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Design Thinking: The Future of Business Strategy


Dameon Green
New York University

Greg D'Amico
Capstone Studies
May 3, 2012

Abstract:

A major aim of Design Thinking methodology is to structure creativity to produce


innovation. In a way, we are moving away from the linear approach and making the non-linear
way more productive. Moreover, companies are being challenged to produced environment that
is conducive to innovation. It's participants are more focused on exploring possibilities than
poking holes in ideas. Simply stated, Design Thinking takes the focus from the competitor and
puts it squarely on innovation. it blur boundaries and wall put between creators and consumers so
that they may work together to produce the best solution. Design thinking itself provides us with
no roadmap. Rather it provides the tools and principles such that you may create your own
roadmap. Its not meant to be a quick fix. It gives us the frame and pieces but we must put the
puzzle together for ourselves. Though part of the methodology deals with process optimization, it
is primarily concerned with the phenomena of innovation.

Introduction:
What if managers thought more like designers? How is this done? Its as simple as 3
words:Empathy, Invention, and Iteration (Liedtka, J. & Ogilvie, T., 2012). Most executives are
convinced that the way they think works. In their minds, it's probably a matter of time, resources,
talent or some other input. Brown (2008) believes that thinking like a designer can transform the
way you develop products, services, processes and even strategy. While this might not happen
overnight, there is a growing recognition that through the effective integration of design and
creativity have become practical and attractive propositions for users or customers (Cox, 2005).
One may ask Why Design Thinking and why now? The answer, at least partially, lies in the fact
that companies are getting comfortable with the idea of creating as we go.
Design colloquially refers to the appearance or styling of a particular product or outcome,
but the proper meaning goes beyond that it should be used to refer to a process rather than it's
outcome (Stickdorn, M., & Schneider, J., 2010). Global economies are moving fast to build
design into their business base as well as utilizing design-influenced approaches in other areas
(Design Council, 2007). Design begins by enhancing brand perception through building
aesthetically pleasing products and smart evocative advertising. What follows is the creation of
ideas that meet consumers need and desires (Brown, 2008). Design is now focused on the
interaction between people and technology, and products serve as platforms for experiences,
functionality and service offerings . Designs new role is to illustrate and represent the complexity
of the system to make it more understandable as well as represent the added value that the
product brings to the company. Designers are now charged with responding to the emergence of
new environments and user needs (Stickdorn, M., & Schneider, J. ,2010,pg. 56,67).

Actant & Haig (2011) suggest putting aside the false dichotomy between craft and design
in favor of viewing design as a form of craft. In addition, design should be considered as a way
of connecting ideas. Design is a social process that involves thinking and working across
different perspectives. In a way design serves as a bridge to connect people and ideas that move
them (Adams, R. S., Daly, S R., Mann, L. M., Dall'Alba, G., 2011).
Design Thinking Defined:
There seems to be a problem with determining a true classification of Design Thinking as
an art or science. It is more analogous to a new Liberal art of technological culture (Buchanon,
1992). Placement in liberal arts means it must be shared in the daily lives of men and women.
This placement may indeed be fitting as design primarily focus on products and symbols that
people interact with daily. Brown (2008) defines Design thinking as a reasoning tool that helps
balance the traditional problem solving practice that is highly analytic with the practice of gut
feelings and intuition Design thinking, at it's core, is the integration of reliability, mastery of
analytic thinking with validity, invention of intuitive thinking. These disciplines are at the core of
modern day problem solving.
Design Thinking effectively is to engage in curious, critical and creative dialogues.
Further, it is learning process while simultaneously seeking input from multiple, adjacent and unthought of sources, eliciting inspiration from the stories, experiences and characteristics of
people, places and things (Mootee, 2011). Like any process, Design Thinking will be practiced at
varying levels by people with different talents and capabilities (Liedtka, J. & Ogilvie, T., 2012).
The idea of Design Thinking has typically represented what designers understand about design
and how they go about designing based on this understanding. Tackling ill-defined problems and
solution focused problem solving are primary goals. In many ways, its a subtle fusion of art,

science and technology as parallel disciplines within the production of products and the creation
of processes (Buchanon, 1992).
Design Thinking begins with 4 core questions (Liedtka, J. and Ogilvie, T. ,2012):
1) What is? argues that all successful innovation begins with an accurate assessment of the
current reality 2) What if?, on the other hand, is focused on the creative generation of new ideas.
3) What wows? helps managers to prioritize possibilities and then prototype the most attrac- tive
ones. 4) What works? translates ideas into action in the form of small marketplace bets.
Principle Argument:
Design Thinking will become an increasingly important component in business strategy.
Businesses are increasingly focused on innovation. Design Thinking is focused on creating the
environment and processes for innovation. Companies are beginning to realize that constant
innovation is critical so that companies remain competitive. Markets aren't staying the same. The
world is constantly changing and there is only one way to keep up. Find ways to get better using
available knowledge and expertise. Design Thinking aims to do this using the following:
1. Design Thinking focuses on what is possible as opposed to what has been
done successfully before. It thereby produces an environment that fosters
innovation in contrast to merely replication and competition.
2. Design Thinking re-enforce the notion that the customer is at the center
of any business model or marketing plan thereby humanizing the process.
3. Design Thinking advances the fusion of linear and non-linear thinking in
business strategy.

4. Design Thinking empowers businesses and executives to create their own


roadmap to success it provides the tools and principles by which they may
apply their expertise for maximum competitive advantage.
5. Design Thinking's focus is on prototyping and learning as we progress in
the process of creating products, processes and services.
6. Design Thinking advocates constant innovation as the primary method of
acquiring and maintaining competitive advantage
Supporting Arguments
1. Design Thinking focuses on what is possible as opposed to what has
been done successfully before. It thereby produces an environment that
fosters innovation in contrast to merely replication and competition.
People can become quite inspired while immersed in sea of innovation. They become
increasingly committed to make a dream become a reality. Innovation is part of human nature.
(Meinel, C and Leifer, L., 2011). Creations, ideas, inventions and innovations can only grow and
prosper if they are being constantly nourished and placed in the correct environment. (Meinel, C
and Leifer, L., 2011). Design Thinking supports this notion by creating a more efficient and
structured way of doing it through co-creation. The concept behind co-creation may sound
simple, however, it is both an essential element of Design Thinking and highly complex. It is
about creating positive synergies for all parties involved. (Buckley, M., Beames, M., Bucolo, S.,
& Wrigley, C., 2012). Design Thinking provides a new way to think about and put our expertise
in action. It optimizes what we already possess the requisite expertise to do.
In the world of service design, practitioners are focused on generating an environment
that facilitates idea generation from unique perspectives in the creation of services and a for the

development, prototyping and testing of these service. This is the hallmark of co-creation.
(Stickdorn, M., & Schneider, J. ,2010). Managing the creation of the new and preserving the best
of the present are among the greatest aims of innovation. The clues to the new future lie in the
dissatisfaction with the present (Liedtka, J. & Ogilvie, T., 2012).
Design thinking has much to offer a business world in which most management ideas and
best practices are freely available to be copied and exploited (Brown, 2008). Indeed its a new
way. This new framework should require us to challenge old assumptions and connect to new
perspectives. The major accomplishment of such framework is to map an interconnected space of
knowing, acting, and being professionals (Adams, R., Daly, S., Mann, L., Dall'Alba, G., 2011)
Great design occurs at the intersection of constraint, contingency, and possibility- elements that
are central to creating innovative, elegant, and functional designs. (Liedtka, J. & Ogilvie, T.,
2012). Today, rather than enlist designers to make an already developed idea more attractive, the
most progressive organizations are challenging us to create ideas at the outset of the development
process (Brown, 2008).
2. Design Thinking re-enforces the notion that the customer is at the
center of any business model or marketing plan thereby humanizing the
process.
Design thinking uses Personas as opposed to merely demographic numbers and charts
(Stickdorn, M., & Schneider, J.,2010). They give life to groups based on shared interests. I call it
humanizing demographics. These groups that marketers study represent real people, however,
over time traditional business has removed people from the process. Instead preferring lifeless
charts, spreadsheets, and ratios. Design is done by human beings to, for, and with other human
beings. Design is also done among objects and the world we live in (Actant & Haig, 2011). Its all

about the shared journey. The members of the team and customer all share the pain and glory.
Keeping people at the center of the process means getting out into the real world, seeing what
people are doing, and figuring out what they want (Brown, 2008). Companies need people to
focus on gathering new sources of information. Bring in the Anthropologist. This is a field
person who is out in the field to interact with products, services and people. The Anthropologist
is known as a primary learning role. People who adopt the learning roles are humble enough to
question their own worldview, leaving them open to new insights everyday (Kelley, T & Littman,
J.,2005). Anthropologists see things that have gone unnoticed and have a tendency to keep
running lists of innovative concepts worth emulating and problems that need solving. They also
find inspiration in unusual places (Kelley, T & Littman, J., 2005).
Design thinking is based on deep empathy with the customer, and commercial customers
are
used to relatively fast response times from their partners and suppliers (Allen, K., 2012).
Brown (2008) notes that this empathy, and it is perhaps the most important distinction
between academic thinking and design thinking. in the process we are diving into the
environment and looking to gather new info through first-person experiences. Finding the
"bullseye" is when you have the customer squarely in the center of the process. discussing how
they benefit or could possibly benefit from the service (Stickdorn, M., & Schneider, J. ,2010).
Many companies create breakthrough by developing a deep understanding of customers lives.
Great design satisfies both our needs and our desires and appeals to us both emotionally and
functionally. Therein lies the ultimate key to business success (Brown, 2008).
Understanding user needs is a central element of any business models value
proposition,

particularly as such understandings focus on how to predict what users want and how they will
behave (Khalid 2006). Such outcomes arise from the application of such design tools as
ethnographic and activity observations, wherein the designer analyses and interprets the
overarching context of use for an innovation proposal. An important element of a user needs
approach is an understanding that participatory innovation treats the user as a consultant, not a
co-designer. Designers interact directly with users and stakeholders and thus possess the ability
to see a humanised version of each proposal, constantly and powerfully returning the proposal
to a user-centred value proposition (Tether,B, 2010).
Design Thinking puts to use the contextual interview. These are done in ethnographic
format to
observe people in their own environment. Contextual interviews allow researchers to gain an
understanding of the social and physical environment surrounding the service being examined. In
other words, we need to understand what motivates customers to take action and why.
Motivation is named as the fundamental concept for designer seeking to understand regulate and
support human behavior. understanding motivation means understanding the individual and his
environment and how these 2 interrelate (Stickdorn, M., & Schneider, J. ,2010).
3. Design Thinking advances the fusion of linear and non-linear thinking
in business strategy.
Design thinking is perhaps best thought of as a lineal descendant of pure innovation
(Brown, 2008). Through the use of design thinking techniques, facilitators then undertake a
development process that mirrors a typical design process to address agreed goals. It's important
to note that This process recognizes the role (and sometimes the necessity) of dysfunctional
behaviour, non-linear approaches and shifting goals (Cruickshank, L. and Evans, M., 2012, pg

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79). The perceptions of the viability of linear innovation were disputed by presenting a case
study using of the Design-Led Innovation approach (Bucolo & Matthews 2011). The process of
innovation is often seen as being very linear, with research results, new technologies or user
insights being channelled, often prematurely, into specific products and process (Kyffin and
Gardien 2009).
Consider for a moment. We are human beings; our first responses are dominated not by
calculations but by feelings. What we should understand is that if you have an object in your
pocket or hand for hours every day, then your relationship with it is profound, human, and
emotional. iPods and iPhones are a good example (Liedtka, J. & Ogilvie, T., 2012). Design is
done by human beings to, for, and with other human beings. Design is also done among objects
and the world we live in. Perhaps craft is best thought of as a verb that represents the material
translation of the work of design (Bean, J. & Rosner,D., 2012. In this instance, craft is the act of
doing design work where design represent the process.
Design is not a linear process (Brown, 2008). Indeed, the value of design is a different
way of thinking, doing things and tackling

problems from outside the box (Bucolo &

Matthews 2011). While linear, analytical thinking works quite well in predictable environments,
it is not well suited to dealing with unpredictable events. Adding linear process models to design
is likely done to make it more useful for any given scenario. Design Thinking informally
suggests that there are core principles that should be a part of design,creativity and innovation
however non-linear they appear in nature. Over the past few years the design-thinking movement
has begun to pick up steam, finally coming into its own in these turbulent times. (Allen, K.,
2012).

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4. Design Thinking empowers businesses and executives to create their


own roadmap to success it provides the tools and principles by which they
may apply their expertise for maximum competitive advantage.

Great designs inspire and grab us at an emotional level. Design is the process of
invention. Managers who think like designers tend to think of themselves as Creators. This bodes
well for long term competitive advantage in any sector. (Liedtka, J. & Ogilvie, T., 2012).
According to (Brown, 2008), the interdisciplinary approach of design thinking allows companies
to create new forms of value by focusing their strategic efforts on fulfilling costumer desires and
needs. Companies have the right expertise, they simple need to use the right procedures such that
it becomes useful to their customer. Innovation is no longer limited to the production of new
physical products, but to but also new sorts of processes, services, interactions, entertainment
forms, and ways of communicating and collaborating (Brown, 2008).
Todays business are people hungry for new approaches to help them deal with their
increasingly complex challenges. The language of Design Thinking is starting to become demystiied such that it becomes useful for traditional managers. Offering a simple process and toolbased approach to make design thinking is a great first step. Many of the tools designers use to
develop a deeper understanding of their customers needs can be used to help managers create
better value for their customers (Liedtka, J. & Ogilvie, T. ,2012). Many managers need this sort
of program. a step by step set of tools. It isn't because they can't understand or see the design
world but rather this their flavor of risk management as it applies to Design Thinking. Its how
they prepare for the unknown.

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Design expertise contributes by conceiving high value projects, building differentiation,


exploring uncertainty, stimulating creativity and shaping internal culture (Stevens, J., Moultrie,
J., & Crilly, N. ,2008). The goal is to reate value that cant be competed away by competitors.
When company see to create unique value propositions based on creative use of their inherent
intellectual capital, they are left with an act that is hard to imitate. The Design-Led Innovation
approach works on the promise of creating a sustainable competitive advantage by radically
changing the customer value proposition (Bucolo & Matthews 2011). By this we mean that new
forms of value are present in any company's intellectual capital. Innovation practices and design
thinking specifically act to unlock such potential.
If an organization has put in place policies and a structure that enable faster opportunity
decisions and equally quick abandonment decisions, it will do a more effective job of managing
and allocating its resources in uncertain times. (Allen, K., 2012). Companies must first create
structural resilience before implementing new procedures as things may move fast. If policies
and procedures get in the way of fulfilling customer needs, that may be a problem as well. Often,
the traditional structure happens to be the biggest barrier to new solutions and innovative
practices (Allen, K., 2012).
5. Design Thinking's focus is on prototyping and learning as we
progress in the process of creating products, processes and services.
Design insists that we prepare ourselves to iterate our way to a solution, so managers who
thought like designers would see themselves as learners(Liedtka, J. & Ogilvie, T., 2012). Design
thinking is a process that is highly interactive and incremental. People with different
backgrounds and experiences are crucial to drive it. By using prototypes to elicit or provoke
feedback about assumptions gathered beforehand or manifestations of design ideas, it becomes

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possible to validate the assumptions and the resulting design choices (Gabrysiak, G., Giese, H. &
Seibel, A., 2012). Designers understand that successful invention takes experimentation and that
empathy is hard won. They go seek it out anyway. Regard every problem as a possibility and
your perspective will change forever. Focus less on control and getting it right the first time and
more on seeing and responding to opportunities as they come. (Liedtka, J. & Ogilvie, T., 2012).
Meinel & Leifer (2011) introduce the Hunter-Gatherer model. It suggest that we can
achieve more success from research and marketing activities if we are taught to be better with
handling business spontaneity. its about learning on the fly in uncertainty territory. Using solid
principles, Design thinkers move forward along the hunt knowing that they will find gold and
know it when they see it. The Hunter-Gatherer model is all about actions, activities, and
movements, what we do in the moment, what we learn on the fly, and how we discover the
unknown in unfamiliar terrain. There is no roadmap or fixed model of how innovation is
produced.
The Hunter-Gatherer Model revolves around enfolding events, awareness, observation,
and real time intervention. We are hunting for an idea that sells, and it had better be big. We
want to solve a problem, perhaps remove the problem itself through design thinking, new
products, and/or remarkable services. We find that the designer-ly ways of approaching design
research are decidedly different than the approach derived from the physical sciences (Haig,
2011).
Within the the Design Thinking Paradigm, Prototyping is paramount. It's goal is to learn
about the strengths and weaknesses of an idea before you spend tons of money producing the
product or delivering the service (Brown, 2008). Its more about learning as we go through
uncharted terrain using solid principles such that we find gold in our search and we know it when

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we see it (Meinel, C and Leifer, L., 2011). The Business Model Canvas (Pigneur & Osterwalder
2010) is prescribed to design teams as a tool for quickly and intuitively prototyping possible
business models during early-stage generative and evaluative exercises. This is indeed a major
step forward being that it fuses the Design Thinking approach into something that traditional
businesses view as familiar. A somewhat non-intrusive template for innovative practice.
6. Design Thinking advocates constant innovation as the primary
method of acquiring and maintaining competitive advantage.
The very core of many management theories are being questioned and management is
close to a point of failure. Many corporations are facing crises on several fronts and not only
from the obvious such as low cost competition, disruptive technologies, economic sustainability,
and social development. Business leaders need to find new things to handle new opportunities
and to organize for a future of unprecedented uncertainties (Mootee, 2011). Weve come to the
end of the runway on maximizing productivity and re-engineering processes. The tools of design,
including post-it notes and whiteboards, have become ubiquitous (Brown, 2008). Employees are
now being bred to innovate. Innovation is the key to success in this period of uncertainty.
Further, innovation is commonly held as a profession that is a blend of art, craft, science,
business savvy and understanding of customers. It is now the principle method of competitive
advantage. Companies that fail to adopt this view are getting left behind (Brown, 2008).
Proactively dealing with uncertainty has become as important as technological genius.
The ability to anticipate and resist or adapt to unpredictable events of enormous impact. In short,
a resilient organization will thrive in both good times and bad. For decades- 5 year strategic plans
were the thing. Many executives did these plans as if nothing would deviate from what had been
predicted to the detriment of the company. The financial crisis saw modern business come to the

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end of a relatively stable and predictable cycle. Turbulent economic times are indeed a catalyst
for the design thinking movement as no one wants to be caught off guard. (Allen, K., 2012).
Traditional vs. Design
Traditional approaches are much better at poking holes in ideas than exploring
possibilities. In traditional office environment employees take turns playing the devil advocate.
There seems to be a bigger prize for those are better at tearing down ideas than there is for those
who develop innovative ones. Design Thinking starts with what's possible. The design process is
a system of spaces, not a set of orderly steps (Brown, 2008). The process is different for every
company and should be different every time.
The differences between the traditional business approach and a design approach are
profound yet the 2 are potentially very complimentary. Either can be used to optimize the other.
The design thinking attitude says that executives should develop scenarios of possible future
outcomes instead of spreadsheets. Design Thinkers use methods to structure creativity so that it
counterbalances the devil's advocate and produces a more constructive force. Effectively, the 2
approaches differ primarily in the principle assumptions made. Traditional business thinking
assumes rationality and objectivity having its decisions driven by cold logic. Design assumes
instead human experience sees true objectivity as an illusion. There is only individual truth
and answers are only better or worse (Liedtka, J. & Ogilvie, T., 2012).
Conclusion:
The natural evolution from design to design thinking reflects the growing recognition on
the part of todays business leaders that design

has become too important to be left to

designers (Brown, 2008). It is time to take design thinking to the next level: Action in a
professional environment. We must first use design thinking to conceptualize and plan how to

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make our products and processes better. Then, we must act upon this new knowledge. Further, it
needs to become a way of being and move beyond a short-term experiment (Adams, R. S., Daly,
S., Mann, L., Dall'Alba, G., 2011).
Fundamentally, Design Thinking is all about problem solving. Jonassen, (2000) says we
are inept at teaching problem solving because we don't understand problem solving activities.
Thus, it isn't included in mainstream curricula. this is quite ironic being that it is probably the
most useful skill in any profession. It's about being able to make a major cul- tural shift.
Companies must incorporate three elements to maximize its chances of success: 1) employ a
design thinking approach to problem solving 2) develop structural resilience before strategy 3)
Create options to reduce the impact of uncertainty (Allen, K., 2012).
The key is to recognize designs purpose as evolving from industrial practice in
operations to a theoretical strategic purpose. It requires full integration of design into strategic
direction (Stevens, J., Moultrie, J., & Crilly, N. , 2008). Every Manager needs design eventhough Design is a mysterious no-man land where only the brave and brilliant dare
tread"(brown, 2008). It's about going into the depths of everyday lives of people so that we may
produce better products and services (Stickdorn, M., & Schneider, J. , 2010). What this means for
business leaders today is that they need a new way of thinking. They need Design Thinking.

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