle Model. Technology types include tools, techniques, machines, methods of organization, etc.
The technology circle’s focus is on implementation, which includes general concepts such as implementation architecture, workloads, and performance. These elements are found in any engineered system, not just those based on high technology. For example, a restaurant has an implementation architecture (seating arrangement, placement and layout of the kitchen, etc.) and performance characteristics (average wait before seating, time from order placement to service, value for price, etc.).
To be consumable, a solution must be compatible with current standards in the ecosystem and product environment, and also must be acceptable by community standards. For example, a brand-new technology may not be consumable if it requires significant updates to current infrastructure. Note that the product’s comsumability is independent from its desirability, which is addressed within the usage circle.
With this slide, the cycle of interdisciplinary concerns has connected to itself. You can now see the trio consists of marketing, design, and production. These concepts will be addressed in more depth in the two-circle section of the tutorial.
The technology circle contains the flow of workload across the system.
The cycle begins with parameters. These parameters include the underlying domains, properties, constraints, and various associations and cause-effect relationships. Parameters and relationships among them form the foundation for engineering work. The choice of parameters for a given system leads to a set of applicable heuristics. Heuristics are basic principles (or “rules of thumb”) that can be used to solve problems. As “rules of thumb”, Heuristics do not guarantee a solution. In fact, different heuristics may give conflicting advice in a given situation. But it is in the use of heuristics that most engineering problems find resolution. Heuristics reduce search time for solutions to problems by exploiting the structure and characteristics of the environment. Author Billy Vaughn Koen defines the engineering method as the use of heuristics to cause the best possible change in an uncertain situation within the available resources. This is the definition of engineering adopted within the Three-Circle Model. Because Koen’s definition of engineering is universal, the Three-Circle Model can be applied to domains beyond those people might associate with the term. The restaurant example from the previous slide illustrates the model’s breadth of application. The Three-Circle Model has been applied successfully in non-profit organizations, educational settings, and religious institutions in addition to more obvious technical domains.
Once a set of heuristics is chosen, targets are established for how the system must perform on its workloads. A workload is something that induces effort within a system. In the restaurant example, workloads include the number and types of meals produced, the flow of customers, table setting and clearing, etc.). Anticipated workloads have a strong influence on system architecture and design. For example, the restaurant’s kitchen must be designed so it can quickly process the variety and number of meal orders it will receive during operation.
The targets are measured in terms of actual system performance on the workloads. The system’s performance is evaluated with a particular eye on tolerance. Tolerance refers to the technology’s ability to cope with change and variation. Tolerance is key in interpreting the overall validity of the chosen heuristics and the underlying parameters of the problem. For example, one might choose Newtonian physics as the domain and underlying set of parameters to solve the problem of GPS-based location. However, the tolerance of the Newtonian heuristics is inadequate, and the precision of the location results would be unacceptably low. A second pass at the problem would be required to account for the effects of relativity that Newtonian physics cannot model.
There are several facets to the general definition of value, but the pertinent definition for the Three-Circle Model is the quality that makes something desirable or of worth. Value often is measured in money, or equivalence of goods or services, but many things possess non-economic or intrinsic value.
Value has an economic and a conceptual component. When you see an ad for a product offering some experience and function for a price, you assess the value of the product by comparing the two aspects. If the economic cost is justified by the promised experience, you will perceive sufficient value to make the purchase.
A capability is the ability of a system to perform some action in support of a user’s goals, expressed in terms that the user understands. The final part of the definition is important, and helps separate capability from technology. For an e-reader, a capability might be “read indoors or in direct sunlight.” This is distinct from the underlying technologies around display and contrast ratio, and is expressed in terms the end user can understand. This reflects capability’s position as the connection between usage (the conceptual view of the system) and technology (the implementation view).
In similar fashion, ingredient bridges the system’s implementation and economic perspectives. Ingredients are how the underlying technologies, which afford the system’s capabilities, get supplied to the user and make money for the company. The term component is a near-synonym for ingredient, but component is often reserved for physical parts of a system. Also, using ingredient allows for unique first letters, which comes in handy when abbreviating the regions of the model. Component and Capability would create two “C” terms.
This slide contains a more detailed look at the value region. One sense of value is transactional: the result of an exchange between two or more parties. When we purchase a ticket to see a movie, we are participating in such a value transaction – cash for the merchant, and a (we hope) good entertainment experience in exchange.
The other sense of value is that of a canonic belief. These values that are not transactional in nature, but they do influence the transactional form of value. For example, a common canonic belief is environmental friendliness in products, whether that entails resource conservation, not being tested on animals, or not causing some other harm to the environment. These canonic values can influence an individual to purchase products that are aligned with those beliefs.
Irene C. L. Ng’s book Value and Worth (InnovorsaPress, December 20, 2012) is an excellent source of detailed information on value, and the terminology in her book is in general alignment with the Three-Circle Model. Ng distinguishes between value-in-exchange (value) and value-in-use (worth). Value and worth could be separated by substantial time.
Some products and services see large swings in price based on spikes in demand. For example, hotel rooms can get very expensive when large conventions come to a city and reduce availability. Booking well in advance could save money. But the opposite is often true as well, where last-minute sale prices are driven by excess capacity. We buy some things in expectation of future value-in-use, but sometimes find them to be disappointing or a failed investment later (gym memberships are a frequently-cited example).
The model shows that offering and promise meet the world outside the system in brand. Brands offer customers a way to recognize and choose solutions within cluttered markets. In this regard, a brand is a heuristic a customer can use to simplify purchase decisions.
An offering includes the product (its design, features, quality, packaging, distribution, etc.) and any associated services (financing, warranties and installation, etc.). But note that this is in the conceptual and economic sense, not the implementation sense of the Ingredient area of the model. The company name and product brand are also elements of an offering, providing important intangible value by offering an identity and community to the user. An Apple iPOD* and a Harley-Davidson* motorcycle are a good examples.
In this way, an offering can activate existing values for an individual, such as entertainment or security. This anticipated experience creates a value proposition in the user’s mind, and increased willingness to enter into the transactional sense of value mentioned above. See for example the paper by Shalom H. Schwartz, Basic Human Value: An Overview. Schwartz explains that actions become more attractive if they promote attainment of valued goals.
The slide also shows the market cycle, which refers to both the thing (the market) and the activity (to market). Market is centered on brand, and draws together some of the world outside the product with portions of B, U, and V. That is, it unites the outside world with the economic and conceptual merits of the product, expressed as value.
* Other names and brands may be claimed as the property of others.
The Three-Circle Model has several implications for a solution development life cycle. Many life cycles express development phases as a sequence of activities. For example, Planning, Development, and Test. The Three-Circle Model names phases after work states that are based on what is known about the underlying solution. This permits the Three-Circle Model to be used across traditional sequential life cycles, agile life cycles, and hybrids. The Three-Circle Model does not prescribe the activities that a team uses to move from opportunity to solution, only the work states that must be achieved.
Solution evolution is based on vision — the coherent expression of an organization’s identity. Vision is related to an organization’s mission, and its roles and relationships within its external context. The vision, along with information on customer problems and trends in technology development, motivates identification of an opportunity, which is formed into abstract concepts that illustrate overall ideas. Concepts in turn are developed into more tangible candidates, which lead to one or more selected solutions that meet the original opportunity’s requirements and solve a customer problem. Throughout this process, it is the vision that pulls development forward.
In general, the progression from Concept to Candidate represents a flow from the possible to the probable to the plausible on the way to the actual solution.
The center region representing the integrated system changes in each stage from left to right as system evolution progresses. At first, even the boundary of the integrated system is not understood (dashed line). By the time the concept is evident and its scope has been defined, the system has become bounded (solid line), but its detailed contents are still not apparent. After further definition and analysis, the interior region of the integrated system is better known (less transparent fill) and understood to be feasible at an acceptable level of risk. Finally, as the solution is defined, (solid fill) the interior structure of the integrated system appears as system elements are partitioned among platform, ingredients, ecosystem, or other system components.
Systems development based on a sequential, decomposition-oriented approach can mask interoperability and performance data until the very end of the project. This often leads to late, unpleasant surprises with no time left to make corrections. Worse yet, it may not even be possible to correct the problems found if they are architectural in nature. Serious architectural issues can mean effectively starting over, so it is much better to locate them as early as possible.
Especially in complex domains (which is where many social-technical solutions are found), early system information is invaluable for understanding how various system elements will behave, and whether chosen approaches are indeed feasible and effective. These factors are among the rise of agile and evolutionary methods within both software and systems engineering. Evolutionary engineering focuses on early, frequent deliveries of stakeholder value based on what is learned through rapid development cycles. Since complex domains have short foresight horizons, early, frequent information about the changing reality faced by the development team becomes vital to overall success.
This situation is the mirror of the previous. Technology teams are often so committed to their creations, which have often consumed years of work, that they assume the technology is valuable and are frustrated that others don’t immediately share that opinion. In some cases, the technology represents their entire career’s work. So then how to convince a skeptical planner or architect that the technology deserves a place in the solution?
As in the case of the stuck mobile payment app, the answer lies in the knowledge that is obtained by taking the “long way around” the model. The technology must afford capabilities in support of usages that create value for the business. One the technology team can speak to all the regions, the planner or architect will have an easy time including the technology – so long as the arguments and data are credible and contain sufficient detail.
Teams often over- or under-weight some topics covered within the Three-Circle Model because of the specializations of various team members. Further, the development processes and practices used by the team may cause attention to be paid to just a subset of the regions.
By diagramming the current activities and specifications, a team can get a good picture of how well it is covering the model and take action where needed to either eliminate wasteful redundancy or close risky gaps. In some cases, the exercise may point to the need to add a team member with the necessary skills (for example a business analyst, human factors engineer, cultural anthropologist, or technologist). These exercises may point to gaps within the life cycle used by the team (or the entire company). The previous section on life cycle implications may be useful in guiding those efforts.