Product, service, ecosystem: how design thinking can evolve to address broader organisational transformation

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A comprehensive treatment of design thinking and its broader contributions is well-provided in The Design Thinking Playbook: Mindful Digital Transformation of Teams, Products, Services, Businesses and Ecosystems by Michael Lewrick, Patrick Link and Larry Leifer.

Michael Lewrick is the author of Design Thinking: Radical Innovations in a Digitised World. Patrick Link is Professor of Product Innovation at Lucerne University. Larry Leifer is the Founding Director of the Hasso Plattner Design Thinking Research Program at Stanford.

Though wide-ranging in coverage, the layout and design of the book could do with considerable improvement, as well as the flow of content between sections. More actual case studies would make the frameworks and tips easier to understand.

Here are my key takeaway from the 350-page book. See also my reviews of the related books Experiencing Design, Design Your Thinking, Creative Confidence, Customer-Driven Transformation, Deliver Great Products that Customers Love, Creative Thinking Handbook, and Innovator’s DNA.

Check out YourStory’s d.Zen (‘Design Zen’) section for more resources on design thinking, and our ‘8 Is’ Framework for Design Thinking.

I. Design thinking: mindset and toolset

The authors review a number of design thinking frameworks that cover the basic flow: <Understand> <Observe> <Define point of view> <Ideate> <Prototype> <Test>.

Other variations are Hear-Create-Deliver (Swisscom); Understand-Observe-Analyse-Visualise-Evaluate-Optimise-Implement (IDEO); and Empathise-Define-Ideate-Prototype-Test (d.School).

The authors categorise three kinds of problems: well-defined, ill-defined (multiple paths and solutions), and wicked (partial solutions help understand the problem clearer). Most design thinking addresses ill-defined problems, and a clear problem statement helps alignment (‘how might we’).

Design thinking involves being driven by curiosity and accepting complexity. The people-focused approach is based on collaboration, co-creation, and iterative experiments.

The authors list a range of impacts of design thinking: better customer satisfaction, more sales, lower costs, efficient innovation, and improved work culture. Related disciplines include empathetic design, human-centred design, inclusive design, universal design, and experiential design.

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Insights

The authors recommend the ‘six WH questions’ to yield deep insights: who, why, what, when, where, and how. Customer research is better done in-house than outsourced to consultants at this stage.

“We must leave our comfort zone and speak to people in order to get a look at ideas from a new angle,” the authors emphasise. Empathy needs proximity, engagement, and courage, and calls for internal and external mindfulness.

Effective interviews have a mix of questions that seek clarity, trace behaviours, explore exceptions, compare experiences, and imagine the future. The authors advise using a question map with clusters of questions rather than a sequential questionnaire. Questions should have sub-questions as well.

Customer insights can be effectively captured in personas, which include demographic information as well as pains, gains, and jobs to be done. The authors describe this in the form of a user profile canvas, with actual drawings depicting users.

Descriptive frameworks like AEIOU help here: activities, environment, interaction, objects, and users. The empathy map builds on this by capturing what the user does, says, perceives, thinks, and feels.

Lead users are often innovators themselves, and can be roped in during need-finding discussions and co-creation. “Lead users have developed many major innovations themselves,” the authors observe, citing mountain bikes and GEOX shoes as examples.

The customer journey can be captured in a phrase like <When> <I want to> <so I can>. Another effective graphical capture is the hook framework: trigger (external, internal), action, reward, investment.

The double-diamond approach (diverge-converge) helps understand the problem space and develop the solution space. The gap between divergence and convergence is sometimes referred to as the “groan space.”

The authors recommend the nine-window tool to structure insights and define the point of view. It is a 3X3 matrix of past, present, and future status of systems, sub-systems, and super-systems. Examples include patient records in the form of a centralised database, decentralised database, and blockchain.

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Other tools are suggested for the phases of ideation (SCAMPER, benchmarking, radical ideas, inversion), and testing (experiment grid). “The building of a funky prototype cranks up creativity one more notch,” the authors add.

Enablers for effective brainstorming include facilitation, inclusion, confidence, and even humour. “Laugh a lot but never laugh at one another,” the authors advise.

A good clustering approach for generated ideas involves two axes: what is existent, new for us, or new for the industry, in terms of product and customer segment (yielding a 3X3 matrix). The authors suggest other useful matrix classifications such as important/urgent, implementable/feasible, and speeds of dissemination/adaptation.

For effective visualisation and further reflection, the entire process or structure can be captured in a poster. “The goal is to visualise the collective intelligence of a team or capture a mood,” the authors suggest.

Prototypes

At the later stages, a good prototype should allow users the ability to experience and evaluate the offering. “Prototypes are assumptions that must be scrutinised,” the authors affirm.

This can be in the form of a sketch, wireframe, paper/wooden/Lego model, mockup, or story. Digital prototypes can be in the form of landing pages, videos, or open hardware platforms.

A simple prototype will entail less hurt when it has to be rejected. “Never fall in love with your prototype,” the authors caution.

A portfolio approach can break up an offering into a solution, product, and service. Examples include full-kitchen solutions, kitchen products, and maintenance services.

Prototype testing should capture what was liked and disliked, along with questions and ideas that cropped up during the discussion. The experiment grid should include hypotheses, learnings, metrics, and indications of whether momentum is in the right direction.

II. Organisational transformation

At a larger scale, the design thinking mindset can benefit entire organisations. Skills in facilitation and storytelling become important here in a strategic context.

Organisational spaces themselves can become more flexible for people to gather around, discuss, and document ideas. Meaningfulness can be reflected in design of the work environment itself, the authors advise.

Talent

People with T-shaped or even Pi-shaped (domain, leadership) expertise can serve as effective bridges between communities. Resilient or U-shaped teams can bounce back to equilibrium after disruptions.

Employees will thrive in creative tasks if they feel safe, supported, appreciated, and energised, the authors observe. Roles in creative teams should include innovator, visionary, strategist, maker, salesperson, and brain. This requires a combination of conceptualisation, communication, organisation, and problem-solving.

The authors recommend their Connect2Value framework for business transformation in this regard. It connects knowledge, talent, and systems to value, thus unleashing network effects and growth.

Interesting organisational structures are emerging in companies like Spotify, which has a blend of tribes, squads, chapters, and guilds. This enables more purpose, autonomy, personal responsibility, and transversal exchange.

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Communication

Competencies in visualisation need to be built up. This can even include simple sketches that draw attention to specific issues, eg. via icons (reduced picture of an object) or symbol (no resemblance to the actual object, such as red cross for medical stores).

An effective story has flow, suspense, and punchline. It includes emotion, a likeable main character, conflict, change and climax.

According to the Golden Circle model of Simon Sinek, communication should begin with the purpose (why), before moving on to process (how) and result (what). Ultimately, this should deliver value to stakeholders (which the authors describe as ‘wow’).

The authors also describe six core skills of organisational facilitators: positive attitude, breadth of knowledge, inclusion, systematic approaches, focus on momentum, and building relationships. They can also be clustered into the ‘3 Es’ – enable, empower and encourage.

Challenges can arise in bridging silos in the organisation, and overcoming skepticism or lack of ongoing commitment to the practice. Implemented effectively, design thinking can increase organisational confidence and customer centricity.

Scenarios

Leaders use scenario planning to convey desired visions of the future, which can galvanise people and transform organisations through a combination of extrapolation and ‘retropolation’. Examples include Pictures of the Future (Siemens) and the Hype Cycle (Gartner).

The authors offer a useful tool and collection of case studies around their ‘Foresight Framework’ (downloadable as a free 250-page PDF here). The phase flow of Perspective-Opportunity-Solution-Team-Vision has been used by Samsung, Volvo and Deutsche Bank.

Visioning future scenarios can help evolve business models and accelerators for emerging technologies, in domains such as smart cities.

Strategic foresight embeds design thinking in a continuum of products, services, and portfolios, the authors explain. Effective methods here are progression curves, white spot analysis, and even ‘real theatre.’ This can drive internal and external co-design and co-creation.

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III. Designing the Future

The last section of the book connects design thinking to other related and complementary disciplines, and trends such as digital transformation.

Systems thinking

“The use of a convergence mindset of systems thinking and design thinking will be pivotal in many areas,” the authors explain. For example, autonomous car design will involve understanding not just cars but traffic and social systems as well.

“With complex problems, the real world is usually multidimensional, dynamic and non-linear,” the authors add. Big-picture perspectives, modeling, simulation, feedback analysis, and multi-stakeholder expectations come into play.

The authors show how design thinking also connects to lean canvas and lean startup models in the phases of customer profile and experiment reports. Elements of lean canvas include USP, existing alternatives, short concept or analogy, key metrics, and unfair advantage.

Differentiation via business model has been shown by companies such as Rolls-Royce (power by the hour for engines), Vigga (lease of clothing), Flippa K (recycling of customer clothes), YR (customised printing of personal T-shirts), and SaaS companies.

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Ecosystems

Companies need to master not just product/service design, but ecosystem design. The authors offer their business ecosystem design canvas as a useful tool in this regard. Ecosystem awareness, management, and sustainability are key success factors.

The ultimate lever is business ecosystem design, the authors emphasise. This helps go beyond blue oceans to black oceans, which are impossible for new competitors to penetrate (eg. Android and Apple app stores).

The authors show the growth of the Minimum Viable Ecosystem (MVE) in the case of WeChat. It expanded from messaging to social media, payments, and super-app offerings.

In the world of patient health records, the ecosystem spans pharma industry, medical device manufacturers, academia, and government. Value streams of each sector need to be factored in to create a virtuous loop. Inter-organisational co-creation, however, involves challenges such as culture clash, not-invented-here syndrome, and IP conflict.

Digital transformation

Digital technologies have evolved rapidly from web and smartphones to cloud, sensors, and AI, with broader implications in ethics and regulation.

Big data analytics, AI, and social CRM are transforming how customer insights are developed, prototypes tested, and new services developed. For example, Swisscom has integrated online customer service forums with self-help and tech-savvy users called ‘Swisscom Friends.’

In this new world, hybrid thinkers need to combine analytical data-driven thinking with intuition. They combine creativity, inspiration, visualisation, and digital tools.

The authors describe design use cases for human-robot collaboration, including cobots, industrial robots, service bots, social bots, and drones. The persona will coexist with a “robona.'

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A digitally-transformed organisation will need to be agile and cross-disciplinary, and leverage network effects to create digital ecosystems. It will need to evolve through phases like digital explorer, digital player, and digital transformer, the authors describe.

It will need to build multi-dimensional business models (with platforms and content), and engage with startups and other stakeholders. Challenges arise in cannibalisation of old models and redefining core strategy, the authors caution. New companies may need to be spun off as well, and older ones exited.

Ultimately, organisations should move towards a “quadruple diamond” structure, the authors sum up. This combines the divergent and convergent phases of design thinking with systems thinking and data analytics.

YourStory has also published the pocketbook ‘Proverbs and Quotes for Entrepreneurs: A World of Inspiration for Startups’ as a creative and motivational guide for innovators (downloadable as apps here: Apple, Android).