Design Thinking is no longer the exclusive domain of designers. By applying the process that has produced indispensable products like the iPhone, or iconic imagery such as London’s railway network map, you can develop effective solutions to the greatest business challenges.

Some of the world’s most successful companies such as Google, Apple, Microsoft and Netflix are already using this nonlinear problem-solving process. Here’s how you can increase innovation and value with the power of the Design Thinking process.

Contents

 

What is Design Thinking

Business decisions have traditionally been made by managers using ‘rules of thumb’ or heuristics to help make sense of complex, uncertain and ambiguous information. While taking care to avoid any potential bias, managers would weigh up options and make a decision with the best interests of the business in mind.

Design Thinking encourages us to make decisions from the perspective of the user or customer. It takes the approach that designers have traditionally used, which is to understand the customer and focus on the solution to a specific problem. Design Thinking develops several solutions and tests them with the user until they and the business are satisfied..

You might think of design as the finished result of an object, an image or clothing. Yet, it’s more helpful to think of design as a process for problem-solving. Design Thinking takes this problem-solving process and applies it to areas where designers haven’t traditionally worked.

Design Thinking encourages us to make decisions from the perspective of the user or customer.

A common urban myth highlights the benefit of Design Thinking. The myth says that in the 1960s NASA spent a lot of money developing a pen that was able to write in space. They defined the problem as ‘pens don’t work in zero gravity’. The Soviet Union on the other hand viewed the problem from the user’s perspective – ‘the astronaut needs an implement to write in zero gravity’. So, they used a pencil.

Design Thinking is about putting users first. It’s about empathising with the user.

 

Benefits of Design Thinking

Research by the Design Council in the UK has found that design can have a positive impact on all business performance indicators. To put that in monetary terms, for every £100 spent on design, businesses increased turnover by £225. These profitable businesses were twice as likely to have recently developed new products or services, and most of them had designers in managerial and executive levels.

Internationally, large organisations like IBM have made a cultural shift and introduced a Design Thinking framework that is in daily use. With a third of their global workforce now using Design Thinking, IBM’s Design Thinking teams are reducing design and development time by up to 75 per cent. In addition to reducing time to market, IBM is also helping to reduce costs and create greater ROI for their customers as well.

The user-centric approach of Design Thinking also improves customer retention and loyalty, something that can be seen clearly with Apple users. When Steve Jobs introduced the first iPhone in 2007, he highlighted the benefits for the user, not the marvels of technology that enabled one device to do so much. He championed Design Thinking by focussing on people’s needs and desires in addition to the needs of the business.

Design can have a positive impact on all business performance indicators.

 

The key principles of Design Thinking

One of the key principles of Design Thinking is to step into the shoes of your user or customer. Human-centred design creates solutions, products and services that satisfy fundamental human needs and desires. It’s the difference between giving the user what you want and giving the user what they need.

This isn’t a new idea. In 1894, Will Kellogg used Design Thinking to create a breakfast food that is still a household staple over 120 years later. He created Corn Flakes for hospital patients with diet restrictions, then asked them what they thought of it. With their feedback he adjusted the formula, something he continued to do when he was selling the product in stores.

Design Thinking is non-linear, and redesign plays an essential role in the process. Mr Kellogg recognised this as he listened to his customers and continually redesigned his cornflake formula until all parties were satisfied. At any point in the Design Thinking process you must be prepared to take a step back to redesign.

Another key principle is to embrace ambiguity. The world is becoming increasingly nuanced and there is no one right way of doing things. All business decisions will involve a level of ambiguity which can’t be removed or oversimplified. It’s in this zone that you can see things differently and experiment to find true innovation.

 

How Design Thinking Differs from Traditional Thinking/Agile Thinking

Traditional thinking relied on proof and decisions were based on previous experience. Business theories evolved from Max Weber’s bureaucratic theory to Michael Porter’s five forces analysis, and beyond, to give business leaders the proof they needed to support their decisions. Customer interactions were limited to focus groups and often their feedback was discounted when it didn’t support the desired decision of the business.

One of the most famous mis-steps of traditional business thinking was the introduction of New Coke in 1985. Despite a consistent portion of focus groups responding negatively to the idea of changing the flavour, Coca-Cola decision makers believed it was the solution to the growing popularity of soft-drink rivals. The market quickly told them otherwise.

Agile Thinking is another concept that has similarities to Design Thinking. Agile thinking is a software development process for teams that has been adapted and adopted in many different types of business. Agile is based on a manifesto that values individuals over processes, working software over comprehensive documentation, customer collaboration over contract negotiation and responding to change over following a plan. It creates several iterations of a solution in a process called sprints. Each iteration is tested and reviewed before moving onto the next iteration, allowing the team to respond to change quickly and get a solution to market rapidly.

As a leader in business you might feel like you have to make a choice between one or the other. The good news is that they dovetail together quite nicely. Design Thinking is a process that identifies a problem to be solved from the perspective of the user. Agile thinking can be used to create and refine that solution. There’s a large area of overlap where Design Thinking works very well with Agile Thinking.

A postgraduate education can expose you to case studies across all different industries, by examining a range of common and specific risks in different situations. You’ll also get the opportunity to meet people from a variety of backgrounds. Learning from past experiences – both your own and of others – is a good way to help identify more risks on projects, as you’ll have a greater understanding of the kinds of things to look out for.

 

Design Thinking Process

The Design Thinking process has five main steps which are research, define, ideate, prototype and execute.

Research

Put yourself in your customers shoes. Their perspective of the problem may be completely different from where you’re looking. While your definition of the problem is ‘sales are down’, your customers may actually be struggling to find your product online.

Define the issues that the user experiences

What patterns do you observe in the difficulties and barriers that your users experience? The answer will help you create a clear point of view statement which frames the problem from the perspective of the user.

Ideate

Come up with ideas to solve the problem using brainstorming, mind mapping, role playing scenarios, storyboarding and other design processes. Designers are known for working with Post-it notes to gather their thoughts. This allows them to get all of their ideas down on paper, then move them into relevant groups for refinement and for the next ideation. Narrow down your ideas to a few possible solutions.

Prototype

Develop a tangible prototype or scaled down version of your preferred solutions. Bring your customers or users into this process to get their feedback. Does the prototype specifically address their problem? The answer will decide whether your prototype is accepted, improved, redesigned or rejected completely.

Execute and test

Test your accepted prototype. Again, it’s important to invite your customers or users in to test the solution. Even though you’ve gone to the effort of understanding the problem from their perspective, that won’t be enough to enable you to test the solution independently.

While testing might suggest that the end is in sight, it’s very likely that the outcome of the test will send you back to any of the earlier stages of Design Thinking. This process continues in iterations until all parties are satisfied with the result.

 

How Design Thinking Applies to Business

For over a decade, businesses that apply Design Thinking have been outperforming those without Design Thinking. Research and measurement in the US and UK reveals that these businesses have out-performed on share price, competitiveness, market share, sales and employment. They include companies with a visible design approach, such as Apple, Herman-Miller and Walt Disney – and companies that apply the design process internally, like IBM, Whirlpool and Newell-Rubbermaid.

In these businesses, Design Thinking is applied at a strategic level and carried down through the business in a way that is measurable. It’s used to review business functions which are reducing time to market and delivering cost savings. As an organisational driver, Design Thinking helps to identify new markets and then minimises organisational impacts when entering those markets. With a focus on the user, it’s also an essential process in brand perception activities.

 

Design Thinking Success Stories

Anyone who has had an MRI scan will tell you that it’s not a pleasant experience – it involves lying with your head inside an enormous magnetic ring that is claustrophobic and alarmingly noisy. For children, the experience is so frightening that many have to be sedated. So, GE Healthcare applied Design Thinking to make it a less traumatic experience.

An engineer observed a child arrive with their parents at hospital for an MRI. Before they had reached the beige, dimly lit room where the MRI machine was located, both parents were stressed, and the child was crying. The engineer understood the anxiety of the user and the machine hadn’t even been turned on.

GE Healthcare transformed the MRI from a test to an adventure. The MRI machine and room were painted to become a pirate ship, camping ground or underwater reef. In the camping adventure, children lay down in a special sleeping bag and participated in a story that enabled the MRI test to take place. These child-friendly scanners not only alleviate the anxiety for children and parents, but they reduce the time required and eliminate the need for sedation.

Proctor and Gamble (P&G) used Design Thinking to restore the brand perception of its best-known skin care brand, Oil of Olay. In the 1990s the brand was seen as old-fashioned and only suitable for older customers who were price sensitive. P&G looked beyond customers who may become Oil of Olay buyers and instead focussed on customers in distant markets – women in their mid-thirties.

P&G research enabled them to reframe the problem from reducing wrinkles with skincare products to promoting a healthier, youthful and beautiful life. Olay Total Effects was launched as a mass prestige (masstige) product – at a higher, prestige price than Oil of Olay, but for a mass market. Three more masstige products followed at higher prices and P&G enjoyed double-digit sales growth, with higher profit margins.

 

Interesting and Unusual Applications of Design Thinking

Design theorist Horst Rittell came up with the concept of wicked problems to describe ambiguous problems that don’t have a definitive solution. Problems like poverty and climate change are wicked problems. Design Thinking offers a way to approach these problems that is completely different to our traditional methods.

Project H Design is a charitable organisation that uses Design Thinking to create humanitarian solutions for global communities. One example is a Hippo Roller which is a water tank that will hold four days of water for a family of seven and can be rolled by children like a wheelbarrow. After creating the Hippo Roller, they raised funds to supply them to villages in North-eastern South Africa.

On a more personal level, many are using Design Thinking to improve their own lives. Stress is a common experience in the modern world, with constant connectivity, limited privacy and never-ending emails. Design Thinking offers a process that starts with self-empathy to define and reframe the problems in our lives, before testing prototypes that can lead to improvement.

 

How to Learn about Design Thinking

 

RMIT’s online MBA is built around Design Thinking. As a core course, Design Thinking for Business introduces the process of Design Thinking and how it can be applied in a business context. You are then invited to apply this process throughout other core courses on leadership, financial analytics and strategy.

This two-year intensive part-time course will enable you to apply Design Thinking on a daily basis, whether you are redesigning your life, or tackling the most wicked of problems.

Design Thinking is a process that empowers you to identify a problem and frame it around the user. By solving the user’s problem, rather than simply applying your solution, you can satisfy all stakeholders. And as a non-linear and unlimited process it makes it possible to ensure continuous improvement into the future.