THE DESIGN OF BUSINESS BY ROGER MARTIN
In this book, Martin says that companies with a "design-focused business" will evolve and stay on top of new customer needs and thus create the right product for the right time. He addresses some critical aspects of business, such as how discovery takes place through the knowledge funnel, why reliability bias makes advancing knowledge so hard, and how thinking like a designer can create a sustainable advantage for a corporation.
At the beginning of the course, I wondered what design thinking was; having a background in engineering and business was unchartered territory for me. I wanted to know what role design thinking plays in the business environment, How could the knowledge of design thinking be implemented in new businesses and ventures. After reading the description and reviews of the book, I was excited to delve deep and understand more about the subject from the business point of view. As a result, I chose this book for my reflection.
Martin puts design and design thinking as the critical element of business success. The book explains that successful companies start by solving a challenging problem once and repeatedly figuring out how to solve it. Then, the company can translate the repeatable process into code and scale the solution for mass consumption. This progression is shown in the diagram below as a company moves their solution from Mystery to Heuristic, Algorithm, and finally Code. In Martin's mind, this is natural progress as it solves problems and attempts to scale and become efficient as you go through the knowledge funnel.
The book provides a simple way of thinking about the flow of innovation from Mystery through Heuristics to Algorithms in an organization. It then looks at the role of understanding the why (validity) and the what (reliability). The stories from companies as varied as McDonald's and P&G to Hermann-Miller, Research in Motion, and Cirque de Soleil are fascinating and informative and give a real business context to the general model.
I believe that Martin is correct; only companies that embrace design thinking as a core capability have any hope of long-term sustainability and competitive advantage. Part of what makes this book so satisfying is that Martin thinks rigorously, communicates clearly, and takes a definite stand on his positions, which means there is substance to his arguments. I am indeed delighted to read this book and express my thoughts on the same. I finished reading the book in just a couple of days; that's how much I was intrigued by it.
When you look at the big companies that have failed in the past, you can see that they grew complacent. These companies prioritized the analysis and its refinement(exploitation) over innovation(exploration). That made them vulnerable to the disruptive upstart innovations that ousted them from their top spots. In contrast, companies with a design focus are constantly going back to their source of inspiration and creating new and better products that keep them current such as Apple, for that matter. Design is what apple is known for and not just any format but the disruptive one.
Another aspect of Martin's argument is the balance between the stable reliability of iterating on successful designs and the validity of creating new solutions to other mysteries. Companies look at the numbers to try and make shareholders happy; shareholders like reliable solutions. However, reliable solutions age because they stop being valid to the current problems that customers are solving. However, to solve existing problems takes time, money, and effort, all things that shareholders and analysts are not very fond of. Overall, Martin argues that there has to be a balance between the two for a company to be successful. The examples of Martin's timely solutions are P&G's Magic Eraser which came out of P&G rethinking their design strategies and moving away from reliable methods making P&G grow from 100 Billion to 200 Billion in market valuation in just over three years. Another example is the business model of Southwest Airlines, a disrupter company, which shows that a new way of thinking can mess up reliable and somewhat old business models.
Design thinking belongs in more departments than the super expensive R&D. It is a fundamental point of view that impacts how companies invest and evolve. This reasoning was the first time I had heard someone advocating for including design thinking so thoroughly into a business, and it was delightful. Last but not least, it is fair to say that the world is full of conflicts, including the uneasy relationship between intuitive thinkers and analytical thinkers, between the force of validity and reliability. These relationships can be highly productive; facilitated by the design thinker.
