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Design-driven Innovation
16. marts 2017
Af Christopher Scales, Strategic Design Director, Designit
Christopher Scales, Strategic Design Director at Designit and part of the Expert Panel in the Plus-programme, explains how the working principles behind design can help companies win markets and remain competitive. NB! This article is in english.

I have been practising as a designer in the corporate world for 20 years both inside large organisations and externally as a consultant. During this period I have witnessed design increase in stature as its purpose gradually moved upstream from being just a tactical activity to one that can set the strategic direction. It has been a bumpy road. There are still many design sceptics out there, some of whom I have worked with closely (you know who you are) but after all the many projects, debates and negotiations, I remain firm in my belief that the working principles behind design are a good way to help companies win markets and remain competitive - the reasons for this, I will l attempt to explain in this article.

Design-driven innovation
Before I start, I think it is vitally important to clarify what I mean by the term ‘design-driven innovation.’  Within the corporate world, the term ‘design’ is often misunderstood and is confused with the more recognised aspect of design practised in industries such as fashion and home furnishings, where designers are tastemakers to the aspiring consumer.  Considering design in this way leads to ‘design driven innovation’ being misunderstood as something ‘soft and fluffy’, and it is therefore too often perceived as a risky and expensive activity reserved exclusively for the creative type and therefore not relevant to the corporate world.

I advocate, however, that design-driven innovation is not exclusive to the traditional design industry. Engineers innovate too, as do people working in operations, in the supply chain and in marketing.  Making innovation ‘design-driven’ is simply adopting a design-driven mindset where the focus is on innovation. In other words, it is about applying ‘design thinking’ to the innovation process and as such, it is relevant to all aspiring and ambitious businesses.

Design thinking, in my opinion, is a mindset defined by two key governing principles. The first is creativity: fostering it throughout the workforce. The second is relevance, achieved by focusing continually on the needs of your customers. Combined in the right way, these two governing principles can help companies yield compelling and relevant customer value propositions: the stuff that wins markets and builds strategic advantage.

Let me give you an example from the manufacturing world.  In order to combat margin reductions (due to the increased competition from emerging markets) industrial manufacturing is looking at Internet of Things and Big Data as a way to generate new revenue streams beyond their core business. The change journey these companies need to address requires an internal mindset shift from products to services, which in turn requires new organisational structures, business models and new ways of thinking.

As more pieces of hardware become connected and ever smarter, the scope of their understanding needs to exponentially grow. A hardware manufacturer now needs to think about all the potential beneficiaries of the data generated by a smart connected product. This could be anyone working across their respective value chain - from lifecycle management and supply chain to maintenance and usage. Networked products and the Internet of Things are complex!

This is why people-centred research is so essential to the innovation process; understanding your customer is key. This is the principle of building an initial understanding of what really matters to the people who will ultimately benefit from the product or service being innovated. Armed with this understanding, companies are better able to navigate the complexity of a change journey. It acts as a guiding light to help set the right direction for innovation activities and thus reduce the probability of being lured off-track by the prospect of an exciting new technology that does something really cool but doesn’t really add any relevant value.

‘But we do this already and I, therefore, know what we need to do’ is the response I have heard so many times. However, the reality is that companies are asking the wrong questions and therefore getting the wrong answers. Steve Jobs’ famous quotes, ‘people don’t know what they want until they see it’ and ‘skate to where the puck is going, not where it is’ capture the essence of how Design Research differs in methodology.  Design Researchers do not ask customers what they want. They shadow them, observe and interpret their behaviour in the context of the strategic objective. People generally struggle to articulate what they really need and the process of shadowing and observing people’s actions in the context of their daily work will give a far more realistic and honest outlook of what each service beneficiary really needs and how a company can come up with something that their competitors hadn’t thought of.

Opportunity spaces
So once you’ve asked the right questions and collected your feedback, the design thinker utilizes their creative abilities to synthesize the information into opportunity spaces. This is the process of combining new external information gathered through research, with current internal knowledge such as technical capability and industry know-how. It is important to allow teams the required time, space and focus to be able to absorb and process all the information.

I use the term ‘abductive logic’ as a way to describe this process because it highlights how different in mindset it is to that of ‘deductive logic’ – the mindset with which most companies approach design innovation programs. Let me explain what I mean.

Deductive logic is sequentially reducing the uncertainty of a new opportunity as it matures. It’s a valid way of working on development programs but inappropriate, in my opinion, for the early phases of product and service innovation. This is because, in general, the ideas with the most innovation potentially present the highest risk. Deductive logic will kill these ideas before they get a chance to prove themselves. Whereas, on the other hand, abductive logic builds and explores different constructs of data that possibly could make sense. However, it requires the time and space to help teams discover opportunity spaces that are novel, unique and delightful: the stuff that wins markets and builds competitive advantage. These ideas then need to be protected from the naysayers (and there will be plenty of them) by incubating them to the level of maturity they need in order to get a fair evaluation.

The 80/20 rule
The value of working fast is an important one here. Fostering and incubating ideas that are not yet proven is often an uncomfortable experience for a large company because there is no guarantee the idea will not fail. To combat this the 80/20 rule can come into play, whereby teams spend 20% of their time to achieve 80% certainty, instead of 80% of their time seeking 100% certainty. (Even with the latter approach there is really no guarantee full certainty is achieved). Google ‘Design Sprints’ for example are 1-3 week intensive programs whereby cross-disciplinary teams are tasked to conceive, prototype and validate a new opportunity. Should the idea fail there is a low perceived loss within an organization due to the limited amount of time invested.

In his TED Talk, ‘The Unexpected Benefit of Celebrating Failure’, Astro Teller from Google X explains how his team seek to kill new ideas as early as possible. Killing ideas early is celebrated because it means no further resources are wasted on the wrong things. This mindset encourages teams to be more creative because the risk of failure is mitigated.

Visual thinking
I am a big advocate of thinking visually. Traditionally, drawing is an attribute designers are considered to excel at. However, in the corporate world it is a method that has generally been looked down upon because of its association with the arts and not with business strategy. However, drawing and visualizing information can be a powerful tool when setting strategic direction.

Design thinking has pioneered visual tools to help companies manage the complexity of a business problem by mapping and visualizing relevant knowledge into opportunity frameworks such as customer journeys and service blueprints. Such frameworks enable teams to see the big picture and see the right opportunity spaces. They help cross-disciplinary teams engage in a shared language. Its something everyone can read and it enables focused discussion and alignment.

Design thinking also uses visually rich storyboards and short videos to capture and share the value a new opportunity. The ability to viscerally capture the essence of an idea in a short movie is, in my view, far more impactful and memorable than a Power Point deck. It can generate the necessary internal momentum and excitement required to gain internal buy-in for a new innovation opportunity.

To conclude, I think its interesting to see how the gradual emergence of design-driven innovation has coincided with the exponential growth of digital technology, with companies such as Airbnb and Uber proving how a design-driven approach can harness technology in the right way to create powerful value propositions that disrupt industries. Both companies identified a clear untapped need in the market and delivered a service that truly adds value through a convenient digital tool that is a delight to use. As startups, both were free of the corporate barriers standing in the way of innovation so it was easier for them to be design driven.  What this highlights is how much of a hindrance corporate barriers and design cynicism are to innovation. There are too many business leaders out the claiming to be innovative who aren’t and in my opinion it is their responsibility to empower their workforce to realize their creative potential. Not only can it generate new competitive advantage in the market but it will also most probably create an inspired and more motivated workforce.

So business leaders, put your money where your mouth is.  If you focus on your customer, ask the right questions, advocate creative thinking and visualise it. Then you’ll have the opportunity to realise something novel and unique and is good for business in an exciting and memorable way.

Christopher Scales, Strategic Design Director, Designit udgør en fjerdedel af ekspertpanelet i Plus-programmet og har bl.a. være med til at udvælge de 18 Plus-partnerskaber.