Business Design vs. Traditional Strategy: Why Companies Must Adapt

March 20, 2025

Business design belongs alongside traditional strategy, not in place of it. That is INNOBASE's position, and the case for it is methodological rather than empirical: positioning frameworks answer where to compete and how to allocate, while design methods test whether a proposition is wanted, at what price and at what cost to serve, before capital is committed. We found no study comparing outcomes for firms using one approach against firms using the other, so nothing below claims measured outperformance — and most of the evidence the 2025 version of this article rested on did not survive checking.

Update disclosure. First published 20 March 2025, rebuilt in July 2026 after an evidence review. This is not the article published in 2025 — twelve claims were removed, five of them percentage statistics, and what survived is attributed below with its limitations.

What survived the check

The 2025 version argued that traditional strategy suits stable markets, business design suits uncertain ones, and firms that do not adopt the second will fall behind — a case resting on five percentage statistics and a set of unsourced assertions.

We traced all of them. Most did not hold. Nothing supported the claim that over 60% of executives expect their business models to become obsolete within five years, an unnamed "2023 global survey" reporting 62%, or the figure that 87% say disruption accelerated over five years. Two were worse than unsourced: "design-led companies deliver 32% higher revenue growth" misstates its own study, and the claim that Harvard Business Review found culture to be the biggest barrier to innovation is contradicted by the HBR survey we located.

The idea underneath is still worth arguing. The numbers used to sell it were not.

Where the frameworks came from

Porter's Five Forces comes from Michael E. Porter's "How Competitive Forces Shape Strategy", Harvard Business Review, March–April 1979.

SWOT's origin is disputed. Archival research by Puyt, Lie and Wilderom (Long Range Planning, 2023) reconstructs it as originating at the Stanford Research Institute in the mid-1960s under Robert Franklin Stewart, originally called SOFT. Albert Humphrey is widely credited elsewhere, and the common attribution to Harvard in 1965 is one those authors call an academic urban legend. We show the disagreement rather than settle it.

One detail matters practically: the original method was participative — structured manager dialogue, not top-down analysis. The complaint that SWOT is static may be about how it is used, not what it was. (The Ansoff Matrix is usually credited to a 1957 HBR article; we could not confirm that.)

Fix the vocabulary before the metrics

The OECD/Eurostat Oslo Manual, fourth edition (2018), cut the innovation typology from four types — product, process, organisational, marketing — to two: product innovations and business process innovations. The new category partially replaced the previous three, and the old and new counts are not fully comparable. In plain terms: figures gathered before 2018 and figures gathered after it are not counting the same things. Any run of yearly figures that crosses 2018 therefore contains a break caused by the definition changing, not by anything happening in the market.

Eurostat's own Statistics Explained glossary still defines innovation in the pre-2018 form and cites no Oslo Manual edition.

Our reading: which definition you adopt depends on which official page you land on — a real source of error in innovation reporting. Standardise on the 2018 typology, state the edition, and annotate any series spanning 2018.

If you need an auditable system, one now exists

ISO 56001:2024, published in September 2024, is the first standard in the ISO 56000 family to specify requirements rather than guidance, and therefore the first that can be audited and certified, in an organisation of any size. ISO 56002:2019 gives guidance for building such a system — useful, but not a basis for certification.

One buyer's caution: if a supplier claims certification, ask what it is accredited against.

A second: publishing a standard is not evidence it works. We found no independent outcome study of ISO 56001 adopters and no certification-uptake data globally or in the GCC. It buys an auditable structure, not a demonstrated return.

Verification note: ISO's catalogue and OECD's pages block automated retrieval, so these standards and the Oslo Manual change were checked through a national documentation centre and independent standards and certification records, not the issuers. That route tells us what the documents contain. It does not tell us their current status, and we have not checked at ISO whether ISO 56001:2024 is still current or whether ISO 56002:2019 has since been revised or withdrawn — confirm both at the issuer before relying on them. The sources we reached disagree on ISO 56001's exact publication day, so we give the month only. One of the pages this article describes is live and undated: Eurostat's Statistics Explained glossary was read on 29 July 2026, shows no date of its own, and may have changed since. Check directly before citing.

The business case for design is thinner than it is sold

McKinsey's "The Business Value of Design" (October 2018) tracked 300 listed companies over five years across three industries. It ranked those companies on its own McKinsey Design Index — its scoring of the 300, not an external measure. As the design publication Form Trends reports the result, the companies in the top quarter of that ranking beat industry counterparts by 32 percentage points on revenue growth and by 56 percentage points on total shareholder returns — share-price gain plus dividends.

Note the unit. A percentage point is the gap between two percentages: if growth rises from 10% to 42% that is a 32-percentage-point gain, whereas "32% higher growth" would turn 10% into 13.2%. Form Trends reports percentage points; the American Marketing Association renders it as "32% higher revenue growth" — materially different, and the version the 2025 article copied. McKinsey's own page did not respond to us, so the original wording is unconfirmed and we cannot say which rendering McKinsey itself used. Even read correctly, the study is correlational: better-performing firms can afford more design. It is roughly eight years old and promotes a service line.

The counterweight is peer-reviewed. Bathla, Chawla, Hofaidhllaoui and Dabic, in the European Journal of Innovation Management (27:9, 2024), reviewed 57 studies of design thinking in management education and training. Only two used randomised designs; terminology was equivocal, and many omitted methodology and validity assessment. That concerns a research literature in education, not commercial practice — but confident performance claims rest on a thin base.

The most important finding is negative. We found no study — peer-reviewed, official or industry — comparing outcomes for firms using business design against firms using traditional strategy. That is an absence of located evidence, not proof that no such comparison has ever been made; we searched and did not find one, and we say so rather than fill the gap.

The obstacle is political before it is cultural

An HBR survey by Scott Kirsner, published 30 July 2018, asked 270 corporate leaders in strategy, innovation and R&D what blocks innovation in large companies. Internal politics — politics, turf wars, lack of alignment — was the most cited obstacle, ahead of cultural issues. The body is paywalled, so we quote no percentages and cannot report where culture placed.

This reverses what the 2025 article claimed, and it changes the intervention. If proposals die in funding committees and territory disputes rather than in attitudes, the fix is decision rights and sponsor accountability, not a values programme.

Two consultancy surveys sketch the rest, both with a commercial interest in their own findings — as do we, since business design is one of INNOBASE's two pillars. Roland Berger's study of just over 100 global businesses (2022) found nearly 80% reporting pronounced silos harming cost, innovation and profitability, and 20% reporting the right measures in place to address them. That 20% is preparedness, not excellence, though the 2025 article rendered it as the latter. In the 2026 AlixPartners Disruption Index, 72% of 3,200 CEOs and senior executives across 11 countries and 10 industries said it is increasingly hard to determine which disruptive forces to prioritise. The full report would not open for us, so those figures come from the publisher's own press release.

Our interpretation, not the surveys': that prioritisation problem is what design methods address, because they force a testable question before commitment.

The UAE context, and what it does not prove

In WIPO's Global Innovation Index 2025, the UAE ranks 30th of 139 economies, its best to date — though a two-place rise sits within the noise of such a composite. The UAE Ministry of Economy and Tourism, reporting Federal Competitiveness and Statistics Centre data, put non-oil activity at 77.3% of GDP in Q1 2025 — described there as the highest share on record, and, like all quarterly national accounts, based on estimates subject to revision. We have not checked whether a later quarter has since surpassed it. The Government of Dubai Media Office reported 71,830 new companies joining the Dubai Chamber of Commerce in 2025 — a measure of entry, not survival. The Dubai Economic Agenda D33 targets a doubling of Dubai's economy by 2033.

That is competitive density and a policy environment rewarding new entrants. The targets are declared, not audited, and none is evidence that any method works. We found no UAE or GCC data on adoption of design-led methods or ISO 56001 uptake.

Our position, stated as a position

"Innovation" has an authoritative definition (Oslo Manual, 2018). "Innovation management system" has one (ISO 56001:2024). "Business design" has neither: we found no standards body, government or peer-reviewed consensus definition. What follows is INNOBASE's own view.

We use business design to mean designing a business model the way a product is designed: starting from evidence about how people behave, expressing the model as testable assumptions, and testing the riskiest before committing capital.

We argue it belongs alongside traditional strategy rather than in place of it, and the case is methodological, not empirical. Positioning frameworks answer where to compete and how to allocate. They do not tell you whether a proposition is wanted, at what price, or at what cost to serve. Design methods produce that evidence early and cheaply. That is the whole argument, and we claim no measured outperformance, because we found none.

What to decide

Choose the standard deliberately. If a board, regulator or procurement process needs demonstrable innovation capability, ISO 56001:2024 carries auditable requirements; ISO 56002:2019 is a guidance document and does not. Be aware that "certification" is used inconsistently in this market, so a supplier's claim of ISO 56002 certification is not equivalent to accredited certification against ISO 56001 — ask which of the two is meant.

Standardise vocabulary before metrics. Adopt the 2018 two-type typology, state the edition, flag the 2018 break in any series.

Buy method, not percentages. When a supplier quotes a design performance figure, ask which study, which sample, which period, and whether it says per cent or percentage points.

Test where proposals actually die. Before funding a culture programme, trace three recent innovation proposals through your own approval process.

Start with a decision already on your table. Take one commitment you are about to make on judgement alone, reduce it to its riskiest assumption, and test that first. It is a contained way to test the method itself.

Working with INNOBASE

INNOBASE works across two pillars: business design and business transformation. If you are weighing whether to add business design capability alongside an existing strategy process, we are glad to talk it through.

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If you are weighing whether to add business design capability alongside an existing strategy process, talk it through with us.
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