The Design of Business: Why Design Thinking Is the Next Competitive Advantage

by Roger L. Martin

  Again, speaking to designers can help illustrate the core of the design thinker’s stance. IDEO’s Tim Brown explains the difference between the reliability mind-set and the validity mind-set, as he sees it: “Most managers are trying to design variance out of the system, and cannot handle a process which starts off not knowing where it will eventually get. Poor design briefs are not normally the ones with too many constraints (although that can be an issue), but the ones that take all opportunity for discovery and surprise away.” 4 The design thinker has a stance that seeks the unknown, embraces the possibility of surprise, and is comfortable with wading into complexity not knowing what is on the other side.

  The design thinker’s stance, however, does not demand validity at any cost. The best designers recognize the importance of reliability in steering them away from flakiness. “Good designers are as anal about the things that matter to them as the most anal bookkeeper in your accounting department,” says Microsoft’s Bill Buxton. “When in a time-crunch, often the first thing that the professional designer will do is block off a schedule—precisely so that they know how much time they have to play and explore before they have to deliver. Design is not art; it is about pragmatic compromise rather than perfection. Behind the apparent chaos is discipline. It just appears as chaos because the calculus is different than that of other disciplines.” 5 Again, taking the stance of the design thinker leads us to strike a balance between validity and reliability by explicitly seeking out validity, not by eliminating reliability altogether.

  For the manager, the first step to acquiring a design thinker’s stance is to be conscious of your own stance. Think about the decisions you make and explicitly ask yourself about the assumptions and beliefs behind them. Then compare your stance to the design thinker’s embrace of complexity and willingness to be surprised. Do you see an opportunity to move closer to the design thinker’s stance? The first move in that direction may be as simple as reminding yourself, again and again until it becomes second nature: “My job is to balance reliability with validity.”

  Tools

  The key tools of design thinkers are observation, imagination, and configuration. This troika of tools follows consistently from the design-thinking stance.

  The first of the three is observation—deep, careful, open-minded observation. Since design thinkers are looking for new insights that will enable them to push knowledge forward, they must be able to see things that others don’t (for example, patterns that can help turn a mystery into a heuristic). This requires careful watching and listening in a way that is responsive to the subject, as an ethnographer would. An ethnographer attempting to understand how youngsters in China think about their handheld phones would watch them use their phones before even asking a single question. And when appropriate to ask, the question would likely be of the form: “I saw you punch one button repeatedly; you looked frustrated. Then you flipped the phone closed and opened it again. Why were you doing that? What were you thinking? How did it make you feel?”

  That’s a very different approach from asking, “What are the top five things that matter to you about your handheld phone?” Now, any phone manufacturer would love to know which five things matter most to young users. But to ask for a ranked list from phone users would be to ask them to do the designers’ jobs for them. Users can and do conceptualize their feelings about their handhelds, but rarely in the form of a top-five list. That list is for the designer to compile—and only after diving deep into the user experience.

  Deep, user-centered understanding, using the techniques of the ethnographer, is an essential tool of the design thinker. Shallow understanding that is oriented to confirming and perpetuating the current model causes knowledge to ossify rather than move forward. As a manager, if you want to understand your customers, think carefully about the kind of data you want and how best to get it. Embrace the idea of spending time with your customers. Imagine you work at one of the big three automakers. How could you better understand what American consumers really want in their cars? You could look at the list of best-selling cars and try to infer what it is about the Honda Civic that is so appealing. Or you could ask a focus group of customers how important things like gas mileage and color selection are to them. Chances are that you would end up exactly where the Big Three are today. Consider, instead, actually spending time with your customers and those of your competitors, going to their houses and garages to listen to them talk about their cars, how they make them feel, what makes them happy, and what frustrates them. From these visits, you would be able to distill deeper insights into the mystery of your changing customers than analytical thinking could ever get you.

  The second tool of the design thinker is imagination. At first blush, it may seem that imagination is simply a natural act of the human mind, rather than a tool. It’s true that we all have imagination. Yet for many of us, it is underdeveloped. Design thinkers programmatically hone imagination into a powerful tool, one comprised of an inference and testing loop.

  To move from one stage on the knowledge funnel to the next, one has to experience, through observation, data that is neither consistent with nor explained by the current models—as Dr. Scherer has done in analyzing the genes of people with ASD (see chapter 2). When faced with that data, one must make an inference to an explanation. It is a guess that constitutes the best explanation one can devise given the data, which is insufficient to yield a statistically significant finding. That inference-making process is what we call abductive reasoning, Charles Sanders Peirce’s third form of logic.

  It is a powerful form of reasoning about the world that, as we have seen, is underutilized and underdeveloped in the business domain in favor of deductive and inductive logic. Businesses don’t reject abductive reasoning merely because they’re hidebound; after all, abduction does have a weakness we’ve already explored, which is that ideas based on abductive reasoning can’t be proved in advance. There is a decent chance they could be just plain wrong. This is why the inference-testing loop is so important. Here, the design thinker tests the breakthrough inference by producing a prototype and observing whether it operates as desired or expected. Typically, even with a talented abductive thinker, the initial prototype falls well short of what’s desired.

  Those shortcomings, viewed from the design thinker’s stance, offer the opportunity to infer what would make the prototype better, giving rise to a succession of new tests, new inferences, new prototypes, until we arrive at a winning design—whether that is a design of a product, service, customer experience, or organization. In your role, you can choose to make prototyping and testing part of your lexicon. Just as you explicitly embrace abductive thinking, asking yourself what could be true, you can commit to testing and retesting that inference.

  The final tool of the design thinker is configuration—translating the idea into an activity system that will produce the desired business outcome. This is essentially the design of a business that will bring the abductively created insight to fruition. Without that, all the observation and imagination will have no meaningful payoff. The master of configuration is Steve Jobs, who created an activity system for the iPod, including iTunes and Apple stores. The system made iPod a compelling product, exceedingly hard to replicate and highly profitable. (See figure 7-2.)

  For a manager, the configuration step is to ask how your insight and new solution fit into the larger scheme of the business in which you operate. The activity system you create may relate only to your department or project. But even within that limited sphere, you can build a model to test and verify.

  FIGURE 7-2

  Apple’s iPod activity system

  Source: Apple Activity System developed and copyright by Heather Fraser and Mark Leung, 2008.

  Experiences

  To be a better design thinker, consciously use your experiences to deepen your mastery and nurture your originality. That advice probably sounds familiar to readers of The Opposable Mind. Integrative thinking—the subject of
that book—and design thinking have much in common. Integrative thinking is the metaskill of being able to face two (or more) opposing ideas or models and instead of choosing one versus the other, to generate a creative resolution of the tension in the form of a better model, which contains elements of each model but is superior to each (or all). Design thinking is the application of integrative thinking to the task of resolving the conflict between reliability and validity, between exploitation and exploration, and between analytical thinking and intuitive thinking. Both ways of thinking require a balance of mastery and originality.

  Mastery, whose markers are organization, planning, focus, and repetition, requires repeated experiences in a particular domain. Because masters in their domain have seen particular phenomena before and know what they mean, they don’t have to interpret every sensation or input from scratch as a novice would. In the infinite morass of data, they can pull out the few salient points that make a difference and mentally map their causal relationships. When a customer complains to an automobile mechanic that the car accelerates sluggishly when the light changes and shudders when decelerating, the mechanic, drawing on personal experience, will know the first part to check for a problem is the fuel line. Because the mechanic has encountered this problem many times before, the mechanic knows from experience how to structure the investigation to resolve the problem quickly and without wasted effort.

  Some contexts don’t reward the repetition, structuring, and planning that are the hallmarks of mastery. Those nonstandard contexts require the creation of a new approach or solution; they require originality. Originality demands a willingness to experiment, spontaneity in response to a novel situation, flexibility to change directions as information dictates, and responsiveness to opportunities as they present themselves, even if they’re unexpected. Rooted as it is in experimentation, originality openly courts failure. It’s important to become comfortable with the processes of trial and error and iterative prototyping, or you’ll be tempted to focus on the less risky mode of mastery, to the exclusion of originality.

  Mastery without originality becomes rote. The master who never tries to think in novel ways keeps seeing the same thing the same way. In this manner, mastery without originality becomes a cul-de-sac. By the same token, originality without mastery is flaky, if not entirely random. The power is in the combination.

  Successful design thinkers—at any level of the organization—will devote time and practice to mastering the specific tools and skills associated with their role. They will strive to understand how things work within their system. But, at the same time, they will consciously and explicitly seek out opportunities to try new things and test their boundaries. Just as reliability pushes out validity, an overemphasis on mastery can obliterate considerations of originality. Make a continuing, conscious effort to counteract this tendency by nurturing your originality, even in the smallest of ways. Flex your creative muscles, volunteer for a committee outside your area of expertise, and stretch outside of your area of mastery.

  FIGURE 7-3

  Design thinker’s personal knowledge system

  Overall, the knowledge system of a design thinker—someone who sets out to design business rather than to replicate what currently exists—has specific, unique components of stance, tools and experiences (see figure 7-3).

  Working More Effectively with Different Colleagues

  Since the business world is a reliability-oriented place, in the bulk of organizations most of your colleagues will be reliability-driven analytical thinkers. But the organization also needs validity-driven people to keep the organization from stagnating through overexploitation and underexploration. The problem is that validity-driven people make the reliability-driven folks profoundly nervous. And the reliability-driven folks depress the heck out of the validity-driven folks.

  That means that if you want to be a designer of business and an effective rather than frustrated design thinker, you need to become skilled at working productively with reliability-driven analytical thinkers who dominate the hierarchy and the validity-driven intuitive thinkers who are often brought in to “get the organization out of the box.” Otherwise, nothing will get done except that you and those on the two extremes will annoy each other.

  There are five things that the design thinker needs to do to be more effective with colleagues at the extremes of the reliability and validity spectrum: (1) reframe extreme views as a creative challenge; (2) empathize with your colleagues on the extremes; (3) learn to speak the languages of both reliability and validity; (4) put unfamiliar concepts in familiar terms; and (5) when it comes to proof, use size to your advantage. For each of these five pieces of advice, there are specific thoughts on applying the lesson to reliability-driven and validity-driven colleagues.

  1. Reframe Extreme Views as a Creative Challenge

  Design thinkers generally love nothing more than a tricky and complicated design challenge. They welcome constraints, which help them define the challenge and push their ideas in unexpected directions. They enjoy the opportunity to advance knowledge to the next stage of the knowledge funnel. However, faced with colleagues at the extremes of reliability or validity, design thinkers often take an unproductive approach. They are inclined to dismiss their analytical colleagues as squares and philistines who can’t appreciate what needs to be done and their intuitive colleagues as flighty and impractical folks who threaten organizational order.

  Rather than viewing these colleagues as problems and attempting to wish them away, the design thinker needs to embrace the challenges of the extremes as a wonderful design challenge that is as exciting as any other managerial design challenge. For reliability-focused colleagues, the design thinker has to embrace the challenge of finding creative ways to help them see the value of accepting some validity into the path forward. And for validity-focused colleagues, the design thinker has to embrace the challenge of finding creative ways to bring managerial order to their work without destroying its integrity.

  Dealing productively with colleagues on both extremes is not a problem to be rued but rather a design-thinking task of central importance, one which requires the design thinker’s best work.

  2. Empathize with Your Colleagues on the Extremes

  The only way to design a compelling solution is to really understand the user. It’s almost impossible to design something compelling for someone you don’t respect or wish to understand. Architects’ offices are cluttered with filing cabinets full of unrealized, unbuilt houses, all designed for clients whom the architects saw as philistines. The designs, whatever their merits, are an indictment not of the client but of the architect, whose lack of respect for the user prompted the rejection. The architect finds consolation in the brilliance of the design, explaining away its stillborn fate by arguing that the client was unworthy of it, forgetting whose job it was to understand the client’s needs and wishes and, under those constraints, design a beautiful home.

  In contrast, the effective design thinker empathizes with colleagues who exist at the extremes of analysis and intuition, seeking to achieve deep understanding of their positions and uncover the greatest range of options for a compelling solution. What are the colleague’s greatest hopes? What keeps him or her up at night worrying? What are the minimum acceptable conditions for the colleague to embrace a design solution? How much risk is the colleague willing to absorb? The design thinker can answer these questions with either empathy or disdain.

  What keeps the reliability-driven colleague up at night? The ineffective design thinker sees the colleague’s desire as proverbial ass covering. The effective designer thinker sees the colleague’s desire to protect employees from the consequences of a reckless decision. In the case of the schism between the worldview of the design thinker and the analytical thinking colleague, a better, more empathetic understanding enables the design thinker to probe what distinguishes a reckless decision from a sensibly aggressive decision, seeking to understand the distinction from the reliab
ility-driven colleague’s standpoint. Only with such empathy can the design thinker forge a solution that productively meets the reliability-driven colleague’s needs.

  Likewise, the only way the design thinker can create a productive organizational context for intuitive thinkers is to empathize with them. Those seeking validity are not trying to be dangerous and worrisome; they are attempting to make sense of fuzzy data, qualitative insights, and judgment. Intuitive thinkers see things that escape analytical thinkers. Only by empathizing with validity-seeking thinkers—and really understanding the way in which they think—can the design thinker be capable of devising managerial structures that address the organizational need for both reliability and validity.

  3. Learn to Speak the Languages of Both Reliability and Validity

  To empathize, one needs to communicate. But analytical thinkers and intuitive thinkers speak different languages. Analytical thinkers speak the language of reliability, because they put a high priority on the production of consistent, predictable outcomes. They frequently use words such as proof, regression analysis, certainty, best practices, and deployment. Intuitive thinkers speak the language of validity, because they put a high priority on the production of outcomes that delight, whether or not they are consistent and predictable. They frequently use words such as breakthrough, new to the world, and, yes, awesome. But to analytical thinkers, these words connote danger, uncertainty, and guesswork—things that encourage, if not compel, them to say no. In such circumstances, it is incumbent on the design thinker to learn the languages of both extremes. Otherwise, design thinkers might as well be speaking Greek to an Italian audience.