The human-centered approach to problem-solving holds the key to unlocking both high-value opportunities for customers, and driving strategic change within organizations....
Design thinking is more than a way to generate innovative ideas for new products and services; it is a powerful social technology capable of encouraging more productive and strategic conversations. Design thinking is a human-centered approach to problem solving. The methodology typically involves creating numerous solutions, then prototyping and testing them until a winning solution is found.
When coupled with digital transformation and a human dimension, design thinking holds the key to unlocking high-value opportunities for customers as well as driving strategic change within organizations. But leaders will only realize these benefits if they change their mindsets and skillsets in specific ways.
In fact, design thinking can do for innovation what Total Quality Management, Six Sigma and Lean principles have done for manufacturing, according to Jeanne Liedtka, a professor of business administration at the University of Virginia’s Darden Graduate School of Business. It is widely believed that these principles have streamlined supply chain management and improved customer experience. Design thinking is potentially even more important, though.
“Design thinking can unleash creativity and help people work together more effectively to manage risk in a changing world and develop radically improved business processes specifically around producing organic growth,” Liedtka said, at a recent webinar led by IMD professors Didier Bonnet and Patrick Reinmoeller. “It’s not very often we discover a new way of working that really has the potential to create dramatic improvements in business outcomes.”
She said the methodology does that by providing a highly structured, scalable and teachable set of tools and methods for innovation. These include new conversational approaches to problem solving that are dialogue-based, so they help organizations bring divergent stakeholder groups into the conversation to find new solutions to problems.
This is immensely valuable to businesses, added David Kester, managing director of David Kester & Associates (DK&A). “The wisdom you get from so many people working in diverse groups — that’s where you get the speed, the smart thinking, and the real creativity going, as you have so many different viewpoints working together.”
Kester provided a real-world example of a four-stage design thinking process at the front end of innovation, the starting point where opportunities are identified and concepts are developed prior to formal product development. His organization teamed up with the multinational software corporation SAP to reduce the prevalence of single-use plastics in modern life. These products have a well-documented and negative environmental impact because they never fully degrade and end up being ingested by marine life.
The first step, discovery, entails home visits, user workshops and interviews with 24 consumers representing a diverse demographic mix to see what single-use plastics they were using daily, and why. The second step was to define project briefs, a short description of the key tasks at hand that might contribute towards solutions for these problems.
The third step was develop, which saw the team engaging in a process of co-creation, ideation and visualization of potential products in a workshop involving 30 big companies. The fourth and final step was delivery, which involved prototyping, and evaluating the results of user testing. The best ideas taken forward as prototypes were tried in the marketplace to build user adoption.
Kester said the benefit of these four steps was not just a faster time to innovation, but high team engagement, earned media value (the monetary value of the audience’s engagement with digital content) and a busy innovation pipeline for the companies involved in the workshop.
Kester’s specific project with SAP was rooted in digital transformation, or the process of using digital technologies to create new business processes, culture, and customer experiences to meet changing business and customer needs. The webinar panel viewed the role of technology as vital in the innovation process.
“Design thinking and digital transformation make excellent bedfellows,” said Didier Bonnet, Professor of Strategy and Digital Transformation at IMD. He advised participants to think of technology as a way to overcome traditional operational constraints in their organizations when it comes to fostering innovation.
“Technology has already allowed us to communicate in different ways and tear down geographical borders, to an extent,” said Bonnet. “In a similar vein, digital technology should be seen as a creative tool to bust constraints when trying to crack complex problems and extend the sphere of possible solutions. This way of thinking about technology makes a difference between success and failure.”
Successfully applying design-thinking methodology to business takes a combination of technology and people. Indeed, all the speakers agreed that autoethnography, an approach to research that seeks to describe and systematically analyze personal experience, was enormously important to innovation.
Patrick Reinmoeller, Professor of Strategy and Innovation at IMD, underlined the importance of bringing together the data with people for innovation to flourish. “How we work together is extremely important in pushing organizations to transcend boundaries to innovation,” he explained. He cited strategy as one corporate function where human-centered approaches could have a transformational impact.
“The revolution that design thinking has brought about is that in strategy we are now at a point where we don’t start with thinking, but we start with observing and taking things in as they really are. And then we start trying stuff out, not assuming we have hit the nail on its head. Finally, we reflect on the process and see how we can further improve it the next time around.”
Despite the immense possibilities that design thinking heralds for strategy and many other business functions, organizations face a number of key challenges which they will need to overcome to reap the full benefits of innovation.
One major barrier to design thinking is education, or the lack thereof. Liedtka summarized the panel’s viewpoint when she said, “There’s a basic skill deficit. We aren’t particularly good, for instance, at doing hypothesis testing and experimentation – we don’t teach it well, or do it, and organizations don’t encourage it. And we don’t have those conversations about bringing diverse perspectives in the room, acknowledging that diversity, and working with it in a productive way.”
Furthermore, she said, organizations were suffering from a fear of failure — “the only thing harder to do in an organization than starting a new idea is to kill one that’s already going” — in addition to our false notions of efficiency.
“We want to decide things quickly to get it out in the market, because that looks more efficient to us, but we may fail. Design thinking asks for an upfront investment in terms of what is required. We need to slow down at the beginning so that we can speed up at the end.”
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