In the new customer-centric era, what all the design thinking fuss is about?

Last year right in the middle of a design thinking corporate training, a friend and colleague asked me “ Juana, what all this fuss about design thinking now? This whole is not a new concept as we had implemented this method ourselves while digging it out in the fields of South Africa, some 10 years ago” she said. 

As part of our intrapreneur’s series we are now moving into design thinking principles and tools, let’s start by digging into some reasons what all the design thinking fuss is about?

Gone Is The Era Of The Product

For the past century, we have been dwelling in a product economy at last. Twenty years ago my core job was to sell the same product to everyone using the same marketing strategy. One bullet for all kind of thinking where we used mass advertising to sell consumer goods and increase volume every coming day.

I recall learning and implementing the Just-in-time theory and supply chain economics which helped to optimize volumes and increase profits. Somewhere along the way, corporations understood that customer were ignored and grew their customer support departments which included divisions that managed warranties, maintenance, and call centers, many of them outsourced.

In the 21st-century customer are far more aware of its surroundings as compared to the previous ones due to mobile phones and internet connectivity. He could now research and analyze his options before he spent his money or in some cases, they don’t’ even need money. On the other side, the concept of ownership has also changed and converted into a renting/leasing/ exchanging need basis model. A new model where you do not have to buy the whole CD when you can download a song or just hail an UBER rather purchasing a car which is now being considered a liability.

Many companies like Blockbuster, Abercrombie & Fitch and Circuit city had suffered from this customer transformation as they did not keep up the pace with the changing end-user requirements. Today, if you don’t meet customer changing expectations, you could be dropped in a few clicks. Customers have new prospects now which does not only include millennials but even the old school customers as they are learning to integrate these new models.

The Age of the customer

Forrester called this new era “the Age of the Customer. A new age where digital-savvy customers would change the rules of business, creating an extraordinary opportunity for companies that could adapt, and creating a threat to those that could not.

Forrester Research explains that companies that are customer experience (CX) leaders are seeing a growth which is about five times greater than the companies that are CX laggards. This creates an exponential increase in brand loyalty that augments chances of outsmarting tests that comes along the way in terms of inflations and recessions. However, to become a CX leader, it’s vital to cultivate in-deep customer understanding and empathy and pushing human insights to all edges of an organization.

Some leading examples of this company’s transformation are using design thinking. Spotify, Netflix, and Amazon demonstrate beautifully the advantages of establishing a direct ongoing relationship with their customers, and this focus pays off in Billions. They forgot about the traditional segmentation concepts and deal with their customers as individuals only with their unique demands and provide what they are looking for.

Spotify design thinking system called ‘GLUE’

Spotify’s design principles work on a system developed by them which they term as ‘GLUE’. Stanley Wood, design director at Spotify explains in this interview how he realized a need to establish more focus on Spotify’s expectations and aligning it to the opportunities.

“This was an important lesson for me. I learned to sell the problem before the solution to activate change. The curse of being a designer is you often jump into problem-solving mode. ?

In 2013, Spotify decided to write some principles to turn this design thinking group into a team with a shared point-of-view, then in 2015 “Glue” became a dedicated team made up of designers and engineers.

Netflix focuses on the users to reinvent itself

Netflix has become the most favored season binging and movie watching portal for the young and other generations. They threw away the one shoe fits all model and customized their movie screens as to what the customer likes. Personalization has made Netflix beat every movie providing service be it online or super big movie stores that were the “thing” in the past.

There isn’t a better example of a business that has pivoted based on customer preferences, wants, and needs than Netflix. While Blockbuster failed to handled disruption, Netflix pivoted by using design thinking to become on-demand streaming to answer changing customer expectations. Netflix didn’t stop there they continue to reinvent themselves into content creation with striking success. All of this combined with data analytics and artificial intelligence had transformed not just their users but the sector as a whole.

Amazon obsessive customer focus

Jeff Bezos said the 'secret sauce' to Amazon's success is an 'obsessive-compulsive focus' on customer over a competitor. This is one of the best examples of becoming a customer focus leader. They use original and look alike data to sell items of liking for each individual customer. They look for personalization in every sale which brings them more sales. Another reference is Amazon prime, a paid subscription service for free two-day delivery as consumers love free shipping.

Where do you start?

If you are an innovator, entrepreneur or intrapreneur, where do you start? And how do you proceed?

Here is where a systematic method as design thinking comes into the picture to structure your process of problem identification. Design thinking will help you to empathize with the customer, define the hypothesis, test, learn and iterate within a framework that enables flexibility and collaboration.

Here we are in the 21st century and I still sit in meetings with intrapreneurs or entrepreneurs who had never talk with their customers about their problems, needs and wants. CB insights compiled a list of startup failure post-mortems and found that the number one reason is “no market need”. This reason alone constitutes 42% of failed startups, which means that new businesses are tracking problems that are interested to solve, rather than problems that serve a market need.

Professor Stefanos Zenios introduced his design thinking course at Stanford LEAD with a quote from Thomas Alva Edison.

"I find out what the world needs, and then I proceed to invent it."

This quote captures the definition of innovation. Zenios explains that the keywords in this quote are “need” and “invention”. Therefore, innovation is a new way to solve a need. 

Design thinking helps us to frame and accelerate the innovation process by starting with the customer. Human-centered design means that the center of the process is the customer, his problems and how we empathize and develop a solution to answer his specific needs. The more specific you become, the better!

In this age of the customer, you always start with the end-user as the first entity that you should understand to help them. If we achieve the goal of focusing on a real need and creating a solution that works for this customer, the process is successful.

In the coming weeks, we are going to explore this particular area of interest. We will also look upon methods and how design thinking will help you to accelerate your innovation project.

At this moment of our history, there are a lot of opportunities to dig into what the world needs and innovate. Keep following and share your thoughts about what is all design thinking fuss about?

REFERENCES and more

Forrester the Age of the customer

Design Doesn’t Scale.

Secrets of design leadership—from Stanley Wood of Spotify

Spotify uses real customer data to build personal emotional connection

How Netflix rose from the ashes by becoming customer-centric

How Netflix Uses Design Thinking to Reinvent Itself, Over and Over 

Jeff Bezos said the 'secret sauce' to Amazon's success is an 'obsessive compulsive focus' on customer over competitor

CB Insights Top Reasons Startup Failure

Photo by Sharon McCutcheon and fotografierende from Pexels