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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.
ii
Design Thinking for Business
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4
Design Thinking for Business
Contents
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
5
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
7
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.
8
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).
Design Thinking for Business
9
Reframing Context to Design New Experiences
(Hekkert and van Dijk, 2011)
Customer
Experience
Realm
10
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
11
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
