The Explainer: What Is Design Thinking?

Summary

Design 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• 📈 Companies often struggle with strategy due to relying on outdated data or making risky bets without evidence.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.