Maureen Thurston and Brad Graham describe design thinking, a new approach to business innovation and how to encourage it.
For decades, corporate Australia has been over-reliant on data
and analytics to guide decision making, often at the expense of
innovation.
The old adage "numbers don't lie" is something many business
leaders have readily adopted as their modus operandi. The issue
with these numbers is that while they can help you understand the
present, they can't help you imagine the future.
This is why many management teams are now mastering a new set of
techniques captured under the umbrella of 'design thinking'. What
these techniques do is stretch the art of management and strategy
development to help people envision new futures - things we cannot
'control' through data, spreadsheets or analysis.
Creative tools and techniques taken from the design profession,
used to create such design-oriented products as the iPod or
ergonomic chairs, are being employed to transform business
processes, re-invent corporate strategy, create new products and
professional services and carry out change management.
Appreciation of the value that design thinking can bring to
business is building momentum across Australia's blue chips and
leading agencies. For instance, our firm, Second Road, works with
Downer EDI, AMP, Leighton Holdings, CBA, Suncorp, the ABC, PwC and
the Australian Customs and Border Protection Service, to name a
few.
Unlike more traditional management efficiency techniques which
hinge on analytical thought, like Six Sigma, design thinking starts
with an intense focus on observing people as they go about their
daily lives at work or in a social setting and listening to
them.
Analysts commonly refer to this as 'field research' which, instead
of exclusively relying on data points to make decisions as analysts
do, anecdotes and experiences are gathered through observational
research.
The key is to use dialogue to gain a deep understanding of the
expectations of all stakeholders, inside and outside the
enterprise, rather than work towards an immediate solution to a
problem or opportunity. These insights are then acted upon in
facilitated exercises that encourage an open and non-judgemental
exchange of ideas and issues, from which, like designers, the
participants then synthesise their insights into the issues.
PowerPoint presentations presenting a finished solution are out.
Instead, managers are encouraged to visualise their ideas, which
can vary from a simple drawing to a three-dimensional mock-up of a
business problem or idea, which is tested and retested.
When Suncorp merged with insurance giant Promina in 2007, Second
Road used visualisation and collaboration in a series of 'strategic
conversations' to empower both groups to shape their future. The
notion that a "picture is worth a thousand words" rang true for
both organisations, which had to undergo massive structural and
cultural change as a result of the $8 billion merger - one of
Australia's largest ever corporate marriages.
For Suncorp's Commercial Insurance (CI) group, we drew upon a
standard design technique - the use of metaphor - to help them
visualise their future based on the metaphor of a 'thriving city'
to represent how people saw the merged entity. Labelled SunCity,
the design team drew a map of the new business with its own piazza,
streets, parks and buildings representing the new business' values
as well as its customers, suppliers, advocates and the wider
community.
Space on the map was allocated for people to create their own
neighbourhoods within the city, allowing senior managers to
collaborate together to work out how their areas fit into the city
and fulfilled the wider vision. Interestingly, the chief financial
officer's office became 'lifesavers', with a banner over its
neighbourhood encouraging people to "swim between the flags", to
explain how it saw its rules and guidelines.
The experiment worked.
Staff surveys showed 94 per cent of employees understood the vision
for the business and how they fit into it, as opposed to 48 per
cent before. They also reported a 76 per cent increase in the
extent to which employees felt their colleagues understood the
vision.
Darden Business School, one of the world's leading management
schools, believes the processes of visualisation and collaboration
were instrumental in creating a compelling vision for the new
Suncorp CI community and achieving buy-in throughout the
organisation. The school has created a full case study to use as
part of its teaching collateral.
Businesses and government organisations are increasingly turning to
the design world to source new approaches to management. Some, like
Suncorp, are grappling with new organisational structures or
operating in a new competitive landscape. Others, like the
Australian Tax Office (ATO), are looking for new approaches to old
problems.
On paper, the design world and the Tax Office seem like strange
bedfellows but the ATO was one of the earliest adopters of design
thinking in Australia. It has used design thinking to improve its
executive reporting processes and to set up a 'product review lab'
to examine and improve tax documents based on how people interact
with them.
The impetus was the introduction of the goods and services tax.
With compliance and complexity causing major headaches for both the
Tax Office and taxpayers, design thinking was employed to repair
what many people believed was an incomprehensible tax form.
That realisation lead to a redesign based on the insights gathered
through observation-oriented design research techniques. In one
session, a manager from a small business was observed battling her
way through an early business activity statement and broke down in
tears when she was told she would have to fill it out every three
months.
Early on, the ATO recognised the importance of using design as a
means to understand and respond to its customers. Today, it has its
own design department, and the former Tax Commissioner Michael
Carmody has again instituted design thinking in his current role as
chief of the Australian Customs and Border Protection
Service.
While design thinking is a very powerful tool, that's not to say
analytical techniques such as Six Sigma don't have their place.
It's hard to imagine the ATO developing new tax regulations or
audit programs without doing a traditional analysis first.
The key point for business is that design thinking can be just as
effective and work hand-in-glove with more traditional management
techniques.
In many companies that have elevated design across the business,
such as Proctor & Gamble, innovation and the bottom line have
been boosted. According to a 2003 report by the Danish Design
Center, increasing design activity, such as design-related employee
training, boosted a company's revenue on average by 40 per cent
more than other companies over a five-year period.
While design thinking tools were initially developed by designers
in their constant search for truly innovative new products, they
can be embedded into any enterprise and taught to people with no
background in the visual arts.
In his book The Creative Priority, Jerry Hirshberg coined the
phrase 'creative abrasion' as a way to describe the journey from
perspiration to inspiration - the tension, angst and effort
encountered along the way to value creation. While design thinking
is such a journey, it is important to understand that it is not a
random one sparked by a 'eureka moment'. It is a disciplined
process with a distinct set of critical skills - observational
research, collaboration, visualisation and prototyping - that help
to formulate and implement innovative and compelling value
propositions.
Design thinking can certainly be a force for positive change but it
requires bold leadership and a leap of faith.
By taking this leap, businesses have a real opportunity to shift
the traditional idea from genius and innovation being 99 per cent
perspiration and 1 percent inspiration to a more balanced
split.
Maureen Thurston is a former associate professor at the Californian
Art Center College of Design and is currently a design leverage
consultant with innovation consultants Second Road. Brad Graham is
senior consultant, also with Second Road.