Design as Business Strategy: Key Principles of Successful Design Strategy

by IA Collaborative on 04.01.2018

The importance of design and “Design Thinking” to organizations and corporations across the world, has never been more prominently recognized than it is today. Designers hold top positions at global companies like Nike, Apple, Phillips and Johnson & Johnson. Disruptive companies like Airbnb, Kickstarter and YouTube were co-founded by designers. Top business schools at universities like Harvard, Stanford, Northwestern and John’s Hopkins have incorporated Design Thinking into their programs as required education, pioneering multi-disciplinary programs, and dual degrees. Looking ahead to the next generation of new companies and startups — 87% of them believe design is important to their business, and 85% of them have C-level executives weigh in on design decisions. Even the United Nations recently leveraged Design Thinking at the “AI for Global Good” Summit.

At IA Collaborative, we have practiced what is commonly known as “Design Thinking” since our founding in 2000. We were an early pioneer of human centered design and one of the first to link it to business strategy and innovation.

Today, we work at the forefront of design with the world’s top companies and brands — and yet, as popular as the term Design Thinking has become, we recognize that many executives are still new to the notion of design in a business and organizational context. For them , and anyone else who is just starting to engage in this kind of work ,  we want to share our perspective on design thinking, what it delivers, and share key principles for applying it to your own projects and initiatives.

Design Thinking: An Overview

The term “Design Thinking” has been described as a strategy, an approach, a methodology and a mindset. When people use Design Thinking in business, it means quite simply: applying the principles of problem solving most commonly associated with the design of products and services, to solve complex business challenges.

For those new to this space, the following are three foundational principles of Design Thinking that will give you instant credibility in any situation where the term is introduced:

Principle #1: Human Centered Design – Live the Problem to Design the Solution.

A foundation of Design Thinking is that observation of human behavior leads to insight. “Live the problem to design the solution” means observing the experiences of your users  and  getting as close to their lives as possible.

It’s not what people say, it’s what they do.

Designers know that people can’t articulate their unmet needs. But, if you know how and where to look, people can often “show” you what they want to achieve. This can be seen in work-arounds, or other patterns of behavior that users often do without realizing why. By observing what people actually do, not just what they say they do, you can design what people never knew they needed, but now can’t live without. A few real-world examples that help illustrate this point:

When designing a new appliance for Indian conglomerate Godrej, we visited the multigenerational homes of Indian families and discovered that for them, owning an appliance is a source of pride akin to owning a home or a car in America. Families blessed their appliances upon arrival to the home and annually celebrated the anniversary of this “family member” by baking a cake — a deeply human insight that we never would have known through a phone interview.

When designing a new operating room (OR) and patient experience for Johnson & Johnson, we scrubbed in for surgery and observed surgeons in their natural work environment. As just one example within a much larger project, we observed surgeons creating elaborate workarounds to make up for bad packaging design of surgical instruments. It never would have occurred to the surgeons that packaging was the problem, because working around it had become second nature to them. Simply by observing them in the context of their real work, we uncovered an immediate, “must do” opportunity for innovation.

When Nike engaged IA Collaborative to understand and bring to life a powerful yet under-addressed target market — the youth athlete — we went to the basketball courts and spent time with the families of sport-obsessed 10-year olds to capture their mindset, lifestyle, and deepest aspirations. This approach revealed a winning brand experience strategy for Nike that would forge a lifelong bond between the brand and youth athletes.

Principle #2: Iterative Design – Stay Connected to Your User.

For a designer, user insight is not a “phase.” Innovation is an ongoing process of iteration and collaboration based on user insight. No matter what your role, the job of the multidisciplinary team is to uncover insights, build strategies and concepts, and continually connect with users at all stages of the journey to refine an offering.

We recently prototyped a new service business for our diabetes management client, Dexcom. Through our human-centered, observational research, we uncovered what people really wanted from their Dexcom continuous glucose monitor (CGM): a predictive, digital service that would tell them what to eat and when to take medication before an emergency occurred. But to develop the actual service, we built all the elements of a real business — including prototypes of digital screens, which we progressed to higher and higher fidelity — and continually brought new versions of the service to users across the diabetes management ecosystem: patients, HCPs, administrators and caregivers. By gauging reactions to early designs, we were able to fix potential problems before we wasted development time, and ensure our solutions met the needs of all stakeholders, not just the diabetes patient.

Dexcom CLARITY was launched in 2015, and in 2016 Dexcom realized YoY revenue growth of 42% reach nearly $600M in sales. The company has since grown to a market cap of over 6 billion, with users evangelizing the Dexcom CLARITY service on social media. A further testament to the platform, Dexcom has been selected as the only diabetes data provider to be integrated with Apple Watch, due to the “game-changing,” human-centered, and systemic nature of its design — all of which could never have been achieved without continuous connection to Dexcom’s users throughout the design process.

Principle #3: Systemic Design – Maximize Impact.

There is a vast difference between an idea and a viable offering.

Breakthrough business offerings never exist in isolation. It takes a systemic approach and multidisciplinary team to execute and operationalize any impactful innovation. At IA Collaborative, we use a framework called the Seven Elements of Design Innovation™ as a means to consider and take action on the various components necessary to bring a new product, service, experience or environment to the world.

IA Collaborative’s Seven Elements of Design Innovation

The Seven Elements are as follows, with corresponding key questions to answer within each:

  • User Experience: What are user wants, needs, and potential?
  • Brand: What relationship will users like to have with us?
  • Channels: Where will users engage throughout their purchase journey?
  • Profit Models: What will users value and how will we derive profit?
  • Partners & Resources: What user needs will be served if we leverage others’ capabilities and profit models?
  • Process & Structure: What systems and internal capabilities will we leverage or evolve?
  • Offering: What platforms, products and services will be rewarding to deliver?

Innovation requires systemic thinking. And regardless of where the initial “spark” comes from, it means always considering these seven lenses and collaborating with the right people in your organization to identify, develop and operationalize new business opportunities.

This is just an introduction for applying Design Thinking to take on complex challenges. Leading businesses in every industry are elevating the role of design far beyond the aesthetic and functional components of creating new experiences. Design is being leveraged as the strategy and process to set vision, create breakthrough businesses, and create cultures of innovation.

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