design thinking for business innovation

Design Thinking For Business Innovation

Prepared by Kevin HuangJune 26, 2016

Why Design Thinking?

Understanding the mindset of people you are building this* for

Developing a deep understanding of unmet needs

Consideration of a wide and fresh array of solutionsAvoiding the pitfall of imposing the wrong solution on a community

* This can be a product, service, course, program, process…

Design thinking=InnovativeProblem Solving

Design thinking is a process - applicable to all walks of life -of creating new and innovative ideas and solving problems.A Liter of Light

(click to watch the video)

Design thinking is a way of thinking that helps you innovate and solve problems like a designer.

There are three types of problems

known knowns known unknowns big unknowns1 2 3

You know how to solve them. You know ways to find out how to solve them. You don’t know how to solve them because you don’t know the root cause.

blind spots

YourviewYourblind spots

A lot of opportunities!

Blind spots are the sweet spots for innovations.Take on a larger point of view by engaging in conversations with your customers.Understanding their view will make you understand the root cause of the problem.

Not all types of problems are best suited for a Design Thinking approach!

known knowns known unknowns big unknowns1 2 3

Bad weather during flight.Switch off auto-pilot.required activitiesrequired mindset

execution & implementation

checklist thinking

My smartphone smashedWhat could have caused this?required activitiesrequired mindset

test, search, sort, solve

analytical thinking

Customer ignores my productHow can I understand why?required activitiesrequired mindset

immersion, engagement

Design Thinking

5 tips on how to identify big unknowns12345

You are highly unfamiliar with the customers/market needsYou have little sense of likely outcomesYou have not seen this type of problem beforeYou have no hypotheses to test (yet)!Your usual source of data and analytics will not clearly help you find a solution

Problem solvingProblem findingDoing the right thing Doing the thing right

Design Thinking helps you with solving the right problems

Design ThinkingLean Start-up

AgileExecute

3 major steps to create business valueExplore

customer/problem fitTest

problem/solution fitExecute

product/market fit

3 major steps to create business valueExplore

customer/problem fitTest

problem/solution fitExecute

product/market fit

Invent the future. Discover unmet needs of your customer and unsolved problems that he wants solved. Collect insights through immersion and observation.

Test your ideas and hypothesis. Prototype and see how consumers react on it. Adjust product, pricing or positioning accordingly.

Bring the product to life. Identify the activities. Capabilities and resources you need to market the product a reality.

Re-frame business problems to customer-centricopportunity spaces that drive value = invention of business

Administration of business Invention of businessWhat corporates are good at. What corporates often fail to do!ExploitationStatic knowledgeShort-termIncremental stepsMinimal riskPredictable smaller rewardsAnalysis, reasoning, data from the past, mastery

ExplorationDynamic knowledgeLong-termSignificant leaps forwardHigh riskPotentially high rewardsIntuition, feeling, hypothesis of the future, originality

ExplorationHow to identify real problems?

We don’t need more useless products.In order to avoid building products or services that nobody will use, we have to solve real problems. If the problem is non-existent, the solution becomes meaningless.

First, identify the root cause of your problem“Customer ignore my product in store? Why?”

e.g. bag of ice-cubes

1Because she does not like buying it.

2Because she does not like other things in her bag to get wet.

3Because this affects other things, and she does not like that.

4Because she does not want to pay for things in wet packaging.

5Because she only want to pay for quality.

Why? Why? Why? Why?

You’ve identified the root cause of your problem“How do you solve it?”

5 Why’s MethodPerfect warm-up for Design Thinking!

1234

Helps to dig deeper into the problem of a user experienceiterative questioning to explore cause-effectLooking for the root cause of a problem5 iterations are typically enough to provide anticipated insights

Design Thinking helps you withIdentifying the root cause of a problem.It’s called CUSTOMER EMPATHY.

I know exactly how you feel.

3 shortcuts to customer empathyTRY - immersion LOOK - observation ASK- engagement

1 2 3

Immerse yourself in the experience of others Observe what people do Capture what people say they doFiguratively wear many hats. Try to experience the same as your customer does. Uncover hurdles, pains, inconveniences, etc.

Form a distance, try to capture insights about your customer. Stay unobtrusive and almost invisible for the sake of spotting when the problem occurs.

Only one rule applies: engagement should take place in the real environment. Make people feel comfortable while you are documenting.

Some Examples

TRY - immersion1

Kid-friendly MRI. Simple commands to get the san done accurately become part of an adventure.

MRI scans require a person not to move, but little kids cry and move around.

By immersing in the experience of a kid they learned that…… for a kid an MRI room must be a very stressful and a frightening experience.

LOOK - observation2

Big brewery notices consumption in bars is low, while beer is popular in store.

By observing the people’s behavior in the bars, they learned that…

Waiting staff is not serving beer with great delight because they are tired of long shifts.

Pick-up service offered by brewery so waiting staff is quicker at work and back home.

ASK - engagement3

Water wells installed by NGO’s are not being used.Through engaging in their environment, they learned that…

The road to the water wells is longs and the water barrels too heavy.

90 liter Hippo Roller enables user to collect 5 times more water than a single bucket + improved water access.

Valuable insights!

The solution that emerge at the end of the Human-Centered Design should hit the overlap of these three lenses: they need to be Desirable, Feasible, and Viable.

Process InnovationEmotional InnovationFunctional InnovationExperience Innovation

An Inspiring Design Thinking Story

How Did Airbnb Start?It was late 2007 in San FranciscoBrian Chesky and Joe Gebbia just moved from New York. Without employment, they were having trouble paying their rent and were looking for a way to earn some extra cash. They noticed that all hotel rooms in the city were booked, as the local Industrial Design conference attracted a lot of visitors.

The youngsters saw an opportunity. They bought a few airbeds and quickly put up a site called “Air Bed and Breakfast.”The idea was to offer visitors a place to sleep and breakfast in the morning. They charged $80 each a night. The idea succeeded and the first Airbnb guests were born: a 30-year-old Indian man, a 35-year-old woman from Bostonand a 45-year-old father offour from Utah sleepingon their floor.

When they started by plopping three air beds on the floor. They looked at it and were like, “This isn’t exciting”. Being designers, they then thought about their guests — they became the ‘patient’. (Customer Empathy)

The most amazing part of this is the change. Their neighborhood had a lot of homeless people on the streets who were always asking for some alms. So, to help out their guests and not put them in an uncomfortable dilemma, they did something superb:

They thought through all the trivial parts of their visit — they provided things like city guides to the guest. They even wanted to do something fun and gave them shirts that said, “I stayed at Air Bed and Breakfast” (which was actually just their apartment.)

They even gave coins to their guests to give to the homeless on the streets outside their apartment!

A Really Rough Start

They built three versions of the website, but the traffic was very disappointing. The Airbnb founders had to think of ways to make money quickly. They managed to make a whopping $30,000 selling the Obama O’s and Cap’n McCains, and raised it’s first funding $20,000 from Y Combinator - but they are still making only $200 per week.

They decided to travel to New York, their biggest market, to meet their users. They discover that the main problem is that the pictures of most listings aren’t pretty.What did they do?They buy a camera and go door-to-door to take better pictures of the listings.The outcomeAirbnb doubled its usage in one week and their free photography program resulted in 2.5 times more bookings

Discovered A Major Problem

Airbnb finally starts taking offAfter visiting their users in New York, the company finally gets some traction. The focus is changed from shared spaces to all types of accommodation. It’s March 2009 and Airbnb has 2500 listings and close to 10,000 registered users.


The most recent statistics show that Airbnb now has over 1,5 million listings in over 190 countries and 34,000 cities. Airbnb hosts have hosted over 40 million guests. The company is worth an estimated 25.5 billion, based on the latest round of funding of 1.5 billion (June 2015).

Airbnb continues to implement Design Thinkingto enrich the entire experience of travelling

…and to resolve the new problems too.(violate the city hotel rules & regulations, tax collection, bad experiences, safety concerns…)


Watch Airbnb’s Latest TV CommercialWhen you stay in an Airbnb, you get more than a home. You get more than a city. You get a neighborhood. The local coffee shop is yours, too. Wherever you go, you get to feel like you #LiveThere. Even if it’s just for a night.

Implementing Design Thinking Process

Designing Attractive Value Proposition=Building An Effective & Efficient Business Model

The Key ToEnduringBusinessSuccess

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Fit

Create Observe

Tell the story of how you create value for your customer

Value Proposition Customer segment

Design Attractive Value Propositions that Sell

Build Your Business Model that Work

Workshop

Business Model Canvas