Innovation by Design

How Any Organization Can Leverage Design Thinking to Produce Change, Drive New Ideas, and Deliver Meaningful Solutions

Thomas Lockwood, Edgar Papke

• Publisher: Career Press
• Year: 2017
• Print ISBN: 9781632651167
• eBook ISBN: 9781632658906
• Topic: Business
• Subtopic: Business General
• Index: Business

Why are some organizations more innovative than others? How can we tap into, empower, and leverage the natural innovation within our organizations that is so vital to our future success?

Now more than ever, companies and institutions of all types and sizes are determined to create more innovative organizations. In study after study, leaders say that fostering innovation and the need for transformational change are among their top priorities. But they also report struggling with how to engage their cultures to implement the changes necessary to maximize their innovative targets.

In Innovation by Design, authors Thomas Lockwood and Edgar Papke share the results of their study of some of the world’s most innovative organizations, including:

• The 10 attributes leaders can use to create and develop effective cultures of innovation.
• How to use design thinking as a powerful method to drive employee creativity and innovation.
• How to leverage the natural influence of the collective imagination to produce the “pull effect” of creativity and risk taking.
• How leaders can take the “Fifth Step of Design” and create their ideal culture.

Innovation by Design offers a powerful set of insights and practical solutions to the most important challenge for today’s businesses—the need for relevant innovation.

10 Attributes

Design Thinking at Scale

“Design thinking is the glue between all disciplines.”

—Arne van Oosterom

We entered our study using criteria that all the organizations, in one form or another, are using design thinking as the methodology of innovation, customer experience, execution, and performance. This includes an interest in finding out how each organization introduced and implemented design thinking as well as how they further integrated and scaled its use. As a result, we found a number of common practices, as well as the uniqueness that accompanied each organization’s journey.

One important finding is that innovative design thinking organizations all share the attribute of scaling, an expansion in the use of design thinking throughout their organizations. Regardless of the size of their organization, they see design thinking as a key strategic element of innovation and a means through which to influence their cultures. Through our interviews, we learned that several have integrated design thinking into their organizations with the goal of having every member, in some way, trained in design thinking.

The big lesson is that any organization, of any size, can use design thinking as a means to influence culture and achieve greater levels of innovation. Regardless of size, whether it is 20 people or 300,000, the more people know about how to engage in design thinking, the greater the level of innovation.

Among our group of innovators, the scale of adoption and use varied, as did the manner in which they implemented and integrated it. For some it started with the CEO and was top-down; for others it was bottom-up or has a grassroots origin. Or it came in from the side, finding its way into the organization through a specific function, group, or acquisition, and spreading from there.

What we didn’t expect was the scale to which some of the companies and organizations are applying design thinking. As an example, at Intuit, through its acclaimed Design for Delight (D4D) approach, virtually every one of its close to 10,000 employees is trained in design thinking. In our list of study group companies, the numbers are impressive: Kaiser Permanente, 15,000; GE Healthcare, 6,000; Marriott, 5,000; Honeywell, 3,000; and P&G, 1,300. Deutsche Telekom trained over 5,500 in design thinking in 2016 alone. In the span of 2015 to 2017, SAP trained more than 20,000. This clearly explains their capability to innovate and respond to customer needs.

We found that the number of people trained is not only a reflection of the commitment of the organization to increase its capability to solve problems and innovate, it is also a reflection of their understanding of the influence that design thinking will have on its culture, and how each strives to align its culture and leadership to be innovative.

UNIQUE PATHS

How did they do it? The truth of the matter is that each of the organizations in our study group found its own path. Some set a strategic agenda, some just leveraged what they had and grew organically, some relied on outside experts, some recruited executive-level design leaders, a few acquired design or design thinking firms, some top executives got turned on and cascaded it out, some went through HR, and some just let passionate design thinking employees emerge and spread influence by success. At Marriott and Kaiser Permanente, design thinking started out as function and found its way to becoming a means through which to engage employees in small groups and eventually on a much larger scale. In others, like GE, Philips, Visa, and IBM, organizations invested in the acquisition of talent and strategically developed design thinking as a competency.

*Training is ongoing and ever increasing, and some numbers are estimates from the companies, but this gives a general indication of the scale as of May 2017.

Intuit, SAP, Deutsche Telekom, and P&G approached it from the top down. A CEO or leader experienced the power of design thinking and found it to deliver a means through which to solve the most difficult of problems. In other organizations it started as means to which to solve a particular business problem in one part of the organization, and people were naturally drawn to its qualities and wanted in on the game. What was consistent is that, regardless of how it was happening—how it was introduced, implemented, and integrated—people are drawn to participating in design thinking.

We found a number of significant insights as to how organizations come to implement and eventually arrive at embedding design thinking. We also found that as much as an organization’s culture is unique, so is its approach to introducing, implementing, and eventually embedding design thinking in their organizations. Furthermore, in light of unique cultural and leadership preferences, the role modeling, reinforcement, and reputation of leaders of how design thinking is used and supported has a great deal to do with both its immediate as well as its longer-term value to an organization.

We identified the early CEO adopters—leaders like A.G. Lafley at P&G, Intuit founder Scott Cook, and SAP founder Hasso Plattner—and found that each had an experience or introduction to design thinking from which they came away with one simple understanding: It is the means through which to solve problems faster and better, and drive innovation through their companies. They all recognized the power of human-centered design as not only the instigator of the innovation they sought in the design and creation of products and services. They also recognized its application to any problem that their organizations would face. Whether at the intuitive or intellectual level, they experienced and saw potential of the pull factor and leveraging of the collective imagination.

COMMITMENT INFLUENCES CULTURE

Organizations took different paths, but it is clear that design thinking is critical to influencing their cultures to be more innovative. And each goes about it in a unique way, reflecting both the culture when they started, how it has shifted and, in some cases, transformed along the way. How they got there is as individual and unique as their cultures. Along with these findings, we also came away with a set of conclusions that are important to the success that each has created. The conclusions include:

• Scaling matters. Leadership knows how important it is to provide design thinking skills and give access to design thinking to its workforce, and understands the significance of being able to apply design thinking to all parts of the organization, or as many as possible.

• It’s not always about spending money on big training programs. What is important is to identify and hire people with the right mindset and get them out in the organization coaching and training people by engaging them in doing. Regardless of who they are and where they work in the organization, it’s about teaching them to think like (some) designers, or better-stated design thinkers, including role-modeling what it looks like.

• Naming or branding a design thinking program helps uniquely align the effort to the company and elevate the importance of its application and use, and provides a common language and framework. It communicates that it is more than just worthwhile doing, and not just a department thing. It signals the importance of participating and what it represents to the culture. And, it provides a way for users to associate and identify with its value and becomes a source of pride. That said, unique names could also cause confusion. About half of the sample group just called it Design Thinking, which also makes sense.

• Leadership involvement is powerful. Eventually, if leaders aren’t versed in design thinking and don’t learn to get out of peoples’ way to use it, it can undermine everything an organization is setting out to accomplish. The best leaders of design thinking are those who are curious and practice it themselves.

• There is no one roadmap that every organization has to follow to get to the promised land of creating an innovative design thinking culture. The path will be unique. This requires leaders to be adaptable and aware of the path as it unfolds and not to be constrained by holding on to what the culture has been in the past. Rather, to think like a designer, adapt to the user needs and keep an eye out for what’s missing and the culture needs most.

• The passion and creativity of design thinkers are something to embrace. They embed design thinking into the culture with the goal of shifting mindset and making it part of the organization’s DNA. They commit to the idea of creating human-centered cultures and leveraging design thinking to inspire cultures of innovation.

In PwC’s 2016 report of The Global Innovation 1000 Study, in the ranking of the top innovators and spenders, of the 10 most innovative companies, only half are on the list of the top 20 R&D spenders.¹

Reinforcing what we stated at the outset of this chapter, among our key findings, the most important is the understanding that any organization can leverage design thinking to become a more innovative culture. This is proven through the fact that, though there are similarities in how some of the organizations in our study group have introduced and integrated design thinking, each has a unique story to tell.

For some, at the early-stage development of the organization and culture, it provided an immediate engine for creativity and growth. For other, more mature organizations, it became a beacon for change and cultural transformation, inviting shifts in mindset and in longstanding beliefs and behaviors. In several cases, their story becomes a part of the organization’s history and lore, which is known to people inside and outside the organization. It also becomes a key influence on not only the culture, but it also extends to the customer experience and interactions with all its stakeholders. Design thinking also becomes a great source of pride.

DNA BY DESIGN

A little more than a decade ago, long before Intuit began thinking of itself as a design-driven company with the desire to embed design thinking in its DNA, it began its journey in what is now an amazing tale of transformation that is a cornerstone of its story and culture. The story anchors a set of initial shifts in its culture that produced the design thinking scaling effort the company set out on—and, so far, it has succeeded in very well.

In about 2006, Intuit’s founder, Scott Cook, recognized that Intuit had to become more innovative and decided to encourage all employees to spend 10 percent of their time on unstructured projects. His inspiration came from Google’s 20-percent unstructured time model. Being that Intuit is an accounting software company, Cook thought that 10 percent seemed more prudent. Shortly thereafter, he was further inspired by an article about design thinking written by Roger Martin at Rotman University in Toronto. Design thinking had been a method of problem solving used by designers for many years, and now a business school was suddenly getting press about its application as a creative way to solve business problems by thinking like a designer. Cook learned it was about using abductive reasoning for problem-solving, versus deductive or inductive reasoning. As he absorbed more about design thinking, he wondered whether it could help his accounting software company be more innovative. Concurrent with his pursuits and increasing knowledge about design thinking came the company’s realization that, as the 10 percent of unstructured time initiative moved on, Intuit employees didn’t know how to spend the time well.

In 2007, to reinvigorate Inuit’s performance, Cook and then-CEO Steve Bennett decided to focus on the role of design in the company. Cook created a one-day program he called Design for Delight (D4D) and, with the intention of setting out on a transformation toward being a design-driven company, invited the company’s top 300 managers to an off-site meeting. Based on deep customer empathy, idea generation, and experimentation, D4D was created to clearly articulate Intuit’s approach to design thinking and to provide the entire company with a common framework for building great products. Cook then delivered a five-hour PowerPoint presentation to which he received a polite, yet unengaged response.²

For the offsite, Cook also invited Alex Kazaks, an associate professor from Stanford, to present for an hour. Kazaks took a different approach to his segment: Rather than present from a PowerPoint, he engaged the audience in a design thinking experience including prototyping, feedback, iterating, and refining. When asked, two-thirds of the off-site participants provided the feedback that most of what they learned occurred in Kazaks one-hour presentation and the hands-on activity. When Cook understood the significance of the moment, he decided that shift in Intuit’s culture was badly needed. This prompted what has become the journey of Intuit toward embedding design thinking into the company’s culture—its DNA.³

When Thomas was president of the Design Management Institute, part of his role was the oversight of all content and programming for DMI, which included developing three conferences per year (in the United States, Europe, and Asia); during his six-year tenure he produced 22 conferences for design leaders. Thomas decided to run the 2009 U.S. conference in San Francisco and invited Roger Martin and Darrel Rhea to join him as co-chairs. They called it Re-Thinking Design and invited Scott Cook to be a speaker. It was one of the first conferences about design thinking, and the first time DMI had a CEO speak at a conference. As much as Scott had a great impact on the audience, the conference and its passionate design leaders in attendance also had inspired him.

This may have led to the second step in Intuit’s design thinking journey: the development of a team of design thinking coaches. The team consisted of aptly named “Innovation Catalysts,” whose role was to work with managers throughout the company in their product initiatives. The idea is not to offer the direct expertise to solve a problem, but rather, to offer managers and teams the means through which to apply design thinking. Over the past decade, more than 1,500 Innovation Catalysts have been trained, and taken three, five, or 14 days of design thinking leadership training. The training is all done internally, employee to employee.

The Innovation Catalyst idea came from early benchmarking with P&G. The key was selecting people interested in design thinking to become catalysts, not just because they were skilled at it, but rather because they also have a passion for it and, in their words, “can turn the lights on” for other people and unleash their creativity. Many of the company’s Innovation Catalysts are not even in what would be considered as creative roles (accountants, for example). The company’s key discovery is that design thinking is not about the roles and jobs that people do; rather it’s about people, and their interest to collaborate, to be creative, to participate, to seek to understand, to have empathy, and to create solutions, regardless of the role participants are in. And it’s about the unexpected results that come with it.

As an example, a group that primarily focuses on TurboTax, and is very product- and feature-driven, is always looking for insights and inspiration into the not-so-inspirational watching of how people do tax returns. To use their creative time, they often explore how to make improvements in the way products are sold. During a two-day design thinking workshop, one team had taken on an experiment that failed and needed a new problem to fill their remaining time. One of the team members raised the question as to why the product they were working on was only sold in seats of five and not in single seats. They concluded that perhaps someone in product management, at one point in time, thought that selling multiple seats was the optimal way to sell. To test their idea, the team suggested changes to the script used in the call center. They then ran some quick tests right then, on the fly, with call center staff, customers, and prospects. In a very short period of time they learned that many more people were interested in buying just one seat, or three seats. As a result, after further testing, they changed their policy to sell individual and smaller numbers of seats. What was the result of this small customer-centric, quick prototype test? A...

Table of contents

• Cover
• Title Page
• Copyright Page
• Dedication
• Contents
• The Context
• 10 Attributes
• Conclusion: Looking Forward: Future Possibilities
• Notes
• Index