Knowledge Center: Article
Bolstering innovation through design thinkingSubscribe to Consumer Markets 9/7/2016 James de Vries
Companies have long struggled to instill creativity and innovation in their organizations. One strategy is “design thinking,” an innovation methodology that draws upon the practices and sensibility of designers to help solve business problems. We recently asked James de Vries, the creative director of the Harvard Business Review Group, to explain how it works. While the result—or output—of design thinking in a company might be a tangible product or service, de Vries argues that the process of design is the place to start. The following commentary is adapted from an interview.
The essence of design thinking is taking what great designers do instinctively and teaching it to your team and organization in such a way that it unlocks creativity and builds new revenue streams.
That’s what it is. What it’s not is a silver bullet to solve all your problems. In fact, the concept of design thinking is often hard for executives to even understand. For this reason, I sometimes disagree with it being called “design thinking” at all. When we talk about design, some executives immediately imagine the end of the process—the product or service—and they think that design thinking is all about creating something “nicey nicey.” And if we call it thinking, they envision someone sitting in a lounge chair smoking a pipe and having deep thoughts.
Rather, design thinking shares many traits with agile software development. You’re looking to find a way to solve problems creatively, and innovate quickly, with quality. But you need to resist the temptation to look for one answer. Instead, you want to create a mushroom of possibilities that generate the energy and momentum that will help you find the right direction. The initial phase of design is a blossoming of different options, rather than a narrowing down.
Design thinking is also about action—taking advantage of the process that designers go through and applying it as a discipline for solving difficult problems. It taps into our natural ingenuity as human beings, and uses some simple techniques that unlock the creative and collaborative spirit inherent in all of us.
Indeed, design is the ultimate human activity, because we use our left and right brain—not in a random way, but by directing creativity based on smart, logical, and intuitive thinking. You don’t discard logic. You develop techniques to surprise yourself into a creative solution that also makes logical sense. And it’s hard work.
Making the leap of faith
One challenge with design thinking is that it’s often seen as yet another fad. To get past this, design thinking needs to be integrated into the fabric of the business. It needs to have clear sponsorship from the top, with senior executives who understand what’s involved and are convinced of its merits.
But that’s challenging because design thinking can’t be measured analytically. I agree with Jon Kolko, of the Austin Center for Design, who says great ideas can’t be tested—only mediocre ideas can be tested. Because designers are conceptualizing something that doesn’t yet exist, their process can be measured only after the fact. This means they must make intuitive or inferential leaps.
So for business leaders to copy the way designers intuitively work, they must often do the opposite of what their instincts tell them, forsaking strictly deductive reasoning for abductive “leaps of faith.” And to do this, of course, executives need to be convinced that it will give them a result.
Anecdotally, we know that design thinking has the capacity to create a huge leverage on investment, but initially the hard data may not be there. Therefore, business leaders need to get comfortable putting away their usual sorts of expectations for hard and fast results.
James de Vries
Born in Sydney, Australia
Visual Communication Degree, Sydney College of the Arts, 1984
Harvard Business Review Group (2011–present)
Creative director, Harvard Business Publishing media group
de Luxe & Associates (1993–2011)
Responsible for major publication designs, including revamps of newspapers, books, and magazines in Australia, New Zealand, and the Asia Pacific region
Taking the plunge
Yet companies do—and are—benefiting from design thinking. For example, PepsiCo CEO Indra Nooyi has created the function of chief design officer (CDO). She sees this as a way to gain strategic advantage, investing in a system that allows a giant business like PepsiCo to innovate across all of their corporate and product silos. Pepsi CDO Mauro Porcini has a very close relationship with the other divisional heads. When I visited him in his New York office, I noticed that the global head of beverage is in the office next door. There is a real sense of closeness at the top there.
In my interview with Porcini for Harvard Business Review, he says design thinking needs to be introduced into an organization as an evolution, rather than a revolution. He identifies five main stages—denial, when an organization refuses to see that it needs a new approach or a new culture; hidden rejection, where the leaders want a new approach but the rest of the organization isn’t there yet; the occasional leap of faith, with some good projects under way, and some quick wins proving the viability of design thinking; the quest for confidence, when the company sees that it’s working, and moves to embed it in the organization; and holistic awareness, when everybody understands that there’s a culture of innovation, and everyone can take part.
One of his best examples of design thinking at Pepsi is a series of fountains and vending machines that allow customers to mix their own drinks. It’s called Spire—and it’s unusual in that it includes the delivery of the product as well as the drinks themselves. It came about because Porcini wanted to reimagine how his team might build beverage, and eventually food, experiences in restaurants in the future. The new machines were prototyped rapidly and received positively in the marketplace.
Business leaders like the idea of design thinking because it offers a low-risk way of testing new models for products, services, and strategies, compared with, potentially, having someone make a business case based on conjectural financial projections, and calling for, say, 20 people for six months. They work away, and things get more complicated. They then ask for another 20 people, and in reality the project takes a year. The risk level goes up and the chance of failing increases.
I believe we will see the real power of design thinking at the strategic level. While it’s very useful in a consumer-based company for developing new ways of coming up with products, potentially the greatest opportunity lies in developing ways for companies to use design thinking to create strategy, and find new sources of competitive advantage.
“Breathing in” the emotions of your customers
Apple is an outlier organization, and for that reason I don’t usually like referencing it. However, we can learn from Apple’s evolution. In its early days, Apple’s existing strategy was driving the company to death. Market share was down to 3.5% at one point, and a new CEO had come in and put forward the quite logical idea that Apple should license the manufacture of Apple clones. Now, in a conventional business that would make sense, because it opens the market up. But it didn’t work for Apple.
Apple recognized that what made its strategy work was not just the hardware, but how the customer interacted with the product, and cloning wasn’t going to accomplish their goals. Instead, Apple needed something completely radical and surprising—which happened, as we know, with the iPod and then the iPhone.
As the new company-saving products were rolled out, the true nature of design thinking at Apple became apparent. It wasn’t so much about the design—which was already exemplary—but the thinking behind the design. The essence of their skill was to “breathe in” the needs, desires, and emotions of the customer, and then produce an integrated software and hardware package that was way beyond a nice-to-have. With iPods and iPhones such a compelling and irresistible impulse buy, they became a must-have for many consumers.
As Apple disrupted the music and smartphone industries, it also disrupted itself—moving so far away from its “computer” roots that it even removed the word computer from its original company name, Apple Computer.
Technology companies that are all about intellectual property and innovation are often good exemplars of design thinking—particularly as coding skills become more and more commodified. IBM, for example, now has a goal of teaching techniques of design thinking to all of its workforce. To make a statement, the company has set up its cloud solutions division, the Watson Group, in New York’s “Silicon Alley” district, in a building designed by Fumihiko Maki, who designed Tower 4 of the new World Trade Center.
Designing strategic advantage
Design thinking shouldn’t take place separately, inside a corporate skunkworks. While this can be a great device to experiment without disrupting the mainstream elements of the business, setting up a rebel unit can easily wind up ghettoizing the so-called “cool kids.”
Anyone can become a design thinker—and being good at it doesn’t mean you need to be a good designer already. Obviously, some people catch on to it much more quickly than others, but I’ve seen great design thinkers emerge from actuarial divisions or among the ranks of company engineers. There are still roles for virtuoso professional designers, and it is helpful to have been a designer—but it’s not essential. The objective is the co-authorship of solutions, with teams working to discover stuff that you didn’t know was there.
Companies can use tools, such as ethnographic studies, or giving cameras to a group of potential customers so you can see what they do with their day. There are many time-honored techniques that allow you to get into the mind of a customer without trying to drag it out of them in a stuffy two-hour interview.
An arsenal of different methodologies is available; the Pittsburgh-based LUMA Institute, for example, identifies 36 useful methods.1 Some of these are good for discovering the problem, and others for defining the best direction, or understanding how your customers will use your product or service. Once companies find what they need, they can often build the capabilities in-house.
Without immediately quantifiable results in terms of dollars and cents, companies may find it useful to watch for two early success indicators: improved engagement with customers, and reputational feedback from the marketplace.
Leadership support is particularly crucial at the delicate “hidden rejection” phase, because if you experiment with something and it doesn’t work, that will reinforce the naysayers who claimed it was all rubbish anyway. Someone needs to prioritize and communicate priorities—it’s not a free-for-all—and, to borrow an image from pottery, you must constantly “trim on the wheel” to keep things going in the right direction.
The key is that it needs to be responsible to the top and not treated as a backwater of the marketing department.
Finally, I believe companies need to commit enough resources to encourage the success of design thinking. Too many great ideas have failed because they were meanly funded.
James de Vries is the creative director of the Harvard Business Review Group.
This commentary is adapted from an interview conducted by Thomas Liddle, an alumnus of Heidrick & Struggles' Sydney office.