Magazine Fall 2017 Issue

Why Design Thinking in Business Needs a Rethink

To reach its full potential, the popular innovation methodology must be more closely aligned with the realities and social dynamics of established businesses.

Martin Kupp, Jamie Anderson, and Jörg Reckhenrich Reading Time: 6 min 

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Creative Thinking Business

In recent years, “design thinking” has become popular in many industries as established companies have tried to apply designers’ problem-solving techniques to corporate innovation processes.1 Key elements of the design thinking methodology include fast iterations; early and frequent interaction with customers; agile process design with less hierarchy; and a learning-by-doing approach that involves building prototypes and creating mock-ups of any kind as early as possible in the process.

Here’s how design thinking initiatives are supposed to unfold in a corporate setting: A clearly defined innovation challenge is presented to a team trained in design thinking. The team conducts research to better understand the problem. Drawing on their insights, they propose a variety of solutions, start building prototypes, and in the end, identify a fresh, profitable business opportunity.

That’s how the process is supposed to work — but it hardly ever does. Over the past seven years, we have helped more than 20 companies pursue more than 50 design thinking initiatives and have found that such initiatives rarely proceed according to the textbook model. Innovation is an inherently messy process, made even messier because it conflicts in many ways with established processes, structures, and corporate cultures. Fortunately, once you understand the challenges, you can avoid the most common pitfalls.

The root of most of the problems is the disconnect between design thinking and conventional business processes. After all, most companies’ successes are built on delivering predictable products by repeatable means. That means organizations almost instinctively resist bringing fuzzy, messy, and abstract vision into the equation. This antipathy toward design thinking runs deep, all the way from the C-suite to line workers. We find that employees often try to dodge design thinking assignments, shying away from the habits and mindsets the methodology requires.

The organization of the teams themselves leads to a second difficulty. The design thinking methodology calls for egalitarian, self-organized teams, but this isn’t how most established large companies work. In fact, the design thinking teams we have studied tend to have clear process and project owners, usually senior managers. These managers not only supervise the design thinking project but also assign tasks to team members and are responsible for its outcome. To make things worse, these senior leaders often supervise 12 to 15 design thinking projects at a time. This maximizes the leader’s time but reduces the teams’ efficiency, hinders passion and commitment, and slows progress.

In many companies, four cultural factors tend to aggravate these structural limitations:

Specialization

Specialization often leads to a tacit agreement that makes certain tasks the territory of certain departments. This has two effects on design thinking. First, participants from different departments often have difficulty communicating because of their very specific viewpoints. Second, many people who belong to departments that are traditionally considered less creative, such as accounting or internal audit, suffer from low levels of what management thinkers David and Tom Kelley call “creative confidence.”2 If you’ve never been encouraged to see innovation as part of your job and have been told that you’re no good at it, you’ll probably take people’s word for it. This may reduce friction and make the organization function more comfortably, but it also reduces the chance of a creative spark.

Human Speed Bumps

Managers in some departments (particularly legal, compliance, and regulatory affairs) tend to see their role as basically to stop things from happening. To get the most out of a design thinking exercise, people in these departments must embrace a can-do attitude and focus their creative energies on exploring how else things can be done. It takes a special kind of leadership to enable this supportive culture in traditionally conservative and risk-averse functional domains.

Focus on Monetary Results

In projects with a high degree of novelty, the expectation should be around the amount of learning that takes place, not the result. Focusing too early on monetary results (or other metrics) can discourage creativity — and ironically, reduce the chances of a profitable long-term result.

Failure Phobia

Many established companies punish failure, which discourages the risk-taking design thinking requires. In a workshop with a large consumer goods company, we asked participants to formulate hypotheses regarding consumers’ buying behavior in one product category. Instead of formulating useful hypotheses, participants developed ones that were so broad and unspecific that they would be impossible to test. We soon realized that the workshop attendees were avoiding mistakes for which they could be held accountable. Unfortunately, reducing their personal risk of failure meant reducing their collective chance of success.

Our research suggests that companies need to take five steps to take full advantage of the potential of design thinking:

1. Encourage top managers to champion design thinking initiatives. We find that design thinking teams require two kinds of attention by top management: proactive and follow-up. Proactive attention comes in many forms, such as launching an initiative, taking part in the process, developing and submitting ideas, and removing obstacles. Follow-up attention is the energy the leader invests after the design thinking team does its work, such as pushing ideas through the organization and sometimes giving explicit feedback when ideas are not pursued. Such behaviors can help embed and sustain design thinking in established organizations.

However, the biggest limiting factor is that managers are spread far too thin. Rather than try to monitor the progress of 12 to 15 design thinking initiatives, managers are better off pursuing a single design thinking goal at a time.

2. Balance the teams. Balancing intuitive and analytical thinking is one of the biggest challenges when establishing an innovative culture. Such teams are very tricky for established organizations to manage, as it is difficult to allow people freedom while at the same time ensuring that they don’t lose focus on other important business goals.

One key is for team members to recognize and appreciate the diversity of their experience and skills. For example, some members might focus more on workshop facilitation, whereas others may use their personal networks within the company to identify potential projects. The teams should include all pertinent functions, including marketing, sales, product management, and research and development.

3. Set ground rules. Design thinking teams need a lot of autonomy to function well. They should be empowered to act without getting permission for every tiny step. A good way to do this is to set minimal rules for the team, for example, by writing a list of five things they are not allowed to do, such as endanger brand perception or engage in illegal activities. Everything else, by default, they are allowed to do.

4. Integrate design thinking into product-development processes. Design thinking is often treated as yet another assignment from headquarters — just one more box to be checked. To change that perception, the teams responsible for design thinking should look more closely at their existing product-development processes. It can be helpful to integrate specific design thinking deliverables, such as early customer feedback in the problem-definition phase, larger-scale customer feedback in the market-solution phase, and prototypes and mock-ups throughout the process. Linking design thinking to innovation strategy should make it easier to measure the influence of design thinking on the quality and market fit of new products and services. More stakeholders will then see it as an integral part of product development, and not a parallel process.

5. Redefine the metrics. Because design thinking is about the early phase of the innovation process, teams should focus not on profit but on learning. By clearly defining learning outcomes through questions (such as “Why don’t patients sign the consent form?”), you can then define precise hypotheses (such as “because the form is too long” or “because the language is incomprehensible”). Even if the overall project fails, the captured learning will lead you to a better question or another project.

Supporting Design Thinking

Too many enterprises have naively invested in training employees in design thinking methodologies, and then been disappointed when they don’t see a tangible impact on innovation outcomes. Innovation is an inherently social process that involves not only inventing but also convincing people to do something in a new way. To be successful, a design thinking program must be closely linked with the organization’s social dynamics. Without the right supporting mechanisms, you probably won’t achieve the desired results.

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About the Authors

Martin Kupp is an associate professor of entrepreneurship and strategy at the Paris campus of ESCP Europe. Jamie Anderson is an adjunct professor of strategic management at the Antwerp Management School in Antwerp, Belgium. Jörg Reckhenrich is an artist based in Berlin as well as a faculty member of CEIBS Zurich Institute of Business Education in Switzerland.

References

1. Peter G. Rowe’s book “Design Thinking,” published in 1987, was the first publication to use the term. The book described a systematic approach to problem-solving used by architects and urban planners. The application of design thinking methodologies beyond architecture emerged in the 2000s; instrumental in this were works by Tim Brown and by Roger L. Martin. See P.G. Rowe, “Design Thinking” (Cambridge, Massachusetts: MIT Press, 1987); T. Brown, “Design Thinking,” Harvard Business Review 86, no. 6 (June 2008): 84-92; T. Brown, “Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation” (New York: HarperCollins, 2009); and R.L. Martin, “The Design of Business: Why Design Thinking Is the Next Competitive Advantage” (Boston, Massachusetts: Harvard Business Press, 2009).

2. T. Kelley and D. Kelley, “Creative Confidence: Unleashing the Creative Potential Within Us All” (New York: Crown Business, 2013).

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Comments (19)
Peter Hahn
Can't agree more about how important it is to get design leaders to the most senior level.
I run a small business. And everywhere I hear about design thinking. And therefore I want to know if this knowledge can change the course of familiar business processes.
Design Thinhink will be discussed during Innovation week Online created by Future London Academy. A 5-day online programme specially created for experienced innovation professionals, service designers and business leaders who are constantly looking for new approaches, tools and fresh case studies. Sounds interesting! What do you think?
Jörg Reckhenrich
Hi Wendy, point well taken. What the design thinkers invented was definitely a very fine and also simple to do, process. To make things simple, easy to access is a huge effort and needs stamina. Therefore the flood of design thinking initiatives is unbelievable. We saw often in our research, that organizations are simply attracted to work differently from the stiff work environment. There must be a different way is the promise of D-Thinking approach. Unfortunately, we saw that organizations simply "play" innovation.     

That is the what needs to be done: rethinking your own approach to reach out to the next level of a positive challenge. You have to do this in the arts, in every successful business and of course for D-Thinking as well.
wendy rich
its been a copy paste work nowadays designers need to reinvent themselves
Michael Wiley
Much depends on the industry and environment that a company resides in.

Design thinking is well-suited in companies that employ an adaptive strategy. In such a setting, experimentation and fast learnings are essential for survival. 

A perfect example is Telenor and its adaption to changing conditions moving from fixed lines to cellular. 

This environments are hard to predict and hard to shape. 

The problem is that most large companies still operate in the traditional classic mode.
Sharath Chandra Kogila
The article provides good reason why Design Thinking as a method may fail to integrate into established business set-ups. One important reason i think is motivation to comeback after an initial failure of employing the process. 

Another area that needs insight and requires research is. Does organizations needs a behavioural change management program before Design Thinking is employed as a process. It is important to package these together for DT to be effective
Narinder Sahota
Thanks, good article. I think Karl Burrow highlights the critical convergence that is occurring around design thinking, lean startup and agile practices (with experimentation climbing the hype cycle). Yet at the heart we see the same challenges that limited many  Enterprises embracing Agile practices in the first wave some 3-5 years ago. The human factor and the corporate middle management tier's desire to maintain the status quo is the achilles heel Exec leadership need to overcome either through inspirational leadership that generates a focus on a new compelling purpose or communication of a genuine  existential threat from disruption.
Yeuj Mak
Hi Martin,  You are seeing what you see because agility has not been able to scale to the height of enterprise level, remaining mostly at teams level where design thinking has been fully embraced no doubt.  In todays' 4th industrial revolution, management has to let go of control and the mindset that an organisation can be controlled like a machine.  It needs to the whole range of skills to manage investments, projects in all 3 horizons of defending status quo, growing new businesses and exploring opportunities.  Design Thinking is most crucial and appropriate in the latter because no one can predict the future in todays' complex and uncertain environment.  Parallel fail-safe experiments must be carried out in a sandbox while the plane is flying (business as usual).  Complexity-based approach is thus unavoidable as explained here https://vimeo.com/235139657.
Martin Kupp
Dear Anna, thank you very much for your comment. We fully agree. Once I was working with a large insurance company and had the possibility to visit their innovation space. The first thing I noticed was a poster with a set of rules like: Please do not remove the furniture from the room; Please check in and order the material that you need in advance; Please write only on the designated areas and only use appropriate pens; Please clean the surfaces that you used for writing ... and so on. When I laughed and took a picture of the poster, some of the participants did not even understand what I was laughing about. Many companies still have a long way to go!
Anna Glaser
Very interesting research! The best corporate innovation tools often fail to lead to success because management is not aligned. You can learn fast how a new tool works but it lasts a long time to change behaviors and management practices. Creating “egalitarian, self-organized teams” is not only important for design thinking but also for several other “hot” management topics like the “liberated company” or “corporate fab labs”. A lot of companies that I visited, for example just use the term “liberated company” and try to train their managers how to consider the opinions of their staff but at the end of the day fall back in control behaviors with little individual freedom of expression. Or companies create “corporate fab labs” where employees should go to “play”, but they don’t give them enough time to experiment. I think you point to an interesting research gap that is not enough explored in the literature: the gap between the theoretical concepts the managers try to implement to increase innovation and the reality. How long does it take to close this gap? What are the reasons that some management teams are reluctant to these changes and others are not? Thank you for this good article which got my neurons stimulated!
Martin Kupp
Dear Richard, thank you very much for your comment and your observations. I am actually working on some research on creativity in ethical decision making. We see that especially in ethical decision making, creativity is absent or even seen as a bad thing. In executive education classes we use a number of cases to make people aware that sometimes better solutions exist and that you need creativity to come up with them. A good case for this is for example the Vodafone in Egypt case by my dear colleague and friend Urs Mueller. You will be able to check it on The Case Centre website.
Martin Kupp
Dear Karl, thank you very much for your comment. I agree with your observation. We did not focus in our research on innovation catalysts. But I did a large corporate MOOC program for a large telco operator about three years ago. The program was developed around the design thinking principles. With 3000+ participants in the MOOC, we had a good insight into the design thinking capabilities of the participants and were able to detect future evangelists (or catalysts). This is also a very good way to spread such an initiative.
Richard McCracken
Thank you for sharing a very interesting snapshot of your experience Martin, Jamie and Jorg.
It seems to me that a large part of the difficulty lies in a general view that creativity is somehow separate and outside normal life - only 'special' people are creative and creativity is something to be deployed in special circumstances when 'normal' approaches fail - developing a new product, for example. This otherness of creativity reduces both frequency of use and effectiveness when it is unpacked for the special project.  It needs to be mainstreamed and like any muscle imbedded into daily practice to operate at its peak. Everyone is creative, and these design approach can and should be used to improve existing practice, systems, daily working life and not just reserved for that 'creative' new project.
Do you think case-based or similar approaches such as action research might have a part to play in normalising creativity among staff who do not think of themselves as creative?
Karl Burrow
I agree with this article Organizations are facing a shift where lean, agile, and design thinking are intersecting  within  organizations to drive innovation and transformation. Innovation catalysts are key to execute this for progress. Cross functional and cross departmental team alignment is a must.

Just had a discussion about this with Tom Kelly of IDEO in Tokyo which we touched on this in detail.
Jörg Reckhenrich
The article is based on an intensive and long project with a global pharmaceutical company, which has a site in Germany. The impact of cultural alignment was most insightful and crucial to the success of the project. The role of CEO acting more as a facilitator, defining a frame in which the team could develop ideas and solutions, created the difference.
Martin Kupp
Dear Sylvain, thank you for your comment. I fully agree with your observation regarding the different languages being spoken and I think that this would be a very promising avenue for further research.
laure helfgott
Very interesting, thank you!
Re-thinking the metrics is a huge topic indeed: we are trying to evaluate non-existing ideas as we do for existing products, forgetting that intuition and inspiration mainly spring from non-productive moments, without precise objectives, and in unexpected situations ... ;-)
Sylvain Bureau
Thank you for this paper which raises key issues. I share the same observations with a growing tension between the impressive diffusion of design-thinking within large corporations and limited changes in the way people work... I guess that one key challenge is also related to the language people use within companies. Language tends to remain bureaucratic and far from the language spoken by designers.
M L Bhatia
About "Why Design Thinking in Business Needs a Rethink", I have not been able to read the full article as I had already exhausted my monthly quota of three articles. I shall attempt to read it next month and then shall be in position to offer comments unless the rule is relaxed and I am permitted to read it this month..
M L Bhatia
The articles are based on hard research work and provide useful insights on innovation which are very helpful to me as an academic, consultant, and author on Technology Management. My recently published book is:
Essentials of Technology Management by M L Bhatia, New Age International Publishers (London, New Delhi, Nairobi), www. newagepublishers.com