Marketing: Design Thinking for Business

BUSM 4534

Design Thinking for Business

Graduate School of Business and Law

MBA Executive

2

BUSM 4534 – 1710 S1 2017 Design Thinking for Business

Learning objectives

Upon successful completion of this course you will be able to:

LO1. Analyse and discuss design thinking, its manifestations and implications across

organisational contexts.

LO2. Differentiate between various contemporary methods to identify opportunities and

solve problems.

LO3. Create and communicate end-user driven solutions to business problems or

opportunities utilising design thinking.

LO4. Demonstrate creative, critical and ethical thinking through developing and

recommending solutions to business problems and opportunities that benefit relevant

stakeholders.

LO5. Evaluate potential outcomes of design thinking in view of better decision making,

implementation and sustainability of solutions.

Prescribed Text

Liedkta J & Ogilvie T (2011) Designing for Growth: A

Design Thinking Toolkit for Managers. New York:

Columbia Business School Publishing

http://primo-direct-

apac.hosted.exlibrisgroup.com/RMITU:Books_articles_and_m

ore:TN_ebrary_pqebrary10470171

Additional reading (optional)

* please refer to readings specified in the course guide

Jeanne Liedkta and Tim Ogilvie and Rachel Brozenske (2012)

Designing for Growth Fieldbook: A step by step project guide.

New York: Columbia Business School Publishin

NOTE: You have a prescribed text book available online on the link below: The

information contained in the text book will assist you in the practical

application of the tools that you will use throughout the intensive and are

required reading in order to complete your assignments.

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Design Thinking for Business

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Design Thinking for Business

Contents

Introduction: The Importance of Design Thinking ……………….. 5

Topic 1: Human Expectations and Experiences as the

Foundation for Design Thinking …………………………………… 7

Topic 2: Desired Outcomes of Design Thinking ………………… 10

Topic 3: Understanding Design Thinking in Its Complexity ……. 13

Topic 4: The Principles of Design Thinking and Design Logic:

Viewing and Understanding the World as a Designer; or: the

‘Thinking’ of Design Thinking …………………………………… 18

Topic 5: Implications and Benefits of Design Thinking for the

Ecosystem: Designing for Increasingly Complex Systems ………. 22

Topic 6: Design Thinking and Innovation ……………………….. 29

Topic 7: Design Thinking and Business Models …………………. 33

Topic 8: Design Thinking and Strategic Marketing/Strategic

Management ……………………………………………………… 36

Topic 9: Design Thinking and Ideation: Co-creation and co-

design for more effective co-innovation ……………………….. 40

Topic 10: Design Thinking and Decision Making: Multi-

Stakeholder and BIAS Considerations …………………………... 44

Topic 11: Design-driving Strategy, Capabilities and Culture ….. 48

Topic 12: Design-driven Organisational Transformation ………. 53

Design Thinking for Business

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Introduction: The Importance of Design Thinking

Design thinking is evolving into a central success factor for firms. Indeed,

firms such as Apple, Uber and Pepsi demonstrate that being design-led can

generate significant firm benefits and help sustain long-term profitability.

To ensure an organization-wide emphasis on and coherent implementation

of design thinking, leading corporations have recently begun creating new

C-suite positions such as ‘Chief Design Officer—CDI’ (for example at Apple

and Pepsi). The exploding managerial interest in design thinking is also

reflected in increasing business conferences and articles, including for

instance a recent Harvard Business Review special issue on the topic of

design thinking.

While design thinking focuses on human experiences and human-centred

solutions to improve business and life conditions, design thinking can play

several roles within an organisation.

First, design thinking can function as an approach to the innovation and

strategy making process. That is, design thinking tools and concepts can be

applied to innovation and strategy processes, to ensure effective outcomes

that serve all relevant stakeholders.

Second, design thinking can represent a way of seeing the world. That is, as

a cognitive frame for interpretation, managers can adopt design thinking as

their personal logic or mental model to understand business phenomena

and to make respective business decisions.

Third, design thinking can emerge into an organisation-wide philosophy and

core competency. That is, design thinking can become everybody’s job in

the firm (similar to quality), systematised through a common language and

facilitated through organisational culture, structure and capability building.

Design thinking thus includes designerly sense-making, decision-making and

action-taking for competitive business success.

For example, for Indra Nooyi, CEO of PepsiCo describes the importance of

design thinking to her corporation:

“Design has a voice in nearly every important decision that the

company makes.”

“We had to rethink the entire experience, from conception to what’s

on the shelf to the postproduct experience.”

“In the past, user experience wasn’t part of our lexicon. Focusing on

crunch, taste, and everything else [that is part of the experience] now

pushes us to rethink shape, packaging, form, and function. All of that

has consequences for what machinery we put in place—to produce, say,

a plastic tray instead of a flex bag. We’re forcing the design thinking

way back in the supply chain.”

“We don’t sell products based on the manufacturing we have, but on

how our target consumers can fall in love with them […] a well-

designed product is one you fall in love with. Or you hate. It may be

polarizing, but it has to provoke a real reaction. Ideally, it’s a product

you want to engage with in the future, rather than just “Yeah, I

bought it, and I ate it.”

“We’re just getting started. Innovation accounted for 9% of ournet

revenue last year. I’d like to raise that to the mid teens, because I

think the marketplace is getting more creative. To get there, we’ll

have to be willing to tolerate more failure and shorter cycles of

adaptation.”

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Design Thinking for Business

What Indra Nooyi describes in simple terms manifests the promise of design

thinking: emotionally, culturally, socially, cognitively and behaviourally

meaningful solutions that enable valuable and memorable experiences for

benefit of all involved stakeholders.

But using design thinking as a genuine organisational philosophy and

capability means moving beyond great stories and new vocabulary – it

requires processes, tools, mental models and a culture that supports

institutionalising design throughout the organisation. That is the promise of

this course.

Indeed, this course is designed to enable you to demonstrate a globally

applicable understanding of design thinking and leverage designerly, work-

ready skills in business contexts. The ability to think and act with a

designerly perspective is a critical success factor for firms. For this

purpose, the course will enhance your capability to understand and manage

the principles, tools and implications of design thinking for business.

Through a mix of academic and practical work, you will learn what design

thinking with its holistic focus on human experiences means for business

and its consequences for organisational design and customer experience

design. You will be challenged to creatively and critically reflect on

business problems and opportunities applying a design thinking approach,

and thereby explore, evaluate and even critique the design thinking

solutions of others. Design thinking will help you empathise with and then

connect external with internal business contexts and stakeholders. In doing

so, you learn to leverage design thinking’s power in improving and

innovating business and life conditions. Going beyond the innovation

process, this course takes a particularly strategic perspective on design

thinking so as to help organisations capitalise on the benefits of designerly

sense-making, decision-making and action-taking for competitive business

success.

Reflection

Use your favourite and least favourite company based

on personal experiences and think about the following:

•Why did you have great or dissatisfying

experiences with those two companies? What

triggered those emotions?

•How do you think those companies got to the

point of that particular experience quality? What

are these companies doing right or wrong that

delights you or sets of you off?

•What do you think are these companies doing

differently internally? How do they differ in

terms of their outlook to the world, the role of

customers, the role of good design (for products,

services, and systems)?

Design Thinking for Business

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CUSTOMER EXPERIENCE DESIGN AND DESIGN

THINKING

Topic 1: Human Expectations and Experiences as

the Foundation for Design Thinking

Design thinking always starts with, continues with, and ends with human

experiences. If sense-making, decision-making, or action-taking, humans sit

at the centre of every step of design thinking. In designer language, this

focus is often expressed and given attention by way of the user experiences

(UX), also referred to as customer experience in the general business

literature (CX). Research clearly shows that those companies that focus on

the customer experience significantly outperform those that are lagging

behind in terms of customer experience, see the following chart:

http://www.watermarkconsult.net/blog/2013/04/02/the-watermark-

consulting-2013-customer-experience-roi-study/

However, design thinking not only focuses on user or customer experiences,

but on the experience of all stakeholders involved. For example, the

management literature recently highlighted the benefits of managing-by–

design for employees. Similarly, design thinking factors in the experiences

of other external stakeholders and their efforts involved in achieving

desired outcomes.

A focus on experiences requires a simultaneous focus on human

expectations. As the philosopher Schopenhauer put it centuries ago, we live

through “memory and anticipation”, or experience and expectation. Both

give human life meaning and provide emotional energy for life’s trajectory.

Indeed, reminiscing about experiences and longing to (re)experience makes

life special, and poses challenges to design ‘remniscable’ and ‘longable’

experiences.

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Design Thinking for Business

Expectations arise through previous experiences, through the experiences

of others and for example through the marketing activities or an

organisation. In the latter case, a customer’s expectation represents the

promised value proposition by an organisation. Hence, experiences are

framed by and consequently ‘experienced’ based on a priori expectations.

Hence, design thinking also deals with understanding and managing

expectations and subsequent experiences, illustrated in the following

figure:

The figure connects marketing and design thinking. Both elements are

intrinsically linked. For purposes of illustration, the figure sees customers

at the heart of organisational concern and activity. And the core vehicle for

communicating with customers and making promises or value propositions

is through marketing. Design thinking thus builds the foundation for

internal and external marketing activities.

As design thinking addresses both human expectations and human

experiences, this topic helps ensure a company-wide focus on what matters

most.

Organisations can use various tools to emphasise and leverage the

importance and quality of customer experiences. These include, for

example, customer experience maps that sketch the entire customer

journey including all touchpoints, actions, thoughts and feelings. Based on

such insights, touchpoints and experience processes can be optimised or

completely redesigned. Hence, organisations need to consider the qualities

and impact of the product or service itself (what the focal resource or

interaction platform can do), the interaction with the product or service

(how it is to use the product or platform), and the impact of the context

(how stakeholders and other resources shape usage and interaction).

“High-performance organizations are creating these

compelling, even seductive, consumer experiences by

design” (Gruber et al., 2015, p. 2).

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Reframing Context to Design New Experiences

(Hekkert and van Dijk, 2011)

Customer

Experience

Realm

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Design Thinking for Business

Topic 2: Desired Outcomes of Design Thinking

Engaging in design thinking is simply a means to an end. The end represents

an improvement of life conditions of the individual, and an improvement of

the associated business organisation or collective system. Design thinking

thus aims to contribute to individual well-being and collective welfare.

Indeed, while the individual is at the heart of design thinking, mutual and

collective benefits are always a necessary condition to declare design

thinking outcomes a success.

A central design thinking outcome represents ‘desirability’, or the degree

to which customers crave your organisation’s solutions. This craving

depends on a couple of value drivers. The basis for this represents utility,

or the degree to which a solution helps a user to achieve their

goal/accomplish their task. The next element manifests in usability, or the

degree to which a solution is easy and simple to use or interact with for the

user. The final element relates to pleasurability, which symbolises the

extent to which users find it pleasurable to use because of the sensory

stimulations (how it feels, tastes, smells, looks, sounds) or for example

because of social connections or cultural acceptance. These elements

address the question: do users want it or even crave it? and why?

Meaningfulness—or the degree to which a solution or experience offers

meaning to the individual—can accordingly be established through

emotional, psychological, social, or cultural implications of a solution or

experience.

While from a customer or user perspective, design particularly aims at

optimising utility (functional benefits), usability (ease of realising benefits)

and pleasurability (sense-related benefits) (Stickdorn and Schneider, 2010;

Homburg et al., 2015), from a provider perspective, the same desired three

outcomes are summarised by the umbrella term desirability (Brown, 2009).

Desirability is commonly complemented by viability (for example,

profitability and the risks associated with realising benefits) and feasibility

(for example, the workability or practicability considerations of realising

benefits) (Brown, 2009). Importantly, design always has to factor in

monetary considerations as ultimately the ecosystem is supposed to benefit

Design Thinking for Business

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from the new design. Design thinking is not just about aesthetics or

beautiful products. Design thinking is about improving life and business

conditions of all relevant stakeholders. Given this importance of collective

betterment in design thinking, purely considering the individual customer’s

benefits would be myopic. The sweet spot emerges where all criteria are

met simultaneously as indicated in the following figure:

Design thinking is ultimately not just a world-view or creative process but

also the necessary input for decision-making. In this course we will clarify

the role of important outcomes that any design thinking project needs to

achieve, independent of context and time.

Reflection

Think about your own organisation.

• Desirability: do users want it or even crave it?

and why?

• Across which desirability drivers does your

company excel? Across which desirability

drivers does your company need significant

improvement and why?

• How good is your company in linking customer

value with firm value and even with value of

extended network partners? How can the

company improve in getting this right?

• Feasibility: can we deliver it reliably? is

technically and organisationally doable?

• Viability: does the solution scale profitably? is

it financially sustainable?

Design Thinking for Business