Design Thinking Demystified
Do you ever wonder what makes big corporations like Apple, Coca-Cola, Proctor & Gamble and IBM all standout?
You might think- they have huge talent and a fat wallet bankrolling their projects. Well, there is some truth to that. However, the real reason is far from this. In fact, its something that is not so obvious. So what is it? Design thinking.
This is what has enabled these large corporations to outperform other companies on the S&P 500 for the past ten years by more than 200%. So what is design thinking?
Design thinking is a unique approach to innovation. By making it human centered, it uses elements such as experimentation and empathy to come up with inventive solutions while incorporating the people’s needs, the prospects of technology, and what is required for the success of a business.
It is unlike using historical data or taking leaps of faith for business success. This strategy seems to be more problem focused, but on the contrary, it is solution focused and involves taking actions in order to ensure the ideal future.
Design thinking is not the new kid on the block. In fact, it has been around since the ‘60s, where it was widely used in the science, architecture, and engineering industries. It then made its way into the corporate world through “Wicked Problems in Design Thinking,” a journal article by Richard Buchanan in 1992 that looked into the ways design thinking could be used to deal with obstinate human concerns.
The question that comes into most people’s minds is this: “Is design thinking really applicable in business?” The answer is yes, and it can lead to extraordinary results. This is because at its backbone, design thinking can help come up with strategies and initiate organizational changes.
However, most people dismiss or underrate design, thinking that it is simply about “what something looks like.” But in fact, the principles of user experience comprise three components: how a product looks, how it feels, and how it works.
So, how can one incorporate design thinking into their business? Before delving into that, we have to understand one thing: Design thinking is not an individual effort. Instead, it involves collaborations between marketing managers, professionals, and business owners, as well as the users. So, with that said, here is an outline of how to solve complex tasks using design thinking.
First, you should employ empathy. This is the development of a deep understanding of the human needs that are in play. The next step is to look at problems from a new light by involving human-centric methods. Ensure that you come up with multiple ideas during the sessions. Next, come up with a prototype, which is a miniature version of the new product or feature. Finally, carry out rigorous tests on the finished product or feature, and make changes where necessary. We shall look at this in more detail later.
Design Thinking and Business Models
Now that we have seen how design thinking can be used to come up with new products, let’s take a look at how it can be used to formulate business models. In this case, the design process is divided into five steps, which we are going to look at in depth.
In this phase, the focus is to gather data. You want something on which you can base your new business model. As such, it is crucial to know from where you are going to gather the data. If you are clueless about this, start with your customers, and try to have an understanding of their needs, as well as their frustrations.
There are many who are for the idea of looking beyond the walls of the company and into the needs of the customers, as this leads to innovative ideas compared to brainstorming within the company. Meeting the needs of the customer is key to the success of a business.
Also, stay clear of market research agencies or otherwise outsourcing the task. This will prevent you from getting firsthand experience. Instead, roll up your sleeves, and talk to all kinds of customers, be they satisfied customers, discontented customers, and people who would never consider buying your product, as well as people to whom you have never reached out. And feel free to pursue your competitors’ customers.
Understand what makes them feel content with what the industry has to offer and why they opt to buy not from you, but your competitors.
Another place to gather data is to look at the most popular business models within your industry and outside it, which means understanding the workings of an industry and its prevalent business models. This will help you have a clear understanding of what model may not be working and why.
Apart from your customers and other companies, you might also gather data from your “internal customers” by asking them to comment on what they think of the way you do your business and to give an assessment.
After you are done gathering data, the next step is to understand it. For that reason, the goal of this phase is to create a distinct and compelling opportunity in the market.
When trying to come up with a business model design, it is best to incorporate various design-thinking frameworks when analyzing the data. You could, for example, map out the customer’s journey. This will help you to understand their experiences, including what pains them, and most importantly, to identify blind spots in the journey that current offerings or business models are not addressing.
Additionally, ensure that you have a bearing of what the customer is looking to achieve, what job they want done, and what frustrates them about the current customer experience.
When done with this phase, you should be able to have, on paper, opportunities for groundbreaking designs for your business model.
Once you have identified opportunities, the next step is coming up with ideas on how to take advantage of those opportunities. In most cases, having pinned down customers’ needs and struggles and coming up with solutions will lead you down Ideasville. Also, you can brainstorm by raising conversation starters such as, “What about …?” or, “How might we …?” Furthermore, you could cut to the chase by researching other industries and business model innovations to find inspiration for your own.
This stage is not about trying out different business models. Successful innovators have struck the most success by only experimenting with a single business model as opposed to many. Besides, very few companies have the resources to try out several model ideas.
In most cases, if the research in previous phases was carried out satisfactorily and you came up with a viable idea, the real issue will be how to actualize the idea. Chances are, if you discover a way to bring it to life, it will be successful.
This final stage entails going through the results of your experiences and the experiments you have carried out. In most cases, evolution involves repeating the previous steps as you ideate and add a few touches, and in extreme cases, re-designing the business model again.
When in this stage, keep reflecting on the success of your business model and whether it is of any value to the concerned parties. If not, then it might be time to start the journey of discovery.