The Value of Design Thinking and Management
2nd part of an MDes Dissertation produced for Ravensbourne University London
The Power of Design Thinking:
“Design thinking is a human-centred approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success” (Tim Brown, executive chair of IDEO). IDEO describes that thinking like a designer is often a tool for businesses to create products, services, and strategies. But what does it mean to think like a designer? Recalling back to the start to my postgraduate course, we opened a discussion about what design thinking was, in which we unpacked its iterative nature and its power of being a tool for change — a reference point part of the bigger process. Over the course, it became clear that design thinking was a powerful tool that could help achieve a number of things including problem-solving, reframing, abductive reasoning, a way of giving things shape and form, synthesising and even collaborating. If we put these ideas together, we begin to see design thinking as a creative process to resolution of problems and creation of solutions with the intent of creating change. “Design thinking is beginning to be considered a means of improving corporate strategy and, indeed, of transforming a business”. It is therefore being seen as “more comprehensive than the part it plays in traditional product development”. But what does it really mean to think like a designer?” (Cooper, Junginger and Lockwood, 2009).
Thinking like a designer requires one to understand what a design process may look like. Here, the terms analysis and synthesis come into the equation. They originate from classical Greek, meaning “to loosen up” and “to put together”, respectively. This is where design thinking differs from an analytical scientific approach to defining all parameters of a problem to create a solution. The thinking process of a designer is said to be ‘iterative’. A process of repetition and in this case — a repetition of analysis and synthesis, which always go hand-in-hand. “Every synthesis is built upon the results of a preceding analysis, and every analysis requires a subsequent synthesis in order to verify and correct its results” (Wikipedia and Pursel, n.d.). The term design thinking in itself can be confusing when thought through. When we say design thinking, we refer to a key activity taking place, but because the phrase is a ‘doing word’ it is not clear if we refer to thinking about design, thinking through design or thinking of design. When referring to design in practice, we might say that design thinking as an activity allows us to reflect on questions such as what can be designed and who can design it. Thinking about design perhaps shifts our perspectives from only products and services to a system-focused approach. In its wider perspective, when design is applied to the transformation of business, it involves visualisation of concepts and delivery of products and services. However, design thinking as an integral part of the business is not always easy to achieve. In conversation with an independent Design Manager who has worked with numerous businesses big
and small, she reveals that with many organisations, the first step is getting them to understand the role of design in their business, and the many touchpoints it has in an organisation. Companies where new ideas are not widely taken upon and projects that reject the probability of new ideas, usually find it difficult to introduce processes such as design thinking with their work (interview).
With that being said, the concept of design thinking is now taking place in the wider context of management to allow for organisational changes to take place. This ensures design activities can be viewed as being drivers to discover unmet needs, that can create new visions and transform organisations by solving problems such as missions, strategy and ethos, for example. This wider understanding allows it to tap into other parts of the business such as management. However, management of design only happens when organisations recognise the need for design in their work. “People tend
to think of design as individual disciplines, because of which they don’t see it as connected with their business and don’t manage it” (Interview).
“Design is a potent strategic tool that
companies can use to gain competitive
advantage. Yet most companies neglect
design as a strategic tool. What they don’t
realise is that good design can enhance
products, environments, communications
and corporate identity” (Kotler and Alexander Rath, 1984).
Design and Management:
Design as a process and activity is not enough if it is not managed. Design from its managerial perspective is a relatively emerging field. It is fairly complex, and hence, defining it proves to be difficult. Even professionals working within the field of Design Management define it differently. In an article written by lecturers working within Design and Management along with the past president of the Design Management Institute, Thomas Lockwood, they define it to be “the ongoing management — and leadership — of design organizations, design processes, and designed outcomes (which
include products, services, communications, environments, and interactions)”(Cooper, Junginger and Lockwood, 2009). Contrastingly, the Interaction Design Foundation perceives that management and leadership are not the same. And managing design is different from leading design
organisations or processes. “Management, in any business activity, is the act of working with people and processes to reach organizational objectives in the most efficient manner possible. It can include planning, organizing, controlling, staffing and directing people and processes. What it does not include is leadership. While some managers are leaders many are not
and leadership is effectively bestowed upon a person by those who follow a leader and cannot be dictated by corporate position. Leadership is a proactive pursuit and leadership may change within a group dynamic depending on the situation currently being faced — management on the other hand is constant and more reactive. “Management is doing things right; leadership is doing the right things” (Interaction Design Foundation, 2019).
As a Design Management student myself, I have come across multiple definitions of design management, which, in some way or another encompass my journey of Design management. Ultimately, I believe that the role of Design management is to foster an understanding of the role that design plays to fulfil an organization’s long-term goals and objectives. It can also be what links together design, businesses, innovation, and customers to create competitive advantage across their triple bottom lines: environmental, social and economic factors. Design management itself is concerned with how and when design is used in any project or process that a business goes through. Depending on the type of company and their objectives, effective design thinking activities can allow a design manager to implement and manage the creative process and project. Because of which, using design thinking is the prerequisite for effective design management. Unfortunately, designers find a lot of teams in businesses jumping to solutions before exploring the problems or reaching out to understand what their customers want (interview). When
approaching strategies for change, businesses that are open to new ideas and involve discussions of design early on in their processes can be more effective when looking for new business models to deal with the loss of sales or competition (Interview).
“Design Management focuses on a complex of all visual manifestations of
companies, brands and products. As well as on non-visual aspects relating to the design process as such, or to processes for product development, production, distribution, sales, delivery or service.”
There is an obvious creation of synergy between the creative and business realm. They produce the best outputs when applied together; however, these realms still operate with their own culture and own values and project the lack of focus on design in management courses and the lack of focus on business and management in design courses. As a result, businesses tend to view design as their own individual disciplines or even their experience of it (graphic design or product design) and lack the openness to successfully harness its potential.
A recent study into the effectiveness of design investment and management suggests that design will bolster business performance not when it is simply applied or invested, but rather when it is a well-managed process. Peter Dickinson points (Dickson et al., 1995) out that one of the skills of design management is to manage innovation processes and thus concludes that good design management gives companies a competitive advantage and greater success.
In many SMEs (Small and Medium-sized enterprises) where effective design management techniques are rarely adopted, they produce products and services that are technically adept but “ difficult to use or are uninspiring to their intended customers” (Kootstra and Design Management Institute, 2009). On the opposite side, companies may create excellent products and services but fall short on branding, communications and appropriate marketing that attracts customers. Ultimately, these companies fail to gain competitive advantage through the effective use of design.
Designing Business Models for Innovation:
The first chapter in this research underpins the value of organisational and systemic changes in achieving circularity — which directly connects with business models and innovation. We know that business models and innovation are best unleashed with effective deployment of design and management, hence suggesting that well-managed design is an effective way to create organisational changes dealing with sustainability and circularity.
As a product designer, human-centred design was a sort of ‘mantra’ that was part of all our projects. Learning about designing products was more about how this product/service functions perfectly, looks appealing, and less about how good design can benefit the system. This approach to design is potentially problematic. It portrays design thinking as being product and/or user-focused, whilst disregarding the larger perspective that design sits in. ‘Human-centred’ (HCD), as said by Brown, has caused designers to fail to recognise the wider product or service journey past it users — the
very fact that the circular economy is dependant on the focus of the before and after of the product/service journey, means that design thinking focused on HCD is a disservice to achieving circularity. Design thinking and its changing role in organisational transformations must evolve, I believe, from the ever-loved ‘human-centred’ to a humanity-centred approach which stretches beyond just the users but factors in how innovation will impact the system, society, and the planet. The approach to circularity and innovation as said by Chris Sherwin (Sherwin, 2018), is a ‘team sport’. It requires a multidisciplinary mix of skills that involve, marketing, financial, legal, supply chain along with design. The way of incorporating this change leading businesses to the humanity-centred approach is through a dynamic shift in business models which would require the design thinking process to be well crafted and managed. The challenge with robust business models is that the problems brought to the table ought to be well-defined to kick-start
a process. These problems can be crafted in the form of How Might We questions that help translate ideas and insights into questions that can be ideated and solved. For example, if a business is looking for more sustainable approaches to their work, questions such as ‘how might we as a business start to become more sustainable?’ is too broad as a challenge, more focused ones such as ‘how might we continue to do business in this same area while adapting to the environmental regulations?’ might be a prompt to think about sustainable change. But we must first understand the idea of a Business Model and what role it plays in organisations.
“A business model provides a framework for a company’s monetization.
It focuses on defining the audience (customer segment), unique selling
proposition, brand positioning, method of delivery, and distribution channels.”51
They intend to shape every aspect of the organisation’s growth and development and usually change and adapt over time as demands, industries and technologies change. While they are about delivering value to consumers at appropriate costs, there are things to consider even when a company defines their business model, such as what value are they trying to create? Is value to consumers the only important aspect of delivering or does value provided to the ecosystem and society part of the equation? Finally, are the appropriate costs measured only monetarily or do they also account for the costs of consuming resources within the industry?
Design thinking for Business Models
Because design thinking is still being understood by many managers and businesses, its definitions and applications as used by industry professionals have slightly differed and evolved over time. For the purpose of this analysis, I consider the process illustrated by IDEO from their Design Thinking for Educators handbook. While most processes follow a similar format, this particular one is easiest to follow for people even without a design background.
Discovery:
The discovery phase for Business Model Design is all about the right kind of information.
In this phase, all and any information you gather can be used in some form or another.
The process of creating or redesigning a new business model usually starts with a
challenge. So as a business, you know what you want to bring to the table — almost. Inspiration for new business models usually come best from the market and industry.
Customers, potential customers, competitors customers can be approached first hand to successfully innovate. Asking about what satisfies, or dissatisfies customers about the industry at present can spark inspiration for disruption and therefore — creation. Learning about the customer’s pain and gain points along with their knowledge and understanding of what a business may be trying to change, can help match their expectations. Besides the customers, it is also proven (Sniukas, 2019) that looking at business models that dominate and work in the industry can help in understanding what works and why. Lastly, the internal customers and the people that form the heart of the business are important to understand the values that each share. The values that you might want to create with a new business model and how they perceive the skills and assets that can be leveraged.
Interpretation:
The interpretation phase is almost the synthesis phase where you ‘put-together’ the information you have collected. You try and articulate the information you have collected as a business opportunity. Marc Sniukas, the director of the strategy department at Deloitte, says “Make sure you clearly understand what the customer is trying to achieve, what his job-to-be-done is and what makes the current customer experience unsatisfying” (Sniukas, 2019). Customer journey mapping and user personas are the keys as
they help create customer representative groups and articulate the experiences, gain and pain points. This phase is about the effective opportunity for business models. Here, How Might We questions can help clearly present what you know and what to achieve. For example, a question such as ‘how might we adapt to the growing concerns of sustainable business practices whilst still creating value for our market and customers” is a broad question that seems impossible to answer. But it is these that create inspiring
and innovative business models.
Ideation:
Once you understand the market and your consumers, it is followed by identifying the opportunities or the changes you may want to bring to your business. This phase is all about developing ideas on how you can seize those opportunities you have identified. As part of the design thinking brainstorming process, I have used tools such as the Blue Ocean strategy canvas and the Eliminate, Reduce, Raise, Create tools to help with
brainstorming ideas. Ultimately, thinking in the bigger picture, they can be evaluated through value propositions which will help you identify what value your ideas will provide to the business itself, to your customers and very importantly — the system you resource from.
Experimentation:
Snikuas says that he believes experimentation comes with engaging with only one business model idea, rather than multiple ideas as many people suggest. Here, you would experiment with one idea and find different ways to make it happen. Prototypes? Perhaps. “Sloppy discovery and uninspiring questions will lead to dull ideas that are not likely to be very attractive to customers.” So it is important to get every phase right from the beginning so as to lead you to one inspiring business model to experiment with. Reaching out to customers to share your business plans and ethos of working will help the experimentation process by gaining feedback. Once you have validated and implemented this, you begin to learn what works and what does not, which gives you inspiration and insights to further design the business model.
Evolution:
The evolution phase is about reflection and discovery. Re-discovery, to be exact. A journey about re-looking at ideas and outcomes of the experiences as part of the business model development process. Although this is theoretically the last phase in the process, a design journey doesn’t and shouldn’t have any end to it. The end of one process is an inspiration to begin another one. Once here, you fine-tune or redesign and ideate the business model until you can scale it up or use it for other parts of the organisation. This phase brings in reflection as a designer, and even as managers and leaders, you have something to constantly reflect on — the success and influence of your
work. In a discussion with a Management Consultant, I had the chance to reflect on what the meaning of ‘success’ is and how it is measured up in organisations as part of different projects and outcomes. He exclaimed that “success is about a wish to continue a relationship” (Markham, 2020). This is an important part of the evolution phase in your business because a successful relationship with your users — internal and external as well as with the society and system, would stem from constant growth and reflection of said
relationship. Continuing to measure up the value that is created for all involved parties, is the goal of a successful relationship and the business model. Despite the growing body of research and analysis on BMs, they are complex and multidimensional, giving rise to challenges that may hinder its implementation. Business model innovation often cannot take place because an organisation cannot identify an appropriate model or challenge for the technologies or solutions. “Clear and strategic change can only happen when companies have a clear vision and the resources to follow through it” (interview). Clayton Christensen identifies that “the root of tension is the
conflict between the business model established for the existing technology, and that required to exploit the emerging, disruptive technology” (Chesbrough, 2010). Prahalad and Betiss’ concept of dominant logic of how firms create and capture value can act as a double edge sword as it describes how businesses usually assess, select and interpret information in often chaotic environments. But following this submissively can risk businesses to miss potentially valuable uses of their technology and prevent them from utilizing value-creating opportunities (Chesbrough, 2010).
Similarly, organizational inertia is stated as a reason that change efforts are sometimes unsuccessful (Geissdoerfer, Vladimirova and Evans, 2018). Inertia caused by different barriers to organisational change such as inefficient top management, agency problems and power struggles, also apply to complex business model changes. The discussion for change management’s stages and
pitfalls are vast and are not the focus of this research, however, it is to be acknowledged as a part of BMI and plays an important role in guiding change.
Ultimately, design thinking is a tool for creating change. With the thinking process comes the management process and businesses that use and manage design effectively see better successful innovation. “Well-managed design has the power to enable strategy, create innovation, build brands, and ensure customer satisfaction”. The five-step design thinking process is especially useful when integrating design for the first time as it outlines a framework from which new business models can be created. In the case of sustainable and circular business, they are an outcome of successful business
models. But, with design focused on users, how can businesses begin to think about the experiences their consumers encounter and how might this begin to affect their competitiveness and business models?
…End of chapter 2…
