Achieving Greater Results with Design Thinking
As a strategy consultant for the past twenty years, I have worked for dozens of market leading companies, from family-owned enterprises in Latin America to billion dollar behemoths with global brands and operations headquartered in the US. Most of these companies have been in business for at least as long as I have been in consulting. Like most companies that have been around for decades, they have experienced periods of steady growth, in top-line revenue and bottom-line earnings, as well as periods when these indicators have taken a hit. As incumbents, they were accustomed to operating in a relatively stable economic and competitive environment in which success or failure was often determined by the peaks and troughs of the traditional business cycle. In this low-risk environment, they relied on analytical, data-driven tools to achieve success in their existing markets. For most of them, the goal was primarily to maintain and protect market position or the status quo.
But, through my work with clients, I have seen firsthand how the current business environment has been effected by the convergence of multiple disruptive forces, including globalization, new technologies (i.e, the internet), demographic changes and intense competition. These forces are causing many incumbents to experience an unprecedented level of uncertainty, making it increasingly difficult for them to achieve their annual targets and long term goals. In their search for growth opportunities incumbents must look to new, unchartered markets. As these markets are inherently riskier, incumbents cannot depend on the left brain, analytical tools that helped them to succeed in their existing markets. To survive in this hypercompetitive and rapidly changing environment, incumbents are increasingly turning to a right-brain, creative approach to solve their growth and earnings problem: Design thinking.
If you’re like many incumbent organizations, I guess you’re wondering, “what is design thinking?” Good question! Before answering this question, I must remind you that the act of designing is a skill usually associated with architects, engineers, and “designers” (such as fashion designers, web designers or concept designers). But design thinking, as explained in Wikipedia, “is a rigorous, collaborative, human-centered approach to solving business problems” that uses tools and methodologies that designers have been employing for decades. In a business context, design thinking is fast becoming an essential tool for executives who see it as a framework to achieve greater results over the long-term. The focus is on proactively identifying new markets and customers as well as developing innovative products and services that satisfy evolving customer wants and needs. Design thinking is particularly useful for solving complex problems with cross-functional teams, which consist of participants from different departments or divisions who are most comfortable working with others in their organizational silo or function. Design thinking is a structured, but flexible, approach that these multi-disciplinary teams can use to solve complex business problems. It allows them to discover a wealth of new possibilities and ideas by tapping into the unique perspectives, points of view and skill levels on the team. As described by Jeanne Liedtka, Professor of Strategy at Darden School of Business, in her book, “Solving Problems with Design Thinking: Ten Stories of What works”, design thinking is “an approach to problem solving that is distinguished by the following attributes:
- It emphasizes the importance of discovery before solution development using market research approaches that are empathetic and user-friendly;
- It expands the boundaries of both our problem definitions and our solutions;
- It is enthusiastic about engaging partners in co-creation; and
- It is committed to conducting real—world experiments rather than just running analyses using historical data.”
The next question on your mind should be “what is the structure of the design thinking process? Another great question. Design thinking is organized around three (sometimes four) phases: (1.) developing a deep understanding of the problem; (2.) brainstorming of key insights and idea generation; and (3.) prototyping/testing. In the first two phases, we stress to participants the importance of understanding the customer’s current reality and staying focused on the problem rather than rushing to come up with solutions, which is the natural tendency of business leaders well-trained in execution. In the final phase of prototyping/testing, we help teams develop a very rough, low resolution mock-up of the most promising solutions. We have them share the mock-ups with customers to get their candid feedback on how well they address the problem. The purpose of showing the mockup is to understand how well the solution solves the customer problem defined in the first phase, not to have the customer validate product/service features or benefits. Assuming favorable customer feedback and enthusiastic support for the solution, the team moves to the final phase that involves developing a working prototype of the solution and further testing in the market with actual customers.
Another question I’m often asked is “what are some of the tools used when implementing design thinking? Each phase of the design thinking process involves the use of different tools for information gathering, brainstorming, prioritization and prototyping. Some of the common tools used in each phase include:
Understanding the problem:
- Ethnographic techniques (e.g., journey mapping)
- Mind mapping
- Customer co-creation
- Concept Development
- Rapid prototyping
- Customer co-creation
- Learning Launch
As the business environment becomes increasingly competitive and the threat of disruption casts a bigger shadow over it, incumbent leaders like yourself must leave their comfort zone in search of new growth opportunities. Design thinking offers you the opportunity to create tremendous value for your customers and shareholders. The combination of processes and tools seeks to stimulate deeper understanding and creativity and will help you to discover solutions that best address your customers’ unarticulated needs. As many of my clients will attest, applying the design thinking framework is without question hard work. But, I know they would all agree that the potential payoff is worth the investment.