Why does something that was introduced to management science in the late 1960s continue to fascinate us, asks Suvi Nenonen.
I recently spent a week in San Francisco and the Bay area with a couple of dozen European executives, visiting local innovative companies such as Airbnb, Google, IBM and various tech start-ups. Even though I expected digitalisation-related buzz words – such as Internet-of-Things, cognitive computing, and application programming interface – to dominate the discussions, the most commonly uttered term during that week was ‘design’.
Sure, the sleek design of iPhones is a clear competitive advantage to Apple, but why this enduring fascination with design thinking? Why does something that was introduced to management science in the late 1960s continue to fascinate us? (Herbert A. Simon (1969), The Sciences of the Artiﬁcial.)
Finding new strategic options by being creative
Tim Brown, the CEO of IDEO, often defines design thinking as a creative problem framing and problem solving process that simultaneously considers desirability (what do people desire), feasibility (what is technically and organisationally possible), and viability (what is financially viable).
Even though we typically associate design thinking with beautiful designs for tangible products such as clothes, furniture and machinery, savvy managers know that the same approach can be used to design systems such as service delivery processes, business models – or even national healthcare systems.
The latter systemic approach to design thinking is particularly interesting from the strategy perspective. As strategy is about making educated choices in the face of uncertainty, design thinking brings one unique attribute that many other strategy frameworks lack – it can generate new strategic options.
So, even if the idea of having a more creative strategy process makes the more analytically dispositioned minds slightly uncomfortable, being able to augment the available option space is a lucrative value proposition to all strategists.
Human-centric and holistic
When it comes to the exact design process to follow, there seems to be as many variations on the theme as there are consultants, speakers, and academics. Luckily most of these processes are fundamentally rather similar, so no serious harm can be done by opting for one design thinking process over another.
Two points about design thinking processes are worth highlighting, though. First, basically all design thinking applications take a human-centric approach, and frame the design challenge from the perspective of the customer or the beneficiary. So, framing your strategic design processes with a question akin to “How to maximise our revenues and destroy our competition” is unlikely to generate truly creative results. Second, even though all design processes use creative tools such as storytelling and prototyping, using only a single tool is not the same thing as design thinking. Thus, there is little point in trying to shortcut the creative process and start straight from the prototyping phase.
Even designer glasses are myopic
Like all approaches and frameworks, design thinking also has its pitfalls and limitations. The critics of design thinking often point out that many design processes deliver only incremental innovations – and typically strategists are after something more radical.
Additionally, design thinking can be – wait for it – too customer-oriented for more wicked and systemic strategy challenges. So, if your strategic ambitions include reconfiguring your industry or creating a completely new market around a novel technology, it might be a good idea to run separate design processes for each stakeholder group (for example: suppliers, channel partners, regulators, and end consumers) to make sure that your strategy is a win-win-win for all parties involved.
Despite these limitations, design thinking is an interesting addition to our strategic repertoire. Most strategy processes tend to over-emphasise the rational and the analytical, so adding some creative and synthesising elements balances things out. And even if the design thinking processes doesn’t deliver the expected new strategic options, when done properly it will inevitably augment top management’s customer understanding and ability to collaborate. As side-effects go, these are definitely from the pleasant side of the spectrum.
Associate Professor Suvi Nenonen works at the University of Auckland Business School’s Graduate School of Management and teaches in the MBA programmes. Her research focuses on business model innovation and market innovation.