Design Thinking

It has been very gratifying to see the considered comments that have followed some of my posts. I am delighted to see a conversation going on about many of these topics. My approach has been to just let them run rather than making any attempt to moderate or direct. This time however I was so struck by some of the comments on my last post that I felt compelled to attempt a sequel on the topic.

The idea that the reset is more complex this time rings very true to me. Paulo points to a crisis not only of credit but healthy food, sufficient energy and an aging population. The common factor is that these are all resources (including having enough working age folks to support retirees) that are being stressed by our incessant growth. They have now been joined by a lack of economic resource that, as we are seeing clearly in the US election, has jumped right to the top of the agenda.

In the past economics have trumped all other concerns in times of crisis to the point that important issues, such as renewable energy, have lost ground. My question is whether this is going to be the case this time?

It strikes me that one of the contributions that design thinking could make is to help find ways to show the interconnectedness between many of the strands of this particular crisis. Michael Pollan in a brilliant New York Times article, titled Farmer in Chief, did just this when he argued for a new approach to food policy. He connected health, food, economics and energy in a compelling way and helped show how a we might conceive of a system that would positively impact all of these interconnected resources.

I believe there is a real opportunity for a mass change in behavior around our use of resources toward approaches that are more sustainable (and probably more local) with this recession acting as a catalyst. Before this can happen however, as with all systemic change, we first need visibility and transparency. While cause and effect is not clear we will not change our behavior.

Crawford mentions ING Direct as an example of simplicity and transparency in financial services. There is evidence of an increased uptake around services that give new levels of transparency and control. PNC Bank in Pittsburgh recently launched a new service called Virtual Wallet that gives users much more control of how and when cash flows in and out of their account. Apparently it is proving to be a popular offering. (I should declare self interest here and mention that an IDEO team helped PNC with this service.)

Similarly, we need  tools to give  transparency to what energy we use, what food we eat, how we use water, what materials go into the products we buy and use and throw away. Artist Chris Jordan has done a fine job of giving us some insight in aggregate (one of his images is at the head of this post) but we have very few ways of understanding the impact of our decisions at an individual level. It is all very well to know my annual carbon footprint, which is very depressing, but this is backward looking. I need tools that help me make a decision now and show me the implications of that decision over time.

Geoffrey Moore (of Crossing the Chasm and Dealing With Darwin fame) and I spent yesterday speaking with a large group of analytics folks brought together by analytics software company SAS. I have to say that I have always considered analytics to be a long way from design thinking but I left yesterday’s session with a new point of view.

One of the biggest problems in design is knowing what questions to ask. You can take the intuitive approach but this seems to be very random when you are thinking about more strategic and upstream problems. At some point the potential area of exploration covers 360 degrees and goes to infinity. It seems to me that using clever pattern recognition through software analytics might point out interesting areas to explore. I heard about one example yesterday that is connected to a project IDEO did a few years back. When we helped Bank of America develop the savings service, Keep the Change, I had assumed that the consumers we observed were picked based on intuition. One of the BofA analytics folks was in the audience and she told me that her team had worked on the project and analyzed consumer data to identify some target groups of users that the company were interested in understanding better. So it turns out that analytics helped point us toward a segment that ended up inspiring us to create a pretty successful service.

I wonder what interesting patterns might emerge from the use of analytics and be a source of inspiration for design thinkers if we put some thought to it.

By the way, the graph above is the Google trend for use of the term design thinking over the last four years.

I met up with old friend and design thinking colleague Colin Burns last night. He is back living in bucolic Scotland these days and one of his many activities is to help out his friends Henry and Mo with their delicatessen in Kenmore on Loch Tay. The story Colin told me was that his wife Elaine came up with the idea of Credit Crunch cookies when Henry and Mo were talking about how the sale of cookies had soared since the credit crunch stories had started. You can check out Credit Crunch Cookies here and while I know this is shameless promotion I think it is a fantastic example of someone taking advantage of new consumer behaviors in a recession. Cookies represent an inexpensive way of having a treat when times are tough.

This is something I have been wondering about quite a bit recently. If a recession hits the reset switch for all of us then what new behaviors emerge that represent opportunities for innovation? Thinking back it seems like low cost airlines emerged in the recession of the late 80’s and early 90’s when consumers decided flying cheaply was more important than reserving your seat or having a crumby meal. That recession created a new industry that has gone on to disrupt nearly all of the existing incumbents.

I would argue that the recession of 2001 created new behaviours as well. The uncertainty created by 9/11 combined with the new access to the internet was a boon to any service that provided information, advice and reassurance. Google was the big winner but so was Trip Advisor, Angie’s List and WebMD. While the dotcom crash weeded out many of the weaker on-line offerings it also reinforced those that really did offer more for less just when we wanted it.

I am very interested in what new behaviors might emerge this time around and ultimately what innovations they may inspire. Will it be something to do with people changing their attitude toward saving versus spending? Will the growing uncertainty of the world encourage us to look for lives that are more resilient and sustainable versus ones where we are on the limit and vulnerable to the next downturn? It seems to me that now is the time that companies would be well served to think about this so that they are ready with the answers when the market turns. After all it isn’t only Credit Crunch Cookies that have the potential to make a killing.

More about the MLab. At the inagural event the MLAb folks interviewed the attendees to hear about what radical remedies they might have for the future of management. I talked about innovation and design thinking of course and if you want to check out my rambling conversation then you can do so here. More interestingly there is a series of other interviews with folks as varied as Gary Hamel himself, Kevin Kelly, Steve Jurvetson, Terry Kelly (CEO of WL Gore), John Mackie of Whole Foods, Marissa Mayer (Google), Lenny Mendonca (McKinsey), Vineet Nayar (the brilliant CEO of HCL) and CK Prahalad. This is quite a resource of thinking that is well worth spending some time with. You can find it here.

I spent Friday with a great group of people thinking about experimentation. The session was held at IDEO under the auspices of the Management Lab (MLab). MLab was founded by Gary Hamel and is designed to support research and experimentation around the future of management. It is a great privilege to hang out with Gary and the other smart people he invites to these events. I will leave it to Gary to publish more about the content of the session but it did get me thinking about how important it is to remind ourselves of the value of experimentation. My hypothesis is that organizations generally avoid experimentation when it comes to processes and management. In fact they positively hate it. One reason may be that it is scary to mess with people and processes and much harder to do than messing around with new technology or new products. That feels more like an excuse than a reason to me. I believe we lack processes for prototyping our ideas quickly when it comes to management. One insight that came from the day was that experiments too often turn into initiatives. Experiments are designed for learning and it is okay if they fail whereas initiatives are too important to fail. I came away thinking that initiatives are things to be avoided at least until you have learnt from some experiments.

In the interests of learning, here is another IDEO blog that publishses some of the experiments we have been up to recently. It’s called IDEO Labs.

Janet Rae-Dupree wrote about design thinking in the business section of the New York Times this weekend. It is good to see the discussion about the broader role for design appearing in the mass media. The article illustrates the very gray line between the traditional role of design and the more strategic contribution that design thinking can make. It is sometimes hard to tell what happened from the physical outcomes alone which adds to the challenge when it comes to explaining what design thinking is. I find it very easy to slip toward describing what is simply good design (based on a relatively conventional brief) or what is good business using normal convergent processes. A test is perhaps whether the business (or organizational, or societal) outcome is significantly different than would have been the case if design thinking had not taken place. In other words, were new choices created not only about the product, service or experience but about the business goal itself? Did a product become a service? Did a service become an experience? Were entirely new users or markets identified? Were new to the world offerings created? These questions seem to reflect the higher bar that I believe we might expect to be the result of a broader application of the design approach.

I do agree with the comments from Lara Lee of Jump Associates and George Kembel of the D-school that we must be leary of claiming design thinking as the perfect and only approach to all problems. The ability to integrate different approaches seems to me to be at the core of design thinking itself and it would therefore be foolish to assume its primacy as a problem solving methodology. My argument would simply be that we have spent the last few hundred years assuming other approaches are best and that it is time to consider design thinking alongside the alternatives.

While I offered a simple view of what makes design thinking unique in the article, the discussion that resulted from my earlier post about definitions of design thinking gives a better impression of the richness of the subject. Check out the comments if you haven’t already done so.

I have just been given a fabulous new book created by a recent arrival at IDEO, Ferdi van Heerden for publishers Gestalten. It’s called Data Flow and takes a look at data visualization in graphic design. This has long been the domain of Edward Tufte and Richard Saul Wurman but Data Flow does a great job of showing a diverse range of work from designers worldwide. Some of the work wins more points for aesthetic elegance than for information clarity, which somewhat defeats the point, but there are plenty of examples of innovative and effective ways of communicating complex data. My favorites includes World Mapper which connects a world map to data such that each country is scaled to represent its true scale for whatever topic is being displayed. Jessica Hagy with her wonderful and humorous index card graphs shows how graphical information can represent humanity. Xavier Barrade makes sense of the concept often used describing the loss of Amazonian rainforest based on the number of football (soccer) pitch equivalents by literally drawing the pitches onto aerial photos of the Amazon. It’s worth checking out for some great visual inspiration.

One of the workshops I was involved in at Summer Davos was on ageing. I was quite shocked by some of the data that the World Economic Forum had printed in a report that was released at the session. While I was well aware that the western nations, along with Japan, are experiencing a rapid ageing of the workforce, I had not appreciated the actual figures. The number of working age people supporting those over retirement age is going to drop from 4:1 to 2:1 over the next forty years. This halving of our ability to support the cost of social services and health care is dramatic and is clearly going to have significant ramifications on both the quality and quantity of support we can expect. The other big surprise for me is that the same thing is going to happen in China. It took France 115 years to double its number of 65 year-olds. It will take China just the next 27 years.

The point of the workshop was to get industry executives to start thinking about the issues now and to begin to imagine what kinds of innovations might be required if we are to manage this change. One example that came up is the commitment that some Japanese technology companies made several years ago to invest in robotics in the belief that Japanese society would not have enough people to provide for the elderly. I remember many commentators scoffing at these efforts when the first products like Sony Aibo appeared. Now a few years later when the issue is becoming more mainstream and the technology rapidly advancing Sony and the other manufacturers don’t look quite so silly. Paul Saffo claims that the 21st Century will be the century of robotics and Japan is certainly betting on that to help with its ageing problem.

Interestingly, although several of the ideas that came up in the workshop were for products, the most popular idea was for a service that helped lonely people stay connected. What resonated about this idea was that it served a need that people have long before they get old and so it seemed like it may be possible to persuade people to join up before they are expensive to support. This led on to ideas about insurance and financial services. Service innovation, as well as technology, is going to be key to dealing with the ageing problem. It seems to me that there are still very few companies looking at this issue and very few examples of interesting innovations making it to the market. Hopefully the workshop got at least a few CEO’s thinking differently.