Business Theory & Practice

Design Thinking- What’s The Story?

Design Thinking- What’s The Story?

Why are businesses discussing the deployment of Design Thinking in 2016? It’s not a new concept. According to Wikileaks, the notion of design as a “way of thinking” in the sciences can be traced to Herbert A. Simon’s 1969 book The Sciences of the Artificial,[2] Robert McKim’s 1973 book Experiences in Visual Thinking, and [3] Peter Rowe’s 1987 book Design Thinking, which described methods and approaches used by architects and urban planners. Design thinking was adapted for business purposes by David M. Kelley who founded IDEO in 1991.

So, why is it a big deal now? The release of the November 14, 2015 article, IBM’s Design-Centered Strategy to Set Free the Squares in The New York Times and the November 16, 2015 article, IBM Discovers ‘Design Thinking’ in Fortune magazine are responsible for most of the renewed interest in Design Thinking. When IBM “discovers” something and begins hiring over 1,000 people with a non-technical specialty to harness the power of the discovery, smart businesses should and typically do take notice.

What’s the essence of Design Thinking? FastCompany simplified the concept into: Design Thinking is a proven and repeatable problem-solving protocol that any business or profession can employ to achieve extraordinary results. Design Thinking is comprised of four primary elements:

  1. DEFINE THE PROBLEM – Another way to state this element is to define the right problem to solve.
  2. CREATE AND CONSIDER MANY SOLUTION OPTIONS – Businesses often fall into the trap of solving a problem the same way every time. Design Thinking requires multiple solutions.
  3. REFINE SELECTED DIRECTIONS – The selection of 3 to 5 potential solutions need to be embraced and each possible solution should be prototyped and tested. It may be necessary to repeat steps 2 & 3 if none of the solution options resolve the problem selected.
  4. PICK THE WINNER, EXECUTE – If adequate resources have been allocated to the previous steps, step 4 is almost anti-climatic, the winning option(s) are self-evident and ready for execution.

Herbert Simon described a seven step process in his work: [1]Define, [2]Research, [3]Ideate, [4]Prototype, [5]Choose, [6]Implement, and [7]Learn. Whether the Design Thinking protocol is outlined in a seven, four or even three stage process, see – shape – build, it all comes from the same place a proven method that always delivers. And it doesn’t matter what opportunity or problem is put into the front end of the process.

Following are two examples that illustrate the power of the Design Thinking protocol in improving businesses.

The Rotterdam Eye Hospital was characterized by long dreary corridors, impersonal waiting rooms, and the overwhelming aroma of disinfectant. Over a ten year period, the hospital’s management team completed a transformation from the environment described above into a bright and comforting place. The transformation was triggered by incorporating design thinking and design principles into their initial planning process. The end result is that the hospital is a showcase that has won numerous awards for safety, quality, and design. More importantly, patient admissions have increased by 47% over their pre – transformation levels. They focused on understanding their end-user’s (patient’s) experience. They wanted to understand how their patients felt when entering the hospital. They found that most of their patients feared going blind. The hospital focused on how to minimize patients anxiety about potentially negative outcomes. An intriguing example of Design Thinking results was the creation of a culture and training program titled, “Eye Care Air” that was inspired by the safety and training programs used by airlines. Eye Care Air trained all caregivers in fear reduction techniques, teamwork, and safety.

In 2009, Airbnb was not the darling of venture capitalists and investment banks as they are today but they were nearing bankruptcy with a weekly cash flow of $200.00. Realizing they were in trouble, the three co-founders maxed out their credit cards and sought help from Y Combinator an organization that funds early stage startups. Paul Graham from Y Combinator and the co-founders reviewed the Airbnb site closely trying to uncover why more customers were not booking reservations on the site. The review uncovered that a large majority of the images used in the Airbnb listings were very amateurish most likely shot with a person’s camera phone. Graham suggested a non-scalable non-technical idea to address the issue: travel to a location with multiple Airbnb listings, rent a high resolution camera, take multiple exterior and interior photos of the properties listed, and replace the existing photos on the Airbnb site with the new more professional images. Within a week, Airbnb saw results from their experiment. Their weekly revenue had effectively doubled from $200 to $400, the first financial improvement the firm had experienced in eight months. Lesson learned, sometimes business problems require non-technical non-scalable solutions. Airbnb encourages team members to experiment with new ways to improve the business and doesn’t penalize failure treating it as a learning experience. This culture enables Airbnb to develop innovative features and find new opportunities quicker than their competitors. Co-founder Joe Gebbia pushes his team to always think bigger. “Whatever the idea is today, think of ways that you can expand by 100 fold and then show me what it looks like.”

About the author

Randall Smith

Randall Smith

Randall Smith is the Marketing Analyst for 1stel and weekly contributor to the 1stel blog.