Reshaping Business with Design Thinking

Design Thinking is a powerful approach for managers and strategists to tackle complex challenges, drive innovation, and develop effective strategies. It complements traditional management practices by integrating customer insights and human-centered design into strategic planning (Knight et al., 2020; Liedtka & Kaplan, 2019).

This approach enables organisations to identify unexplored growth opportunities, create value propositions, and transform business models (Liedtka & Kaplan, 2019). Design Thinkingemphasises understanding customers, prototyping, experimentation, and fostering engagement (Liedtka & Kaplan, 2019). It combines technological feasibility, business viability, and human desirability to generate innovative solutions (Bachnik, 2016).

By adopting design thinking, managers can enhance organisational creativity, uncover customer needs, and develop better business offerings (Bachnik, 2016). This approach has been successfully applied across various industries, demonstrating benefits in product and service innovation, strategy development, and achieving competitive advantage (Dennehy et al., 2016). Ultimately, Design Thinkingprovides managers with valuable tools to navigate complex business environments and drive strategic growth.

This article, which builds upon a series of recent posts, explores how Design Thinkingcan empower managers, business leaders, and strategists to tackle complex challenges and drive innovation.?

Unlocking Innovation: How Design Thinking Can Transform Your Management Style?

Design Thinking promotes empathy, creative problem-solving, and a culture of innovation by employing interdisciplinary teams, rapid prototyping, and user co-creation (Starostka, 2014). Design Thinking methods and tools support idea incubation and innovative solutions, particularly when balancing team collaboration and software limitations (Chasanidou et al., 2015). The approach creates sense and knowledge through empathy, although misconceptions may lead to unintended employee costs (K?ppen & Meinel, 2015). Once trained in Design Thinking, employees can apply its principles throughout their projects, from software development, staff engagement, strategic planning and internal processes (Dobrigkeit & Paula, 2019). By addressing viability, desirability, and feasibility, Design Thinking enhances innovation potential (Chasanidou et al., 2015). Overall, Design Thinking’s impact on organisational culture and innovation is significant, making it a valuable asset for companies seeking to maintain a competitive edge in today's market.

Case Study - Design Thinking at LEGO: Building a Culture of Innovation Through Empathy

The LEGO Group, once a titan of the toy industry, faced a significant challenge in the early 21st century. Despite its iconic status, the company was experiencing a slowdown in innovation and a growing disconnect between its products and the evolving needs of children. The traditional product development process, heavily reliant on internal expertise and market trends, was no longer sufficient to drive growth and maintain relevance.

To address these challenges, LEGO made a strategic decision to embrace Design Thinking. This human-centered approach emphasised empathy, collaboration, and rapid iteration to create innovative solutions that met the needs of users. By conducting extensive user research, including observing children at play and holding workshops, LEGO gained a deep understanding of the changing play patterns and interests of its target audience. This empathy-driven approach fostered a culture of innovation within the company.

Instead of relying solely on internal brainstorming, LEGO utilised Design Thinking workshops to bring together diverse teams, including designers, engineers, marketing professionals, and even parents. This collaborative approach encouraged the generation of creative and out-of-the-box ideas that went beyond traditional building sets. By empowering employees at all levels to participate in the innovation process, LEGO fostered a culture where new ideas were encouraged and valued.

One of the most notable outcomes of LEGO's adoption of Design Thinking was the creation of LEGO MINDSTORMS, an innovative robotics platform that combined traditional building blocks with programmable elements. This product was a direct result of the company's focus on understanding user needs and leveraging technology to create new and exciting experiences.

In addition to the development of new products, LEGO also saw a significant increase in the number of innovative ideas generated within the organisation. The emphasis on user-centric design and the collaborative nature of Design Thinking fostered a more creative and productive environment. By involving employees at all levels in the innovation process, LEGO was able to tap into a wealth of diverse perspectives and ideas.

Overall, LEGO's success in transforming its business and regaining its market leadership can be in part attributed to its effective implementation of Design Thinking. By prioritising empathy, collaboration, and rapid iteration, the company was able to develop innovative products that resonated with its target audience and drive long-term growth.?

From User to Customer: Design Thinking for Business Growth

Design Thinking can help businesses deeply understand customer needs and develop user-centric solutions. It employs empathy and experimentation to create innovative products, services, and processes (Nistor et al., 2019). By focusing on human-centered principles, organisations can improve their success rate in innovation and address complex business challenges (Fuchs & Golenhofen, 2018). Design Thinking enables companies to redefine complex processes into simple, innovative solutions, enhancing business performance and customer experience (Boguda & Shailaja, 2020). This approach is particularly useful in mapping the customer journey, identifying critical touchpoints, and uncovering opportunities for improvement. For instance, Design Thinking can be used to develop personas and visualise the customer journey, leading to actionable insights for enhancing service quality (Barbosa et al., 2023). By prioritising customer needs and experiences, Design Thinking drives customer satisfaction and loyalty, ultimately contributing to long-term business success.

Case Study Airbnb: Revolutionising Hospitality Through Design Thinking?

The traditional hospitality industry, dominated by hotels, offered limited options for travellers seeking unique and affordable accommodations. Guests often faced standardised experiences and high costs. Airbnb disrupted this market by leveraging Design Thinking to create a platform that connected travellers with unique accommodations offered by hosts.

By conducting extensive research, Airbnb gained a deep understanding of the pain points of both travellers and hosts. They discovered a desire for authentic experiences, affordable options, and a sense of community. To address these needs, Airbnb developed its platform to offer a wide range of unique accommodations, a user-friendly booking process, and trust-building features. Technology played a crucial role in facilitating seamless communication between hosts and guests, providing secure payments, and offering personalised recommendations.

As a result of its Design Thinking approach, Airbnb achieved significant success. The platform revolutionised the way people travel by offering a diverse range of accommodation options. By prioritising user needs, Airbnb fostered high levels of customer satisfaction and loyalty. The company expanded rapidly, operating in numerous countries and becoming a household name.

Airbnb's success demonstrates the power of Design Thinking in creating innovative and customer-centric businesses. Understanding customer needs is fundamental to developing successful products and services. Technology can be a powerful tool to enhance the customer experience. Moreover, continuous innovation and adaptation to changing market dynamics are essential for long-term success.

Future-Proofing Strategy: Design Thinking for Disruptive Change

Design Thinking is a valuable approach for businesses to develop flexible strategies in response to market disruptions and changing conditions. It offers a systematic process of empathising, defining, ideating, prototyping, and testing (EDIPT) to address crises and adapt to client demands (Duncan et al., 2022). This approach can assist firms in developing exploitative response strategies to disruptive innovations, enabling them to strengthen existing technologies and products (Radnejad et al., 2021). Design Thinking can help to enhance new product and service performance across various levels of market turbulence (Nakata & Hwang, 2020). Furthermore, it is gaining prominence in business education as a creative process that fosters innovation and prepares individuals to face 21st-century challenges. Leading Business Schools and universities are increasingly integrating Design Thinking into their curricula to produce innovative graduates capable of meeting evolving workplace needs (Hayati et al., 2024).

Case Study – Business Model Under Fire

In the early 2000s, Netflix, initially a DVD-by-mail rental service, faced a significant challenge. The rise of broadband internet and changing consumer habits threatened its traditional business model. Recognising the need for adaptation, Netflix embraced Design Thinking to navigate this disruptive landscape.

Through extensive user research, Netflix identified a growing demand for instant and convenient access to entertainment content. The limitations of physical DVDs became apparent, and the potential of streaming technology emerged as a promising solution. Instead of clinging to their established model, Netflix adopted a Design Thinking approach to develop a new strategy.

The company pivoted from DVDs to a streaming platform, offering on-demand access to movies and TV shows. A user-friendly interface with personalised recommendations and seamless playback across various devices was designed to enhance the viewing experience. To cater to diverse viewer preferences, Netflix implemented strategies for acquiring a wide range of content libraries, including original productions.

Netflix's adaptability transformed the company from a DVD rental service to a global leader in streaming entertainment. The shift to streaming led to a surge in subscribers, as consumers sought the convenience and variety offered by the platform. Additionally, Netflix's investment in original content positioned it as a major player in the entertainment industry, producing award-winning series and movies.

Netflix's success underscores the power of Design Thinking in fostering innovation and adaptability. By actively monitoring trends and user needs, the company was able to anticipate and respond to market shifts effectively. The willingness to change its core business model and embrace new technologies demonstrated a flexible and agile approach. Moreover, Netflix's commitment to understanding and catering to evolving user needs ensured that it remained competitive and relevant in a rapidly changing market. The company's ongoing investment in innovation, through features like personalised recommendations and original content, further solidified its position as a leader in the streaming industry.

Beyond Brainstorming: Design Thinking Tools for Effective Teams

Design Thinking utilises specific tools and methods to enhance team performance and creativity. Research has shown that it can improve concept utility and team satisfaction, although it may not always increase time efficiency (Duka?a et al., 2023). Effective Design Thinking teams often employ a disciplined approach, balancing authority and supportive behaviours to enable important team processes like reflexivity and psychological safety (Heldal, 2021). Tools such as empathy mapping, user personas, prototyping, and user testing can foster innovation when team collaboration and software limitations are balanced (Chasanidou et al., 2015). To support Design Thinking teams, diagnostic tools like the ‘Insight-Driven Narrative’ (IDN) tool. The IDN tool helps teams create and communicate a clear narrative that ties together user insights, problem identification, and potential solutions. It's used to frame the problem in a way that highlights the user's needs, pain points, and opportunities, leading to more user-centric design solutions (Sonalkar et al., 2016). While Design Thinking methods can enhance team performance, their effectiveness depends on proper implementation and a structured approach to the innovation process.

Case Study - Building a Better Shopping Experience Through Design Thinking

IKEA, the global furniture giant, faced a decline in customer satisfaction due to a complex store layout, confusing product information, and a lack of in-store assistance. To address these challenges, the company turned to design thinking, a human-centered approach to innovation.

Through empathy mapping workshops, IKEA's management team gained a deep understanding of customer frustrations. By mapping out customer thoughts, feelings, and actions, they identified common pain points such as difficulty navigating the store, unclear product information, and challenges with furniture assembly. This empathetic understanding enabled them to create user personas, fictional characters representing key customer segments. These personas helped the team tailor solutions to the specific needs and preferences of different customers.

Instead of implementing a complete overhaul of their stores, IKEA adopted a prototyping approach. They created low-fidelity mock-ups of improved signage, designated assembly assistance areas, and interactive displays showcasing furniture in different settings. These prototypes were then tested with real customers in select stores to gather feedback and refine the designs.

The implementation of Design Thinking resulted in a significant improvement in the IKEA shopping experience. Customers reported greater satisfaction with clearer navigation, easier access to information, and enhanced in-store assistance. Additionally, the improved shopping experience led to increased sales as customers spent more time and money in IKEA stores. By focusing on customer needs and providing a more enjoyable shopping experience, IKEA solidified its reputation as a user-centric company.

This case study demonstrates the power of Design Thinking in transforming businesses. By using tools like empathy mapping, user personas, and prototyping, IKEA was able to gain valuable insights into customer needs, develop innovative solutions, and create a more positive shopping experience. This approach can be applied to a wide range of industries to enhance customer satisfaction and drive business growth.

Design Thinking: The Future of Business

This article has explored the multifaceted applications of Design Thinking across various business contexts. By adopting a human-centered approach, organisations can unlock innovation, enhance customer satisfaction, and develop effective strategies to navigate complex challenges.

Design Thinking offers a valuable toolkit for managers and strategists, enabling them to:

• Understand customer needs: By empathising with customers and stakeholders, organisations can develop products and services that truly resonate.
• Foster innovation: Design Thinking encourages creativity, collaboration, and the generation of new ideas.
• Build a strong customer base: By prioritising user experience and satisfaction, businesses can cultivate long-term customer loyalty.
• Adapt to changing market conditions: The iterative nature of Design Thinking allows organisations to respond effectively to disruptions and emerging trends.
• As demonstrated by the case studies of LEGO, Airbnb, and Netflix, the successful implementation of Design Thinking can lead to significant business growth and competitive advantage. By embracing this approach, organisations can position themselves for long-term success in today's rapidly evolving marketplace.

References

‘Design-Led Strategy: How To Bring Design Thinking Into The Art of Strategic Management- E. Knight, J. Daymond & S. Paroutis (2020)

‘How design thinking opens new frontiers for strategy development’ - J. Liedtka & S. Kaplan (2019)

‘Design Thinking: Why Managers Should Care’ -Katarzyna Bachnik (2016)

‘Leveraging Design Thinking To Innovate’ – D. Dennehy, F. Adam & F. Carton (2016)

‘Design and design thinking in building an innovative organizational culture

Justyna Starostka’ - Justyna Starostka (2014)

‘Design Thinking Methods and Tools for Innovation’ - Chasanidou et al (2015)

‘Empathy via Design Thinking: Creation of Sense and Knowledge’ – K?ppen & Meinel (2015)

‘Design thinking in practice: understanding manifestations of design thinking in software engineering’ – Dobrigkeit & Paula (2019)

‘Design Thinking: The Power of Customer-centric Approach to Problem Solving’ – Nistor et al (2019)?

‘Creating Customer Value Through Design Thinking’ – Fuchs & Golenhofen (2018)?

‘Design-Thinking’ – Boguda & Shailaja (2020

‘Design thinking in the customer journey in a sports center’ – Barbosa et al (2023)

‘Crisis response: design thinking can smooth disruptions’ – Duncan et al (2022)

‘Design thinking in responding to disruptive innovation: A case study’ – Radnejad et al (2021)

‘Design thinking for innovation: Composition, consequence, and contingency’ – Nakata & Hwang (2020)

‘Design Thinking: An Analysis in Business Education’ – Hayati et al (2024)

‘DTMethod: A New Evidence-Based Design Thinking Methodology for Effective Teamwork’ – Duka?a et al (2023)

‘Design thinking teams and team processes: Creativity through discipline’ – Heldal (2021)

‘Design Thinking Methods and Tools for Innovation’ – Chasanidou et al (2025)

‘Diagnostics for Design Thinking Teams’ – Sonalkar et al (2016)