The Explainer: What Is Design Thinking?
Summary
TLDRDesign thinking is a strategic approach that helps companies avoid common pitfalls in strategy-making by focusing on human behavior. It involves three stages: inventing a future by immersing in customer lives to form theories about their needs, testing these ideas through iterative prototyping and quick experiments, and finally, bringing the successful product to market by identifying necessary activities and resources. This method, popularized by David Kelley, Tim Brown, and Roger Martin, was exemplified by Procter & Gamble's turnaround of the Oil of Olay brand by targeting a previously ignored demographic and testing various product aspects.
Takeaways
- 📈 Companies often struggle with strategy due to relying on outdated data or making risky bets without evidence.
- 🔍 Design thinking offers a strategy-making process that focuses on human behavior to avoid common mistakes.
- 🌟 Pioneers like David M. Kelley, Tim Brown, and Roger Martin have popularized design thinking in business strategy.
- 🛠 The design thinking process has three main stages: inventing a future, testing ideas, and bringing the product/service to life.
- 🧐 Start by forming theories about customer needs through immersion in their lives rather than traditional market research.
- 📝 Test your theories with iterative prototyping and quick experiments to gather consumer feedback.
- ✂️ Adjust the product, pricing, or positioning based on the insights gathered from consumer responses.
- 🏢 In the final stage, identify the necessary activities, capabilities, and resources for production, distribution, and sales.
- 💡 Design thinking can unlock new markets and strategies by using imaginative, human-centered problem-solving.
- 💡 An example of successful design thinking is P&G's turnaround of the Oil of Olay brand by targeting a previously ignored demographic.
Q & A
What common mistakes do companies make when setting strategy?
-Companies often make mistakes by either relying on backward-looking data that doesn't predict future customer needs or making risky bets based on instinct rather than evidence.
What is design thinking and how does it help in strategy-making?
-Design thinking is a strategy-making process that avoids common mistakes by using tools from the design world and focusing on human behavior to create strategies.
Who are the key figures that popularized design thinking?
-Design thinking was popularized by David M. Kelley and Tim Brown of IDEO, and Roger Martin of the Rotman School.
What are the three major stages of design thinking?
-The three major stages of design thinking are: 1) Invent a future by forming theories about what customers might want, 2) Test your ideas through iterative prototyping and quick experiments, and 3) Bring the new product or service to life by identifying necessary activities, capabilities, and resources.
How does immersing oneself in customers' lives help in the strategy-making process?
-Immersing in customers' lives helps by observing and asking questions about their behavior, which provides insights into their needs beyond what they might express in polls about specific products or services.
What is the purpose of iterative prototyping in the design thinking process?
-Iterative prototyping allows for testing ideas with 'good enough' products or services, making adjustments based on consumer responses, and refining the product, pricing, or positioning.
How does design thinking help in identifying new markets?
-Design thinking helps identify new markets by observing and understanding human behavior, leading to the discovery of unmet customer needs and opportunities for innovation.
Can you provide an example from the script of how design thinking was applied in a real business scenario?
-Procter & Gamble used design thinking to turn around the skincare brand Oil of Olay. They observed shoppers, identified a market of women in their 30s and 40s that was being ignored, experimented with new formulations, tested prototypes and pricing, and launched new products that were well-received.
What was the industry's primary target audience for skincare products before P&G's intervention?
-Before P&G's intervention, the skincare industry primarily targeted women over 50 who were worried about wrinkles, ignoring the needs of younger women in their 30s and 40s.
How did P&G adjust their strategy for Oil of Olay based on their design thinking process?
-P&G adjusted their strategy by experimenting with new formulations that addressed multiple skincare goals, testing different prototypes, price points, and store displays to cater to a broader range of consumers.
What is the role of human-centered problem-solving in design thinking?
-Human-centered problem-solving is central to design thinking as it focuses on understanding and addressing the needs, behaviors, and motivations of users, leading to more effective and innovative strategies.
Outlines
🔍 Design Thinking for Strategic Innovation
This paragraph introduces design thinking as a strategic approach to avoid common pitfalls in strategy-making. It contrasts the typical reliance on historical data or instinctual decisions with a more forward-looking and evidence-based method. The process involves three major stages: inventing a future by forming theories about customer needs through immersion in their lives, testing these ideas through iterative prototyping and quick experiments, and finally, bringing the successful product or service to market by identifying necessary activities, capabilities, and resources. The example of Procter & Gamble's turnaround of the Oil of Olay brand is used to illustrate how design thinking can lead to capturing new markets and developing innovative strategies.
Mindmap
Keywords
💡Strategy-making
💡Backward-looking data
💡Risky bets
💡Design thinking
💡Human behavior
💡Prototyping
💡Iterative experiments
💡Capabilities and resources
💡Observing shoppers
💡Human-centered problem solving
Highlights
Companies often stumble when setting strategy due to reliance on backward-looking data or risky instinct-based bets.
Design thinking is introduced as a strategy-making process that focuses on human behavior to avoid common mistakes.
Design thinking was popularized by David M. Kelley, Tim Brown of IDEO, and Roger Martin of the Rotman School.
The process consists of three major stages: inventing a future, testing ideas, and bringing the product or service to life.
Inventing a future involves forming theories about customer needs by immersing in their lives rather than polling about specific products.
Observing and asking questions about customer behavior is key to understanding their needs.
Testing ideas is done through iterative prototyping with 'good enough' products or services and conducting quick experiments.
Adjustments to the product, pricing, or positioning are made based on consumer responses during testing.
Bringing the new product or service to life involves identifying necessary activities, capabilities, and resources for production and distribution.
Procter & Gamble's turnaround of the Oil of Olay brand is cited as an example of successful design thinking application.
P&G observed shoppers in different retail channels to understand the market and customer needs better.
The skincare industry was primarily targeting an older demographic, neglecting the needs of younger consumers.
P&G identified a significant market opportunity by focusing on the needs of consumers in their 30s and 40s.
The company experimented with new formulations to address multiple skincare goals.
Different prototypes, price points, and store displays were tested to gauge consumer response.
P&G launched a series of premium, widely distributed products that appealed to a broad consumer base.
Design thinking's human-centered problem-solving approach can unlock new markets and strategies.
Transcripts
When companies set strategy, they often stumble.
Either they collect a lot of backward-looking data,
which doesn't tell them what future customers really want.
Or they make risky bets based on instinct instead of evidence.
Design thinking is a strategy-making process
that avoids these mistakes by applying tools
from the world of design and shifting
the focus to human behavior.
Popularized by David M. Kelley and Tim Brown of IDEO
and Roger Martin of the Rotman School,
design thinking has three major stages.
First, invent a future.
Form a few theories about what customers
might want, but don't have by immersing yourself
in their lives.
Instead of polling them about specific products or services,
observe and ask questions about their behavior.
Next, test your ideas out.
Use iterative prototyping with good enough products
or services, and conduct a few quick experiments
to see how consumers respond.
Adjust the product, the pricing, or the positioning accordingly.
Finally, bring the new product or service to life.
When you've got a winner, identify the activities,
capabilities, and resources your company will
need to actually produce, distribute, and sell it.
For example, when senior managers at Procter & Gamble
wanted to turn around the skin care brand Oil of Olay,
they began by observing shoppers in both mass retail channels
and high-end department stores.
They realized that their industry
had been primarily targeting women over 50 who
were worried about wrinkles, while pretty much ignoring
those in their 30s and 40s who were concerned
about other issues.
This was a huge market to be captured.
So P&G experimented with new formulations that
would tackle multiple skin care goals then
tested different prototypes, price points,
and store displays.
Finally, the company launched a series of new premium,
yet broadly distributed products that
were well-received by a wide range of consumers.
By using imaginative, human-centered problem solving,
, design thinking can help you unlock new markets and identify
new strategies.
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