Successful companies are always looking for new ways to compete in the marketplace, and one approach, which has taken the corporate world by storm, is design thinking.
Design-led companies such as Apple, Coca Cola, IBM, Nike, Procter & Gamble and Whirlpool have outperformed the S&P 500 over the past 10 years by an extraordinary 219%, according to a 2014 assessment by the Design Management Institute. Great design has that “wow” factor that makes products more desirable and services more appealing to users. This explains why McKinsey, Deloitte, IBM, Facebook and Capital One have recently bought design firms.
Great design is an outcome of design thinking, a methodology used by designers to solve complex problems and find desirable solutions for customers. Entire corporations have adopted design thinking to re-invent the way they innovate, including P&G, GE, IBM, Pepsi and SAP. The focus of innovation has shifted from being engineering-driven to design-driven, from product-centric to customer-centric, and marketing-focused to user-experience-focused.
What is design thinking?
According to Roger Martin, author of The Design of Business, “Design thinking is a process of continually redesigning a business on the basis of insights derived from customer intimacy.”
Design thinking draws on logic, imagination, intuition and systemic reasoning to explore the possibilities of what could be, and to create desired outcomes that benefit the end user (the customer). A design mind-set is not problem-focused, it’s solution-focused, and action-oriented. It involves both analysis and imagination. Design thinking is linked to an improved future and seeks to build ideas up—unlike critical thinking, which breaks them down.
Design thinking informs human-centered innovation
Human-centered innovation begins with developing an understanding of customers’ or users’ unmet or unarticulated needs.
“The most secure source of new ideas that have true competitive advantage, and hence, higher margins, is customers’ unarticulated needs,” says Jeanne Liedtka, author of Solving Problems with Design Thinking, in an article in the Batten Review. “Customer intimacy—a deep knowledge of customers and their problems—helps to uncover those needs.”