I came across this great article in Marketing Magazine by Michelle Dunner, and I think it really clearly states how design thinking can improve business. I know this is what we are teaching design students, to think of the user experience and expand on the possibilities of services and products. Here's a great quote by Designworks strategy director Luke van O.

“Even at the exploration stage, design thinking offers an interesting way of approaching problems in a manner that invites trying something new. It’s a positive way of exploring the opportunity for change rather than a scary way of reacting to the need for change."

Seemingly crazy ideas, out of the box thinking – why are the problem-solving processes of the design disciplines are being tapped to drive innovation and market impact in 2015? By Michelle Dunner.

In recent decades, few consumers could fail to have been exposed to one of the most famous exponents of the process known as ‘design thinking’.

With not even the slightest hint of hyperbole, Apple, its guru Steve Jobs and head designer Jony Ive set the mood for a generation with the suite of ‘i’ products – Pod, Phone, Pad, Mac. For decades now, the company has delivered a host of instantly desirable items making Apple the world’s biggest company by market capitalisation and cemented it as an all-time great brand. While ‘design thinking’ may not be particularly new, it’s certainly hot. Australian organisations are increasingly looking to the process to drive improvements and innovations in their businesses. It’s led to a rise in strategic significance of the role of designers, whether in consultancy firms or in-house, and raised questions on whether it sits most naturally as part of the marketing function.

While Apple’s case study is often cited by design thinking leaders (if somewhat reluctantly), there’s no doubt it represents the most successful example yet of a company that has the process at its heart – and it’s hard to argue with the impact on the bottom line.

So what is design thinking, why is everyone talking about it and what are the takeaways for marketers?

RMIT University design professor, Gerda Gemser says the definition can be ambiguous. “There are lots of interpretations, but to my mind it’s a set of practices that helps companies see problems from a new perspective and solve them in an atypical way,” she says.

While design thinking essentially evolved from industrial and product design, the process is now being embraced across the corporate spectrum. Gemser explains: “In Australia, we see financial institutions now using design thinking, which may, for example, help them discover gaps in the market for new services, or redesign existing services.”

The challenges

Given design thinking is not a product but a process, what are the factors that could derail its impact? Gerda Gemser says companies need to have a purpose in mind. “If you are not interested in innovation, new services, new products, new solutions to problems, then don’t look at design thinking.

“I’ve only been in Australia for two years and I would say we are in the initial phases of embracing design as a competitive force. In Europe, where I did my PhD, its benefits to business are much more established. It’s not yet ingrained here with companies that design can help them innovate and compete better and the upside is a lot here that can be done. Having said that, there are, for example, some large financial institutions here that are embracing design thinking and there are major consulting organisations like Deloitte that are doing a lot in this area.

“Design and innovation are closely linked and innovation is certainly not a fad. Companies need to innovate and differentiate to survive. In Western economies, it’s the only way to compete because they certainly can’t do that on costs.”

Designworks’ Luke van O says it’s important to communicate what the process does and what it can bring. “A lot of our engagements come from large, established clients that are not afraid to ask big questions of themselves or approach a potentially significant change in their corporate history. At the same time, there has to be a level of pragmatism involved. The moment you start talking about design thinking to some corporations, there’s an attitude that it’s chaotic, loose, ill defined or self-indulgent. The reality is that it’s an extremely high-level cognitive exercise that requires a lot of specific elements to be set so that it’s an achievable process.

“I would be surprised to find any situation in any business that couldn’t be served by a design thinking approach. It’s a method, a way of looking at things, an alternative process to finding a way through. It doesn’t mean that it’s the only process that would work, but I believe, given the strong possibility that it will create a benefit, it should be explored.”

that are not working well. Having said that, it’s not suited to a program or desire for incremental improvement – companies implementing design thinking should be looking at something that is radically different, something that hasn’t been thought about.”

Designworks strategy director Luke van O agrees. “Even at the exploration stage, design thinking offers an interesting way of approaching problems in a manner that invites trying something new. It’s a positive way of exploring the opportunity for change rather than a scary way of reacting to the need for change.

“In the current climate, it can be very difficult for leaders to find new ways of looking at things, or even the time to step back from the day-to-day running of their business to look at essential strategy such as evaluating immediate competitive threats.

“I see a boldness in the corporate world at the moment, a desire to seize opportunity. Design thinking, by definition, is a more positive way of looking at the future of an organisation. The focus is on a better future state; what point do we want to get to and what can we achieve, rather than what limitations do our problems impose? Basically, design thinking shouldn’t replace the processes an organisation has always used, but rather be embraced as a way of generating different solutions to problems.

“A lot of clients focus on trends, but I recently told a client that we needn’t consider them at all. Once a trend’s been identified, named and is being talked about, it’s no longer new. To be new, you must create the things that will become the trends followed by others. That’s where the design thinking process can add most value.

“It’s a key reason why Apple and Jobs are so often discussed in this context – that notion of the outsider, the challenger, the rebel becoming this hugely successful corporate beast. What they came up with seemed like crazy ideas at the time. People often react now to new ideas with a desire to validate them through testing. How do you test the future?”

Are you in, or not?

Big organisations are now actively recruiting designers. Companies such as UK banking giant Barclays, Asian telecommunications firm Singtel and computing behemoths IBM and Microsoft have ramped up their intake of designers in recent months. Some of these companies have products, some have services, others have combinations of the two; what they all have in common is customers.

With in-house capability rising, what are the implications for design consultancies? Gemser says a role remains for both. “Microsoft is a company that was always very engineering-based and still is. I read in The Sydney Morning Herald recently that they’ve tried to become more design-driven, having doubled their number of designers over the last four years to around 1400 and giving designers – rather than the engineers – more influence in decision- making.

“That doesn’t mean, though, there is no role for the external consultancy. If you take [Dutch electronics company] Philips as an example, they have a lot of designers in-house, but maintain relationships with external consultancies because they get fresh perspectives and that’s an important part of the design thinking process.

“I would say, however, there’s a trend to greater professionalism in design consultancy firms. It’s not about just looking at service design or interaction design; the firms need to operate on a more strategic level. A firm might be engaged to look at a particular problem but, in design thinking, often they need to go beyond the initial brief to be able to identify something that will offer their client a competitive advantage.”

Gemser says there are two streams in design thinking research. “IDEO, for example, is a proponent of going into the customers’ world, so you can really see what the issues are and then suggest the path to improve. Other researchers like [Milan-based professor of leadership and innovation] Roberto Verganti say it’s important not to engage with the customer too much, so that you can’t see beyond their direct environment. Most customers aren’t trained to see possibilities in the far future – that’s a key thing that design thinking practitioners bring to the process. Steve Jobs said you shouldn’t ask customers what they want. His famous quote is that until you show them, they don’t know.

“To have a successful design thinking process, we must get out of the ivory tower, to engage with stakeholders at all levels and particularly stand in the shoes of the actual customer to get a feel for what they experience and how it could be better,” adds Gemser.

Luke van O says Australian companies generally have taken a consultative approach to design thinking, driven by partnerships with creative agencies. “Sometimes this starts with something small: a company will bring someone in or partner with a business that has design thinking capability.

“It’s extremely unlikely that a large-scale, established corporation will, on a whim, want to review their entire reason for being,” adds van O. “They may snap off a bite-sized problem to see what impact the design thinking process may have. This can often have a snowball effect. Because design thinking is a method, rather than a product in and of itself, companies may give it a go and, if it works, eventually progress to addressing bigger questions.”

FutureBrand director of strategy Doug Nash says that the process relies on the involvement of stakeholders at all levels and benefits from an external stimulus. “A traditional way that corporates have looked at issues, when they’re tasked with preparing their next magazine or internet banking website, is to treat them as piecemeal. They start some internal research to identify, say, their top 10 problems or questions, engage a creative agency to come up with ideas and a GM sits at the top of the tree to pick that one they like,” says Nash.

“A design thinking process founded on creativity can be very challenging for businesses to implement and it sits uncomfortably with some executives because it means a shift in the way they allocate their resources to a problem. Some leaders need to accept that the best ideas may not come from the top. The GM’s idea on what would ‘fix the business’ can’t be privileged.”

Where does it sit and fit?

There is considerable debate on whether design thinking should sit within the marketing function in a typical corporate structure. Gemser believes it depends on who is tasked with innovation.

“If it’s a market-driven organisation, then there’s a natural fit with the marketers,” she says. “If it was an engineering-driven company where the marketers don’t necessarily have a lot of say in terms of product development, then perhaps design thinking shouldn’t sit there. Design should be core to innovation processes and sit where they are being initiated and developed.

“A lot of research suggests marketers and designers think differently and there can be tension between the two. There’s an element of truth to that. Some companies send their marketers to design courses and think after two weeks of training they have someone who knows it all and can become the design professional. That can be a common attitude with many creative pursuits. I think that’s an unnecessary devaluation of the design profession. However, helping marketers to understand the way designers think and to know some of the techniques can help them work together better.”

Nash adds that the process needs to be worked through in light of organisational politics. “The reality is there’s often an overlap between customer experience and what the marketing team would traditionally look after.”

But van O says it’s also a reflection that more organisations are bringing their marketing functions “closer to the centre of the spinning record”.

“I’ve seen the rise of the CMO (chief marketing officer) and more senior marketers assuming CEO positions. It’s purely logical that we see design thinking processes and the elements generated as a result come under marketing. The marketer has gone from a communicator to someone who drives traction and competitive differentiation. I’d describe marketing as the easiest door for design thinking to walk through in order to enter the consciousness of the organisation.”

The big names

Tim Brown, CEO of IDEO, arguably the world’s best-known design thinking agency. Watch his TED Talk titled ‘Designers – think big!’,
Roberto Verganti, Italian leadership and innovation professor and author of Design-driven Innovation,
Hasso Plattner, the billionaire German co-founder of SAP, who helped found the Hasso Plattner Institute of Design (also known as ‘d.school’) at Stanford University, which integrates business and management training into more traditional engineering and product design education. In 2011 he co-edited the text Design Thinking: Understand, Improve, Apply.

The rules

In Design Thinking: Understand, Improve, Apply (2011, Springer), Christoph Meinel and Larry Leifer write that there are four rules to design thinking:

1. The Human Rule: all design activity is ultimately social in nature

“There are studies that substantiate the assertion that successful innovation through design thinking activities will always bring us back to the ‘human-centric point of view’. This is the imperative to solve technical problems in ways that satisfy human needs and acknowledge the human element in all technologists and managers.”

2. The Ambiguity Rule: design thinkers must preserve ambiguity

“There is no chance for ‘chance discovery’ if the box is closed tightly, the constraints enumerated excessively and the fear of failure is always at hand. Innovation demands experimentations at the limits of our knowledge, at the limits of our ability to control events and with freedom to see things differently.”

3. The Redesign Rule: all design is redesign

“The human needs that we seek to satisfy have been with us for millennia. Through time and evolution there have been many successful solutions to these problems. Because technology and social circumstances change constantly, it is imperative to understand how these needs have been addressed in the past. Then we can apply ‘foresight tools and methods’ to better estimate social and technical conditions we will encounter five, 10 or even 20 years in the future.”

4. The Tangibility Rule: making ideas tangible always facilitates communication

“Curiously, this is one of our most recent findings. While conceptual prototyping has been a central activity in design thinking during the entire period of our research, it is only in the past few years that we have come to realise that ‘prototypes are communication media’. Seen as media, we now have insights regarding their bandwidth, granularity, time constants and context dependencies.”

The process

A version of the design thinking process for problem solving described by Cliff Moser in Architecture 3.0: The Disruptive Design Practice Handbook has seven stages in which problems can be framed, the right questions asked, more ideas created and the best answers chosen. The steps aren’t linear, can occur simultaneously and be repeated.

Define

Decide what issue you are trying to resolve,
agree on who the audience is,
prioritise this project in terms of urgency,
determine what will make this project successful, and
establish a glossary of terms.

Research

Review the history of the issue – remember any existing obstacles,
collect examples of other attempts to solve the same issue,
note the project supporters, investors and critics,
talk to your end-users, that brings you the most fruitful ideas for later design, and
take into account thought leaders’ opinions.

Ideation

Identify the needs and motivations of your end users,
generate as many ideas as possible to serve these identified needs,
log your brainstorming session,
do not judge or debate ideas, and
during brainstorming, have one conversation at a time.

Prototype

Combine, expand and refine ideas,
create multiple drafts,
seek feedback from a diverse group of people,
including end users,
present a selection of ideas to the client,
reserve judgement and maintain neutrality, and
create and present actual working prototypes.

Choose

Review the objective,
set aside emotion and ownership of ideas,
avoid consensus thinking,
remember: the most practical solution isn’t always the best, and
select the powerful ideas.

Implement

Make task descriptions,
plan tasks,
determine resources,
assign tasks,
execute, and
deliver to client.

Learn

Gather feedback from the consumer,
determine if the solution merits goals,
discuss what could be improved,
measure success,
collect data, and
document.