Design Thinking for Business

1.1 Design Thinking

Design thinking, in practice, follows paths that intersect with the management of any project in a simple way. It is an iterative and structured design process in several phases that pushes us to understand the user, question assumptions and redefine problems with the aim of identifying alternative strategies and solutions. Peter Rowe was the first person who used this terminology in his book published in 1987 based on design thinking. This work might be invented in 1980s, but its roots have grown over last century.

Design Thinking is a methodology based on a person-centered approach to defining the design challenge and developing a solution that will work in a specific environment. It is a step-by-step method supported by various design tools (Method cards) for each step of the work to refine the results. It places more emphasis on early interaction with the users/ customers and believes in building the solution with the help of cross-functional teams. It spends more than 20% of the time accurately defining the design challenge and the actual needs/ constraints of the user. Design Thinking can be used to develop a solution approach to a difficult problem, which can be a business model, a service or a product (Sosa, 2015). The Design Thinker does not have to be a domain expert. It is applied to the design of products and services and allows to evaluate, through the involvement of professionals and different components within the process (or company), the existing constraints within the organization or the market itself. There are different formulations of the phases of Design thinking, but the most widespread one is certainly the one proposed by d.school, the design institute of Stanford University. (Burba, 2016)

For example, Wright brothers built their first plane successfully after spending many years in repeating the design and creating the prototype. They have learned from failure as a way leading towards success. Thomas Edison collaborated with other talented innovators for developing light bulb (and several other products), through a trial and error iterative process. This spirit of relentless creations & (which would address) love for the resolution of vacuum pain points, creates multinational business today by James Dyson. Design Thinking has many flavors. IDEO, IBM, d. School and the British Design Council have versions of it.

2.0 Benefits of Design Thinking

Design Thinking has allowed many companies to understand that design is not just "Let's do something nice". And to understand that user experience is a process.

As Jared Spool points out, the term "Design thinking" itself is pleonastic: for those who work in the field, the terms "Design" and "Design thinking" are probably superimposable, because the "new" approach is the integration of various techniques, such as Lean UX, customer journey mapping and rapid prototyping. However, the DT paradigm represented the key to convincing companies that design does not only have to do with color or the graphic aspect. It can be said that this approach has allowed companies to understand that the user experience is a process and not simply a product or a service. It also allowed managers and employees to approach the needs of their customers, to work with a multidisciplinary and problem-solving approach, to follow an innovation-oriented direction. Following are the main advantages of this tool. (Galia Novakova Nedeltcheva, 2017)

It has great value for money

Compared to the benefit it generates within a company, the tool and its concepts have a very low value. It is a very simple philosophy, which will not require high investments. The greatest cost, perhaps, is to modify the company's culture to adhere to the practices of design thinking, because only then will some result be achieved. The possibilities for success are huge, but a daily effort is needed.

The customer at the center of the value chain

One of the great advantages of Design Thinking is that it allows us to get to know our client, that is, put ourselves in their shoes and discover their needs. This is largely due to the fact that one of the keys to this method is developing empathy with users, something that is achieved through their observation.

Turn problems into opportunities

Another benefit of Design Thinking for companies is that it not only allows you to define problems well, but also turns them into opportunities. In fact, thanks to this methodology, finding innovative and creative solutions for possible solutions from companies is quite simple.

Risk reduction

It is also important to note that this methodology helps in reducing the risk. This is because all the factors that are present in the development process are taken into account, that is, technology, the market, competition, customers, suppliers, etc.

Focused on the aspects that truly matter to the user

On the other hand, with this methodology, companies can focus on the aspects that truly matter to the user or consumer, whether at a functional or emotional level. And not only that, but it allows you to quickly conceptualize and test new concepts before making the final decision to develop them. As a result, the products are aligned with the wishes of the consumer or user.

Ideal for teamwork

Finally, Design Thinking is an ideal methodology for teamwork, whether it is small or large groups of people. The main advantage of this is that it allows bringing together different specialists with different points of view: designers, developers, marketing experts, and executives. All of them can contribute enormously in the process. 

3.0 Criticism to Design Thinking

The disadvantages are linked to the structural characteristics of the model. As it is not a methodology and focuses on the creative process, there is no guarantee of execution. Obviously, the result does not result from the simple creation of the idea, but depends on the action (innovation-action).

For this reason, critics of the model highlight cases in which great ideas were developed, but did not “get off the ground”. This apparent disadvantage is actually an alert to the fact that we are talking about a tool. 

The practice of Design thinking has shown its limits or some malfunctions. The Design thinking is practiced in certain situations and is excessively centered on the ideation phase and to the detriment of those who understand the users and defining the problem. The risk, in this case, is that it turns into a mere creation of a post-it wall. And, on another side, the exercise of producing new ideas often comes up against an underestimation of the market context in which a company or product moves.

A further risk is that, often the stakeholders involved in the design process seek solutions not for the real user but for what they have in mind. Design thinking must therefore be able to put the company in front of the experiences and problems that users really experience using a service or product. By comparing different departments of an organization, this risk is certainly mitigated. However, the use of data and analysis on the customer journey can certainly favor the process of empathizing and reasoning through the user's perspective.

Furthermore, the importance of the iterative dimension of Design thinking is often underestimated. Despite being marked by well-defined phases, the DT is a method that does not follow a strictly linear model but pushes to reapply what has been learned to redefine problems and perfect ideas and prototypes. If you apply it to find the best possible solution on the first try, your efforts are almost certainly destined to fail.

4.0 Application to Various Sectors

In recent years, the areas of use of Design Thinking have multiplied and a new way of innovating has been born. A way that combines quantitative methodologies and techniques with more synthetic and intuitive inference processes. Several Design Agencies have exploited their skills to face the challenges and needs proposed by the design of digital experiences in an original way.

It is important to note that any company can apply the model. Regardless of size and structure, the exercise of its application helps to develop a culture of innovation and improves the view of those involved in relation to the market, the company, the competition and the customers. (Burba, 2016)

Giants like Sony and Apple routinely use Design Thinking. In fact, Steve Jobs was a big proponent of his application. The brand's products and the success obtained with the public were largely due to the focus on solving problems, with the contribution of the approach. In Brazil, Itaú is a great case when it comes to this tool, which was used to develop a culture of innovation in the area of resource management.

Originally, Design Thinking was mostly an approach to innovation adopted by design agencies and studios. Today, however, its diffusion is permeating in very different sectors. Even in those considered more distant, until a few years ago. Over the past 6-8 years, some major consultancy firms have made acquisitions of agencies and design studios. Operations with a dual purpose: to complete its portfolio of services, but also to renew its market positioning. Like all this, even the major software manufacturers are winking at Design Thinking. In this scenario, Design Thinking becomes more and more a valid development model to face the challenges of the ongoing digital transformation. To give an example, we can mention the Design Sprint methodology proposed by Google Ventures which allowed to generate a methodology in support of the development of digital products.

The one described, together with many others, is an evident sign of how Design Thinking is becoming a fundamental approach in the new digital world. Moreover, digital transformation is pervasive. It not only impacts the most well-known products and services sector, but requires a radical rethinking of the processes and organizational structures with which these products and services are designed, manufactured and distributed. Hence the growing interest in Design Thinking. An approach that starts from a change of perspective from the past, in terms of mentality, processes and tools.

The most adopted (by 81% of the companies analyzed) is the Creative Problem Solving, which foresees the understanding of the user's needs, hypothesizes a large number of possible solutions to satisfy them, and then identifies the most effective solution. This approach is widespread above all (94%) in design studios, technological development companies (82%), strategic consultants (69%) and digital agencies (67%). 65.5% of the annual turnover of these companies derives from the services based on this model, more than 72.7% divided into Solutions (sum of services, products, communication, retail, experience), over 18.6% in the Direction area (business model and vision and brand) and 8.7% in the People area(which includes organization, processes and corporate culture). (Burba, 2016)

The second most adopted model (from 49%) is the Sprint Execution, which has as its objective the creation of a product to be launched on the market, potentially capable of responding to user needs, but subject to being improved after analyzing the reaction of consumers. It is mainly used by digital agencies (100%), but also by strategic consultants (46%), technological developers (45%) and design studios (35%). Almost half of the annual turnover of these companies (47.6%) comes from services based on this approach, in the Solution area (85.6%), while only marginal shares concern the areas of Direction (9.7%) and People (4,7%). (Galia Novakova Nedeltcheva, 2017)

A third of the companies (34%) also use the Creative Confidence model, which, unlike the previous ones, focuses directly on the involvement of people to create and nurture an organizational culture and a mentality suitable for dealing with innovation processes with confidence. This approach is mainly adopted by strategic consultants (54%), design studios (35%) and technological developers (27%), while it is not present among digital agencies. The weight in terms of turnover is also lower (35%), more than half concentrated in the People area (54%), 26.3% in the Solution area and 19.4% in the Direction area.

Finally, DT is the approach with which companies redefine the corporate vision, the messages and values related to the products and services they offer. This model is adopted by 34% of the sample, with strategic consultants (46%) and design studios (41%) showing up later in adoption, while digital agencies (33%) and developers appear less interested technological (9%). Consequently, the impact on turnover is less than 34.7% of the annual turnover of the companies that adopt it, concentrated mainly in the Direction (41.7%) and Solution (36.7%), with a marginal share which derives from the People area (21.6%).

The real protagonists of this trend are the PSI lab or the Public Sector Innovation Labs, literally public sector innovation laboratories. Over the years they have been defined with different names based on the type of categories and mappings they have been subjected to.

These entities represent real experimentation laboratories where approaches such as design thinking have been applied to real contexts in collaboration with governments and public administrations. In recent years, the European and global network of these laboratories has intensified more and more, including subjects with different strands of interest and different methodologies but with the common goal of innovating the public sector. These are laboratories created within the same national government as Mind Labin Denmark, UK Policy Lab in the United Kingdom, Laboratorio de Gobierno in Chile; semi-dependent laboratories from the national or regional government such as TACSI in Australia, the 27th Region in France or independent agencies such as FutureGovor MaRS Solution Labs. (Mcgann, 2018)

References for Innovation Through Design Thinking

Burba, D., 2016. Agile by Design: Integrating Design Thinking and Agile Approaches Helps Organizations Find and Build the Right Customer-Focused Solution., s.l.: PM Network.

Galia Novakova Nedeltcheva, E. S., 2017. Innovation Through Design Thinking, User Experience and Agile: Towards Cooperation Framework, Bulgaria: Sofia University, Faculty of Mathematics and Informatics.

Mcgann, B. ., 2018. The rise of public sector innovation labs: experiments in design thinking for policy.

Sosa, R., 2015. Beyond “Design Thinking”, s.l.: Design and Creative Technologies, Auckland University of Technology.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Management Assignment Help

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