10 1 Understanding the Need for a New Approach

Yet the actual strategy design and validation work must be performed, or at least
closely supervised, by those executives and directors who are ultimately responsible
for its fate. Module 1

1.4 Design Thinking as a Solution

Any successful strategy design process addressing the identified challenges, should
exhibit six key characteristics:

(1) Consistent with the strategy design school, the strategy design process should
be top-down, starting with designing and validation a sound foundation.
(2) The strategy design process should follow an agile, just in time, sometimes also
called lazy, approach, allowing for refinements and pivoting along the way.
(3) The focus should be put on designing the future rather than analyzing the past,
notwithstanding learning from historical successes and failures.
(4) To ensure buy-in and subsequent successful implementation, the strategy
design process should integrate stakeholders early in the design of the strategy,
especially at the validation step.
(5) There does not exist not a one size fits it all approach to strategy design. Any
successful strategy design process must allow for different types of strategies,
that is, customer centric strategies, innovation-oriented strategies, capabilities-
based strategies, or cost-driven strategies.
(6) And finally, the strategy design process must put the targeted customers at the
center of any strategy design activity.

Design thinking is a method for solving wicked problems3 (Churchman 1967),

that is, problems with no upfront clear solution. It is based on abductive reasoning.4
It aims at iteratively designing and validating solutions using a forward-looking
approach and putting the customer at the center stage.
Strategy design is a typical wicked problem. It exhibits the four traits of
openness, complexity, dynamism, and networking, as defined by Dorst (2015). The
strategy design problem is an open problem, as its borders are unclear and per-
meable. There does not exist a single best solution. It is complex in the sense that it
consists of many interrelated elements—like customers, competitors, suppliers, and
regulators. Strategy solutions need to be dynamic, allowing to adapt to an ever
faster changing environment. And solving the strategy design challenge requires

3
A wicked problem is a problem that does not have a definite solution and as such cannot be
solved using linear problem-solving techniques. Solving wicked problems requires continuous
reformulation of the problem.
4
Abductive reasoning is a form of logical inference which starts by observing, followed by
searching for the simplest and most likely explanation, refining it until the solution is considered
sound.
1.4 Design Thinking as a Solution 11

considering a network of stakeholders constantly influencing each other, rather than

focusing on a single individual or group. Design thinking, combined with the
business model framework and game theory, is predestined as a solid approach to
developing sound strategies. In addition, integrating stakeholders throughout the
strategy design process is key to success. Strategy design must become a mindset,
rather than a procedural exercise (Bradley et al. 2011).

1.4.1 Design Thinking Approach

Design thinking is an abductive approach to problem solving, combining the

advantages of design and thinking. It finds its roots in architectural and industrial
design. The underlying process can be characterized by a two-by-two matrix, as
shown in Fig. 1.3. The first dimension looks at the thinking process, which can be
divergent or convergent. The second dimension describes the time period consid-
ered, which either focuses on the past or on the future.
In contrast with other approaches, design thinking zeroes in as much on the
problem specification as it aims at finding a solution. It also moves away from
identifying the single best solution, targeting superiority rather than optimality.
Figure 1.3 illustrates the four steps that define design thinking, as it most appro-
priately applies to strategy. It summarizes the tools to be used during each of the
four steps, namely observing, learning, designing, and validating. Different design
thinking approaches use different terminologies for the various steps or decompose
the activities in distinct ways, but the underlying philosophy remains the same.

(1) Observing (2) Learning

past/present

▪ Observing ▪ Classifying information

▪ Interviewing ▪ Determining analogies
▪ Mind mapping ▪ Identifying personas
▪ Answering five-why ▪ Documenting customer
questions journeys and value chains

(3) Designing (4) Validating

▪ Ideating ▪ Hypothesizing
▪ ▪
future

Brainstorming Experimenting
▪ Prototyping ▪ Running simulations
▪ Building mock-ups ▪ A/B testing

divergent thinking convergent thinking

exploratory confirmatory
analysis synthesis

Fig. 1.3 Four quadrants defining the design thinking approach, including possible tools to be
used at each step
12 1 Understanding the Need for a New Approach

Chapter 2 explores design thinking in more detail and reviews different variations
of design thinking processes from a historical perspective.
To avoid non-value-adding analysis, design thinking proceeds in an agile,
just-in-time, way, moving to the next step as soon as enough insights have been
gained. Whenever insights from a previous step turn out to be insufficient or
incorrect, design thinking iterates back to the previous step and reconditions the
missing or incorrect information. This allows proceeding in an agile way and avoids
the use of unproductive labor whenever possible.

1.4.2 Delivering Value to Customers

Traditional strategy development processes primarily focus inwards on the firm and
outwards on the competition, leaving customers as a residual. Design thinking
supports building the strategy around the customers and their jobs-to-be-done. To
be successful, strategy design must address four categories of questions related to
customers (Brown 2009):

(1) Desirable—Are the offerings and associated value propositions underlying the
strategy desired and sought-after by the targeted customers? Do they help
satisfy a need, alleviate a pain, and/or provide additional gains to the targeted
customers?
(2) Feasible—Can the firm deliver upon the promises made to the customers, both
in terms of functionality and quality? Can the value proposition be upheld?
(3) Viable—Do customers consider the value of the offering worth paying for? Are
customers willing to pay a price which will allow the firm to generate a profit?
(4) Distinct—Can customers distinguish the offering of the firm from that of its
competitors? Do they value the uniqueness during their purchasing decision
journey?

1.4.3 A Common Language

When individuals with diverse backgrounds, from marketing, product development,

operations, legal and compliance, to finance, collaborate on the design of a new or
the upgrade of an existing strategy, a common language is required. The business
model canvas, introduced by Osterwalder and Pigneur (2010), provides such an
easy to understand language, allowing for common fact finding, designing, and
validating by all stakeholders involved in the strategy design process. Through its
four major components, that is, customers, offerings, capabilities, and financials, it
ensures a holistic approach to strategy design. Distinct levels of abstraction support
the top-down approach.
1.4 Design Thinking as a Solution 13

1.4.4 Integrating Stakeholders

A strategy is only worth what senior management, executives, and members of the
board of directors, believe it is. Having senior decision-makers on board is core to
success. To achieve this needed buy-in, design thinking integrates all key stake-
holders into the strategy design process from the beginning on. Senior managers are
expected to participate, based on their experience, in the fact-finding steps (ob-
serving and learning steps). But more importantly, the designed strategy should be
the outcome of a collaborative exercise between senior decision makers (designing
step). Especially important is the active involvement of decision makers at the
validation step. Participation in validating the assumptions ensures a higher degree
of confidence and a commitment in the formulated strategy.

1.4.5 A Three Layers Process

The advocated strategy design process ensures success by decomposing strategy

development into three layers, that is,

(1) the foundation layer,

(2) the business model layer, and
(3) the competition layer.

Each layer focuses on a specific characteristic of a strategy, starting with an

operationalized version of the vision concept—the foundation. Based on the
foundation, the business model supporting the strategy is designed. It defines the
key elements of a successful firm. The third layer focuses on competition and
differentiation. It puts the business model into perspective and ensures a positioning
that provides a lasting competitive advantage. Each layer is described and discussed
in a separate part of this book, part III focusing on the foundation layer, part IV on
the business model layer, and part V on the competition layer.

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Barney, J. B. (2001a). Resource-based theories of competitive advantage: A ten-year retrospective
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Bradley, C., Hirt, M., & Smit, S. (2011). Have you tested your strategy lately? McKinsey
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Recognizing Key Insights That Make
Design Thinking Valuable to Strategy 2

Never delegate understanding—Charles Eames

In recent years, design thinking has become a buzzword for disruptive user-centered
innovation. Its origins can be traced back to the early 1960s (Arnold 1959), namely
to the participatory design movement that was characterized by software devel-
opment. It was based on prototyping and incorporating customer feedback early in
the development phase. Design thinking is a methodology, some call it a way of
reasoning, some even an ecosystem (Diderich 2018), that combines logical thinking
with creativity to understand the present and design the future. It starts by observing
customers in their natural environment to learn their unmet needs, felt pains,
sought-after gains, and jobs-to-be-done. Using ideation techniques combined with
prototyping and experimentation, the gained insights are transformed into tested
and viable solutions. Design thinking connects and integrates useful knowledge
from arts and science alike, giving design a scientific basis (Buchanan 1992).
Design thinking relies on abductive reasoning as an effective way to alternate
intuitive and deliberate actions. Abductive reasoning starts with a set of abstractions,
that is, an incomplete set of observations, and seeks for the simplest and most likely
solution. The initial solution is then improved upon through inference until it becomes
a robust solution. Unlike deductive reasoning, abductive reasoning does not assume
that the solution is contained in the premises of the problem. Quoting Einstein, “we
cannot solve our problems with the same thinking we used when we created them”.

2.1 The Value of Design Thinking

Design thinking addresses diverse shortcomings of analytical strategy development

methods in a dynamic and fast-paced business environment. It aims at learning from
methodologies used by designers, such as architects, artists, or creative directors, to

© Springer Nature Switzerland AG 2020 15

C. Diderich, Design Thinking for Strategy, Management for Professionals,
https://doi.org/10.1007/978-3-030-25875-7_2
16 2 Insights That Make Design Thinking Valuable

solve problems which are incomplete by nature and cannot be solved by traditional
linear problem-solving approaches.
Design thinking exhibits four key traits valuable to strategy design:

(1) Design thinking is customer-centric. Problem solving starts with observing and
understanding customers and their needs, their suffered pains, their sought-after
gains, and their jobs-to-be-done. Insights are acquired by focusing on observing
and listening to customers in their natural environment, avoiding any inter-
ference that could distort the observed.
(2) Design thinking is iterative in nature. It incrementally addresses challenges,
improving solutions step by step, considering what has previously been learned,
and using resources (time and money) wisely. It allows avoiding unfocused
data gathering and analysis.
(3) Design thinking is based on prototyping and validating ideas. It ensures that the
designed solutions work. It does not assume that there exists a single best
solution, but rather uses prototyping to identify trade-offs, validating them, and
retaining those solutions that work.
(4) Design thinking combines the best of the two worlds of analytical and intuitive
thinking, resulting in a so-called abductive reasoning approach.

Table 2.1 summarizes the four key traits of design thinking and explains their
value to strategy development.

Table 2.1 Key design thinking traits and their value

Design thinking trait Value to strategy development
(1) Customer-centric approach, putting – Ensuring customer needs are identified and
customers at the forefront met, their pains addressed, sought-after gains
provided, and their jobs get done
– Creating unique and appreciated added
value for customers
– Securing a willingness to pay
(2) Iterative process, based on observing, – Well-defined systematic process leading to
learning, designing, and validating, validated results
supported by divergent and convergent – Focused approach avoiding
thinking non-value-adding data gathering and
analysis
– Agile, just-in-time, process due to its
iterative nature
(3) Prototyped options, designed and validated – Ensuring that the designed strategic options
jointly with stakeholders are aligned with stakeholder expectations
– Ascertaining that identified needs are met
(4) Approach combining analytical and – Conscious use of resources (time and
intuitive thinking, focusing on those insights money)
that matter most – Constantly (re-)aligning efforts with set
priorities
– Following “fail fast to succeed faster”
philosophy by learning early from
mistakes
2.1 The Value of Design Thinking 17

Design thinking is a systematic process for wicked problem solving as well as a

visual language for communicating about ideas. Through its structure, design
thinking ensures that resulting solutions generate value for the customers for whom
they have been designed. By being iterative in nature, design thinking aims at
solving 80% of the problem with 20% of the resources. This is achieved by
reducing the complexity early on during the problem-solving process, by iteratively
observing, learning, designing, and validating. Non-value-adding and
time-consuming data gathering, and analysis steps are avoided whenever possible.
Design thinking works best if the problem to be solved is poorly understood, there
does not exist a single best solution, and it is impossible to layout a linear
problem-solving process beforehand.
I illustrate the four traits of design thinking with examples, either from real life,
or hypothetical, forward looking situations. Readers should keep in mind that these
examples are not meant to be backwards looking case-studies. Their goal is to help
understand the concepts, frameworks, and tools introduced. They should spur
readers into thinking and coming-up with their own ideas. They offer a possible
basis to formulate novel ideas or combine existing insights in a novel way. Since
strategy is about being different and unique, following successful case studies does
not help achieve that goal. I therefore avoid presenting exhaustive case studies.

2.1.1 Customer-Centric Problem Solving

Design thinking is based on the observation that solving typical business problems
requires an in-depth understanding of the customers, their needs, their perceived
pains, and their thought-after gains. Traditional analytical approaches rely on his-
torical data, like surveys or past experiences, to understand customers and their
needs. They put the focus on known facts from the past subsumed in data,
answering the “what do customers need”, rather than the “why do customers have
specific needs” question. The rationale behind the data is often missed.
Rather than ask the customers what they want, as done by traditional customer
and market research, design thinking investigates what customers do or do not do
and why, what their jobs-to-be-done are. As Henry Ford is often quoted saying, if
he had asked what customers want, they would have said, faster horses.1 In contrast,
observing customers and their behavior, the design thinking expert would have
found out that the customer need or job-to-be-done is getting from point A to point
B in a fast way without sacrificing flexibility and simplicity. By relying on intuition
and experimenting jointly with customers in different environments, design think-
ing provides more relevant insights. It focuses on the unknown rather than the
knowledgeable.

1
According to Vlaskovits (2011) there is no evidence that Ford actually said that quote. However,
even if he did not verbalize his thought on the apparent inability of customers to communicate their
unmet needs, history indicates that Ford most certainly did think along those lines.
18 2 Insights That Make Design Thinking Valuable

Example A relocation company was faced with shrinking margins due to online compe-
tition. Rather than accepting competition and focusing on cost cutting, the firm decided to
identify customer segments that do not primarily buy on price and better understand their
valued needs. To do so, it took a dual approach. On one hand, it conducted interviews with
identified non-customers that chose competitors over the firm to find out what they valued
and missed from the solution they retained. On the other hand, it conducted on-line social
media research to identify what customers were praising and what they were complaining
about.
Contrary to what the firm had initially thought, the identified customers, although being
price-sensitive, where not solely buying on price, but also on quality of service. Also,
customers showed more flexibility with respect to the relocation timeline than expected,
within certain limits. More importantly, the focused analysis showed that expedite problem
handling was highly valued, for instance when something broke or got lost during relo-
cation, ideally through a dedicated contact, rather than an anonymous call center. Another
key finding was the need for transparency along the whole customer journey, from
searching a trustworthy relocation company, through understanding the services and
options offered, to the final delivery. These insights allowed the firm to re-state its strategy,
focusing on targeted customer segments rather than serving everyone, and considering the
specific needs of those customers, in a way that allowed them to regain profitability.

2.1.2 Iteratively Improving Through Prototyping

and Validating

Design thinking is based on the observation that it is not possible to get the solution
of a wicked problem right the first time. Design thinking relies on iteratively trying
out different options and improving solutions over time by considering what has
been learned, what worked, and what did not work. In that sense, design thinking
borrows ideas from agile, or just-in-time, methodologies and puts them into the
context of ideation. In addition, stakeholders are actively involved in ideation,
designing prototypes, and experimentation. Observations and insights are trans-
formed into prototypes of ideas that can be validated with real customers. Each
validation round leads to new observations and insights which allow improving
upon previous prototypes. Successful design thinkers embrace the back and forth
nature, making mistakes, learning from mistakes, and improving upon them, while
knowing when good is good enough.
Example Having worked in a hospital, a team of students had identified an interesting
challenge with pulse oximetry equipment: the wirings proved difficult to handle for the staff
and hindered patient mobility. So, they came up with a wireless pulse oximetry prototype.
They showed it to nurses to validate their idea, who immediately loved it. But when they
talked to hospital administrators, who oversaw procurement, they were confronted with a
“no interest in spending money on wireless pulse oximetry” answer, as administrators did
not see the value of the solution. This lead the team of students to iterate and look for other
applications of their idea. They identified the issue of infants dying from respiratory failure
as a possible problem that could be solved with their wireless pulse oximetry system.
Further iterations lead to an innovative solution, a sock solution that comfortably fits the
equipment on infants and new-born babies. The OwletCare Baby Monitor was successfully
launched in the U.S. market.
2.1 The Value of Design Thinking 19

Coming back to Henry Ford’s “faster horses challenge”, a possible prototype

could have been a carriage solution with multiple horses, but it would have missed
the simplicity requirement. Alternatively, prototyping the idea of small individual
trains could have come up. Again, validation would probably have failed on the
need for tracks, rather than roads. Using the insights gained, the solution of a
trackless train, is then not far away. Only the engine problem still needed
addressing, getting from steam engines to combustion engines.

2.1.3 Validating Ideas with Stakeholders

Designed solutions are only good if deemed so by their actual stakeholders. Design
thinking requires involving different stakeholders, especially those involved in
decision making, into the validation of the designed prototypes. Depending on their
skills, they are requested to perform validating experiments themselves. This allows
them gaining first-hand experience and thus strengthens their confidence in the
obtained results. Although decision makers are often reluctant to actively participate
in assumption validation, they regularly value the insights gained ex-post.
Unwillingness of decision makers to participate in assumption validation is often
indicative of a reluctance to change. Being able to identify and address that
reluctance at an early stage increases the probability of success.
Example While developing a new business model for a multi-family office, the design team
was confronted with the challenge of choosing the right pricing model, that is, relying on
fixed prices, effort-based pricing, asset-based pricing, etc. As the team knew that this
decision would be critical to success, not only with respect to customers embracing the
offerings, but also to get buy-in from the executive team, they decided to involve key
executives in finding out what pricing model is considered most appropriate by the targeted
customers. To do so, they looked for executives willing to interview customers themselves
(unfortunately not all found this a good idea) and coached them to do so. The outcomes
from the interviews where not only that the executives identified the most appropriate
pricing model to implement, it also strengthened their buy-in for the chosen model, as they
had heard first-hand how customers think about price models and what they value, and thus
no longer had to be convinced by a subordinated design team.

2.1.4 Combining Analytical Thinking and Intuition

Analytical thinking is based on using data combined with theoretical models and
deriving insights to make sensible decisions. In today’s world of big data, analytical
thinking is often the preferred approach. It proceeds by understanding complex
20 2 Insights That Make Design Thinking Valuable

problems and decomposing them into simpler ones. To do so, analytical thinking
starts with often unfocused data gathering and fact finding, followed by explicit
search for matching patterns. Only at a later stage are the insights gained from the
information combined to derive a solution, usually aiming directly for the optimal
one (dashed line in Fig. 2.1).
Intuition, on the other hand, is based on the ability to acquire insights without
significant amounts of data, evidence, or formal proofs (dotted line in Fig. 2.1).
Intuition relies on unconscious pattern-recognition and instinct. Experience plays an
important role in feeding the unconscious cognition, inner sensing process. Intuition
often solves problems without being able to explain why, that is, validating the
proposed results.
Design thinking aims a combining the advantages of the two extreme deductive
and inductive problem-solving approaches into one method. The resulting abduc-
tive reasoning2 framework underlying design thinking starts with observing to seek
an initial simple and intuitive solution. Sometimes, the initial solution is only a
partial solution or only partially addresses the problem at hand. Often, the initial
solution results in a rephrased problem statement. By subsequently analyzing the
intuitive solution and gathering data to validate or invalidate it, the initial solution is
revised and improved upon. Design thinking uses abductive reasoning to infer ever
improving solutions, up to the point where the outcome is considered good enough
or can no longer be improved upon.

2.2 A Look at the History of Design Thinking

While ideas around the concept of industrial design can be traced back to the late
1940s and early 1950s, the concept of design thinking emerged for the first time in
the 1960s in the context of participatory design (Arnold 1959). Participatory design
was a movement characterized by quick software prototype development cycles,
incorporating customer feedback into the prototyping process.

2.2.1 The 1970s

It is fair to say that the first milestone in the design thinking history was set by the
publication of Herbert A. Simon’s book The Science of the Artificial in 1968
(Simon 1968). He introduced a three-step process to solve complex decision
problems:

2
Abductive reasoning is a form of logical inference which starts with an observation then seeks to
find the simplest and most likely explanation. It has been developed by the philosopher Charles
Sander Pierce, who defended that no new idea could be developed by deduction or induction using
past date (Martin 2009). One can understand abductive reasoning as inference to the best
explanation.
2.2 A Look at the History of Design Thinking 21

Inductive approaches
– Based on intuition without formal proofs
– Driven by unconscious pattern matching
and experience
value created

Deductive approaches
– Based on theoretical models, data
gathering, and fact finding
– Driven by deductive analysis

elapsed time

Fig. 2.1 Deductive and inductive problem solving versus value created

(1) intelligence gathering,

(2) designing possible solutions, and
(3) choosing a particular solution.

Compared with today’s design thinking processes, Simon’s approach was still
linear in nature and did not put a strong focus on testing and validating designed
solutions with customers. Non-linear problem solving was developed shortly
thereafter, mostly by Koberg and Bagnall (1972).
End users were put at the center of software development design by Arnheim
(1969) in a book called Visual Thinking. In 1973, McKim, professor in mechanical
engineering at Stanford University and founder of the Stanford joint program on
design, followed up on Arnheim’s work publishing a book entitled Experiences in
Visual Thinking (McKim 1973), elaborating how visual thinking can be used to
successfully solve wicked problems.

2.2.2 The 1980s

The term Design Thinking, written in capital letters, describing a methodology of

creative problem solving was introduced by Lawson (1980) in his seminal book
How Designers Think. He described how the concept of design is used in archi-
tecture to solve problems. Architects, when compared to scientists, are more
inclined to develop series of solutions until they find one that meets their criteria of
being acceptable, rather than aim for the best possible solution right from the
beginning, and therefore differs from the more linear process used by scientists and
engineers.
22 2 Insights That Make Design Thinking Valuable

In 1982, Cross published a paper titled Designerly ways of knowing (Cross

1982), that established some of the intrinsic characteristics underlying today’s
understanding of design thinking, namely a base for a coherent discipline of study
and a focus on a broad audience. He noted that design thinking focuses on the
future, creating new solutions, rather than on the past, elaborating on existing
solutions. At its heart lies a visual language of modeling. Design thinking is viewed
as one of three so-called cultures for representing and accessing human knowledge.
These are:

(1) Science culture—Analytical, based on controlled experiments, relying on

classification, and focusing on the physical world.
(2) Humanities culture—Analogy and metaphor based, focusing on evaluation and
criticism, and driven by human experience.
(3) Design culture—Modeling driven, based on pattern formation and recognition,
synthesis focused, and based on a man-made world.

A central feature of design thinking is generating satisfactory solutions fairly

quickly rather than relying on prolonged problem analysis (Cross 1982, 2006,
2011). This characteristic is necessary to solve ill-defined and ill-structured wicked
problems that do not have a single correct solution which can be found by
exhaustive search. Solutions must be constructed, synthesized, rather than found,
and recognized by the designer’s own effort. Consequently, design thinking is
largely based on tacit knowledge and difficult to externalize.
In 1987, Rowe published Design Thinking (Rowe 1987), describing methods
and approaches used by architects and urban planners to solve wicked problems.
University of Stanford’s Faste, expanding on McKim’s work, introduced design
thinking as a method for teaching creative actions.

2.2.3 The 1990s

The 1990s were characterized by the adaption of design thinking to solving busi-
ness problems. In 1991, Faste’s colleagues Kelley, Moggridge, and Nuttall founded
IDEO, a consulting company based on design thinking. IDEO was, and probably
still is, the most prominent product and industrial design company embracing and
advancing design thinking. Buchanan broadened the view on design thinking as a
methodology for solving wicked problems in his paper called Wicked Problems in
Design Thinking (Buchanan 1992).

2.2.4 The New Millenial

The new millennial was shaped by the development and introduction of formal
processes to apply design thinking to problem solving. A large body of knowledge
around design thinking, both from an academic and a practical perspective, has
2.2 A Look at the History of Design Thinking 23

been developed and published over the years. The approaches described in this
section cover the most relevant insights gained over time.
In 2001, the team led by Brown at IDEO, introduced its three-step process
around inspiring, ideating, and implementing (Brown 2009).
In 2005, researchers at the newly founded d.School at Stanford University
developed a five-step design thinking process that has been at the heart of many
subsequent researches on design thinking processes. The five steps are:

(1) Empathize. This first step is about understanding the problem at hand. Obser-
vations, interviews, and measurements are some of the key tools used to
gaining an objective, non-judgmental view of the challenge at hand. Key are
empathy and customer-centricity.
(2) Define. During the second step of the design thinking process, the gained data is
used to clearly define the problem at hand and describe the core challenge to
solve in an objective way. The problem is defined in terms of customer and
their needs, rather than the firm’s internal goals. Sometimes the define step is
compared to a root cause analysis taking a customer-centric perspective and
using as input the data from the empathize step.
(3) Ideate. New possible solutions are created by starting with a large number of
ideas and narrowing them down through eliminating those ideas that are
unacceptable in terms of cost, value, time, resources, etc. More often than not
does the ideation step include brainstorming or brain walking exercises.
(4) Prototype. Prototyping is about transforming ideas into actionable concepts that
can be shared, reviewed, and validated. Prototypes need not be perfect and are
iteratively refined and improved until they can demonstrate value from a cus-
tomer perspective. At this step, several prototypes are usually defined.
(5) Test. Before selecting a prototype as the problem’s solution, they are tested and
validated. To do so, experiments are designed and performed. Based on the
outcomes of the experiments, the prototypes are iteratively refined until a
validated working solution is found.

The British design council introduced in 2005 its double diamond method. It is
based on two iterations of divergent and convergent thinking steps. First, during the
divergent discovery step, insights related to the problem at hand are collected. This
step is similar to the empathize step of the d.School process. Next, applying con-
vergent thinking, the problem to be solved is defined, as does the step with the same
name in the d.School approach. During the third step, the develop step, divergent
thinking is used to develop possible solution to the identified problems. It includes
ideation and prototyping, as well as experimenting. Finally, convergent thinking is
used to select the retained solution in the fourth step called deliver. The double
diamond process can be considered a simplification of the Stanford d.School pro-
cess. In addition, it can be perceived as adding a second dimension to the design
thinking process, notably the amount of insights gained over time through divergent
and convergent thinking.
24 2 Insights That Make Design Thinking Valuable

The Hasso Plattner Institute of the University of Potsdam introduced in 2007 a

design thinking process similar to the d.School one, based on six the six phases:
(1) understand, (2) observe, (3) ideate, (4) prototype, (5) test, and (6) implement.
The front-end of the process was slightly adjusted and an additional implementation
step added. It remains an open question whether problem specification as well as
implementation of the designed solution should be an integral part of design
thinking or not.
Eppinger and Ulrich (1995) from the MIT, known for their research on product
development, introduced a more analytical version of the design thinking process. It
consists of the four steps (1) understand the problem, (2) develop possible solutions,
(3) prototype, test, and refine the developed solutions, and (4) implement the
retained solution. Although similar to other design thinking processes on paper,
Eppinger’s approach is rooted in an analytical engineering-based way of thinking.
In addition, the iterative nature of design thinking is used in the third step, around
prototyping, testing, and refining.
Schneider and Stickdorn (2011) introduced a design thinking process specifi-
cally tailored to service design. It encompasses four phases, that is, (1) explore,
(2) create, (3) reflect, and (4) implement. Rather than rely on physical prototypes
that can be tested, they suggest a mental approach replacing formal testing by a
reflection phase.
In 2011, Liedtka and Ogilvie (2011) at the Darden School of the University of
Virginia, introduced a variation of the design thinking process whereby they
rephrased the different process steps as questions and combined them with activities
and tools supporting answering the questions. The explicit goal of their approach
focuses on solving wicked problems, rather than on generic design. The four
questions to be answered are:

(1) What is? Answering the first question sets the scene for solving the considered
wicked problem. It ensures that the real problem or opportunity to be tackled is
correctly identified and well understood. Answers to the “what is” question,
summarized in so-called design criteria, help avoid framing the problem to
widely or too narrowly. Key tools supporting answering the “what is” ques-
tions, are personas, the customer journey mapping tool, the value chain anal-
ysis, as well as generic mind mapping frameworks.
(2) What if? Creativity starts with identifying possible opportunities which may
solve the problem at hand. Answering the “what if” question directs the search
for solutions to possible opportunities and avoids focusing on constraints. Key
tools to generate ideas and options for solving the posed challenge are classical
brainstorming as well as concept development.
(3) What wows? The third question focuses on evaluating possible solutions
identified, focusing on retaining those that may be most relevant and valuable.
As design thinking is essentially hypothesis driven, answering the “what
wows” question requires formulating and validating assumptions behind the
developed ideas. Rapid prototyping and assumption testing are key activities
that help answer the “what wows” question.
2.2 A Look at the History of Design Thinking 25

(4) What works? Finally, the fourth question allows learning from the real world
how the retained solution would be received and what value customers would
see in it. Two key tools supporting finding out what works are customer
co-creation as well as learning launch.

2.3 Design Thinking for Strategy

The simplest model of a creative process is a two-step process, an expanding stage

of divergent thinking where many possibilities are generated, followed by con-
vergent thinking, trending towards the best idea (Sawyer 2012).
Experience has shown that, out of the numerous design thinking processes
developed so far, a variation of the double-diamond method is the one that works
best to support strategy development. Indeed, it relates to the two phases of strategy
development, understanding the past by looking backward, and designing the future
by looking forward. In each phase, divergent thinking is followed by convergent
thinking as illustrated in Fig. 2.2. There is no need to include a dedicated problem
specification step in the process, as the strategy design challenge is well defined at
the outset. In strategy work, the distinction between ideation and prototyping is also
less relevant and often slippery, thus separating ideation from prototyping is not
necessary. In addition, strategy implementation is best handled outside the strategy
development process, as it requires a distinct skill set.
Each of the four steps of a design thinking-based strategy design process has a
well-defined outcome: insights, knowledge, prototyped ideas, and validated strat-
egy. This optimizes resource allocation and focuses on required skills. It is that
focus, combined with categorized outcomes, that ensures process efficiency without
losing creativity (Tschimmel 2012). Through proceeding iteratively, only adding

prototyped
ideas
knowledge validated
strategy
degree of creativity

insights

O L D V
Observing Learning Designing Validating
divergent thinking convergent divergent thinking convergent timeline
thinking thinking
understanding the past designing the future
1/3 of the time spent 2/3 of the time spent
© Dr. Claude Diderich. Used with permission. Based on illustration from Diderich (2018)

Fig. 2.2 Linearized version of the design thinking process used for strategy design
26 2 Insights That Make Design Thinking Valuable

value analysis are performed, exploratory analysis during the divergent thinking
steps (observing, designing), and confirmatory analysis during the convergent
thinking steps (learning, validating).
I use the term design thinking for strategy (“DTS”) to describe the design thinking
approach illustrated in Fig. 2.2 to solving the strategy development challenge,
whether for developing new strategies or improving upon existing ones. DTS
extends beyond the traditional customer-centric way of thinking. DTS is strategy
focus-centered design, whereby typical design thinking is customer-centered and can
be seen as a special case of DTS, in which the strategy focus is set to be the customer.
For example, a firm may want to become more effective by sharing production
processes among multiple independent offerings. Such a strategy focus can be
developed using DTS, without primarily being customer-centric. Although the
customer still retains a key role in DTS, the focus is on exploiting a firm’s invention
capabilities, leveraging its core competencies, or generating value through financial
engineering, just to name a few possibilities.
The four steps of the DTS process are:

(1) Observing (divergent thinking, focusing on the past). During the first step of the
DTS process, the observing step, relevant insights are gathered. The goal is not
to get an exact replication of the real world, but a first proxy that allows moving
forward in the strategy design process. Observing aims at gaining insights
without interfering, that is, changing the observed because of the way obser-
vations are conducted.
(2) Learning (convergent thinking, focusing on the past). During the learning step,
the insights gained from observing are processed, clustered, synthesized, and
transformed into knowledge. What is important is separated from what is not
important. If, during the learning step, apparent information is considered
missing, the process loops back to the observing step to gather the missing
information.
(3) Designing (divergent thinking, focusing on the future). Next, during the
designing step of the DTS process, ideas are generated, based on the learned
knowledge, and transformed into prototypes. Prototypes may be either physical,
like using the LEGO® SERIOUS PLAY® method, or mental models, like sto-
ryboards. They do not have to be complete. The goal is to build a representation
of the proposed strategy that is realistic enough, so that it can be validated.
(4) Validating (convergent thinking, focusing on the future). During the fourth step
of the DTS process, the validating step, the chosen strategy is tested by
designing and performing experiments. This helps remove grid-locked dis-
cussions, often encountered in conference rooms (Liedtka et al. 2017). The goal
of any experiment is attempting to identify potential weaknesses in the design
made, rather than to prove its validity. If any of the experiments fails, the
process reverts to the designing step where alternate ideas are prototyped and
subsequently validated. This usually requires reviewing and potentially
2.3 Design Thinking for Strategy 27

missing feedback failed

information review validations

Observing Learning Designing Validating

Passively Selecting an Selecting target Formulating

observing appropriate populations assumptions
Interviewing framework Developing Developing
informants Identifying key multiple ideas experiments
insights
Questioning Transforming Validating
target customers Clustering ideas into assumptions
insights prototypes
Conducting Selecting a
secondary Synthesizing Consolidating feasible strategy
research knowledge prototypes solution

Insights Knowledge Prototypes Strategy

Fig. 2.3 Alternative representation of the design thinking for strategy or DTS process

adjusting the learning step outcome of the process. The process is iterated until
there are no more open questions that could invalidate the selected strategy or
its characteristics. DTS proceeds in an agile, just-in-time way, avoiding analysis
that do not contribute to the designed strategy.

Figure 2.3 displays a more graphical representation of the DTS focusing on the
activities and expected outcomes of each of the four steps.

References
Arnheim, R. (1969). Visual thinking. Berkeley, CA: University of California Press.
Arnold, J. E. (1959). Creative engineering. Lecture notes. Stanford, CA: Stanford University.
Brown, T. (2009). Change by design: How design thinking transforms organizations and inspires
innovation. New York, NY: HarperCollins Publishers.
Buchanan, R. (1992). Wicked problems in design thinking. Design Issue, 8(2), 5–21.
Cross, N. (1982). Designerly ways of knowing. Design Studies, 3(4), 221–227.
Cross, N. (2006). Designerly ways of knowing. London, UK: Springer.
Cross, N. (2011). Design thinking. London, UK: Bloomsbury Academy.
Diderich, C. (2018). Understanding the value to design thinking to innovation in banking. Journal
of Financial Transformation, 48, 64–73.
Eppinger, S. D., & Ulrich, K. T. (1995). Product design and development. New York, NY:
McGraw Hill.
Koberg, D., & Bagnall, J. (1972). The universal traveler: A soft-systems guide to creativity,
problem-solving, and the process of reaching goals. San Francisco, CA: William Kaufmann.
Lawson, B. (1980). How designers think. Oxford, UK: Butterworth Architecture.
Liedtka, J., Salzman, R., & Azer, D. (2017). Design thinking for the greater good. New York, NY:
Columbia University Press.
Innovation is a discipline. It is not magic. It is something organizations can choose to practice,
improve, and excel at.
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Four Core Principles of Successful Innovation

Analyzing so¡me of the most innovative companies in the world, and studying hundreds of successful
innovations, there emerge four principles successful innovators tend to follow. With these principles
as a foundation, organizations can begin to develop mastery of a new, effective innovation practice.

PRINCIPLE 1: Build Innovations Around Experiences

Experience can be defined as “the act of living through events.” Although the term “user experience”
(or UX) has become associated with the software and information technology industries, user
experience is a key factor in the success of any type of offering. Every company and organization in
some measure creates or affects peoples’ experiences. Focusing on the nature of those experiences
provides the perfect starting point for innovation.
Imagine yourself as an employee of a shoe company charged with creating successful new innovations
in running shoes. You would normally start by studying shoes and thinking about how to improve their
performance, comfort, and style in order to produce a better product. Since competing companies do
exactly the same thing, their improvements more or less match your own. However, by looking at the
larger context of “running shoes,” the wider range of activities your customers engage in related to
running, innovation opportunities are greater which in turn afford new ways of competing.

Athletic shoe giant Nike maintains a market-leading competitive position not by focusing on creating
a better shoe, but by designing a better athletic experience. Beyond innovations in materials,
aesthetics, and performance, the company hasTodeveloped
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experience. Embedded sensors in shoes enable runners to capture, monitor, and upload data about
their running to measure their progress over time. Similarly, Nike provides online tools to help
runners plan runs and choose routes. The result of these kinds of innovations has helped Nike remain
a market leader against intense competition. In short, Nike’s innovations have extended beyond just a
better shoe to supporting peoples’ activities, in running, sports, or regular use, giving people an
engaging experience around wearing shoes.
In most organizations, innovation does not work this way. Instead, it starts with a focus on their
offerings. Organizations try to understand why consumers purchase their current product and how they
use it. The typical methods used to find this information are surveys, focus groups, interviews, home
visits, and usability tests. Consumer researchers seek to answer a host of questions that are primarily
about the product. What improvements can be made to it? Why did people buy this product over
another? What additional features would cause them to pay more for it? As a result, innovations
center on the product itself.
Experience-focused innovation uses a different approach. Emphasis is not on the product, but on its
users. The focus shifts from the things people use, to what they do—their behaviors, activities, needs,
and motivations. The most successful innovations are built not only on detailed knowledge of a
product or technology, but also on what the organization learns from studying peoples’ overall
experience. In studying peoples’ experiences, innovators should focus not only on the obvious
experience of “using the product,” but on the host of activities that surround the context in which it is
used including: recognizing a need, discovering a product or service to meet that need, learning about
it, using it, and extending its use (e.g., sharing, customizing, servicing, upgrading). Organizations need
to expand their concept of product performance beyond understanding the attributes, functions, and
features of an offering, to understanding its users’ motivations, needs, and beginning-to-end
experience.
Thinking about and understanding the extended user experience can lead to great innovations; but it’s
far from easy. Design innovation employs the social science of ethnography—the collection of data
about people through direct observation and interaction with them—to develop a deeper
understanding of people. While innovation should not ignore traditional market-research methods like
focus groups and surveys, ethnographic observation puts a premium on the valuable and often
unexpected insights about people that result from observing them directly in the context where the
organization’s offering (product, service, message) will be used. This approach changes the focus
from what people say to what they actually do.

PRINCIPLE 2: Think of Innovations as Systems

An offering, whether it is a product, a service, or media/message, naturally belongs to a larger system
of offerings, organizations, and markets. A “system” can be defined as any set of interacting or
interdependent entities that form an integrated whole which is greater than the sum of its parts.
Innovators who understand how this larger system works can better create and deliver offerings with
high value.
A traditional approach to designing a healthcare-related product would be to focus on product
performance. By placing the product in the context of the overall healthcare system, we can develop a
greater understanding ofpdfbooksinfo.blogspot.com
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the patient, doctor, hospital, home, pharmacy, medical device manufacturer, medical supplier,
insurance company, pharmaceutical company, government, and so forth. The attributes that define
these components can also be described; for example, the patient’s health condition, treatment plan,
and other information similar to what is found in the patient’s electronic health record. Further, we
can also think about the flows that happen between components, such as a patient’s payments to the
insurance company or the information that patients and doctors exchange. Thinking about your product
in relation to the healthcare system not only helps understand system-level implications for the design
of the product, but also reveals new opportunities for innovation that otherwise you would not have
considered.
Going even further, organizations can pursue simultaneous innovation in several parts of the system.
Offerings based on integrated innovation of multiple parts of a system are likely to have greater value,
and tend to confer massive competitive advantage for the company creating them. The classic
example of this principle is Apple. The iPod and iTunes, the iPhone, the App Store, and later the
iPad, all reflect Apple’s intentional systems innovations. In addressing innovation at a systems level,
the company reinvented the music business, the mobile devices sector, and the tablet computers
industry.

PRINCIPLE 3: Cultivate an Innovation Culture

The story of Apple’s successes through design innovation is well known, and not very surprising.
Apple is a relatively young company, founded and built on the idea of user-centered design of
technology. Although now an established Fortune 500 firm with 60,000 employees worldwide, it has
inherited and maintained much of its organizational culture from its days as a Silicon Valley start-up.
Its founder-CEO, Steve Jobs, was a natural innovator
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the company’s primary differentiators. In short, a company like Apple has many built-in
organizational and cultural advantages that allow it to pursue a design innovation strategy.
Less well known than Apple, but equally important, are the stories of large, long-established
companies that have not historically relied on a design innovation strategy, but find themselves
needing to adopt one. Procter & Gamble’s transformation of its innovation strategy under the
leadership of A.G. Lafley is a prime example. In 2000, the household products giant’s stock was
collapsing as it faced alarming declines in growth and threats from a plethora of private-label brands
with increasing access to the same production technologies and markets. Facing the decision of
whether to cut costs to compete head to head with private-label brands or pour additional resources
into R&D and marketing to rebuild margins, Lafley boldly chose to do both. One of his key strategies
was to inject user-centered design innovation into P&G’s organizational “DNA.”
This principle is about cultivating a mindset among people in an organization that everyone is
actively engaged in innovation on a daily basis and that everyone’s actions can add up to the overall
cultural behavior of the organization.
Innovation practice is a collaborative process and people with competencies in different fields need
to come together to make the process thorough, inclusive, and valuable. Engineers, technical experts,
ethnographers, managers, designers, business planners, marketing researchers, and financial planners,
all need to come together in a shared mental space. Most recently, even end users and community
members are also brought into the innovation process. Although achieving this level of collaboration
is a huge challenge, organizations can take small steps that eventually can lead to big positive changes
in the innovation culture of organizations. One such step is to conduct frequent interactive work
sessions and brainstorming activities among people with diverse expertise.
PRINCIPLE 4: Adopt a Disciplined Innovation Process
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To reiterate: “innovation planning” is not an oxymoron. Successful innovation can and should be
planned and managed like any other organizational function. It is possible to create innovations using
well-developed processes and repeatable methods, all in the service of supporting and extending the
other three principles of successful innovation—understanding experiences, thinking in terms of
systems, and fostering an innovation culture. A high degree of discipline is necessary for these
processes and methods to work, but when they do, the probability of creating successful innovations
can increase dramatically. Simply recognizing and understanding that innovation can and should be
planned is the first, critical step.
It is important to note that the innovation process exists in parallel to many other equally important
processes in an organization and needs to integrate well with them. Innovators need to synthesize
processes from design, technology, business, and other areas. For example, typical technology- and
business-driven innovations start with the identification of a business opportunity or a technology
possibility followed by concept development and then offering them to users. Design-driven
innovations start by understanding people, developing concepts, and then conceiving businesses
around those concepts. Knowing when and where all these processes touch and interact is key to
successful collaboration in organizations.
Companies need to understand effective and compatible design methods to practice design innovation
collaboratively, reliably, and repeatedly. Innovations conceived by carefully integrating design
processes with business and technology have a better chance of achieving high user value and
economic value, leading to greater adoption and market leadership.
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A Model of the Design Innovation Process

The reasons why organizations need a reliable innovation process, and some of the general principles
that underlie successful innovation, were discussed earlier. In the remainder of this book, a model
design innovation process is presented with discussion of 101 design methods innovators can apply
throughout that process. These design methods evolved out of many years of studying cases of
innovation projects and successfully applying the four core principles discussed earlier—building
innovations around experiences, thinking in systems, cultivating an innovation culture, and adopting a
disciplined process.

The Design Innovation Process

The design innovation process starts with the real—we observe and learn from the tangible factors
from real-world situations. Then we try to get a full understanding of the real world by creating
abstractions and conceptual models to reframe the problem in new ways. Only then do we explore
new concepts in abstract terms before we evaluate them and implement them for their acceptance in
the real world. This requires fluidity in our thinking between the real and the abstract.
Just as with nearly any creative or exploratory process the design innovation process moves back and
forth through modes of activity, oscillating between poles of Real versus Abstract and Understanding
versus Making. A 2 × 2 map illustrates the design innovation process. The lower left quadrant
represents “research,” about knowing reality. The upper left quadrant stands for “analysis,” since this
is where we processVisit
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mental models to drive innovation. The top right quadrant is about “synthesis,” during which the
abstract models developed during analysis are taken as a basis for generating new concepts. And
lastly, the lower right quadrant defines the “realization” of our concepts into implementable offerings.
All these four quadrants—research, analysis, synthesis, and realization—combined together is a
well-formalized process model with which to drive innovations in your organization.

Within this framework reside seven distinct modes of activity for design innovation: Sense Intent,
Know Context, Know People, Frame Insights, Explore Concepts, Frame Solutions, and Realize
Offerings. (These seven modes, incidentally, form the structure not only of the innovation process, but
also of the rest of this book.) Understanding the outlines of the innovation process can greatly help
innovators, by providing a guiding structure and sequence for any given project, and ensuring that the
team has the right information and knowledge at the right time.

Process Is Nonlinear
Although the idea of a process implies a linear sequence of events, this can be misleading. Many
projects are actually nonlinear. For example, a project may begin with a sudden brainstorm (Explore
Concepts) and then proceed “backwards” to To
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followed by further exploration and iteration.

Process Is Iterative
The process is also iterative, requiring many cycles through the process, and often through one or
more modes (cycles within cycles), rather than being a direct sequential push. A project might start
with an intent and some contextual research; To
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and analysis, with initial insights being fed back to users for validation; then several rounds of
concept exploration, user feedback through prototype testing, refinement of analysis, and then further
exploration, further prototyping, and so forth. The number of repetitions and loops in any given
innovation project is largely a function of the project’s budget and scope. In some cases, multiple
loops may be necessary, in others merely desirable, and in still others totally unfeasible. Doing more
iterations generally leads to higher-value, more successful innovations—although not if pursued for
too long or without discipline.

Seven Modes of the Design Innovation Process

As discussed previously, there are seven distinct modes of the design innovation process, each with
its own goals and activities. Each mode will be introduced, and then covered in detail in its own
separate chapter

Mode 1: Sense Intent

Early on in the process we are in this mode of figuring out where to start. Before jumping straight into
a project we take a pause and consider the changing world around us. We look at all the changes
happening in business, technology, society, culture, policy, and the like. We gather the latest
happenings, cutting-edge developments, and latest news. We study the trends that can affect our topic
area. We look at the overall effects of these changes. All these offer us a way to reframe our initial
problem and look for new innovation opportunities. It helps us think of an initial intent about where
we should be moving.
Gathering the latest: Searching for the latest happenings, cutting-edge developments, and the latest
thinking going on in the field
Mapping overviews: Taking a step back from details and creating high-level views of the changes
going on in the topic area
Mapping trends: Getting high-level overview of relevant trends in business, technology, society,
culture, and policy
Reframing problems: Framing-up challenges differently based on the associated trends and
conditions and finding opportunities where the organization could create high-value innovation
Stating initial intent: Outlining hypotheses of how the organization could take advantage of
innovation opportunities
Mode 2: Know Context
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In Know Context we study the context—the circumstances or events that affect the environment in
which our innovation offerings (products, services, experiences, brands, etc.) exist or could exist. We
study how our offerings perform in the market. We focus on offerings that are similar to ours and see
how they perform. We study our organization. We look at all the competitors and their evolving
strategies. We learn about our organization’s relationship to our complementors in the industry. We
find out if government policies and regulations have an effect on our innovation topic. Broadly, in this
mode, we pay attention to what is transforming our innovation context including society, environment,
industry, technology, business, culture, politics, and economics.
Planning for research: Creating a work plan for understanding the context based on available time,
resources, methods, and expected deliverables
Searching knowledge base: Searching through large quantities of data from existing sources to find
emerging patterns
Mapping evolution: Creating overviews of key industry developments, eras, timelines, and likely
futures
Doing comparisons: Creating overviews showing organizations in relation to industry networks,
competitors, and analogous organizations
Diagnosing conditions: Gaining perspective on the organization’s capabilities, their performance,
and industry patterns of innovation
Asking experts: Communicating with experts in the field and understanding their analytics,
opinions, and recommendations

Mode 3: Know People

In this mode our goal is to understand people (end users and other stakeholders) and their interactions
with everything during their daily lives. In this mode traditional market research techniques are most
useful when a new offering is already defined. But to explore a person’s unmet or unspoken needs we
must have more powerful methods and tools. We use observational and ethnographic research
methods to learn about
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key objective in this mode is to extract the most valuable insights from our observations. An “insight”
here is defined as an interesting revelation or learning that emerges out of observing peoples’ actual
behavior. Insight is an interpretation of what is observed, and is often the result of asking the question
“why?”
Planning research: Deciding on research objectives, target users, fieldwork protocols, budgets, and
timeframes
Observing people: Recruiting participants, doing fieldwork, documenting people, their activities,
and interactions with objects and environment
Asking people: Conducting surveys, discussing findings with users, and gathering feedback and
validation
Engaging people: Having users participate in activities, conversations, and interactions with
researchers
Organizing finding: Collecting observations and research data, tagging with keywords, and
identifying gaps in research

Mode 4: Frame Insights

After conducting research, the next challenge is to bring structure to what has been found and learned
from the previous modes. We sort, cluster, and organize the data gathered in the previous three modes
and begin to find important patterns. We analyze contextual data and view patterns that point to
untapped market opportunities or niches. Finding insights and patterns that repeatedly emerge from
multiple analyses of data is beneficial. Therefore in this mode we use a mix of different kinds of
methods in order to gain multiple perspectives of the context for a fuller understanding. Guidelines or
principles that are generated in this mode help us move to the next mode for exploring concepts and
framing solutions.
Finding insights: Identifying patterns in research results about people and the context and looking
for insights
Modeling systems: Diagramming the context as a system showing its components, relationships,
attributes, and value flow
Finding clusters: Sorting data in different ways, finding groupings, and revealing high-level insights
Finding patterns: Visualizing research findings as diagrams and revealing hot spots, gaps, and
overlaps
 Making profiles: Defining attributes of key stakeholders and other parts of the system
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Mapping flows: Visualizing how value flows in networks of producers, consumers, suppliers, and
other stakeholders
Mapping experiences: Diagramming user journeys in space and time, discovering pain points, and
showing opportunities
Making frameworks: Summarizing insights and translating them into frameworks and guidelines to
drive concept generation

Mode 5: Explore Concepts

In this mode we do structured brainstorming to identify opportunities and to explore new concepts.
We use the insights and principles framed earlier as the starting places to generate concepts. We
ensure that fresh and bold ideas are generated through collaborative sessions. Team members build
on each other’s concepts while carefully postponing critical evaluation. Further, by basing our
concepts on the results from previous modes, we ensure that the concepts are defensible and grounded
in reality. Concepts for products, services, communications, environments, brands, and business
models and others are typically explored in this mode. Even at this early stage of exploration, we
construct rough prototypes, either to focus team discussions or to get early user or client feedback.
Framing concept space: Converting insights to design principles, reframe assumptions, and making
hypotheses for concept generation
Defining concepts: Brainstorming concepts within the widest solution space permitted by design
principles, gaining inspiration from metaphors, and visualizing concepts
Organizing concepts: Sorting, recombining, and dividing concepts into logical systems and groups;
collecting and archiving concepts for future reference
Communicating concepts: Sketching, diagramming, prototyping, visualizing, and narrating concepts
to understand, validate, and convey their value

Mode 6: Frame Solutions

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In this mode, we build on the large set of concepts that have been developed earlier by combining
them to form systems of concepts, named “Solutions.” We evaluate concepts and identify the ones that
bring the most value to stakeholders (primarily users and businesses). The most valuable concepts are
combined into systems of concepts that work together well and reinforce each other’s value. We also
evaluate concepts based on their compatibilities to help form holistic solutions. We ensure that the
concepts and solutions are organized into useful categories and hierarchies. We iteratively prototype
solutions, and test them in real-world settings. In this mode descriptions of solutions are turned into
depictions to give the team, the users, and the client(s) a visceral sense of “what could be.”
Generating options: Combining the many point-concepts explored in Explore Concepts mode into a
set of solution options for further selection
Systematizing concepts: Clustering and synthesizing concepts into coherent systems, planning
lifecycles of offerings, and creating roadmaps
Evaluating concepts: Scoring, voting, and ranking concepts against design principles, cost/benefit,
viability, and feasibility
Communicating solutions: Refining sketches, diagrams, prototypes, visualizations, and narratives of
proposed solutions
Organizing solutions: Sorting, collecting, and archiving solutions for easy access, including use by
other teams and projects

Mode 7: Realize Offerings

Once potential solutions are framed and prototypes tested, they need to be evaluated to move to
implementation. In this mode, we ensure that the solutions are purposefully built around peoples’
experiences and can provide real value. It is also important to make sure these solutions add
economic value for the organizations producing them. Once we establish high-value solutions,
implementation plans follow. For this, design and business innovators collaborate to define viable
strategic directions. We create roadmaps to show the speculated progression of solutions in distinct
phases. These roadmaps are shared with the stakeholders, showing everyone involved the steps
necessary to implement the solution. A business case is prepared for prompting further action with
clearly defined and specific initiatives the organization
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Major implementation.
Categories

Building prototypes: Developing prototypes to test details, feasibility, viability, and technical
specifications
Defining strategies: Determining market positioning, platforms, partners, and business plans key to
the innovation’s success
Defining tactics: Identifying capabilities necessary to achieve strategies and plan development
trajectory
Developing initiatives: Gathering resources, constructing budgets and schedules, hiring teams, and
creating plans for pilots and launches

Understanding Methods
Understanding the entire design innovation process and life cycle is an initial requirement to
achieving reliable innovation. However, an organization also must understand the specific activities
and methods it can deploy at different points throughout the process. This may include things as
simple as a 2 × 2 position map, like the images shown in this introduction, or as complex as a
proprietary software system for analyzing and sharing innovation insights and protocols. Just as a
master carpenter will expertly select a different set of tools depending whether he is building a house
or a chair, the master innovator needs to be familiar with a variety of methods in order to choose them
effectively for a given project.
The seven modes of the design innovation process form the structure for the remainder of this book.
Chapters 1 through 7 elaborate on the key activities in each mode, and describe in detail over 100
different simple, powerful, highly flexible methods innovators can use to progress through the
innovation process. Each method description includes an example illustrating how that method was
used in that project during the process. These example illustrations range from exploratory class
projects to well-known corporate cases, highlighting the broad applicability of this process to many
different types of innovation projects.