Designers are solving business problems — what’s next?

McKinsey Digital
Dec 15, 2017 · 6 min read

By Julian Koschwitz, Experience Design Director, Digital McKinsey

Design school IoT prototyping session (Photo: Courtesy of the author)

Inductive problem solving — based on the use of facts or ideas — is more relevant than ever. Its widely used by organizations, institutions and communities, often as part of the “design thinking” approach to further innovation. And with this technique now seemingly ubiquitous in design-led approaches, how can it break out and be used for broader impact across other disciplines?

In today’s increasing pace of digitization and decreasing lifespans of business models, design thinking has proven to be valuable for many challenges concerning growth and innovation. At its core is the ability to change the perspective of common strategic thinking: instead of being organization- or technology–centered, design thinking acknowledges that human decision-making is often emotional and potentially irrational (for lack of a more respectful term) — understanding this reality of human behavior can generate more value not only for the users but also for user-serving organizations. Instead of setting up long-term roadmaps and pre-set specifications, design thinking proposes prototypes, experiments and collaboration with the user in a continuous, iterative approach.

The value proposition: Relevance

Designers tend to take an outside-in perspective; they are trained to solve problems by starting with taking the customer’s perspective and asking “What would be valuable for them?” then test, improve, test, pivot, test, change and so forth. It’s messy, fast and driven by tangible artifacts (prototypes) that can be continuously evaluated in the real world. Human-centered design methods [2] are employed to structure and support this process, from observing customers to ideation, prototyping and continuous validation. The real power lays within the transfer from insights to actions, the structured and creative interpretation.

Designers have been working like this for some time, as documented in Henry Dreyfuss’ “Designing for People” (1955), Donald Norman’s “The Design of Everyday Things” (1988), Nigel Cross’ “Research in Design Thinking” (1992), Tim Brown’s “Change by Design” (2009), and many more.

To elevate this approach from a niche practice to an accepted business approach, it must be firmly integrated into an organization.

What’s next: Designing culture

Some organizations are now making great efforts to employ design thinking not only for external / customer-facing efforts, but also as make it part of their internal culture. Airbnb, for example, cites the source of its success on having explored novel ways for which no statistical evidence were supported. Its corporate culture embraced this practice, encouraging innovation even in absence of historic data, allowing new ideas find their way much faster to implementation

Designing culture means to change the way an organization makes decisions about new ideas. Today most organizations’ decisions are grounded in past data, but innovation requires a more daring mindset. And while a design thinking approach is taken for product development and customer experience it is rarely in place when it comes to larger strategic decisions. Designers can facilitate this open approach. This means to establish a culture were exploring new ideas finds the same support as exploiting proven ones [5].

The approach: Generative problem solving.

Today’s world is full of complex, networked and dynamic problems that can’t be solved with already existing frameworks — Roger Martin calls these problems “wicked problems” [4]. Wicked problems come with no past data or established ways of solving them. New approaches have to be found. One way of doing this is through abductive reasoning or design abduction [1].

Deduction is the traditional approach for solving business problems: taking existing data and running it through an algorithm for a precise result.

Induction describes having the data and observing an outcome while it is not clear yet what laws connect the two. Through e.g. experimentation this blank is attempted to be filled.

Design abduction means that only something about the nature of the outcome is known (“What would be desired?”) but nothing yet about the variables and formulas to get there. These need to be figured out through detecting unmet customer needs, prototyping and continuous validation.

“No new idea can be proved deductively or
inductively using past data.”
— Charles Sanders Pierce

Why is this approach relevant? In short, to create something truly new, by definition there is no precedent. The true power comes though through applying the right type of logic for a specific problem and combine them.

Bringing it together

Over the past decade, more than 50 design firms have been acquired by financial institutions, tech firms and management consultancies. Many more design teams have been build up within organizations from all industries — both private and public sectors — for the first time ever [3]. Designers are increasingly common in teams where so far mostly analysts, strategists and technologists were collaborating — in short where abductive reasoning was not present. Integrating these problem solving approaches is a huge advantage these teams have. Yet its potential is only truly realized if the Designer’s generative problem solving approach complements existing analytical problem solving approaches and vice versa. If it is “either analytical or generative” it runs the risk of failing or underdelivering.

Many of today’s challenges — especially given today’s context of uncertainty and rapid innovation — require this integrated set of problem solving approaches.

The evolution: What is next?

When Roger Martin declared design thinking the “next competitive advantage” the year was 2008. In 2017 design thinking has become a well implemented organizational resource, similar to Six Sigma or others. Indeed, design thinking is at the point where it has dispelled preconceived notions around creative folk and is valued when brought to board rooms. CxOs benefit from an easy to use, scalable, 5-step process to drive innovation. It’s no silver bullet, but it has proven to be a powerful influencer on the bottom line [6]. Now organizations have to step up their game and evolve to their needs.

Design thinking as an innovation method describes the designer’s problem solving approach agnostic of any specific discipline and applicable to any problem.

Design thinking is not identical to, nor does it replace, design practice, but it makes some of the most valuable tools useable for everyone.

Designing trust

Design thinking is no stranger to organizations and many have successfully adapted it to their terms. And in those environments, fundamental issues concerning customer experience, product innovation and operational efficiency receive more attention.

But what about issues around trust that are present in times when automated technology will replace human intermediaries from many interactions and transactions? Blockchain technology may have started a revolution that proposes solutions to many inherent problems of the word wide web. Crypto currency, smart property and contracts, and better ways of securing ownership for digital artworks, music and media, and many others.

Designers need to think about the human-centered aspects that are and will be pressing when everybody who has internet access will participate in this. In a future where a cheap android phone with Blockchain apps replaces banks, trust in those products will be even more important than today.

Understanding people’s underlying behaviors, motivations and decision-making has become much more crucial than tactical considerations around optimizing user interfaces for usability and experience. Digitizing processes is valuable, but more so in the context of taking responsibility to understand and improve their foundations is paramount.

References

  1. Dorst, K. (2015). Frame innovation: Create new thinking by design. MIT Press.
  2. Hanington, B., & Martin, B. (2012). Universal methods of design: 100 ways to research complex problems, develop innovative ideas, and design effective solutions. Rockport Publishers.
  3. Maeda, J. (2016), Design in Tech Report, http://www.kpcb.com/blog/design-in-tech-report-2016
  4. Martin, R. (2009). The design of business. Harvard Business School Publishing, Massachusetts.
  5. Martin, R. (2017), Use Design Thinking to Build Commitment to a New Idea, https://hbr.org/2017/01/use-design-thinking-to-build-commitment-to-a-new-idea
  6. Rae, J. (2015), The Power & Value of Design Continues to Grow across the S&P 500, http://www.dmi.org/?page=2015DVIandOTW
  7. Westerman, G., Bonnet, D., & McAfee, A. (2014). Leading digital: Turning technology into business transformation. Harvard Business Press.

McKinsey Digital Insights