design-thinking

A Quick Introduction To Design Thinking

Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered 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.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.

Origin of the term design thinking

While design thinking has historic roots that date back to the 1950s, 1960s, when design methods started to be applied to business, it gained momentum in the early 2000s when the consultancy firm IDEO popularized it further.

design-thinking-google-ngram
How design thinking has grown in popularity starting the 50s, 60s and it gained momentum throughout the 2000s according to Google Books Ngram.

Today Design thinking has become even more predominant and popular throughout the 2010s when thinkers like Tim Brown, Tom and David Kelley from IDEO highlighted how design could be used as the primary force to balance out human needs with technological feasibility and viability.

design-thinking-google-ngram
The spike and explosive growth in interest in design thinking throughout the 2010s, when the founders of IDEO popularized the term.

What is design thinking?

As highlighted on IDEO, by Tim Brown, Executive Chair of IDEO:

Design thinking is a human-centered 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

At the base of design thinking, there is creative confidence. Tom and David Kelley put it in Reclaim Your Creative Confidence, back in 2012:

…creative confidence—the natural ability to come up with new ideas and the courage to try them out. We do this by giving them strategies to get past four fears that hold most of us back: fear of the messy unknown, fear of being judged, fear of the first step, and fear of losing control.

In an interview in 2012, on HBR about “The Four Fears Blocking You from Great Ideas” Tom and David Kelley explained what prevented people to unlock their creative power:

  • Fear of the messy unknown meant as fear of getting out from the office to gather firsthand observations that require the ability to deal with the uncertain.
  • Fear of being judged.
  • Fear of the first step.
  • Fear of letting go connected to the fear of losing control.

In his TED talk, How to build your creative confidence, David Kelley explained how to use a process which psychologist, Bandura called “guided mastery” that enabled people to get comfortable with the unknown or the featured step-by-step.

With confidence built up gradually and deliberately, a renewed self-reliance comes, that Bandura called “self-efficacy,” or “the sense that you can change the world and that you can attain what you set out to do.”

Integrative thinking: The foundation of design thinking

Tim Brown, in 2009 TED Talk entitled “Designers – Think Big!” highlighted:

Roger Martin, the business school professor at the University of Toronto, calls integrative thinking. And that’s the ability to exploit opposing ideas and opposing constraints to create new solutions. In the case of design, that means balancing desirability, what humans need, with technical feasibility, and economic viability.

Tim Brown, in 2009 TED Talk

In short, according to Tim Brown, design thinking is born by balancing:

  • Desirability: do people want it?
  • Technical feasibility: can we actually build it?
  • Economic viability: is it sustainable? Should we do it?

The key ingredients of design thinking and its five stages

Design thinking moves around a few key ingredients such as problem-solving, human-centric (as Tim Brown, in 2009 TED Talk that means “It may integrate technology and economics, but it starts with what humans need, understanding culture and context before we even know where to start to have ideas“). 

An effective design thinking process moves around five key stages:

  • Empathize: what do my users/customers need?
  • Define: what core problem do they have?
  • Ideate: craft and brainstorm creative ideas.
  • Prototype: craft a possible solution for each core problem.
  • Test: does the proposed solution fit and solve the problem?

Customer-centrism as North Star

customer-obsession
Customer obsession goes beyond quantitative and qualitative data about customers, and it moves around customers’ feedback to gather valuable insights. Those insights start by the entrepreneur’s wandering process, driven by hunch, gut, intuition, curiosity, and a builder mindset. The product discovery moves around a building, reworking, experimenting, and iterating loop.

Disciplines like design thinking have become critical in these times, as they flipped the old business logic and moved the moats (competitive advantages) to the bottom of the company, its customers.

Business designers become the architects of business modeling

business-design
Business design enables organizations to deliberately craft a business model to prove sustainability in the marketplace by validating the building blocks of a business model. The business designer can help an organization to build a viable business model by readily testing its riskiest assumptions against the marketplace.

In that respect, UX designers have become among the key people that helped companies build valuable products for customers. And in that, the business design is the evolution of this approach where the whole business is built by gathering as much feedback from customers, thus iterating it quickly, to evolve it fast.

What’s next? The rise of Business Engineering

I argue, that the next step to this evolution is that of the Business Engineer, usually intended as a person using technology to build technical processes within the organization.

However, in the FourWeekMBA view, the Business Engineer is a hybrid between an entrepreneur, customer-centered business designer, and a business analyst, able to prevent false patterns, thus growing the business with a mixture of intuition, business acumen, testing, and experimentation.

Design thinking examples

In the final section, let’s take a look at four examples of design thinking in action.

GE Healthcare

GE Healthcare used design thinking to make their magnetic resonance imaging (MRI) machines more user-friendly for children.

The company observed that children reacted negatively to the long MRI procedure which took place in a cold, dark room with flickering fluorescent lights. 

To improve the process, GE Healthcare observed the children in different environments, interviewed hospital staff, and spoke to relevant experts.

Extensive user research was performed with several pilot products launched, leading to the development of “Adventure Series” MRI machines for children.

One version of this series is the “Pirate Adventure”, which transforms the dark and uninviting MRI machine into a bright landscape filled with sandcastles, beaches, and the ocean.

The initiative increased patient satisfaction scores by 90% and also had the added benefit of improving the quality of the MRI scan itself.

Oral B

Oral B hired two engineers to upgrade its electric toothbrush range, with the company requesting that extra functions such as brush frequency tracking and music playing capability be added.

However, engineers Sam Hecht and Kim Colin found that teeth brushing was somewhat of a neurotic act for many people and that extra functionality could result in added stress and cause some to brush less frequently.

With that in mind, Hecht and Colin recommended more simple, less gimmicky features such as easier chargeability and a more convenient way to order replacement heads via smartphone technology.

Both these features were ultimately successful because Oral B focused on adding features that users wanted as opposed to what it wanted.

Uber Eats

uber-eats-business-model
Uber Eats is a three-sided marketplace connecting a driver, a restaurant owner and a customer with Uber Eats platform at the center. The three-sided marketplace moves around three players: Restaurants pay commission on the orders to Uber Eats; Customers pay the small delivery charges, and at times, cancellation fee; Drivers earn through making reliable deliveries on time.

Uber Eats has become the go-to food delivery app for many because the company has been able to empathize with customers and iterate quickly via design thinking.

The Uber Eats Walkabout Program is one such example, with designers visiting cities where the service is available and conducting extensive research on cuisine, infrastructure, transport, and food culture, among other characteristics.

One of the more common user pain points that Uber solved for its delivery drivers was the issue of finding a parking space in busy cities.

To make the delivery process more efficient, the Uber Eats driver app offers detailed, step-by-step directions from the restaurant to the customer.

Airbnb

airbnb-business-model
Airbnb is a platform business model making money by charging guests a service fee between 5% and 15% of the reservation, while the commission from hosts is generally 3%. For instance, on a $100 booking per night set by a host, Airbnb might make as much as $15, split between host and guest fees. 

In the early days of Airbnb, the founders realized that the listing photos hosts uploaded were not of sufficiently high quality to convert into bookings.

In response, they traveled to many locations themselves and used design thinking to imagine what a customer looked for when selecting short-term accommodation.

The first step was to invest in cameras that took high-quality photographs.

Other improvements included showing images of every room in the accommodation instead of a select few and the listing of special features such as a pool in the description.

It was also discovered that users wanted information on the surrounding neighborhood.

By placing itself in its users’ shoes, Airbnb was able to solve business problems and double its revenue weeks later.

airbnb-business-model-economics
In 2021, Airbnb generated enabled $46.9 Billion in Gross Booking Value, and it generated $6 Billion in service fee revenues. In 2021, there were $300.6 Million Nights and Experiences Booked, ad an average service fee of 12.78%, at an Average Value per Booking, $155.94.

IBM

For IBM, design thinking is a framework that serves to place “end-user needs at the center of the design process and enables teams to collaborate and work more efficiently“.

In essence, this means that for each IBM project, diverse teams assemble and maintain a razor-sharp focus on the benefits for the intended end user.

The company used design thinking to improve customer relations, bridge gaps between the product and design teams, and increase revenue and profits.

In fact, IBM was able to receive a total ROI of 301% from its product portfolio and added an extra $20.6 million in revenue.

How was this achieved? Here are some of the initiatives IBM employed:

  • Product personas were created early in the discovery phase after teams met with real or intended users. This then afforded engineering teams more time to prepare for testing scenarios and reduced total development time.
  • Each meeting was framed in terms of addressing the real, human problem that was the reason for the project to start with. When teams were ultra-specific on what they needed to achieve, they required less time to design, develop, and test processes.
  • IBM also applied design thinking to future investments, using the framework to determine whether a project should be pursued or avoided based on its ROI.
  • Clarifying user needs early on also produced projects with fewer defects. As a result, teams were able to avoid costly and time-consuming reworks and repairs and increase project efficiency. 

Bank of America

In 2004, Bank of America partnered with design consultancy IDEO to identify ways it could encourage more people to open a bank account.

In a campaign called “Keep The Change”, IDEO traveled across the country to observe how people related to money.

Representatives spoke to families and individuals about their banking and spending habits, and after a while, a few patterns started to emerge. 

One such pattern was that mothers in a household tended to control the finances.

In the early 2000s, many would also round up the number in their checkbook to make addition simpler with the added benefit of creating a small buffer in spending.

Though the campaign did not explicitly set out to address financial insecurity, both the Bank of America and IDEO became aware of many consumers’ inability to save money.

If a consumer was more concerned about having their electricity turned off, they did not have the time, money, or energy to develop a savings plan.

Armed with this knowledge, IDEO proposed that purchases made with a debit card could be rounded up and the difference transferred automatically into a savings account.

What’s more, the Bank of America would match each amount that was added up to a certain threshold.

Since it was launched in 2005, the Keep The Change campaign has resulted in over $2 billion saved by 12.3 million new customers.

In addition to the obvious financial benefit of this design thinking initiative, the emotional benefit to consumers who found it difficult to save money is more meaningful and makes the Bank of America top of mind for others who want to take control of their finances.

Related frameworks

Business Engineering

business-engineering-manifesto

Business Modeling

what-is-a-business-model-navigator

Business Scaling

business-scaling
Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.

Business Model Canvas

business-model-canvas
The business model canvas is a framework proposed by Alexander Osterwalder and Yves Pigneur in Busines Model Generation enabling the design of business models through nine building blocks comprising: key partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure, and revenue streams.

Lean Startup Canvas

lean-startup-canvas
The lean startup canvas is an adaptation by Ash Maurya of the business model canvas by Alexander Osterwalder, which adds a layer that focuses on problems, solutions, key metrics, unfair advantage based, and a unique value proposition. Thus, starting from mastering the problem rather than the solution.

Blitzscaling Business Model Innovation Canvas

blitzscaling-business-model-innovation-canvas
The Blitzscaling business model canvas is a model based on the concept of Blitzscaling, which is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency and focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.

Jobs-to-be-done

jobs-to-be-done
The jobs-to-be-done (JTBD) framework defines, categorizes, captures, and organizes consumer needs. The jobs-to-be-done framework is based on the premise that consumers buy products and services to get jobs done. While products tend to come and go, the consumer need to get jobs done endures indefinitely. This theory was popularized by Tony Ulwick, who also detailed his book Jobs To Be Done: Theory to Practice.

Customer Obsession

customer-obsession
Customer obsession goes beyond quantitative and qualitative data about customers, and it moves around customers’ feedback to gather valuable insights. Those insights start with the entrepreneur’s wandering process, driven by hunch, gut, intuition, curiosity, and a builder mindset. The product discovery moves around a building, reworking, experimenting, and iterating loop.

Value Proposition Canvas

value-proposition
A value proposition is about how you create value for customers. While many entrepreneurial theories draw from customers’ problems and pain points, value can also be created via demand generation, which is about enabling people to identify with your brand, thus generating demand for your products and services.

Business Design

business-design
A business designer is a person that helps organizations to find and test a business model that can be tested and iterated so that value can be captured by the organization in the long run. Business design is the discipline, set of tools and processes that help entrepreneurs prototype business models and test them in the marketplace. 

Design Sprint

design-sprint
A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Agile

agile-methodology
Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Other business resources:

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