Tag Archives: Design Thinking

Great Interview with PepsiCo Director of Foresight

ManojFenelon1Check out this interview with Manoj Fenelon of PepsiCo. He has a cool title and lots of interesting things to say. He and I agree that the future of business is about value being created – it’s about more than ownership of products, it’s about ideas and advocacy more than advertising and bottom line.

He covers a few interesting topics:

  • He puts forth a great analogy of “seeds & soil” – it’s not just about have the great ideas but the organizational capability and fortitude to nurture them to bring them to life
  • The strengths and weaknesses of systems and the power of the status quo
  • The lack of empathy in some corporate circles (read my entry on how to gain empathy)
  • The strength of the soul of a brand. Here is an insightful quote:

“As I say, there’s a growing realization that passion comes from a sense of being in the same movement as the people who are running the brand”

“Virtual Reality” Meetings

My sketch of a next-generation environment. Experience is the same whether you enter the physical room or from a device.

My sketch of a next-generation environment. It looks the same when you enter physically or digitaly from any device.

You might remember second life and shudder. However there were things about it that were compelling and the future is going to see a rise again of virtual reality settings. However like anything old that is new again they never quite come back in the same way (think bell bottoms).

The new virtual worlds will be streamlined for everyday use – assisting in conducting the remotely held boardroom meetings, brainstorming sessions or enabling perpetual “war” rooms. They are a metaphor that everyone can grasp immediately and begin to engage without much of a learning curve. Let’s call them Digital Environments rather than Virtual Reality.

While you can enter the room online you can also walk in to the Digital Environment when you enter a physical room (very Inception-like) seeing content posted by others in the “room” or real-time video of the other participants as they engage and interact. Use any device to engage with the displays.

You won’t need an “avatar” just the ability to see the walls of the room and engage with the frames on the wall. Dropping in content that can be viewed and edited by all… or everyone can do a brainstorm put up post-its from any location. Fun!

This will create a need to provide a context for a new wave of applications that enable people to perform tasks across different end points — but in fun and engaging ways like they are imagining at Innovation Games.

Why Borders went Bankrupt…

Not delivering a great customer experience will probably mean that you will not succeed in the long run. However, delivering a great customer experience is not enough to keep you in business.

Borders Books was #1 on Forrester’s list of online book sellers but better than that Borders was rated by Forrester as having the best customer experience in any industry – right before it went bankrupt.

Why? It didn’t have anything to do with merits of a great customer experience. One of the issues was they didn’t stay on top of the evolving needs of their customer’s as they shifted their behavior to digital consumption. They didn’t grasp the significance of the internet as a way to deliver their product, not just sell it. They continued to execute on their value proposition of having the largest selection of inventory but they failed to shift to deliver it through the channel preferred by the customer. They failed to keep an eye on their customer’s evolving needs and continued to work on perfecting a dying model.

They aren’t the first to miss a major transition point. Sears sold its catalog business in 1993, Jeff Bezos founded Amazon in 1994. They had the perfect delivery system to be able to take over the eCommerce space. Read more here “Why Borders Failed While Barnes & Noble Survived

Tesco: The Future of (Grocery) Shopping

This is a great example of how Design Thinking can drive Innovation. Tesco’s South Korean supermarket chain Home Plus plastered subway stations with photo’s of life size grocery shelves. People could use an iPhone app to take pictures of the QR code of the products they want and then check out. The groceries were delivered to their home by the end of the day.

UN Creative Economy Report 2010

This UN Creative Economy report builds on the earlier analysis of its predecessor, with new and improved data, showing how creativity, knowledge, culture, and technology can be drivers of job creation, innovation, and social inclusion. It suggests that world trade in creative goods and services remainedrelativelyrobustatatimewhenoverall levels of international trade fell. It analyzes the rapid growth in the creative economy sectors across the South and the growing share of creative sector trade which is coming from the South. By exploring the factors behind this growth and the potential for further expansion of the sector the report provides useful input into the ongoing policy debate on feasible development options.

Benefits of Leveraging Design Capabilities to Drive Differentiation

Most organizations today need more transformational techniques and processes to enable the creation and delivery of financially viable services and solutions. Going beyond the generation of ideas — to being able to make them real and have them deliver results. This requires a balance of inspiration and perspiration: not just rewarding the big ideas or big thinking but also the ability to bring something viable to market.

I believe that design methodologies have become central to being able to deliver great results. Building a leadership position on subjects relevant to the design profession including research, ideation and prototyping methods is critical to success. Design is not just about producing high quality looking outputs but delivering the right balance of function, emotion and aesthetics. One can come up with a great idea and a beautiful looking solution, but it can really only be validated after testing and iterating with the end user to whom it will eventually apply.

There is an even deeper benefit to be gained by embracing a design-led approach. By nature design is a social experience, it’s a process of solving problems. While there is a lot of hype about creative super stars, real inspiration can come today when closely aligned teams work together to solve problems for the end users. Insights are more likely to come around when resources are dedicated to them and are free from anxiety to try things out. These are key elements that provide the right context for creativity. Ideas rarely come to order – you cannot force creativity – real ideas come unbidden – by working around a problem. Inspiration often feels like a flash but generally comes through involvement with the real process and techniques.

This requires a culture that not only has a vitality, or fire in their belly, to drive new ideas but also has a level of integrity that produces sustainable solutions. This means that what we deliver is a useful and usable solution that delights our customers.

Development Teams Benefit Greatly from Watching End Users

It can be quite eye opening for an engineer to observe a customer using the product they designed. Development teams don’t always have an understanding of how their customers use their products. By watching them in test labs or even in the actual environment, engineers can immediately see where the end-user struggles to use their product.

However, introducing a design-thinking approach (user-needs vs feature focus) in the engineering process can be challenging because it means a fundamental shift not only in process but also to an organizations culture. Expanding from metrics of time-to-market of feature sets to metrics inclusive of getting great results from observations, iterative user testing and early market trials requires a new set of considerations. Balancing time to market against ensuring you are meeting end-user needs can feel uncomfortable at first. The process will be slowed down initially by the activities required to gain an in-depth understanding of end-user needs, but once the team has gained this knowledge, the impact can be significant. Teams need to consider what it will take to win and sometimes being there first is a significant consideration, however winning in the long run means delivering a quality experience. Think of the saturated MP3 Player market before Apple got there.

The biggest benefits a team will see from taking a user-centered approach is a reduction in the time it takes to learn how to use the product (fewer service calls), improvements in the experience of using the product (improved net promoter scores) and not least of all being able to anticipate your customer’s needs (launching innovation ahead of your competition). The result of a design-thinking approach is moving from being reactive and constantly trying to keep up to one where the team can anticipate the users needs.

Critical Success Factor
A shift of this sort is not an easy undertaking at a company level. It requires leadership that makes design a strategic priority putting new metrics in place that drive people in the right direction. It also requires hiring new capabilities at the senior levels of the organization and ideally having an organizational structure where the design leaders report to the CEO like the designers at Apple. Apple might be the best example of an user-centered organization but companies like P&G get it.

Getting Started
In my experience what typically occurs in most engineering organizations is team members familiar with the domain write out the requirements based on what they think users need and design the solution based on how they would use it, rarely ever validating with end users. They may get requirements of the target group from interviews, focus groups, surveys and competitor’s feature sets but they scan this information in order to extract the functional requirements. They often discard non-functional requirements including context (environment & regulatory) and needs of the users (what they need to accomplish, how they want to accomplish it and when they want to do it) which are critically important in designing the entire customer experience and in ensuring the product is useful and useable.

Development teams need to embrace design thinking or user-centered design which is a philosophy and process in which the needs, wants and limitations of the end users are given extensive attention at each stage of the development process. The goal is to go beyond user interface design to the design of the entire experience.

The fastest way to make this shift is to add experts to the team that know how to capture the user needs (user researchers, designers, information architects) and can translate them for the team. Get them working along side the engineers so that a more holistic view is taken. The team should consider the problems they are trying to solve for the target audience not just the requirements of the feature set. Apple thought about how people acquire, manage and listen to music – not just a tool to enable them to listen to music.

Upfront usability testing should be done to baseline existing products, understanding what needs to change and to be able to track improvements over time. Once in use in the environment the team should gain an understanding of the current experience using techniques like contextual inquiry and tracking users feedback so that the entire experience is understood.

I encourage a grass-roots efforts where success can be demonstrated and models can be developed that can then be expanded to the larger organization.

In a Creative Economy Design Thinking is Critical

In today’s economy generating new and sustainable ideas to differentiate your customer experience are resulting an imperative to move beyond the buying cycle to developing new business models to meet customer’s needs. However old ways of driving innovation are not up to the task of meeting these new demands, requiring new ways of thinking.

This imperative is being driven by a shift we’ve been hearing about for a few years now. That we’re moving (or perhaps have moved) from a Knowledge Economy to a Creative Economy. This Creative Economy is about great value being put on the ability to generate new ideas, not just in product development but in services offered and the experience delivered. This transition is happening as a result of knowledge commoditization (much of the left-brain work associated with knowledge is being shipped off) and product commoditization (price and quality is less of a differentiator). As a result companies are forced in to new ways of thinking about growth and that growth is coming from their ability to generate new ideas in these areas. Organizations are allowing power to move from the sources of capital to the sources of ideas.

“Despite spending huge sums on research and development, most (US, European and Japanese) corporations had dismally low levels of innovation productivity. The article continued by saying, “the brutal truth was that up to 96% of all new projects fail to meet the targets for return on investment” (Nussbaum, Berner, & Brady, 2005, p. 72).

Increasingly a new core competency for organizations is person-centered innovation along with a culture that embraces creativity and imagination. This new form of innovation is driven from a deep understanding of the consumer needs, by going beyond demographic trends and customer data, to truly walking in the customer’s shoes. The process is often referred to as Design Thinking; it is a creative process that is grounded in the needs of the target audience, encourages out of the box thinking and rapid iteration of ideas.

As a designer, it is an approach that I have used throughout my career. I am excited to see the shift in thinking in organizations to one that has typically only seen in design houses. The goal of this kind of innovation is to create meaningful consumer experiences, not just the new or improved products but new service models, and in doing so create brand new categories or overall experiences.

This article from Business Week is a must read. “The new (innovation) gurus focus more on micro-innovation — teaching companies how to connect with their customers’ emotions, linking research and development labs to consumer needs, recalibrating employee incentives to emphasize creativity, constructing maps showing opportunities for innovation.

What was once only embraced by the Disney’s and Apple’s of this world, Design Thinking, has gotten the attention of the business community and is being taught in business schools. Stanford has a d-School which is run by the co-founder of IDEO.

It’s an exciting time to be a designer.

Spark Innovation: Walk in Your Customer’s Shoes

Understanding customer’s needs takes more than analyzing market reports, customer data or conducting focus groups. Data indicates the facts but if we don’t get in to the field, walk in the customer’s shoes and understand their struggles, our strategy will not truly be customer-centric. Customers are rarely able to articulate what they need so it is rare for sustainable innovation to come from third-party market research.

If you don’t properly frame the problem in a way that relates to them, you will not be able to empathize with your customers. Without a deep understanding it is unlikely that you will be able to deliver impactful innovation. The best approach is to observe the customer in their environment. Watch them try to complete a task from where it is performed.

There are three fundamental approaches to gaining customer insight.

1) Observe the customer: Whirlpool study the users at home with the washing machines – multiple cameras to watch a customer interact with the designs. Designers can watch the stop-action and slow-motion of the customer movements. Sitting in when the customer interacts with a sales associate or expert.
2) Become the customer: secret shop to see what kind of experience is being delivered, try using your services and installing or trying the product yourself.
3) Listen to their needs: Involve the customer in the creation of the solution. Give customer’s beta versions to try and see how they use it. Ask them to speak out loud as they go through the experience. Ask them to play designer and tell you what they would do.

There are organizations who have formalized an approach. P&G adopted these practices in a program called “Living It.” Intuit has the “Follow Me Home” program where the software designers site with the first-time users in his or her office.

P&G: Design Thinkers in Business

Design Thinking is about driving innovation through a better understanding of end-user needs. It’s a problem solving process that identifies and analyzes audience needs and proceeds through a structured sequence in which research is conducted and ideas are explored to come up with solutions.

A.G. Lafley explains: “Business schools tend to focus on inductive thinking (based on directly observable facts) and deductive thinking (logic and analysis, typically based on past evidence),” he writes. “Design schools emphasize adductive thinking—imagining what could be possible. This new thinking approach helps us challenge assumed constraints and add to ideas, versus discouraging them.

He appointed Claudia Kotchta to lead the design transformation at P&G. The efforts of Kotchka and her team to change P&G’s game with design will go down in business history as one of the most challenging cultural transformation efforts undertaken by a major global corporation. Claudia Kotchta, retired recently from GE after 31 years. She said: “Design is going to continue to grow and prosper at P&G. That was my goal when I took this position. Our senior leaders are really engaged in design now; we have amazing global design talent, and design thinking gets all the other disciplines engaged. We have a wait list of people from every function in the company that want to become facilitators in design thinking.”

Design Thinkers are usually most successful when supported by leadership that defines the value at the top and creates great environments. Claudia Kotchka had A.G. Lafley. Ron Johnson, who developed the concept of bringing high-end design to the masses at Target and now the genius bar at Apple, has Steve Jobs. And the teams at GE have Jeff Immelt. He has extended design thinking across his organization, measuring GEs top leaders in how imaginative they are.

The results are compelling. Read more on how P&G Changes Its Game.

Design Thinking at GE

A great example of an organization adopting the principles of Design Thinking is GE. In this interview Jeff Immelt discusses their focus on the customer and the ability to take risks (do out-of-the box thinking).

This slide deck by Beth Combstock contains some frameworks for how GE drives innovation throughout the company. The Toolbox on Slide 11 (see below) captures the elements of Design Thinking Methodology tools. Slides 12 and 13 are excellent structures for changing the culture to foster innovative thinking.

P&G “Wow” Design

Great article about Design Thinking at P&G.

At the time Lafley took control, P&G’s volume growth was stagnant. He realized that P&G needed its products to resonate more strongly with consumers. He has boiled this mantra down to three phrases, which employees now frequently use:
1) The consumer is boss.
2) The first moment of truth (how the consumer reacts to the product on the shelf).
3) The second moment of truth (how the consumer reacts when actually using the product).

Relying more on human-centered design with a focus on the consumer fits naturally with Lafley’s philosophy, Kotchka says. Before P&G started paying more attention to design, it concerned itself primarily with how functional a product was, she says. Now, she adds, “Functionality is not enough. We want to identify consumer desires, rather than needs. What gives you the ‘wow.'”