Design Thinking in Business

Great design is a fundamental part of creating an image and experience of luxury, exclusivity, and tribal belonging. And yet the consumers who purchase items designed in this manner often select them because they see a little bit of themselves (or who they would like to be) on the shelf. That's great design.

Many companies today truly want to be innovative. They desire to come up with a game—changing innovation like Apple's iPhone, or create an entirely new category like Facebook. Many make genuine efforts to be innovative—they spend on R&D, bring in creative designers and hire innovation consultants. But some get disappointing results.

Why? In The Design of Business, Roger Martin offers a compelling and provocative answer: we rely far too exclusively on analytical thinking, which merely refines current knowledge, producing small improvements to the status quo.

To innovate and win, companies need design thinking. This form of thinking is rooted in how knowledge advances from one stage to another—from mystery (something we can't explain) to heuristic (a rule of thumb that guides us toward solution) to algorithm (a predictable formula for producing an answer) to code (when the formula becomes so predictable it can be fully automated). As knowledge advances across the stages, productivity grows and costs drop-creating massive value for companies.

Martin shows how leading companies such as Procter & Gamble, Cirque du Soleil, RIM, and others use design thinking to push knowledge through the stages in ways that produce breakthrough innovations and competitive advantage.

To coin a cliché, it is out of the box thinking, or change on a massive scale.

Filled with deep insights and fresh perspectives, The Design of Business reveals the true foundation of successful, profitable innovation.

Having worked on innovation teams in both large companies as well as in startups, I can attest to the need to be unencumbered by pure analytical thinking. When you think about it, analytical thought is almost a rear view formula in most companies. It relies on past data to arrive at appropriate future solutions.

It’s not that data is unimportant in design thinking, but pure innovation often lies outside of data sets. In a workshop I once attended on the innovation process, it was compared to a river. Most, the workshop leader mentioned, look for answers within the river itself while never looking on the adjacent river bed. Data, comparatively, is the running water itself. It is a history from upstream, and a predictable future from a downstream perspective. True innovation may require re-routing the flow to arrive at a new paradigm.

It can also be the difference between managing businesses for reliability and seeking validity. Reliability concentrates on reducing process variance and establishing control. Validity concentrates on learning what is right based more on heuristics and qualitative than quantitative methods. Martin's conjecture is that we need both, but probably need more validity to generate the creativity and innovation needed to survive in a dynamic market.

As a side note comparison, we see a similar vein of thought in recruiting. The individual must have X, or have worked in Y for 5-8 years. In essence, you’re asking for the same, or very similar, thought processes that you already have, to be replicated in a new hire. Why not hire the individual with talent and let them figure out (unencumbered by history) the best path forward for your company to meet its goals. It’s a very Kaizen approach to HR.  

In the research work I do for companies I tend to lean to the qualitative and heuristic approaches. By getting people to open up under a guarantee of anonymity, we are able to gain valuable insights into what really is important to the customer. Sadly in some cases, that work is overlooked by those stuck in the river of analytical thinking.  

My mantra for the past fifteen or so years has been ‘innovate or die’. We’ve seen it all over the business landscape with strong, national companies who no longer exist. And, we will continue to see this evolution of business until companies change the way they approach problem solving.