The Design Thinking Playbook

by Michael Lewrick

   EXPERT TIP

  Measure customer centricity

  For change management to result in an integrated and customer- centric organization, we can start with asking how advanced customer centricity is in the company. If customer centricity is still poorly developed, appropriate measures for improvement can be taken. For our example of the racing bike, this means: We build up our muscles purposefully where we need the strength and endurance for our Alpine crossing!

  The maturity of customer centricity in an organization can be determined, for instance, by means of self-assessment. Because customer centricity is a feature of the organization as a whole, we should include all employees to determine its maturity. The employees usually know best where the organization can be improved and what should be improved.

  The prevailing methods for finding out the degree of development of an organization are general assessments, for instance as part of the EFQM self-assessment or as part of a traditional employee survey. From our experience, approaches such as the Customer Centricity Score™ (CCScore™) are more suitable. In this approach, the focus on the customer is consciously chosen as the starting point of a measurement method. The CCScore™ measures the degree of dissemination of customer centricity in the company. The evaluation is then done on different levels of aggregation of an organization and allows for a differentiated view of how strong customer centricity is and, hence, how “fit” the organization is. On this basis, it can be established where we should begin with the development of the mindset.

   HOW MIGHT WE...

  heighten customer centricity?

  Customer centricity is measured mainly with the goal of inferring from the result any specific measures to boost it. Simply to know that we are not comprehensively focused on the customer does not yet change the mindset!

  The measurement of customer centricity is similar to a survey on customer satisfaction. If we involve only a few people, the result is patchy. To get to meaningful information, we must question a representative cross-section of the workforce. Much more important than the measurement itself is the dedication that develops from it. Employees must be actively involved in the development of measures. This is the only way they develop their mindset further.

  The measurement results only constitute the starting point of a multi-tier process that leads to the targeted improvement of customer centricity. In a closed circuit comprising measurement and inventory, reflection and the development of measures, as well as the subsequent implementation in the organization, causes and effects of improvement measures can be tracked and controlled.

  More elements of digital transformation are discussed in Chapter 3.6.

  Step 1: Measure the strength

  The strength of customer centricity is measured by an online assessment. This allows for a very detailed and differentiated view of the individual drivers behind the CCScore™. It will become quite clear what the individual factors contribute to the overall score of the company and where there is potential for improvement.

  Step 2: Infer specific options for action

  In a method-based reflection, the causes and drivers of the CCScore™ results are analyzed, translated into relevant strategies for improving customer centricity, and written down. This so-called U procedure is basically a change process, which develops far more than just customer centricity; it enables the company to strengthen the effectiveness of its organization fundamentally and thus lays the cornerstone for effective design thinking.

  Step 3: Define an action plan and implement it

  To implement the strategies that have emerged, an action plan is drawn up for selected measures. The implementation of the measures is initiated; progress is regularly monitored; and goal attainment is checked in the following CCScore™ measurements. The development of customer centricity can be thus monitored and controlled.

  KEY LEARNINGS

  Transform organizations

  Create an organizational structure without silos—this is the only way to disseminate design thinking transversally in the company.

  Establish a mindset that is focused on designing experiences (e.g., positive experiences across the entire customer experience chain) or “Wow!” effects when dealing with the product.

  Put the customer and his needs at the center of any activity. He is the reason the company exists.

  Consider customer centricity and design thinking as active, complementary aspects of change management. Live the “change by design” thought.

  Measure customer centricity (e.g., by way of an index) and improve it step by step.

  The transformation into a new mindset encompasses all levels: management, structure, and implementation.

  Raise the awareness of company management for a new mindset. Create commitment to and confidence in the new way of working throughout the organization.

  2.7 Why strategic foresight becomes a key capability

  Peter, Priya, Lilly, Jonny, Linda, and Marc have one thing in common. They are all on Facebook. This makes them six amid more than one billion Facebook users worldwide. Facebook has grown into the largest social network in less than a decade. Facebook’s mission is to provide their users with the possibility of sharing information and thus creating an open and networked world. Mark Zuckerberg’s way of thinking in terms of implementing the strategy is straightforward: “We go mission-first, then focus on the pieces we need and go deep on them, and be committed to them.” The great success of Facebook is based on long-term thinking, in particular on a strategy planning with a perspective that goes beyond five years. As soon as the strategy process is completed, Zuckerberg begins to break down the strategy into small and implementable sub-projects (missions) for his teams.

  How do business leaders such as Zuckerberg develop products and services for the customers of tomorrow?

  Their method is referred to as strategic foresight, an approach that focuses on shaping the desired future. Strategic foresight consists of a mindset and a methodology in tune with it. The mindset is characterized by a belief in the future, which we can shape ourselves by hunting for new market opportunities. The methodology includes various tools and techniques that lend a hand in steering the teams systematically and purposefully in the right direction.

  The Strategic Foresight Framework was developed at the Stanford Center for Design Research and has evolved into four schools represented by Drucker, Schwartz, Jouvenel, and Arnold. Of course, the Framework is embedded in design thinking.

  For the development and change of the culture, the mindset is of overriding importance in order to realize the opportunities the future offers. A mindset consists of established attitudes, values, and opinions, which are currently brought to day-to-day work. In the last few years, various mindsets have been discussed that attempt to make the motivation and behavior of people graspable. With a “foresight mindset,” we are convinced we have the future in our own hands. This future is translated step by step into reality with targeted activities. In a company, a foresight mindset can form the basis for launching a new business area or developing an innovative product.

  What does WYSIWYG stand for?

  The idea of “What you see is what you get” became popular in the late 1960s—mainly known by its abbreviation WYSIWYG (pronounced: WIZ-ee-wig) . It means we accept as given what we see before us. It can be compared to the preview of software in which the HTML code is already visible in the visualized interface. A few years ago, the wisdom of WYFIWYG took hold at Stanford: “What you foresee is what you get.” Thus we found out that expectations have an impact on what will happen in the future. What we foresee and intuit also influences the result!

  Why is planning important?

  For good planning, it is vital to know the effect of a possible future. This means we develop the ability to change our own opinion and that of the team.

  Positive moods influence the team. By creating a positive attitude toward future market opportunities, we are better prepared for realizing them:r />
  We can do better!

  We are more effective!

  We have a different approach to the solution of a problem!

  Such a mindset can be learned and applied in each organization, each team, and during any growth phase of a company. At this point, it should be noted that this approach is very different from that of futurologists. Futurologists usually claim that they are able to map the future through scenarios and trend analyses. They base their forecasts on past data or current trends, which they extrapolate into the future. The model for strategic foresight discussed here is based on different considerations. It combines a long-term perspective with the well-known tools of strategic planning and design thinking. This combination enables teams to tackle short-term fields of action that are aligned to medium-term and long-term market opportunities.

   EXPERT TIP

  “Playbook for Strategic Foresight and Innovation”

  Peter really likes the advanced mindset and sees in strategic foresight an ideal complement to his current activities.

  But he also knows that, in the minds of many business leaders, the belief prevails that a sort of secret recipe must exist that enables companies to launch radical innovations on the market. There is a plethora of rumors of various kinds:

  Success is due to the genius of the company founder and serial entrepreneur (Apple & Tesla)

  Unlimited resources are the decisive factor (Google & Facebook)

  It’s just pure luck (Twitter & Snapchat)

  Countless books have been written on the gloomy future of companies that don’t succeed in deciphering the secret recipe. Often companies have no clear idea as to where the journey should lead. Their excuse is that other companies don’t have a clear strategy and vision either and that it is still too early to formulate a clear digitization strategy anyway.

  Ultimately, a clear vision is the only ingredient that determines success. What spoils success are prevailing mindsets and management paradigms based on fear. Fear is easy to stir up, such as with negative financial forecasts about missed targets, cost savings, and the announcements of staff layoffs.

  The good news is: There are other ways!

  Over the last 50 years, a culture was created at Stanford and in Silicon Valley that allows for a team to act in a forward-looking manner and thus develop new products and even industry standards. New models from design and engineering research, and the lecture halls and labs in the Valley, became effective tools for global innovation leaders. Many of these tools were documented in the “Playbook for Strategic Foresight and Innovation,” which is available free of charge to all innovation fans at www.innovation.io. The foresight mindset is disseminated virally in organizations when effective tools are applied accordingly and the long-term mindset is backed by all. Companies such as Deutsche Bank, Volvo Construction Equipment, Samsung Electronics, and many other global businesses have established a new mindset in their organizations with the aid of these tools. The Foresight Framework was developed to protect teams from a “disruption dread”: the growing fear that others might overtake you. The distinguishing feature of the Foresight Framework is a positive vision of the future, the products, the services, and the vision of a company.

   HOW MIGHT WE...

  apply the Foresight Framework?

  The Foresight Framework has such a simple structure that anybody can go through the five stages from beginning to end.

  The first three phases are dedicated to the question of how we best deal with a new or hitherto unknown problem statement. We begin with the famous white sheet of paper and try to capture the future. The problem statement can be directed inward or outward. In extreme cases, it can even mean that we redefine the future of an entire enterprise.

  In the initial phase (”Perspective”), the focus is on understanding the past. This reflection helps us to comprehend what has happened up to the present day. Once a team has understood the past, it is easier to understand possible options for the future. The question of why these options are rated high especially can yield the decisive insight when they are implemented later. Often project teams immediately address the solution. For this reason, it is a vital component of the Foresight Framework to go through this phase and recognize the added value gained in the reflection on the past.

  The next phase (”Opportunity”) deals with understanding the needs of potential customers. When we recognize unfulfilled customer needs, we have already come closer to customer groups, who are most ready for changes, and we automatically address the question of how these customers might benefit from an innovation.

  The third phase (”Solution”) concentrates on the building of prototypes as a potential solution to the problem statement. The value of the solution option that was developed can be better assessed when compared to other solution options and workarounds.

  In the fourth phase (”Team”), the issue is to develop routines for the talents that will help them find new ideas and develop them further.

  The last phase is focused on the Vision, which is indispensable for the viability of an idea. Only with a clear vision will the various stakeholders support the idea, invest their lifeblood in it, and ultimately contribute to scaling the idea.

  The latter two phases help to enshrine strategic foresight throughout an organization. This process takes time because organizations do not learn overnight. This is why every phase has used three tools that are very useful when processing the respective questions (see p. 201). Studies conducted at Stanford have proven that people find such tools helpful for arranging and structuring their thoughts, especially when it comes to knowledge-intensive and complex issues. Strategic foresight is based on abstract ideas with a high level of uncertainty in the early stages of development. The tools help in the analysis of what is already known and what is not. The future can also be made palpable and graspable this way.

  New ways of working and tools for a successful transition are crucial in the age of digitization, which entails great uncertainty for businesses. The ability to anticipate with strategic foresight seems to be of fundamental importance in the 21st century for managers and agile teams alike.

   EXPERT TIP

  Integration of strategic foresight with design thinking

  How can we develop a digital vision?

  Good design thinking adapts to the situation, wins people over with a strong mindset, and helps us with the digital transformation of the company. Strategic foresight expands our view of the future and generates the great visions we need if we want to participate in the next market opportunities. Strategic foresight embeds design thinking in an infinite product and service continuum, which comes to life iteratively in our future-proof concepts. Thus it helps to develop a long-term perspective and robust ideas. The goal is to direct attention to potential opportunities and risks through integrative approaches and a networked way of thinking, and to infer appropriate conclusions from it. Through early detection, strategic foresight helps to deal with the high speed of change on the outside and the frequently prevailing internal inertia of the organization. Furthermore, it promotes the willingness to change.

  How does strategic foresight support design thinking?

  When we superimpose selected tools and methods onto the phases of research, conceptual design, and implementation, we get a “double diamond” with a vision in the center.

  The methods of strategic early detection (strategic foresight) can be used quite well to sharpen the picture of the future, the vision, and future customer needs. It helps with the explanation, design, and selection (filtering) of important topics in the design thinking project.

  The set of methods in strategic foresight helps us with the definition of the digital vision.

  What tools and methods from strategic foresight can augment our toolbox?

  Progression curves help us to put events, life cycles, and other developments in the proper context (analogous to the S-curve model).

  Janus cones support us in depicting multipl
e, overlapping, and intersecting events in a framework.

  Change paths give us an indication of the most important milestones we need to reach in order to perform a certain action.

  White spot analysis provides us with insight into hidden market opportunities and allows a wider view of the competitor landscape.

  Buddy checks help us obtain a good match in terms of the right partners and team members.

  Crowd clovers support teams with the mapping of innovation networks in order to make an idea ultimately come alive.

  Alongside the concept of the future user (see Chapter 1.1), generational arcs can be used that illustrate demographic transformation and enable us to see things from the point of view of different generations.

  A real theater allows us to immerse in the world of tomorrow and experience the needs of users in realistic environments (cf. storytelling, Chapter 2.4).

  A vision statement is the clear and concise summary of an idea. It helps, for instance, to describe the prototype briefly and concisely (see POV, Chapter 1.6).