The Designful Company
Marty Neumeier
This book describes some features of organizations that put design thinking at the center of their approach to business. A relatively short book, it is written in a very concise form for high impact.
The central thesis of the book is that companies today face a set of “wicked” problems that differ from the traditional problems that companies have faced. These problems are unlikely to be solved, but they can be addressed. Some solutions are better than others, but none are “right”. Failure to confront these wicked problems will cause damage in the long run, so companies must take them on. Examples of wicked problems identified by 1500 CEOs and listed in the book are:
- Balancing long term goals with short term demands
- Predicting returns on innovative concepts
- Aligning strategy with customer experience
- Multiplying success by collaborating across silos
- Winning the war for world-class talent
- Protecting margins in a commoditizing industry
A wicked problem is a puzzle so persistent, pervasive, or slippery that it can seem insoluble.*
The 20th century was about homogenization in many ways, and the emphasis on quality (Deming, 6 Sigma, etc.) in the 1990s took this commoditization to an extreme. Many competitive domains showed little differentiation (cars, airlines, personal computers, for example) and barely took the customer into account. These companies did not create satisfaction or delight. In that environment, different offerings create growth. Introducing differentiation involves innovation and creating differentiation revolves around design.
While historically, design may only address the form or appearance of a product or service, design is increasingly part of the whole development from identification of the opportunity to delivery of the customer experience. As a consequence, design has been evolving from a branch of the arts (aesthetics) to an integrative discipline involving everything from psychology to environmental engineering (and aesthetics). According to Herbert Simon (Nobel Prize, economics), “Everyone designs who devises courses of action aimed at changing existing situations into preferred ones.” Good design enables voluntary brand loyalty (think Apple) and contrasts with reluctant or enforced brand loyalty (think Microsoft).
It is hard to convert a company to being innovative. Innovation requires agility, psychological, emotional, and “physical”. Agility is an emergent property that appears when an organization has the right mindset, the right skills, and the ability to multiply those skills through collaboration. Agility is cultural and relates to appetite for ideas and a drive to convert those ideas into action.
Behaviors or approaches suited to design include empathy, intuitiveness, imaginativeness, and idealism. Empathy helps the designer understand what the people really need and/or want. Whether a customer or a project resource, empathy helps connect on an emotional level. Intuition lets the designer jump to solutions before they become logically obvious (and some solutions will never be logically obvious). Imagination supplies the possibility of differentiated results. Idealism is the drive to perfection, and may involve the ability to see deeply into gaps between current and potential offerings. The author comments that these four approaches are not those commonly sought in business leaders and that this could increase the difficulty in developing an innovative-design culture. Creative thinking occurs due to a tension between reality and possibility, while most business practice is based on what is currently true. Inductive and deductive thinking deal well with what is true (what works or is provable), while design deals with abductive thinking (what might be possible) and heuristics (experience-based problem solving).
These two modes of thinking illustrate two different mental models. In the inductive/deductive models, one can imagine that solutions to problems already exist and one must make difficult decisions about which options to choose (the world of best practices). In the heuristic model, imagining/designing a solution is difficult, but deciding is easy once the solution is imagined (the world of invention). Modern companies need to be able to operate in both modes. Using the left-brain/right-brain metaphor, design involves a third brain where logic and intuition combine; companies that embrace design thinking similarly combine logic and intuition to improve their own processes and serve their customers.
While the style of thinking is one important feature of design, another important feature is making things. Designers don’t just imagine solutions; they make prototypes of the solutions. Using these prototypes, designers work through the problem to create solutions. Consequently, design is highly dependent on learning-by-doing. Blending thinking styles, learning-by-doing, and maintaining creative tension over a long period all reflect the effect of an embedded culture for innovation. In the end, this is a culture of constant re-invention.
Aesthetics is the language of beauty, which combines distinctiveness, harmony and sensual pleasure. Humans have an intuitive sense of beauty and detect non-beautiful things easily. These non-beautiful things could be processes, products, services, or policies produced by a company. Those considering these things could be customers, employees or interested by-standers. Beauty is a result of function; highly functional objects are beautiful, which non-functional objects lack beauty. When the Aeron chair was first introduced, people thought it was strange. When they learned how comfortable it was, it became beautiful. The significance of this thought is that we rarely judge new products or services by their beauty and do not make the connection that non-beautiful solutions may really be sub-optimal. Application of aesthetics to problem solving helps detect these sub-optimal solutions. Simplicity and efficiency are aesthetic properties that are not unfamiliar in business; people just don’t think about them this way.
The author describes 15 levers to increase design thinking and innovative output.
- Take on wicked problems
- Sometimes a real challenge creates the right energy and engagement. Companies don’t fail because they choose the wrong course - they fail because they can’t imagine a better one.
- Weave a rich story
- Make it simple and authentic, concrete and emotional, make it about (at its core) people.
- Establish an innovation center
- This could be a physical place or an online place that brings together the resources and common materials for the organization. One organization created an online magazine with success stories, templates, blogs, etc. Use the innovation center as a place to collaborate, so that dispersed people have somewhere to work together.
- Bring design management inside
- People who provide design skills and thinking are not usually part of leadership, and often do receive much respect or recognition. Designers can earn the respect they deserve by competing for funding, providing thought leadership and knocking down internal barriers.
- Assemble a metateam
- This is a team of teams. By developing a network of specialist teams where each set of specialists works together, then the teams work together across specialties, you get the best of both the specialty and the cross-functionality. Individuals in a cross-functional team will not be as capable as a team. These teams may include teams or people from outside the organization.
- Collaborate concertina style
- Metateams are an advanced organizational structure. Independent, creative people need structure to perform at their peak, and this works well when people are very clear about roles and responsibilities. These structures enable people to be individually creative and collectively created – and it is very important to foster both. The transitions from individual to collective and back are like the concertina, which creates its music from the transitions. The device to manage people in this regime is the design brief.
- Introduce parallel thinking
- “Contentious problems are best solved not by imposing a single point of view at the expense of all others, but by striving for a higher order solution that integrates the diverse perspectives of all relevant constituents” (Mary Parker Follett, 1868-1933)
- Some styles of discussion (argument) turn interaction into a win-lose/right-wrong situation and wastes effort. Debate of this type requires real discipline. It is more practical to permit people to express different views of the way forward – but keep the focus on the way FORWARD.
- Ban Powerpoint
- Powerpoint style presentations do not engage or persuade. They do not explain. This is not the fault of the software, but the software discourages interaction between presenter and audience. Consider presentation styles closer to storyteller, teacher or demonstrator. If you’re going to use slides consider three rules: 10 words/slide, pictures and graphs – not words, keep it moving (many simple slides – not a few complex ones).
- Sanction spitballing
- States that don’t permit the free circulation of new ideas – especially ideas that are challenging or unflattering – are necessarily weak states….some organizational experts have suggested the company of the future will look like an “upside-down” pyramid, a more apt description might be a “bottom-up” pyramid.
- Leaders don’t need to have all the ideas; they may be more like editors than authors for the organization.
- It is hard for people to be passionate about executing work they had little input on. Involving people in the development of projects helps build engagement, even if it seems to create delay and confusion. The process of throwing spitballs at the idea, builds engagement
- Successful innovation requires many ideas leading to some prototypes leading to a few projects and even fewer product launches. Organizations that encourage individual exploration are getting a head start on the first two steps. Most fail, but that is one price of an innovative culture.
- Think big, spend small
- First divide concepts into: not new & not different, new and not different, not new and different, new and different. New and different is the goal, but this makes companies most uncomfortable. Most projects are good and not different because these are the most predictable. Risks on good/different projects are controlled by staging, though there is always risk when something different is brought to market.
- Design new metrics
- There are good metrics and bad metrics. Sometimes it is easy to measure and sometimes hard to measure progress. A good metric advances the innovation process rather than distracting it. Good designers use the metrics as benchmarks to challenge themselves or like constraints to drive creativity. It is critical not to confuse progress with measurements – many of the most important things in innovation can’t be practically measured at all.
- Institute branded training
- Most people are untrained in design thinking or innovation as practiced in a specific company. It is the company’s job to provide the specific training to enable innovation in their own organization. This is company-specific training and would differ at Apple and Oracle, because they are different companies.
- Training is one component of a learning organization, and a great learning culture may trump any training program. Across a diverse organization, many different skills might be appropriate, but the organization can provide a framework that guides learning consistent with strategy and culture. If this can be made explicit, then people can act independently to develop their skills.
- Learn through acquisition
- Most acquisitions do not deliver the benefits predicted at the onset, but they do offer an opportunity for the acquiring company to learn from the acquired. Most companies do not take advantage of the opportunity, instead imposing their systems and philosophies on the acquired company. Use the acquired company as a source of teaching.
- Add a seat to the table
- Most companies have silos that separate businesses or functions. Establishing groups that cross these boundaries improves collaboration, but only if the group is guided by someone (or small group) who brings a unifying vision to the effort (for example, chief marketing officer). From a designer’s perspective, the purpose of such groups is to enable complete design briefs to be established, rather than partial briefs that miss critical requirements.
- Recognize talent
- As we move from the spreadsheet era to the creative era, economic value will come from human networks more than economic ones. Companies will create wealth from conversion of raw intangibles – imagination, empathy, and collaboration – into finished intangibles – patents, brands, and customer tribes. Economic value will measured…in terms…of return on creativity. How can an organization accelerate inspiration and engagement? Recognition.
- Consider the following virtuous circle
- Establish and communicate organizational goals
- Design actions based on the goals
- Nominate and assess best outputs – using external examiners as judges
- Recognize the people and/or teams with the best outputs
- Teach the organization what was learned by nominees
- Repeat from 1 or 2, as appropriate
- Judge the output against the criteria set by the organizational goals. Using external examiners decreases internal biases and increase the value of the recognition. External examiners can add validation for those whose ideas align with the goals, but diverge from common internal practice.
- Reward with wicked problems
- While tangible rewards won’t be refused, very creative people prefer to work on difficult problems. People may go all out for a chance to work on an even bigger problem. Some companies create positions that recognize extraordinary contributions with more autonomy and freedom to develop novel solutions to high impact problems.
“…any sufficiently advanced technology is indistinguishable from magic”
Arthur C. Clarke
Organizations that develop cultures based on design thinking may look magical to outsiders. The collaboration, empathic perspective, diversity of perspectives, and customer focus work together to create an organizational perspective that is more than the individual processes.
Like many books written by people in creative organizations, this book assumes that creative activity occupies a high percentage of the organization’s bandwidth. In most companies, it does not and will not. The key take-away from this book, like most of the others of the group, is that many of the processes, procedures, attitudes and metrics developed for managing the on-going business may not apply to the innovative portion of the business – and may be detrimental. Part of the design challenge for companies that hope to become or remain innovative is to create co-existence between routine management and innovation leadership. Some of the suggestions above may be used to create this balance.
*sections in italics are directly quoted from the book
Michael A. Porter
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