Design For Business

Posted on September 9, 2010 Updated on September 9, 2010

Design For Business.

Business have always sought for competitive advantage in the market place and tried to maximize the value it delivers to its stakeholders. These attempts have resulted in various theories of management which have helped businesses to formulate their strategies. Right from the days of scientific management the approach was to deduct some kind of generalist theory which is derived from a set of observations. These theories are then applied to problems at hand so that the processes and systems can run efficiently and predictably. So far so good.

But what happens when the market environment forces business to think anew and create offerings to satisfy customers’ obvious or latent needs? It’s not easy for a business to challenge its own thought process and think differently. Understanding the consumers’ need and creating a new offering is what it takes. Some may argue that market research has been around the scene since long. Scientifically proven methods have been used by businesses to take critical decisions. The results of the surveys, insights from focus groups & the analytical models used for prediction are robust enough and have helped businesses to formulate strategies and ensure business growth.

But there is another school of thought which bases its argument on the premise that, the moment you start analyzing and using consumer research, you drive all the creativity out of the product. No good product was ever created from quantitative market research. Great products spring from the heart and soul of a great designer, unencumbered by committees, processes, or analyses. So the primary source of value creation is analysis but creativity. Creativity cannot be systemized and hence the driving force behind the business decision is not analysis but intuition.

So the eternal dilemma is to choose between analysis & intuition. Each approach has its own pros and cons. The approach which a business takes then reflects in its structure, processes and operational norms. Organisations dominated by analytical thinking are programmed to maintain the status quo and by having tried and tested processes in place with a clear backdrop of organizational structure they have a major advantage of Scalability and reproducibility. They can replicate the business model very fast and build size and scale. This serves as the competitive advantage and helps an organisation reach /sustain its leadership position in the market. Here, the example of McDonalds would be very apt to make the point more clear. Once McDonalds had perfected it fast –food restaurant service delivery logistics ,it was easy for it grow from a small Bar-B-que in San Bernardino suburb to a leading global foodservice retailer with more than 32,000 local restaurants serving more than 60 million people in 117 countries each day.

On the other hand an intuition based organisation mirror the performance of their creative leader. So innovations permeate fast through the organisation, but as the structure and processes are not geared to translate the innovation into business growth. This lack of systemic nature of work makes the organisation wax and wane with individual intuitive leaders. Innovation is important for the growth of a business is more than a cliché now. Innovation has been used so often in business strategy meetings and more so in very superficial terms that as a result of this it has turned to be one of the most abused words in recent times. It high time that innovation is taken in the right perspective and understanding the far reaching implication of innovation. Innovation no longer means rolling out a new product every year or changing the look-&-feel of your communications. Innovation is far more visceral and when managed with the right kind of thought process behind it can truly work wonders and organizations who have developed this thinking are the ones who are leaders in their businesses and paving way for a new method of business. They are no longer managing their businesses, they are designing their business and the secret behind this is the “Design Thinking” approach they have taken.

Design Thinking & Design Doing: There has always been a debate about only Thinking and not doing. A significant part of the body of knowledge remains largely at theoretical and abstract conceptual level and much is “lost in the translation” when applying a theory or thought process to real problem at hand. But when it comes to “Design Thinking” the doing and execution part is in a way taken care of in the Design aspect of it. Design itself represents a process and connotes action. So Design Thinking itself means Design Doing. Also Design as a discipline has been very integrative and holistic in its nature and its overall outlook is oriented towards future. The various stages in a design process like need finding, user research, prototyping, exploring all possible solutions etc if seen with a wider scope can be applied to business processes and systems. So at the broadest level Design can be equated to the process of Strategic Planning .Given this analogy Design principles if applied on the business process and systems can produce better solutions to business problems. “Better” can mean lower cost, better performance, lower service delivery times, higher ROI etc depending on the context and problem.

Design Thinking is increasingly looked upon as the next source of competitive advantage by businesses. Let’s see how “Design Thinking” actually works. Design Thinking needs to be understood at two levels. The first level understands it at abstract knowledge level. Design Thinking is the thought process which enables seamless movement along the Knowledge Funnel.

The figure above represents how knowledge moves along the funnel. It starts with a mystery, a question. At this stage itself the Design Thinking element kicks in and guides us to ask the right questions. Given the numerous amount of phenomenon occurring and information flowing around us it’s very difficult to stop at the correct junctions and ask the correct questions. So what questions to ask and when to ask? Which mysteries are to be considered and which should be ignored or may be kept a track of is the other dimension of Design Thinking. This I would call the Operational Design Thinking which we will see in detail in the later section.

Design Thinking as we would see further applies to a variety of organizations and the principles can be applied to healthcare, art, social sector ,scientific research and restaurants to get equally successful solutions. So a cellular telecom company may think what is the best way to enter the largest but overcrowded consumer market. A FMCG may think how to differentiate its premium brand of men’s soap. A city municipal authority may think of how to develop a garbage disposal system which takes care of interests all the stakeholders involved. A sales man might ask how and what Americans would like to eat when they are on move.

Then next stage of the funnel is a heuristic, an empirical rule that gives a more focused area to concentrate on. Heuristics simplifies the problem and helps move forward in a direction or at least gives an indication as to which directions won’t lead to a solution. The heuristic serves as a guiding concept which can be worked upon to get a probable solution to the problem. So the telecom company may select tariff plan as an aspect which if offered innovatively enough would help it gain a strong foothold in the market. The FMCG major may work out an equation wherein packaging design and price point are combined to create a unique positioning which gives the necessary differentiation. The concept of quick-service drive-through restaurant may be the probable answer which the sales man may get.

Once this heuristic is worked out knowledge gets more and more focused until it gets completely captured in a formula or an algorithm. The algorithm is the purely operational aspect of the design thinking continuum and the most easy to replicate.

This article is part of a series of book reviews on Design Thinking and its importance for businesses. This is work of the core team of Strategic Design For Business at MAEER’s MIT Institute of Design, Pune(www.mitid.edu.in). Comments and inputs on areas like Strategic Design, Design research, Design Ethnography, Design Education are welcome.