MODULE 3

I. Design Thinking for Entrepreneurial Innovation

II. Content Summary

This module introduces students to the principles and methodology of Design Thinking,
emphasizing its application in entrepreneurial contexts. Through analysis of real-world
examples, students will gain insights into how Design Thinking principles can drive
innovation and success in entrepreneurial ventures, equipping them with the skills and
knowledge to navigate complex problems and drive meaningful change in the startup
ecosystem.

III. Learning Outcomes

At the end of this module, students will:

1. Understand the principles of design thinking.

2. Apply design thinking to solve entrepreneurial problems.
3. Analyze the impact of empathy and iteration in problem-solving.
4. Integrate design thinking into the entrepreneurial mindset.

IV. Lecture Notes

3.1 INTRODUCTION TO DESIGN THINKING PRINCIPLES

In this section, we will embark on a journey to explore the foundational principles and
methodology of Design Thinking, a powerful approach to problem-solving and innovation.
Design Thinking offers a human-centered and iterative framework for addressing complex
challenges by understanding user needs, generating creative solutions, and prototyping and
testing ideas. Design thinking originated as a means to teach engineers creative problem-solving
akin to designers. Pioneered by John E. Arnold in 1959, it evolved through works by Herbert A.
Simon and Robert McKim. Its popularity surged with human-centered design in the 80s and
IDEO's founding in the 90s, eventually permeating the business world by the 21st century.

As aspiring entrepreneurs, mastering the principles of Design Thinking is essential for developing
innovative products, services, and business models that resonate with customers and drive
sustainable growth

Design thinking is both a mindset and process aiming to solve complex problems centered on
user needs, emphasizing practical, feasible, and desirable solutions. It involves adopting a
designer's perspective and quickly translating ideas into tangible prototypes. Its uniqueness lies
in addressing "wicked" problems—complex issues defying conventional solutions, spanning
global challenges like climate change to business dilemmas like maintaining competitiveness.

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 3.1 PRINCIPLES OF DESIGN THINKING

Why do entrepreneurs need design thinking?

A majority of the entrepreneurs that get effective growth have added innovation in their businesses.
Here’s how it can help them, and why it is necessary to follow a design thinking process:

1. Long-term strategy planning

Issues that are complex, hard to define, unique, and have unknown consequences need to
be defined. Problems such as poverty eradication, sustainability, healthcare, and education
are examples of wicked problems. As an entrepreneur, it is important as part of your long
term planning and business strategy to consider these aspects as well. In the design thinking
process, we often ask questions about how one might be able to solve these problems in the
future. It encourages innovation and helps in the ideation session. Taking out time to set
goals and how to overcome any shortcomings is key to becoming a successful entrepreneur.

2. Allows divergent thinking

Design thinking follows an approach that allows divergent and convergent thinking. This is
typically associated with imaginative thinking, originality, curiosity, and exploring various
possible outcomes. Convergent thinking revolves around bringing these ideas together to
come up with a single solution. Design thinking allows you, as an entrepreneur, to follow
different thinking styles and explore open-ended options to come up with an actionable
solution. Design thinking tools such as empathy are great for this. Prototyping also plays an
integral role in this aspect.

3. Incorporate a process model

Incorporating a design thinking process can help you track and measure your progress and
outcomes. It also allows you to evaluate feedback from various entrepreneurial activities.
There are multiple ways to do so, but the design thinking process follows a systematic
process that consists of five steps. Empathize, define, ideate, prototype, and test. Following
this process as an entrepreneur can help with creating a framework and timeline to be
followed.

4. Be curious and observe

Design thinking is all about observation. Being curious as to how things are, why they are a
certain way, and trying to come up with solutions to this curiosity is what makes you as an
entrepreneur very unique. It will eventually build empathy in you and that is one of the key
aspects of design thinking.

In the words of IDEO’s Founder, David Kelley, “The main tenet of design thinking is empathy
for the people you’re trying to design for. Leadership is the same thing — building empathy
for the people that you’re entrusted to help.” The words are enough to describe how many
people who understand design thinking will turn into great leaders and be able to create
brilliant products.

With the help of design thinking, we can evaluate and develop empathy with a particular
user. In addition to that, it aids in improving the process of questioning, which includes
questioning the hurdles, questioning the indications, and questioning the hypotheses.

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 There are certain principles that are pivotal to design thinking. These are reflected in the
design thinking methodology, which we’ll explore in detail a little later on. We’ve outlined
five of design thinking’s most important principles below:

1. User-centricity and empathy

Design thinking is all about finding solutions that respond to human

needs and user feedback. People, not technology, are the drivers of
innovation, so an essential part of the process involves stepping into the
user’s shoes and building genuine empathy for your target audience.

2. Collaboration

The aim of design thinking is to pool a diverse variety of perspectives

and ideas; this is what leads to innovation! Design thinking encourages
collaboration between heterogeneous, multidisciplinary teams which
may not typically work together.

3. Ideation

Design thinking is a solution-based framework, so the focus is on coming

up with as many ideas and potential solutions as possible. Ideation is
both a core design thinking principle and a step in the design thinking
process. The ideation step is a designated judgment-free zone where
participants are encouraged to focus on the quantity of ideas, rather
than the quality.

4. Experimentation and iteration

It’s not just about coming up with ideas; it’s about turning them into
prototypes, testing them, and making changes based on user feedback.
Design thinking is an iterative approach, so be prepared to repeat
certain steps in the process as you uncover flaws and shortcomings in
the early versions of your proposed solution.

5. A bias towards action

Design thinking is an extremely hands-on approach to problem-solving

favoring action over discussion. Instead of hypothesizing about what
your users want, design thinking encourages you to get out there and
engage with them face-to-face. Rather than talking about potential
solutions, you’ll turn them into tangible prototypes and test them in
real-world contexts.

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 3.2 DESIGN THINKING PROCESS

The design thinking framework can be divided into three distinct phases: immersion, ideation, and
implementation. This framework can be further broken down into five actionable steps which make up
the design thinking process:

Although these steps appear to be sequential, it’s important to point out that design thinking doesn’t
follow a strictly linear process. At each stage in the process, you’re likely to make new discoveries that
require you to go back and repeat a previous step.

Step 1. Empathize

What? During the empathize phase, you’ll engage with and observe your target audience.

Why? The aim of this step is to paint a clear picture of who your end users are, what
challenges they face, and what needs and expectations must be met.

How? In order to build user empathy, you’ll conduct surveys, interviews, and observation
sessions.

For example: You want to address the issue of employee retention, so you ask each
employee to complete an anonymous survey. You then hold user interviews with as many
employees as possible to find out how they feel about retention within the company.

Step 2. Define

What? Based on what you’ve learned in the empathize phase, the next step is to define a
clear problem statement.

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 Why? Your problem statement sets out the specific challenge you will address. It will guide
the entire design process from here on out, giving you a fixed goal to focus on and helping
to keep the user in mind at all times.

How? When framing your problem statement, you’ll focus on the user’s needs rather than
those of the business. A good problem statement is human-centered, broad enough for
creativity, yet specific enough to provide guidance and direction.

For example: “My employees need to be able to maintain a healthy lifestyle while working
in the office” is much more user-centric than “I need to keep my employees healthy and
happy in order to boost retention.”

Step 3. Ideate

What? With a clear problem statement in mind, you’ll now aim to come up with as many
ideas and potential solutions as possible.

Why? The ideation phase gets you thinking outside the box and exploring new angles. By
focusing on quantity of ideas rather than quality, you’re more likely to free your mind and
stumble upon innovation!

How? During dedicated ideation sessions, you’ll use a range of different ideation techniques
such as bodystorming, reverse thinking, and worst possible idea.

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 For example: Based on what you’ve learned in the empathize phase, you hold several
ideation sessions with a variety of different stakeholders. With your problem statement to
hand, you come up with as many ideas as possible for how you might make your employees
happier and thus more likely to stay with the company.

Step 4. Prototype

What? Having narrowed your ideas down to a select few, you’ll now turn them into
prototypes—or “scaled-down” versions of the product or concept you want to test.

Why? The prototyping stage gives you something tangible that can be tested on real users.
This is crucial in maintaining a user-centric approach.

How? Depending on what you’re testing, prototypes can take various forms—from basic
paper models to interactive, digital prototypes. When creating your prototypes, have a clear
goal in mind; know exactly what you want your prototype to represent and therefore test.

For example: During the ideation phase, one idea that came up was to offer free yoga
classes. To prototype this idea, you set up a dedicated yoga room in the office, complete
with mats, water bottles, and hand towels.

Step 5. Test

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 What? The fifth step in the design thinking process will see you testing your prototypes on
real or representative users.

Why? The testing phase enables you to see where your prototype works well and where it
needs improving. Based on user feedback, you can make changes and improvements before
you spend time and money developing and/or implementing your solution.

How? You’ll run user testing sessions where you observe your target users as they interact
with your prototype. You may also gather verbal feedback. With everything you learn from
the testing phase, you’ll make changes to your design or come up with a completely new
idea altogether!

For example: You decide to test the yoga idea for two months to see how employees
respond. You find that people enjoy the yoga classes, but are put off by the fact that they
are in the middle of the day and there is nowhere to shower. Based on this feedback, you
decide to move the yoga classes to the evening.

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 3.3 HUMAN CENTERED DESIGN

Human-centered design is a practice where designers focus on four key aspects. They focus on people
and their context. They seek to understand and solve the right problems, the root problems. They
understand that everything is a complex system with interconnected parts. Finally, they do small
interventions. They continually prototype, test and refine their products and services to ensure that
their solutions truly meet the needs of the people they focus on.

Cognitive science and user experience expert Don Norman sees it as a step above user-centered design.

“The challenge is to use the principles of human-centered design to produce positive results, products
that enhance lives and add to our pleasure and enjoyment. The goal is to produce a great product, one
that is successful, and that customers love. It can be done.”

— Don Norman, “Grand Old Man of User Experience”

Norman coined the term “user experience” shortly afterwards. This signaled a focus on the
needs of the people who used products throughout their experiences. Norman explained the
reason for the evolution away from “user” was to help designers humanize the people whose
needs they designed for. Human-centered design has four principles:

1. People-centered: Focus on people and their context in order to create things that are
appropriate for them.

2. Understand and solve the right problems, the root problems: Understand and solve the right
problem, the root causes, the underlying fundamental issues. Otherwise, the symptoms will just
keep returning.

3. Everything is a system: Think of everything as a system of interconnected parts.

4. Small and simple interventions: Do iterative work and don't rush to a solution. Try small, simple
interventions and learn from them one by one, and slowly your results will get bigger and
better. Continually prototype, test and refine your proposals to make sure that your small
solutions truly meet the needs of the people you focus on.

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V. Teaching Methods and Activities

A. Design Thinking Application.

Students are grouped into 5 members. Select a ‘wicked’ problem in our society tackle
using design thinking principles. Some examples could include climate change mitigation
strategies, improving access to education in underserved communities, or redesigning
public transportation systems for efficiency and sustainability among others but
students are allowed to identify their own ‘wicked problem’ they can observe.

B. Completion of Tasks.
 Empathy Building: Have students conduct research to understand the needs,
challenges, and perspectives of the people affected by the problem. This could
involve interviews, surveys, or observations.
 Problem Definition: Encourage students to define the problem statement clearly
based on their research findings. Emphasize the importance of framing the problem
in a way that considers all stakeholders and the broader context.
 Ideation: Facilitate a brainstorming session where students generate as many ideas
as possible to address the problem. Encourage wild and unconventional ideas
without judgment.
 Prototyping: Have each group select one or more promising ideas and create a
simple prototype or concept that represents their solution. This could be a physical
model, a storyboard, a digital mock-up, or any other form that effectively
communicates their idea. A digital mock-up is preferred.
 Testing and Iteration: Allow students to test their prototypes with peers or
stakeholders to gather feedback. Encourage them to iterate on their designs based
on the feedback received, refining their solutions to better meet the needs of users.
 Presentation: Finally, have each group present their problem-solving process,
including their research findings, problem statement, ideation process, prototype,
and any insights gained from testing and iteration. Encourage constructive feedback
and discussion from both peers and the instructor.

VI. Assessment and Rubrics

This is the criteria of grading for the Design Thinking Task:

1 2 3 4 5
Criteria Very Poor Poor Satisfactory
Very
Excellent
Satisfactory

Empathy Building. Demonstrates a deep understanding of

user needs, challenges, and perspectives through
comprehensive research methods. Insights gained
significantly inform the problem statement and solution
design.
Problem Definition. Clearly defines the problem statement
based on thorough analysis of research findings. Considers
all stakeholders and the broader context in framing the
problem.
Ideation. Generates a wide range of innovative and
feasible ideas to address the problem. Ideas demonstrate
creativity, originality, and consideration of diverse
perspectives.
Prototyping. Develops high-quality prototypes that

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 effectively communicate the proposed solution(s).
Prototypes demonstrate attention to detail, creativity, and
alignment with user needs.
Testing and Iteration. Conducts thorough testing of
prototypes with peers or stakeholders, gathering valuable
feedback for iteration. Iterations significantly improve the
effectiveness and feasibility of the solution(s).
Presentation. Delivers a clear, engaging, and well-
structured presentation that effectively communicates the
problem-solving process. Demonstrates excellent
teamwork, articulation of ideas, and response to
questions.
TOTAL

VII. References

Stevens, Emily (January 2020). Invisions. What is Design Thinking and How Do We Apply
It? Retrieved from https://www.invisionapp.com/inside-design/what-is-design-thinking/

Bahirat, Tanuja (October 25, 2022). Great Learning. How Entrepreneurs Can Use Design
Thinking? Retrieved from https://www.mygreatlearning.com/blog/how-entrepreneurs-can-use-
design-thinking/

Dam, R. F. (2024, March 1). The 5 Stages in the Design Thinking Process. Interaction
Design Foundation - IxDF. https://www.interaction-design.org/literature/article/5-stages-in-the-
design-thinking-process

Interaction Design Foundation - IxDF. (2021, June 14). What is Human-Centered Design
(HCD)?. Interaction Design Foundation - IxDF.
https://www.interaction-design.org/literature/topics/human-centered-design

Prepared by:

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