What is Design Thinking? New Perspectives on Innovation

By John Carter, Principal at TCGen Inc

What is Design Thinking?

Design Thinking is an innovation process inspired by empathy for the user followed by ideation and implementation. While Design Thinking applies to many endeavors and many types of problems, in new product development, it is a means to direct and focus innovation that drives growth in sales and profits. It is an iterative process allowing a cross-functional design team to question its assumptions and focus on the user experience above all else.

Design Thinking enables teams to expand their ideas through deep insights into the problems customers face. Later in the process, Design Thinking allows teams to focus like a laser on the very best solutions. By testing prototypes with customers, and incorporating their feedback into subsequent iterations, teams separate the best ideas from the rest.

Figure: Steps Involved in Design Thinking, with a focus on Innovation and Product Development.  

Though in theory, Design Thinking encompasses the three overlapping circles of inspiration, implementation, and ideation, it often takes the form of a non-linear problem solving process that has anywhere between five and ten steps. There are several different models, with somewhat different steps, but practitioners need not become too rigid about the process. Design Thinking is a way of looking at innovation, to find the intersection between human values, technical capability and commercial viability.

What new perspectives does Design Thinking offer?

Design Thinking draws on the leading innovators in product development such as Amazon, Apple and Google. These innovators use Design Thinking concepts to clarify product discovery. Their approaches draw from product development more than from problem solving.

Figure:  Design Thinking as Three Loosely Connected Spaces

Although Design Thinking is a system of overlapping spheres, and not a sequence of steps, it is sometimes approached in a sequential way. There are several models of Design Thinking available from such organizations as the Stanford d.School, IBM, Google, IDEO, and others. The new perspective is to recast Design Thinking in terms of its most important usage, product development.  In this perspective, there is a focus on Ideation and customer led innovation, often called “Discovery” in Silicon Valley.   

This approach features some version of the following steps:

  • Empathising with users: including customers, non-customers, lost customers, economic buyers, influencers, and internal customers.
  • Understanding insights and user experiences: grasp their problems and cast them as insights.
  • Ideating proposed solutions: Challenge preconceived notions and develop a range of innovative solutions.
  • Prototyping proposed solutions: Begin to realize a solution.
  • Testing to gain more feedback: Present prototypes to users and incorporate their feedback. For companies that market to broad markets, perform quantitative research to validate.
  • Iterating and reflecting: Define concepts, prototype, and test iteratively; reflect and validate until you have produced the very best solution. Determine the MVP (Minimum Viable Product).

The most important aspect of this process, especially for product developers that are developing hardware or mixed systems, is to gain customer experience insights. Do not get hung up on the perceived need to have functional prototypes. Sometimes, a product idea, represented by a paper prototype placed in front of customers is enough. The key is to get customer feedback and build it back into product definition and product design.

Important Aspects of Design Thinking

  1. Empathy for the user – walking in their shoes
  2. Customer Interaction at all levels in the customer journey
  3. Iteration by prototyping and soliciting customer feedback
  4. Expands the range of possible solutions by allowing for discovery
  5. Enables designers to focus on the best product ideas
  6. Innovation at the intersection between human values, technical capability, and commercial viability

What are the benefits of Design Thinking?

Practitioners of the Design Thinking process report benefits in customer satisfaction and in the fit between products and markets. Building products around the customer experience, based on observation and careful analysis of problems and requirements, reduces downstream problems and lowers support costs.

Design Thinking also has internal benefits. Since ideation is cross-functional, new product ideas have greater buy-in throughout the wider organization. The structured nature of the process decreases guesswork about new products. Decisions are made based on evidence rather than politics.

Although it has proven difficult to measure the quantitative impact of Design Thinking, case studies abound. Most of the best cases show the effectiveness of customer insights gained through careful observation.

For example, Bank of America wanted user-centered approaches to grow the number of accounts opened. In a 2004 initiative, Bank of America engaged IDEO to better understand customer behaviors. They found that women were often the bookkeepers in the household. Many of the women researchers observed kept paper check registers with receipts and other documents stuffed inside. Looking at these registers, designers found that one woman was rounding up her purchases to the next dollar amount. In other words, if she spent $27.73 she would write $28.00 in her register. Then, at the end of the month she had a small amount left over for savings.

After exploring more than 80 product concepts, Bank of America chose a new saving account product based on their customer insight. With the bank’s “Keep The Change” program, every time a user makes a debit card purchase, the amount of the sale is rounded up to the nearest dollar amount, with the difference deposited in a savings account. The program found success with customers since it made saving money easy, painless and invisible. Savings without sacrifice.

Without seeing those handwritten check registers, designers might never have envisioned such a successful product. This example demonstrates the power of sitting down in customer spaces to observe how they use and interact with your offering. 

What are some tips for being successful with Design Thinking?

Customize Design Thinking to your business; modify steps that don’t work for you.

Don’t get stuck in rigid processes or lists of steps. Don’t get caught in the jargon. The most important aspect of Design Thinking is leveraging customer insights, and the process of iterative design. Learn whatever you can from the experts, but modify the process to meet your needs.  If you use design thinking for product strategy and ideation, keep the process short and lightweight.

Design Thinking requires executive sponsorship.

It does not have to be the CEO, but Design Thinking requires the support of leadership to be successful. Design Thinking is a process that thrives on questioning basic assumptions. This can be threatening to some corners of your organization, unless the process of Design Thinking is acknowledged and supported by senior leaders.

Carefully manage the cultural aspect of Design Thinking.

Design Thinking has implications for your corporate culture. For example, Design Thinking requires that the organization has permission to take risks and make mistakes. Some cultures are intolerant of anything that looks like a mistake. Be aware of where Design Thinking bumps up against the assumptions of your culture.

Don’t get stuck in your preconceived notions – use Design Thinking for problem solving.

Thinking “outside the box” is part of Design Thinking. And yet Design Thinking shows how easy it is to rely on preconceived notions. Too many design teams leap to solutions before they’ve really understood the customer’s pain. Design Thinking requires patience while teams cycle through multiple iterations of ideas and prototypes. Try it outside of product development and IT.

Learn how to listen.

Listening is a learned skill. The best listeners yield the most fruitful customer insights. It is much more common for people to have preconceived ideas in their heads that make it impossible to listen. Learn to ask “why?” five times. Ask questions and then listen carefully for the response, not just to the one that confirms your bias, but to the response that yields the richest customer experience insights.


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