Why Design Thinking Is Critical For A Digital Future

No disruptive innovations can be made without understanding the customer’s needs.

In today’s rapidly developing and increasingly digital world, organizations face many challenges. These include disruptive technologies, economic and political pressures, as well as keeping up with changes in customer behavior.

What happens when businesses fumble or turn a blind eye to change? Take ESPN as an example. A recent New York Times article writes,

“The “Worldwide Leader in Sports,” as ESPN brands itself, laid off scores of journalists and on-air talent on Wednesday, showing that even the most formidable media kingdom was vulnerable to the transformation upending the sports broadcasting industry as more and more people turn away from cable television.”

The network has lost over 10 million viewers over the past few years.

Disney, ESPN’s major shareholder plans to revive ESPN’s growth via subscription steaming services — a digital transformation strategy to keep up with changing consumer behavior.

The New York Times reports that the streaming service offering will leverage Disney’s purchase of BamTech, and will allow streaming of hockey, tennis, cricket and college sports.

“You have to be willing to either create or experience some distribution as we migrate from what has been a more traditionally distributed world to a more nontraditional distribution world. And some of that we’re going to end up doing to ourselves, meaning that we understand there is disruption, but we believe we have to be a disrupter, too.” - Robert Iger, Disney CEO

ARE YOU READY?

As I have written in a recent Fast Company article, we are inundated by a new wave of challenges and opportunities as the planet becomes increasingly connected.

Today technologies have wildly different fates:

• Anything that can be digitized will be.

• Anything that can go wireless will.

• Anything that can get smaller will.

• And information will move more freely.

Technological or digital transformations will continue to reshape the way the business world is organized. As information becomes more plentiful and less centralized, more organizations are likely to decentralize, too, in order to respond swiftly to it all.

However, a recent leadership study on digital transformation by Dell unveils most organizations are unprepared:

- 45% fear becoming obsolete in 3–5 years

- 48% are unaware of what their industry will look like in 3 years

- only 5% are classified as Digital Leaders

Digital transformation can be defined as a process whereby an organization shifts their business models, processes, and organizational culture with digital technologies to adapt to changing customer behaviors. They adapt to meet ever-changing customer expectations and engage with consumers in innovative ways.

Today, products and services are entering the marketplace quicker than ever before and product lifecycles are shrinking. Now, customers demand simplicity, flexibility, and speed. Therefore, technology has become an essential tool in fulfilling their needs and providing positive experiences. Organizations must keep up, innovate, and use digital solutions to retain and build stronger customer relationships, as well as generating new revenue streams.

CAN DESIGN THINKING BE THE ANSWER?

“Most people make the mistake of thinking design is what it looks like. People think it’s this veneer — that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.” — Steve Jobs

For decades, analytical thinking was the standard approach used to solve client-facing problems. However, with all the challenges and opportunities brought about by an increasingly technically advanced world, our approach for problem solving has to change as well. This is where ‘design thinking’ can make a substantial difference.

A recent Fast Company article defines:

“Although Design is most often used to describe an object or end result, Design in its most effective form is a process, an action, a verb not a noun. A protocol for solving problems and discovering new opportunities. Techniques and tools differ and their effectiveness are arguable but the core of the process stays the same. It’s taken years of slogging through Design = high style to bring us full circle to the simple truth about design thinking. That it is a most powerful tool and when used effectively, can be the foundation for driving a brand or business forward.”

Over the years this is what I have learned about design thinking and how it can move any organization forward.

First, adapt a basic framework. Contrary to popular belief that design thinking is only used for a new product or service, it is the existing business processes that greatly benefit from design thinking, as they are what usually needs to be reinvented the most.

Although there are many models and frameworks available for applying design thinking, let’s establish some basic concepts:

1. Research — Do extensive cross-industry market research, both qualitative and quantitative, to understand current and changing customer behavior.

2. Define — Define the problem that needs solving.

3. Ideate — Consider many options from many perspectives, disciplines, and sources. Design thinking requires multiple iterations of idea generation before picking the ultimate winning idea.

4. Execute — Develop rapid prototypes to gather feedback from stakeholders. Once the final solution is refined and approved, an execution plan is then produced to move forward.

Design thinking is not just about creativity, as complex problem solving requires a collaborative approach, incorporating all parts of an organization — from internal resources, to partners, and customers.

Second, build agile and adaptive organizations. Organizations that can successfully navigate digital disruptions need to then put that agile mind-set into practice. Agility, by definition, is a business’s response to change–whether those come from new macro- or micro-economic conditions; after all, some disruption snowballs from something that starts small, and other times it arises from massive pressures.

Such organizations are characterized by flexibility and are able to keep up with the changes that occur in a dynamic marketplace. The synergy between design thinking and agile and adaptable organizations is obvious: the iterative nature of design thinking is such that it allows relevant information to influence eventual product or service design. Similarly, adaptive and agile organizations allow relevant information to shape how they work. When design thinking permeates an agile organization, its efficiency and productivity factors are magnified. Therefore, it makes sense that organizations that adopt design thinking must be agile and adaptable, as they are mutually reinforcing.

Third, discover new technologies. Design thinking begins with a discovery process. Understanding how customers are changing is the anchor of digital transformation and design thinking. Today, Big Data, Artificial Intelligence, and the Internet of Things provide the information that kickstarts the design thinking process. For example, the Internet of Things (IoT) phenomenon provides immeasurable insight into the customer’s mind by analyzing daily activities. It is predicted that the IoT market will be more than $50 billion by 2020. Technologies are the enablers, causes, and accelerators of digital transformation and the starting point of design thinking.

Digital transformation is centered on enhancing the customer experience. Organizations need to understand their customer’s unmet needs. Today, organizations can use analytics, and artificial intelligence to churn the information gathered from Big Data and the Internet of Things into patterns that reveal what their customers want. It takes the guesswork out of understanding customers and allows brands to align with the values of its customers.

The design thinking process is a structured, yet creative way to facilitate data driven rapid innovation. It feeds off a cycle of rapid testing of ideas and getting fast feedback from customers to test the validity of concepts. Through rapid testing of ideas, it’s easier to separate the good from the crazy from the crazy good. Once an idea is found that can be brought to fruition, it can be formalized, developed, tested and released. And customer feedback on the final product provides new food for thought that can be used in further innovations.

Therefore, design thinking is well suited for digital transformation. It embraces the need for data driven innovation and recognizes that no disruptive innovations can be made without understanding the customer’s needs.

Copyright © 2017 by Faisal Hoque. All rights reserved.

I am an entrepreneur and author. Founder of SHADOKA and other companies. Shadoka enables aspirations to lead, innovate, and transform. Shadoka’s accelerators and solutions bring together the management frameworks, digital platforms, and thought leadership to enable innovation, transformation, entrepreneurship, growth and social impact.

Author of “Everything Connects — How to Transform and Lead in the Age of Creativity, Innovation and Sustainability” (McGraw Hill) and “Survive to Thrive: 27 Practices of Resilient Entrepreneurs, Innovators, and Leaders” (Motivational Press). Follow me on Twitter Faisal Hoque. Use the Everything Connects leadership app and Suvvive to Thrive resiliancy app for free.