In the ongoing quest for corporate profits, most companies have squeezed out their inefficiencies by now and are coming to grips with the fact that future profits must come from top line growth. But they are also recognizing that opening new territories, extending brands, and marketing campaigns aren’t working so hot anymore. Which means creating new products and services is an imperative – enter design. What’s more, they are realizing that customers don’t really want just more things, they want more meaningful experiences – enter experience design and service design.
So how do organizations create new products, services and experiences that will delight future customers? The best companies put themselves in their customers’ shoes – enter design thinking. And around these preferred experiences they develop new business models – enter business model innovation. It all sounds so easy, but is actually very difficult. Most companies struggle in delivering just moderate, incremental new products and services. But some companies excel – those that have an appetite for great design and design thinking methodologies.
There are six imperatives for design and design thinking to flourish as a strategic resource:
1. The imperative for change.
As Will Rodgers said, “Even if you’re on the right track, you’ll get run over if you just stand there”. Every company needs to evolve in order to create new value. Status quo is never enough; innovation and change is an imperative. It’s one of the lessons learned from the great recession – the companies that are adapting to the new future realities are flourishing, and those that are hanging on to the past are struggling. Some companies like 3M take great pride in measuring the amount of top line growth from new products each year. The future is what we create, not what we had. Design is change, because we don’t design what is, we design what is to become.
2. The imperative for customer experience.
Consider customer as external customers (users) as well as internal employees (also users). Reason being, in a design thinking environment, we are the customers. A former UX Design executive at Apple told me that is why Apple is notorious for not doing consumer testing – they think their employees are the consumers. That’s why good design matters so much at Apple. What if you were to design something for yourself – say a phone. Would it be a fat chunk in your pocket with tiny buttons? Or would it be slim, easy to use, light, durable, smooth, with an intuitive interface? I suspect the later. User centric design helps get you there.
Nothing gets to market, albeit a product, service or experience, without being designed, and how it’s designed can influence a user experience immensely.
3. The imperative to frame problems.
One of the reasons management consultancies and design firms are so capable at framing problems is because they don’t own them. Big companies are built on silos, with “owners”, and are plagued by legacy issues. Some of the most effective innovation cultures are in design firms, and some of the companies that are most effective at innovation have teams that act like design consultants. Using design thinking methods, they gather insights, find patters, and frame problems. They don’t care, for the moment, who owns the problem(s), they just want to figure out what the problem really is, from the customer point of view.
4. The imperative for an open agenda.
In an open agenda environment, and one that is focused on customer experience, all customer touch points – front stage and back stage – are inbounds. But solving problems and innovating often means boundary crossing, which tends to get functional leaders nervous. One way to overcome this is by having open and honest discussion, or strategic conversations, opposed to building slide decks aimed at persuasion. At Intuit, for example, a culture of design-driven innovation is flourishing, and one of the great outcomes is solving big nasty problems as well as creating new products, services and experiences that drive top line growth.
5. The imperative for business model innovation.
Using design thinking to solve the right problems and create customer value is part of the story, but we also need to create new business models. Rather than traditional and complex business analysis, I like the new business model innovation thinking. I worked with Alexander Osterwalder, the author of the “Business Innovation Canvas”, a few years ago in forming a recruiting business. We found it to be an effective way to consider alternative ideas and to innovate a new business model to the category.
6. The imperative for intangible value.
As Interbrand has demonstrated in the annual “Best Global Brands” ranking, intangibles represent a significant part of corporate value. Interbrand’s brand valuation methodology involves both financial performances and the “Role of brand”. In the “Role of brand” category, they “measure the portion of the purchase decision that is attributable to the brand”, which involves intangible factors including “authenticity, relevance, differentiation, consistency and presence”.
How does design influence authenticity, relevance, differentiation, consistency and presence in your organization?
What are the imperatives for innovation in your corporate culture?