IN RECENT YEARS, organizations of all shapes and sizes have begun to embrace design methodologies. People sometimes ask me if this surprises me; and the truth is, not really.

Over the years I’ve had a front-row seat to watch as technology got better and better. In my days at the MIT Media Lab, again and again, Moore’s Law played out before my eyes, as computational systems and networks got faster and faster, cheaper and cheaper. As this continued, we were all told that products and services were going to keep getting better and better; but I just didn’t see that happening. At some point, it became clear to me that technology alone was not going to make products and services any better.

This is when design began to emerge as ‘the way to make a difference’. Not just in products and services, but in addressing questions of how to solve the world’s problems and how to run your organization better as well – to figure out how to combat complexity and to create new value.

The march of technology is definitely tied to the emergence of design. One of the reasons organizations are so chaotic today is because of social media, itself a new technology. A significant side effect of the digital communications revolution is that nowadays, everyone can have a voice. Just a few years ago, front-line workers would never see the CEO or expect to talk to them; but nowadays you can e-mail your CEO – and you sort of expect him or her to write you back! You can even friend him on Facebook.

What this has done is to transform organizations from hierarchies into more of a ‘heterarchy’, where everyone gets to have a say. Make no mistake about it: this represents a major shift for leaders, who are going to have to evolve – and fast! And this is where the radical aspect of design – the ability to rethink things – comes into play. On the one hand, design can still help us create differently-shaped products featuring imaginative solutions; but on the other – and more importantly – design can enable organizations to run better and adapt to changing conditions.

Part of my own function now is to sit on different boards – to function as ‘the person who understands design’ at that level. This makes me optimistic that one day in the not-too-distant future, design will be as much a part of every organization as marketing, accounting or finance. That being said, the fact is, some things don’t need design. There are things that just kind of work already – that have evolved over centuries.

My hope is not that design will be everywhere, but that design will be where it is most needed, which is in creating new kinds of experiences and products, and addressing the challenges organizations are facing as they move from hierarchichal to heterarchichal entities. And from what I have seen, design is up to the task.

 

John Maeda is president of the Rhode Island School of Design and author of Redesigning Leadership (Design, Technology, Business, Life) (MIT Press, 2011) and The Laws of Simplicity (Design, Technology, Business, Life) (MIT Press, 2006).

The Design

of Business

We are on the cusp of a design revolution
in business, and as a result, business people
don’t just need to understand designers
better – they need to become designers.

By Roger Martin

THESE ARE TURBULENT TIMES FOR BUSINESS, as companies struggle to adjust to the globalization of markets and competition, the expansion of the service-based economy, the impact of deregulation and privatization, and the explosion of the knowledge revolution. All of these forces are driving firms to fundamentally rethink their business models and radically transform their capabilities – but an equally important (though less obvious) business transformation is taking place with respect to design.

As we leave behind one economic age and enter another, many of our philosophical assumptions about what constituted competitive success grew out of a different world. Value creation in the 20th century was largely defined by the conversion of heuristics to algorithms. It was about taking a fundamental understanding of a ‘mystery’ – a heuristic – and driving it to a formula, an algorithm – so that it could be driven to huge scale and scope. As a result, many 20^th-century organizations succeeded by instituting fairly linear improvements, such as reengineering, supply chain management, enhanced customer responsiveness, and cost controls. These ideas were consistent with the traditional Taylorist view of the company as a centrally-driven entity that creates wealth by getting better and better at doing the same thing.

 

To be successful in the future, business people will have to become more like designers – more ‘masters of heuristics’ than ‘managers of algorithms’.

Competition is no longer in global scale-intensive industries; rather, it’s in non-traditional, imagination-intensive industries. Today’s businesses are sensing an increased demand for speed in product development, design cycles, inventory turns, and competitive response, and there are major implications for the individuals within those organizations. I would argue that in the 21st century, value creation will be defined more by the conversion of mysteries to heuristics – and that as a result, we are on the cusp of a design revolution in business.

The Progression from Mysteries to Binary Code

Over the course of time, phenomena enter our collective consciousness as mysteries – things that we observe, but don’t really understand. For instance, the mystery of gravity once confounded our forefathers: when they looked around the world, they saw that many things, like rocks, seemed to fall to the ground almost immediately; but others didn’t – like birds, and some seemed to take forever, like leaves. In art, there was the long battle to understand how to represent on a two-dimensional page what we saw in front of us in three dimensions. Music continues to be a mystery that confounds: what patterns of notes and sounds are enjoyable and make listeners feel happy and contented?

We start out with these mysteries, and at some point, we put enough thought into them to produce a first-level understanding of the question at hand. We develop heuristics – ways of understanding the general principles of heretofore mysteries. Heuristics are rules of thumb or sets of guidelines for solving a mystery by organized exploration of the possibilities.

So why do things fall down? We develop a notion of a universal force called ‘gravity’ that tends to pull things down. In art, we develop a notion called ‘perspective’ that guides our efforts to create renderings that appear to the eye to have three-dimensions rather than two. What kind of music do people like to listen to? We learn about chords, and then create song types like ballads, or folk songs, or the blues. If one follows a set of guidelines, one will likely create something that people enjoy listening to.

Heuristics don’t guarantee success – they simply increase the probability of getting to a successful outcome. They represent an incomplete understanding of a heretofore mystery. In any given field, some people barely understand heuristics, while others master them. The difference between them is the difference between one-hit-wonder Don McLean, author of “American Pie”, and Bruce Springsteen, author of scores of hit songs. For McLean, the mystery remained just that: he came up with a single inspiration that created one random event – one of the biggest pop song hits of all time. Yet he failed to produce another hit of any consequence in his entire musical career. In contrast, Springsteen developed a heuristic – a way of understanding the world and the people in it – that enables him to write songs that have great meaning to people and are immensely popular. His mastery of heuristics has allowed him to generate a steady stream of hit albums/CDs over a 30-year period.

In due course, increasing understanding can (though in many cases it never does) produce an algorithm: a logical, arithmetic or computational procedure that, if correctly applied, ensures the solution of the problem. With gravity, great scientists like Sir Isaac Newton studied and experimented long and hard enough to create precise rules for determining how fast an object will fall under any circumstance. In the late 1970s, musical innovators like British techno-music guru Brian Eno experimented with the human heartbeat and determined that songs with a synthesized heartbeat as their rhythm track are instinctively enjoyed by listeners, no matter what you added on top of them. The end result of such algorithms is not always positive, of course: this discovery led to electro-pop and eventually to sham bands like Milli Vanilli, who lip-synched recorded music onstage until caught in the act by an unsuspecting audience. And in art, we eventually got paint by numbers.

In the modern era, a fourth important step has been added to the sequence of mystery to heuristic to algorithm. Eventually, some algorithms now get coded into software. This means reducing the algorithm – the strict set of rules – into a series of 0’s and 1’s – binary code – that enables a computer to produce a result. For example, with gravity, the fact that we had an algorithm for how things fall meant that we could program aircraft with autopilot, enabling a plane to ‘fall’ from the sky in the organized fashion that we want it to, so that it lands in exactly the right spot. At the coding level, there is no longer any judgment involved: the plane lands on the basis of computer instructions that are nothing but a series of 1’s and 0’s, because our understanding of gravity has moved from a mystery to a heuristic to an algorithm to binary code.

Implications for the Design of Business

The progression of the ‘march of understanding’ described herein has important practical implications for today’s business people. Broadly speaking, value creation in the 20^th century was about taking a fundamental understanding of a mystery – a heuristic – and reducing it to a formula, an algorithm – so that it could be driven to huge scale and scope.

Take McDonalds, for instance. In 1955, the McDonald brothers took a mystery – ‘how and what do Californians want to eat’? And they created a format for answering that – a heuristic – which was the quick-service restaurant. Is this heuristic what created enormous value? No, because there were many restaurants in California doing similar things at the time, and all of them were discovering that Californians wanted faster, more convenient food. What made McDonalds different is that Ray Kroc came along and saw that he could drive the McDonald brothers’ heuristic to an algorithm. He bought the store and figured out exactly how to cook a hamburger, exactly how to hire people, exactly how to set up stores, exactly how to manage stores, and exactly how to franchise stores. Under Kroc, nothing was left to chance in the McDonald’s kitchen: every hamburger came out of a stamping machine weighing exactly 1.6 ounces, its thickness measured to the thousandth of an inch, and the cooking process stopped automatically after 38 seconds, when the burgers reached an internal temperature of exactly 155 degrees. By creating an algorithm out of a heuristic, Kroc was able to drive McDonalds to huge size and scope, and to its place today as a global icon.

This move from heuristic to algorithm was repeated over and over throughout the 20^th century. Early in the century, Ford developed the algorithm for assembling cars – the assembly line – and with it grew to immense size. Late in the 20^th century, Electronic Data Services (EDS) developed algorithms for routinizing systems integration and training COBOL programmers, and with it grew to previously unimagined size in the systems integration business. In between, Procter & Gamble created the algorithm for brand management, Anheuser Busch for making and selling beer, Frito Lay for making and distributing snack chips, and so on. For these companies, as well as Dell and Walmart, success depended not so much on a superior product, but on a superior process, and each is an example of the relentless ‘algorithm-ization’ that paved the way for massive value creation in the 20th century.

This dynamic accelerated in the latter part of the 20th century (1985-2000), when many algorithms were driven to code. Like most things in life, this final step of reducing something to binary code has good and not-so-good aspects to it. While coding enables an incredible increase in efficiency, it is also true that with coding comes the end of judgment: patterns of 0’s and 1’s have no judgment or artistry – they just automatically apply an algorithm. In many respects, the extreme achievement of the 20th century is soulless numbers. Neither all bad or all good, this is simply the result of the combination of the relentless march of understanding (from mystery to heuristic to algorithm) with the relentless march of Moore’s Law (Intel co-founder Gordon Moore’s prediction that data density would double approximately every 18 months, and the resultant diminishing costs of information technology) – all of which lead to binary code.

So where do we go from here? Will there be more relentless algorithm-ization? I don’t think so. I believe that we will look back on the 20th century as a tour de force of producing ‘stuff’ – lots of it, as efficiently as possible. I believe we are transitioning into a 21st century world in which value creation is moving back to the world of taking mysteries and turning them into heuristics. I see the beginnings of a fundamental backlash against algorithmization and the codification of the world around us – a realization that reaching to grab the benefits of economies of scale often involves accepting standardization and soullessness in exchange.

I believe the 21st century will go down in history as the century of producing elegant, refined products and services – products and services that delight users with the gracefulness of their utility and output; ‘goods’ that are produced elegantly – for example, that have the most minimal environmental footprint possible, or that produce the fewest worker injuries, whether it be broken limbs or repetitive stress syndrome.

The 21st century presents us with an opportunity to delve into mysteries and come up with new heuristics. As a society we are faced with major mysteries like, ‘how can big cities actually work’? There are more of them than ever before, and while Toronto works pretty well, many cities around the world don’t, and fixing that is a major mystery. Another big mystery involves how to make health care work, when there’s an infinite demand and a constrained supply. These are the kind of modern mysteries that are being presented to us, and there is no algorithm for them, no coding to magically solve the problems they engender.

Implications for Business People

There are three major implications of this shift for today’s business people. The first is that design skills and business skills are converging. The skill of design, at its core, is the ability to reach into the mystery of some seemingly intractable problem – whether it’s a problem of product design, architectural design, or systems design – and apply the creativity, innovation and mastery necessary to convert the mystery to a heuristic – a way of knowing and understanding.

But unlike in the 20th century, this time the goal won’t be to develop mass formulas or algorithms. Firms today are desperately trying to find out what each individual customer wants. Kellogg’s cereal and Hershey’s chocolate bars have 1-800 phone numbers printed on them encouraging consumers to call them with feedback. Pepsi has its Web site printed on each can. Information is being gathered and used to cater to and customize solutions to your every need.

I would argue that to be successful in the future, business people will have to become more like designers – more ‘masters of heuristics’ than ‘managers of algorithms’. For much of the 20th century, they moved ahead by demonstrating the latter capability. This shift creates a huge challenge, as it will require entirely new kinds of education and training, since until now, design skills have not been explicitly valued in business. The truth is, highly-skilled designers are currently leading many of the world’s top organizations – they just don’t know they are designers, because they were never trained as such.

The second implication is that we need a new kind of business enterprise. This new world into which we are delving will require us to tackle mysteries and develop heuristics – and that will require a substantial change in some of the fundamental ways we work. Traditional firms will have to start looking much more like design shops on a number of important dimensions, as shown in Figure One.

MODERN FIRMS MUST BECOME MORE LIKE DESIGN SHOPS		Figure One
Feature	From ‘Traditional Firm’	To ‘Design shop’
Flow of Work life	• Ongoing tasks • Permanent assignments	• Projects • Defined terms
Source of status	Managing big budgets and large staffs	• Solving ‘wicked problems’
Style of Work	• Defined roles • Wait until it is “right”	• Collaborative • Iterative
Mode of Thinking	• Deductive • Inductive	• Deductive • Inductive • Abductive
Dominant attitude	• We can only do what we have budget to do • Constraints are the enemy	• Nothing can’t be done • Constraints increase the challenge and excitement

 

 

The philosophy in design shops is, ‘let’s try it, prototype it, and improve it’. Designers learn by doing.

 

Whereas traditional firms organize around ongoing tasks and permanent assignments, in design shops, work flows around projects with defined terms. The source of status in traditional firms is ‘managing big budgets and large staffs’, but in design shops, it derives from building a track record of finding solutions to ‘wicked problems’ – solving tough mysteries with elegant solutions. Whereas the style of work in traditional firms involves defined roles and waiting for the perfect answer, design firms feature extensive collaboration, focused brainstorming sessions, and constant dialogue with clients.

When it comes to innovation, businesses have much to learn from designers. The philosophy in design shops is, ‘let’s try it, prototype it, and improve it’. Designers learn by doing. The style of thinking in traditional firms is largely inductive – proving that something actually operates – and deductive – proving that something must be. Design shops add abductive reasoning to the fray – which involves suggesting that something may be, and reaching out to it. Designers may not be able to prove that something is or must be, but they nevertheless reason that it may be, and this style of thinking is critical to the creative process. Whereas the dominant attitude in traditional firms is to see constraints as the enemy and budgets as the drivers of decisions, in design firms, the mindset is “nothing can’t be done for sure,” and constraints only increase the excitement level.

The third implication is that we must change the focus of our thinking on design and business. The trends discussed herein have generated increased interest in design by the business world, but it is largely focused on ‘the business of design’: the traditional business world is trying to figure out what designers do, how they do it, and how best to manage them. This misses the point fundamentally, and it won’t save the traditional firm. The focus should actually be placed on ‘the design of business’: We need to think much more about designing our businesses to provide elegant products and services in the most graceful manner possible.

In closing

Business people don’t need to understand designers better: they need to be designers. They need to think and work like designers, have attitudes like designers, and learn to evaluate each other as designers do. Most companies’ top managers will tell you that they have spent the bulk of their time over the last decade on improvement. But it’s no longer enough to get better; you have to ‘get different’.

I believe that we are on the cusp of a design revolution in business – a revolution in the purpose of business, the work of business, and the skills required of business people. The challenge of making the transformation to the Design of Business should not be underestimated. The initial goal is to help modern managers understand this new business agenda and become shapers of contexts, to increase the likelihood that their organizations will thrive in the era of design.

Roger Martin is Dean, Premier’s Research Chair in Productivity & Competitiveness and Professor of Strategic Management at the Rotman School of Management. He is the author of eight books, most recently, Playing to Win: How Strategy Really Works (Harvard Business Review Press, 2013), co-authored with A.G. Lafley. In 2011, he placed sixth on the Thinkers50 list, a bi-annual ranking of the most influential global management thinkers.

Today’s leaders can apply many of the lessons learned in the world of design to strategy-making in the workplace.

By Jeanne Liedtka

AS WE STAND AT THE FRONTIER OF A BUSINESS WORLD in the midst of fundamental change, the field of business strategy is in need of new metaphors. Much of the traditional thinking about strategy formulation and implementation seems ill-suited to escalating imperatives for speed and flexibility. We need metaphors that better capture the challenges of making strategies both real and realizable, metaphors that bring life to the human dimension of creating new futures for institutions, that move us beyond the sterility of traditional approaches to strategic planning. In that spirit, I propose that we resuscitate an old metaphor that I believe offers new possibilities: the metaphor of strategy as a process of design.

The centrality of design skills to the practice of management has long been recognized. In 1969, Nobel Laureate Herbert Simon noted:

“Engineering, medicine, business, architecture, and painting are concerned not with the necessary but with the contingent – not with how things are, but with how they might be – in short, with design. Everyone designs who devises courses of action aimed at changing existing situations into preferred ones. Design, so construed, is the core of all professional training.”

Early models of the design process describe it as consisting of two phases: analysis and synthesis. In the analytical phase, the problem is decomposed into a hierarchy of problem subsets, which in turn produce a set of requirements. In the ensuing stage of synthesis, these individual requirements are grouped and realized in a complete design. Parallels with the design of business planning processes come to mind here. Unlike in business, however, these early models – with their emphasis on systematic procedures – met with immediate criticism for their lack of appreciation for the complexity of design problems.

Design theorist Horst Rittel first called attention to what he described as the ‘wicked’ nature of design problems. Such problems have a unique set of properties, he argued, the most important of which is that they have no definitive formulation or solution. The definition of the problem itself is open to multiple interpretations, dependent upon the worldview of the observer, and potential solutions are many, with none of them able to be proven to be correct. Writers in the field of business have argued that many issues in strategy formulation are ‘wicked’ as well, and that traditional approaches to dealing with them are similarly incapable of producing intelligent solutions.

The ‘first generation models’, as Rittel referred to them, were ill-suited for dealing with ‘wicked problems’. Rittel saw design as a process of argumentation, rather than merely analysis and synthesis. Through argumentation – whether as part of a group or solely within the designer’s own mind – the designer gained insights, broadened his or her worldview, and continually refined the definition of the problem and its attendant solution. Thus, the design process came to be seen as one of negotiation rather than optimization, fundamentally concerned with learning and the search for emergent opportunities. Rittel’s arguments are consistent with recent calls in the strategy literature for more attention to ‘strategic conversations’, in which a broad group of organizational stakeholders engage in dialogue-based planning processes out of which shared understanding and ultimately, shared choices, emerge.

Studies of the design process frequently suggest a hypothesis-driven approach similar to the traditional scientific method. After studying architects in action, philosopher and academic Donald Schon described design as “a shaping process,” in which the situation “talks back” continually, and “each move is a local experiment which contributes to the global experiment of reframing the problem.” Schon’s designer begins by generating a series of creative “what if” hypotheses, selecting the most promising one for further inquiry. This inquiry takes the form of a more evaluative “if then” sequence, in which the logical implications of that particular hypothesis are more fully explored and tested. The scientific method then, with its emphasis on cycles of hypothesis-generating and testing and the acquisition of new information to continually open up new possibilities, remains central to design thinking.

Yet the nature of ‘wicked problems’ makes such trial and error learning problematic. Rittel makes this point from the perspective of architecture: a building, once constructed, cannot be easily changed, and so learning through experimentation in practice is undesirable. This is the ultimate source of ‘wickedness’ in such problems: their indeterminacy places a premium on experimentation, while the high cost of change makes such experimentation problematic.

As in business, we know that we might be able or be forced to change our strategies as we go along – but we’d rather not. This apparent paradox is what gives the design process – with its use of constructive forethought – its utility. The designer substitutes mental experiments for physical ones. In this view, design becomes a process of hypothesis-generating and testing, whose aim is to provide the builder with a plan that tries to anticipate the general nature of impending changes.

A concern of the design process is the risk of ‘entrapment’, in which a designer’s investment in early hypotheses make them difficult to give up as the design progresses, despite the presence of disconfirming data. Design is most successful, then, when it creates a virtual world, a ‘learning laboratory’, where mental experiments can be conducted risk-free and where investments in early choices can be minimized.

This, I argue, offers a very different perspective from which to think about the creation of business strategies. Traditional approaches have shared the perspective of early design theorists and assumed that planning creates value primarily through a process of controlling, integrating, and coordinating – that the power of planning is in the creation of a systematic approach to problem-solving – decomposing a complex problem into subproblems to be solved and later integrated back into a whole. While integration, coordination, and control are all potentially important tasks, a focus on these dramatically underestimates the value of planning in a time of change. The metaphor of design calls attention to planning’s ability to create a virtual world in which hypotheses can be generated and tested in low-cost ways.

Everyone designs who devises courses of action aimed at changing existing situations into preferred ones. Design, so construed, is the core of all professional training.

 

Invention vs. Discovery

Contemporary design theorists have been attentive to the areas in which design and science diverge, as well as converge. The most fundamental difference between the two, they argue, is that design thinking deals primarily with what does not yet exist; while scientists deal with explaining what is. That scientists discover the laws that govern today’s reality, while designers invent a different future, is a common theme. Thus, while both methods of thinking are hypothesis-driven, the design hypothesis differs from the scientific hypothesis.

Rather than using traditional reasoning modes of induction or deduction, Stanford’s James March argues that design thinking is abductive: “Science investigates extant forms. Design initiates novel forms. A scientific hypothesis is not the same thing as a design hypothesis…A speculative design cannot be determined logically, because the mode of reasoning involved is essentially abductive.”

Underlying this emphasis on conjectural thinking and visualization is an ongoing inquiry into the relationship between verbal and non-verbal mediums. Design theorists accord a major role to the use of graphic and spatial modeling media – not merely for the purpose of communicating design ideas, but for the generation of ideas as well. “Designers think with their pencils” is a common refrain. Gestalt psychologist Rudolf Arnheim asserts that the image “unfolds” in the mind of the designer as the design process progresses. And that it is, in fact, the unfolding nature of the image that makes creative design possible. The designer begins with what Arnheim calls “a centre, an axis, a direction,” from which the design takes on increasing levels of detail as it unfolds.

The General vs. the Particular

In addition to the prominent role played by conjecture and experimentation in design thinking, there is also a fundamental divergence between the concern of science for generalizable laws and design’s interest in the particulars of individual cases.

This quality of indeterminacy has profound implications for the design process. First, the tendency to project determinacy onto past choices – ‘prediction after the fact’ – is ever-present and must be avoided, or it undermines and distorts the true nature of the design process.

Secondly, creative designs do not passively await discovery; designers must actively seek them out. Third, the indeterminacy of the process suggests the possibility for both exceptional diversity and continual evolution in the outcomes produced (even within similar processes). And finally, because design solutions are always matters of invented choice, rather than discovered truth, the judgement of designers is always open to question by the broader public.

Each of these implications resonates with business experiences. The need to seek out the future is one of the most common prescriptions in today’s writings on strategy. The risks that the search for the ideal of ‘the one right strategy’ can stifle creativity, cause myopia, and paralyze organizational decision processes have all been recognized.

Yet, the final implication – this notion of the inevitable need to justify to others the ‘rightness’ of the design choices made – is perhaps the most significant implication for the design of strategy processes in business organizations. Because strategic choices can never be proven to be ‘right’, they remain always contestable and must be made compelling to others in order to be realized. This calls into play Rittel’s role of argumentation and focuses attention on others, and the role of rhetoric in bringing them into the design conversation. Participation becomes key to producing a collective learning that both educates individuals and shapes the evolving choices simultaneously. Thus, design becomes a shared process – no longer the province of a single designer.

Participation is critical, in part, because of the role that values, both individual and institutional, play in the design process. Values drive both the creation of the design and its acceptance. Successful designs must embody both existing and new values simultaneously. The ability to work with competing interests and values is inevitable in the process of designing.

The ‘charette’ plays a fundamental role in making design processes participative and making collective learning possible. Charettes are intensive brainstorming/planning sessions in which groups of stakeholders come together. Their intention is to share, critique, and invent in a way that accelerates the development of large-scale projects. One well-known user of charettes is the architectural firm Duany, Plater-Zyberk, who specialize in the design of new ‘traditional towns’ like Seaside, Florida, or Disney’s Celebration. In their charette for the design of a new town outside of Washington, D.C., they brought together architects, builders, engineers, local officials, traffic consultants, utility company representatives, computer experts, architecture professors, shopping mall developers, and townspeople for a discussion that lasted seven days. The more complex the design process, the more critical role the charette plays – and I believe it offers a new model for planning processes in business.

Implied Characteristics of Design Thinking

Despite the avowed plurality that design theorists describe in their attempts to define the field, a set of commonalties does emerge from their work about the attributes of design thinking.

First, design thinking is synthetic. Out of the often-disparate demands presented by sub-units’ requirements, a coherent overall design must emerge. The process through which and the order in which the overall design and its sub-unit designs unfold remains a source of debate. What is clear is that the order in which they are given attention matters, as it determines the ‘givens’ of subsequent designs, but ultimately successful designs can be expected to exhibit considerable diversity in their specifics.

Secondly, design thinking is abductive in nature. It is primarily concerned with the process of visualizing what might be, some desired future state, and creating a blueprint for realizing that intention.

Third, design thinking is hypothesis-driven. Primary is the design hypothesis, which is conjectural and, as such, cannot be tested directly. Embedded in the selection of a particular promising design hypotheses, however, are a series of assumptions about a set of cause-effect relationships in today’s environment that will support a set of actions aimed at transforming a situation from its current reality to its desired future state. These explanatory hypotheses must be identified and tested directly. Cycles of hypothesis generation and testing are iterative. As successive loops of “what if” and “if then” questions are explored, the hypotheses become more sophisticated and the design unfolds.

Fourth, design thinking is opportunistic. As the above cycles iterate, the designer seeks new and emergent possibilities. It is in the translation from the abstract/global to the particular/local that unforeseen opportunities are most likely to emerge. Sketching and modeling are important tools in the unfolding process.

Fifth, design thinking is dialectical. The designer lives at the intersection of often-conflicting demands – recognizing the constraints of today’s materials and the uncertainties that cannot be defined away, while envisioning tomorrow’s possibilities.

Finally, design thinking is inquiring and value-driven – open to scrutiny, willing to make its reasoning explicit to a broader audience, and cognizant of the values embedded within the conversation. It recognizes the primacy of the Weltanschauung of its audience. While the architect imbues the design with his or her own values, successful designs educate and persuade by connecting with the values of the audience, as well.

Implications for Strategy as Design

Having developed a clearer sense of the process of design itself, we can now see the possibilities that such a metaphor might hold for thinking about business strategy, in general, and the design of strategy-making processes, in particular.

1. Like design, strategic thinking is synthetic. It seeks internal alignment and understands interdependencies. It is systemic in its focus. It requires the ability to understand and integrate across levels, both horizontal and vertical, and to align strategies across those levels. A strategic thinker has a mental model of the complete end-to-end system of value creation, and understands the interdependencies within it. The synthesizing process creates value not only in aligning the components, but also in creatively re-arranging them. The creative solutions produced by many of today’s entrepreneurs often rest more with the redesign of aspects of traditional strategies in ways that create added value for customers, rather than with dramatic breakthroughs.

2. Strategic thinking is abductive. It is future-focussed and inventive, providing the focus that allows individuals within an organization to leverage their energy, to focus attention, and to concentrate for as long as it takes to achieve a goal. The creation of a compelling intent relies heavily on the skill of alternative generation. Alternative generation has received far less attention in the strategic decision making literature than has alternative evaluation, but it is far more important in an environment of change.

3. Strategic thinking is hypothesis-driven. In an environment of ever-increasing information availability and decreasing time to think, the ability to develop good hypotheses and test them effectively is critical. Strategic thinking is both creative and critical in nature, and figuring out how to accomplish both types of thinking simultaneously has long troubled cognitive psychologists, since it is necessary to suspend critical judgment in order to think more creatively. Strategic thinking accommodates both creative and analytical thinking sequentially in its use of iterative cycles of hypothesis generating and testing. Hypothesis generation asks the question “what if...?”, while hypothesis testing follows with the critical question “if..., then...?” and brings relevant data to bear on the analysis. Taken together, and repeated over time, this sequence allows us to generate ever-improving hypotheses, without forfeiting the ability to explore new ideas. Such experimentation allows an organization to move beyond simplistic notions of cause and effect to provides ongoing learning.

4. Strategic thinking is opportunistic. Within this intent-driven focus, there must be room for opportunism that not only furthers intended strategy but that also leaves open the possibility of new strategies emerging. This requires that an organization be capable of practicing ‘intelligent opportunism’ at lower levels.

5. Strategic thinking is dialectical. In the process of inventing the image of the future, the strategist must mediate the tension between constraint, contingency, and possibility. The underlying emphasis of strategic intent is stretch – to reach explicitly for potentially unattainable goals. At the same time, all elements of the firm’s environment are not shapeable, and those constraints that are real must be acknowledged in designing strategy.

6. Strategic thinking is inquiring and, inevitably, value-driven. Because any particular strategy is invented, rather than discovered, it is contestable and reflective of the values of those making the choice. Its acceptance requires both connection with and movement beyond the existing mindset and value system of the rest of the organization, which relies on inviting the broader community into the strategic conversation. It is through participation in this dialogue that the strategy itself unfolds, both in the mind of the strategist and in that of the larger community that must come together to make the strategy happen.

Leveraging the Design Metaphor

What would we do differently in organizations today, if we took the design metaphor seriously? A lot, I believe.

The problems with traditional approaches to planning have long been recognized. They include the attempt to make a ‘science’ of planning, with its subsequent loss of creativity; the excessive emphasis on numbers; the drive for administrative efficiency at the expense of substance; and the dominance of single techniques, inappropriately applied. Yet, decades later, strategists continue to struggle to propose clear alternatives to traditional processes.

Design offers a different approach and suggests processes that are more widely participative, more dialogue-based, issue-rather-than-calendar-driven, conflict using rather than conflict avoiding, all aimed at invention and learning, rather than control.

If we were to take design’s lead, we would involve more members of the organization in two-way strategic conversations. We would view the process as one of iteration and experimentation, and pay sequential attention to idea generation and evaluation in a way that attends first to possibilities before moving onto constraints. Finally, and perhaps most importantly, we would recognize that good designs succeed by persuading, and great designs by inspiring.

Jeanne Liedtka is the United Technologies Corporation Professor of Business Administration at the University of Virginia’s Darden School of Business and the former chief learning officer at United Technologies. She is the author of three books, most recently Solving Problems with Design Thinking: Ten Stories of What Works (Columbia University Press, 2013). This article was originally published in California Management Review.

Design has been proclaimed the ‘secret weapon’ for competition in the 21st century. Here’s how today’s managers can start thinking more like designers.

by Jeanne Liedtka

1.		2.
Jorn Utzon Sydney Opera House		Frank Gehry Guggenheim Museum
3.		4.
Coco Chanel LBD		Golden Gate Bridge
5.		6.
Pablo Picasso Guernica		Ingvar Kamprad IKEA
7.		8.
New Urbanism Seaside Community		New Urbanism Seaside Community
9.		10.
Thomas Jefferson University of Virginia		Antoni Gaudi Sagrada Familia

THE PROBLEMS WITH TRADITIONAL APPROACHES to planning have long been recognized. They include the attempt to make a ‘science’ of planning, with its subsequent loss of creativity; the excessive emphasis on numbers; the drive for administrative efficiency at the expense of substance; and the dominance of single techniques, inappropriately applied. Yet, decades later, strategists continue to struggle to propose clear alternatives to traditional processes.

Design offers a different approach and suggests processes that are more widely participative, more dialogue-based, issue-rather than calendar-driven, and conflict-using rather than conflict-avoiding, all aimed at invention and learning, rather than control.

But beneath all the hyperbole, we have to question what it would actually mean for business strategy if managers took the idea of design seriously. What if we tried to think the way designers do? Having studied how various kinds of designers work and create for the past decade, I offer the following ten suggestions as a starting point in the conversation.

 

If We Took the Design Metaphor Seriously

1. We would realize that designing business strategy is about invention. For all their talk about the art and science of management, strategists, in the analytic search for ‘the one right strategy’, have mostly paid attention to the science. Taking the design metaphor seriously means acknowledging the difference between what scientists do and what designers do. Whereas scientists investigate today to discover explanations for what already is, designers invent tomorrow to create something that isn’t.

If strategy is indeed an invention –
just one story about the future among
many – then it is always contestable.

 

We all care about strategy because we want the future to be different from the present. But powerful futures are rarely discovered primarily through analytics. They are, as Walt Disney said, “created first in the mind and next in the activity.” This doesn’t deny analysis an important role, but it does subordinate analysis to the process of invention.

As an example of the tension between invention and analysis, take the Sydney Opera House, whose designer, Jørn Utzon, was awarded architecture’s highest honor, the Pritzker Prize, in 2003. It’s hard now to imagine Australia without the Sydney Opera House, but it’s quite possible that it would never have been built if initial estimates for the project had been accurate. In 1957, when Utzon’s proposal was selected, accountants estimated that the project would take five years to complete and cost $7 million. In reality, it took 14 years and cost more than $100 million. John Lowe, who chronicled the story of the opera house, quotes Ove Arup, an engineer who collaborated with Utzon on the project: “If the magnitude of the task had been fully appreciated… the Opera House would never have been built. And the fact that it wasn’t known…was one of the unusual circumstances that made the miracle possible.” Thank goodness the accountants got the analysis wrong.

 

2. We’d recognize the primacy of persuasion. If strategy is indeed an invention – just one story about the future among many – then it is always contestable. Leaders must therefore persuade others of the compelling wisdom and superiority of the story they have chosen. They must, in fact, make the story seductive; in selling their strategy, they must, to put it bluntly, treat employees like lovers instead of prostitutes.

It’s not easy to entice people into sharing an image of the future. After all, strategies in most industries today call on people to commit to something new and different, to step away from the security of what has worked in the past. This is never an easy sell, even for the most seasoned leaders. Like venturing into a new relationship, persuading others to share your vision works best when you issue an invitation instead of a command.

Designers understand this. Successful architects, for instance, know that to get their great buildings built, they must persuade clients to pay for them, and that requires helping clients visualize the end result. In fact, the more inventive the architect, the more critical the ability to conjure the image for the client and for what may be a very skeptical public. When Frank Gehry began sketching what would become the Guggenheim Museum in Bilbao, Spain, he already had a profound feel for what would draw a very traditional Basque audience to his stunningly inventive creation. Gehry explains his approach: “You bring to the table certain things…the Basques, their desire to use culture, to bring the city to the river. And the industrial feeling.”

Writing in The Los Angeles Times, architecture critic Nicolai Ouroussoff describes the result: “Gehry has achieved what not so long ago seemed impossible for most architects: the invention of radically new architectural forms that nonetheless speak to the man on the street. Bilbao has become a pilgrimage point for those who, until now, had little interest in architecture. Working-class Basque couples arrive toting children on weekends. The cultural elite veer off their regular flight paths so they can tell friends that they, too, have seen the building in the flesh.” Gehry’s Guggenheim persuades and seduces by connecting to the Basque’s past and pointing toward a new future. That is how strategies become compelling and persuasive: they show an organization its future without discounting its past. They tell us what we get to keep as well as what we must lose.

3. We’d value simplicity. Think of an object you love. Chances are that it is complex enough to perform its function well, but no more complex than it needs to be. In other words, it’s an elegant solution. No design is a better exemplar of simplicity and elegance than the little black dress, or ‘LBD’. The most striking aspect of the LBD, designed by Coco Chanel in the 1920s, is its simplicity. The LBD does not overprescribe or adorn, but instead offers a black canvas, which its wearer tailors to the function at hand: add pearls and heels to dress up; a bright scarf and flats to dress down. The possibilities are endless, making the LBD one of the most functional items in a woman’s wardrobe. But the LBD goes beyond mere functionality to achieve elegance: it lacks nothing essential and contains nothing extraneous.

What if we used the LBD as a model for business strategy? We would end up with strategies that would be neither incomprehensible to all save their creators, nor banal and self-evident. They would eschew the faddish and focus on enduring elements, incorporating a versatility and openness that invited their ‘wearers’ to add adornments to fit the occasion at hand. Perhaps most importantly, they would emphasize our positives while acknowledging our flaws – all in the service of offering us hope for a better (thinner) tomorrow.

 

4. We’d aim to inspire. One of the saddest facts about the state of business design is the extent to which we settle for mediocrity. We don’t even attempt to engage our audience at an emotional level, let alone to inspire. Yet the difference between great designs and those that are only ‘okay’ is the way the former call us to something greater.

Consider the differences between the San Francisco Bay Bridge and the Golden Gate Bridge. The Bay Bridge offers a route across the water. The Golden Gate Bridge does that, too, but it also sweeps, symbolizes, and enthralls. It has, like the Sydney Opera House, become an icon of the land it occupies. How many of our business strategies are like the Golden Gate Bridge? Too few.

 

5. We’d master the core skills first. Each of the designs we’ve looked at so far is inventive, persuasive, elegant, and inspiring. Yet all of them succeed because they also work well, and they do this because of the mastery of technical elements. The Sydney Opera House’s sail-shaped roof vaults required expert engineering. The Guggenheim Bilbao’s undulating titanium-clad exterior was possible only with the help of sophisticated computer modeling. And the little black dress worked because Chanel pioneered a synthetic fabric – jersey – that flowed instead of clinging.

If you examine the 1895 painting First Communion, you’ll see evidence of extraordinary technique; the layers of white in the young girl’s dress, in particular, are astonishing. Who was the artist? Pablo Picasso, who, at age 14, had clearly mastered conventional art. Now consider Guernica, which Picasso painted in 1937 to memorialize the Nazi bombing of the Basque village. There is little that is conventional about this painting, considered one of modern art’s most powerful antiwar statements. Picasso, who by this time was recognized as one of the most functional artists of the twentieth century, had moved beyond conventional technique, using his mastery to push the frontiers of art.

 

6. We’d learn to experiment. How does one move from mastery to brilliance? From technical competence to true innovation? By experimenting. Some design experiments take place in the mind; think of the strategic planning process, in which strategists imagine and test new futures – and some find their expression in physical prototypes. Some experiments are even conducted in the real world, and here I offer my only design story from the business world: IKEA. When the company’s visionary founder, Ingvar Kamprad, started out, he had only a general sense of what would become IKEA’s revolutionary approach to the furniture business. Nearly every element of its now-legendary business model – showrooms and catalogs in tandem, knockdown furniture in flat parcels, and customer pickup and assembly – emerged over time from experimental responses to urgent problems. Customer pickup, for instance, became a central element of IKEA’s strategy almost by chance, when frustrated customers rushed into the warehouse because there weren’t enough employees to help them. The store manager realized the advantages of the customers’ initiative and suggested that the idea become permanent.

 

7. We’d be more inclusive in our strategic conversations. The image of the solitary genius at work in his atelier is as much a myth in art, architecture, and science as it is in business. Design teaches us about the value of including multiple perspectives in the design process – turning the process into a conversation. The more complex the design challenge, the greater the benefits of multiple voices and perspectives.

Consider, for instance, the complex and political process of urban planning – in particular, the New Urbanism movement, which emerged from the experiences of the developers and architects of the innovative Seaside Community in Florida. What distinguishes New Urbanism from other architectural movements is its emphasis on wide participation. This participation takes the form of a charrette, an interactive design conversation with a long tradition in art and architecture. Derived from the French word meaning ‘little cart’, charrettes were used at the first formal school of architecture, the Ecole des Beaux Arts in Paris, in the 19th century. As students progressed from one level to the next, their projects were placed on small carts, onto which students would leap to make their frantic finishing touches.

The charrette process used in New Urbanism projects is based on four principles: involve everyone from the start who might build, use, sell, approve, or block the project; work concurrently and cross-functionally (architects, planners, engineers, economists, market experts, citizens, public officials); work in short feedback loops; and work in detail. The charrette, I believe, offers a powerful alternative to the traditional strategic planning process by inviting the whole system to participate and by including local knowledge in the conversation.

 

8. We’d learn to talk differently. Of course, simply putting a variety of people in a room together is not enough. To produce superior designs, we must change the way we talk to one another. Most of us have learned to talk in business settings as if we are in a debate, advocating a position. But within a diverse group, debate is more likely to lead to stalemate than to breakthroughs: breakthroughs come from asking new questions, not debating existing solutions; they come from re-examining what we take as given.

As a case in point, consider the design of New York’s Central Park. In 1857, the country’s first public landscape design competition was held to select the plan for this park. Of all the submissions, only one – prepared by Frederick Law Olmsted and Calvert Vaux – fulfilled all of the design requirements. The most challenging requirement – that cross-town traffic be permitted without marring the pastoral feel of the park – had been considered impossible to meet by all the other designers. Olmsted and Vaux succeeded by eliminating the assumption that the park was a two-dimensional space. Instead, they imagined it in three dimensions, and sank four roads eight feet below its surface.

 

9. We’d work backwards. Most managers are taught a straightforward problem-solving methodology: define a problem, identify various solutions, analyze each, and choose one. Designers begin at the end of this process, as Stephen Covey has famously admonished, by achieving clarity about the desired outcomes of the design and then working backwards.

I’d like to illustrate this approach with a story that is close to home. Thomas Jefferson, who included education among his many passions and interests, devoted the last decade of his life to founding the University of Virginia. For Jefferson, the link between democracy and education was clear: without an educated populace, there was no hope of protecting the fledgling democracy that he and the other founding fathers had worked so hard to create. Jefferson’s university would produce free-minded graduates, and therefore it would need to differ from prevailing educational institutions in many ways: it would be a community where faculty and students work as partners to create a dialogue that produces the kind of learning that democracy requires. The typical large central building would be replaced with a collection of smaller buildings. This garden-encircled ‘academic village’ would be a community of learning where students would have unprecedented freedom in both the choice of curriculum and in governing their own behaviours.

To the modern observer, Jefferson’s genius may appear to lie in the beauty of the architecture he created. In reality, he took much of his architectural inspiration rather directly from the sixteenth-century Italian architect Palladio. Jefferson’s true genius lies in the power of the space that he created and its ability to evoke so vividly the purpose for which it was designed.

 

10. We’d start the conversation with possibilities. Great design, it has been said, occurs at the intersection of constraint, contingency, and possibility – elements that are central to creating innovative, elegant, and functional designs. But it matters greatly where you start. In business, we have tended to start strategic conversation with constraints: the constraints of budgets, of ease of implementation, of the quarterly earnings focus that Wall Street dictates. As a result, we get designs for tomorrow that merely tweak today’s. Great design inevitably starts with the question “What if anything were possible?” After all, if strategy is an invention, a product of our imaginations, and our assumptions are bound only by what we can imagine, then removing the assumptions that arise from the belief in constraints is job number one.

For my final example, we will turn to one of my favorite cities, Barcelona, and examine the story of its great unfinished cathedral, Sagrada Familia, designed by Antoni Gaudi. Gaudi was just 32 years in 1884, when he was named principal architect of the church known as the ‘Cathedral of the Poor’, which would be built entirely through donations. From the outset, Gaudi envisioned the cathedral he wanted to create – a ‘Bible in stone’, a soaring interior that evoked a forest and an exterior with towers that reached for the heavens. He resolved to design his cathedral as though anything were possible, even though the constraints he faced were seemingly insurmountable. Gaudi chose to disregard the usual constraints of time and money. “My client is in no hurry,” was his response to skeptics who doubted that the church would ever be completed. When funds became too scarce to continue construction, he went back to designing, building increasingly detailed plaster models and stepping out of his architect-builder role to raise funds personally.

The very real constraints imposed by the construction materials and techniques available at the time were impossible for Gaudi to ignore. Because the natural world served as one of the primary sources of inspiration in all of his designs, he aspired to create soaring spaces with natural light and found himself profoundly encumbered by the need for straight internal load-bearing walls and beams. Without the mathematical knowledge and modeling techniques available today, the physics of the cathedral’s construction were also a challenge as Gaudi sought to avoid the massive arches and buttresses common to the great medieval cathedrals.

Great design, it has been said,
occurs at the intersection of constraint,
contingency, and possibility

 

In order to work around these constraints, Gaudi sought out new tools and techniques. He found two tools, little-used in Barcelona at the time, that would become the foundation of his work. The first was the ‘catenary arch’, a simple arch whose shape could be simulated by suspending a chain upside down. Gaudi was able to calculate the load-bearing demands placed on the massive cathedral towers by suspending small bags of sand from the inverted chain to mimic the weight that the towers would need to bear. This created a perfect model (albeit upside down!) of the possible shapes and dimensions that a real tower could take on. Computer models run on Gaudi’s towers demonstrate the surprising accuracy of his method.

The second tool that he discovered was a new material: cement. Combined with iron beams, brick or stone pillars, and a new roofing approach, cement allowed the exterior walls to bear most of the roof’s weight, giving Gaudi the freedom of interior design that he craved. Gaudi died at the age of 74 (ironically, run over by a streetcar on his way to church) with his cathedral only partially completed. Ten years later, the Spanish civil war came to the city, bringing construction to a halt. Rioters burned his workshop, destroying all of his plans and archives. Fortunately, the plaster models survived the fire and are being used today to guide the final phase of the cathedral’s construction. Completion is expected within the next 20 years.

All of the design stories told here are about possibilities made real, some of them against great odds. In order to achieve such designs, we must first aspire to achieve them, challenging the mediocrity of much of today’s design. We must also learn new skills, including the mastery of core technologies and the ability to persuade, to talk differently, to experiment. Finally, we must embrace new processes – processes that invite a more diverse set of perspectives into the strategic conversation, that work backwards from a clear sense of the outcomes that we want to create. And we must start our conversations with possibilities. The kind of exemplary designs discussed here are rarely achieved even in design – let alone in business. But as we all know, it is that which is hard to do that is most worth doing.

 

Jeanne Liedtka is the United Technologies Corporation Professor of Business Administration at the University of Virginia’s Darden School of Business and the former chief learning officer at United Technologies. She is the author of three books, most recently Solving Problems with Design Thinking: Ten Stories of What Works (Columbia University Press, 2013).

Cities, buildings, products, services, systems, and strategies all face the same need to combine expertise, insight, engagement and adaptation. It’s time to confront the tensions of design.

by Jeanne Liedtka and Henry Mintzberg

 

NEARLY 40 YEARS AGO, Nobel Laureate in Economic Sciences Herbert Simon argued that, “everyone designs who devises courses of action aimed at changing existing situations into preferred ones. Design, so construed, is the core of all professional training: architecture, business, education, law, and medicine are all centrally concerned with the process of design.”

Given the widespread attention given to design in the business press in recent years, it appears the time has finally come when the business world is taking this message seriously. Yet design is hardly the core of any current management training – or its practice. In fact, it’s not clear that we even agree on what design means. As two business academics long interested in this topic, our purpose here is to show the robustness of the notion of design; to examine the various forms ‘designing’ takes; and to explore its potential for helping people manage more effectively.

The Terminology of Design

Design is both a noun and a verb. As a noun, it refers to an outcome, and some are superior to others: there are great designs, and there are mediocre designs. To appreciate the difference between great and mediocre design, consider a comparison of the Golden Gate and San Francisco Bay bridges. Both offer reliable transport across the water separating San Francisco and its neighbours – but the similarity ends there. The Golden Gate enthralls, sweeps, and symbolizes, inspiring art, music, and myth. The San Francisco Bay Bridge, meanwhile, merely gets the job done. Does this difference matter? We believe that it does – and that business has much to learn from this ‘tale of two bridges’.

Functionality is an insufficient pre-condition for a great design. The personal objects that people cherish do more than just work, they share a number of other characteristics: they seem simple but complete to their users; they contain nothing extraneous, yet lack nothing important; they engage at an emotional level; beyond their ability to serve function without fanfare, they hook their users in an almost sensual way; and finally, great designs manage to be simultaneously enduring and innovative. They connect to the past with a reassuring familiarity, while surprising users with their inventiveness.

Designers who persuade others offer novelty and familiarity in tandem because they understand how users see the world.

 

The important lessons of ‘design as a noun’ turn out to be reassuringly straightforward: if you want great designs, seek simplicity, emotional engagement, and that sweet spot between the familiar and the new. And, of course, do the job well. And yet, if it’s all that obvious, why are we surrounded by so many mediocre designs?

That brings us to the tricky part: design as a verb. Like most things that are hard to do, this is where the competitive advantage lies. Better designing – of products, organizations, strategies – holds the key to unlocking the real potential of design for business. The basic attributes of successful designing are well-recognized: the process is synthetic, future-focused, hypothesis-driven, and opportunistic. It involves observation, the use of frameworks and prototyping. But peel back from these high-altitude accounts, and you will find that the particulars of designing involve varying approaches.

Consider the revolutionary architectural and social experiment of Brasilia, the most completely- planned city of the modernist movement. Rising from the largely uninhabited central plateau of Brazil in the 1950s and designed in exacting detail to be ‘the model city of the future’, it anchors a position at one extreme of design approaches, whereby the designer is evident, declaring his or her intentions, resisting compromise, and imposing his or her will on users.

At the other extreme are the lovely villages perchés (perched villages) of Provence. Evolving over time and through the participation of many, the hand of any single designer seems hardly visible. Yet these villages retain a sense of symmetry and coherence that suggests intention and conscious forethought – no less so than Brasilia.

Exploring the design continuum from the stark, fixed, and imposed, to the adapted, fluid, and evolving allows us to develop a deeper understanding of what constitutes ‘design as a verb’, and sets up an examination of the challenges of designing for business. To explore their range, we describe four disparate approaches to design.

The Formulaic Approach: Brasilia

First, we return to Brasilia, where the design tensions were resolved by coming down heavily in favour of the designer’s global knowledge and expertise, a controlled process, and a fixed design. Architect Oskar Niemeyer used established techniques and official principles to reach what he considered to be an optimal answer. We use the term ‘formulaic’ to describe this approach.

For modernist architects, the crises of the highly-industrialized cities of the world were reflected in their traffic, congestion, and poor standards of living. Only ‘total planning’, they believed, could resolve these problems. By creating a new kind of city, Brasilia’s designers set out to create a new kind of society, using architecture as an instrument of change. The modernist principles driving design included the organization of the city into separate zones for work, living, and recreation; the replacement of traditional streets with high-speed one-way avenues radiating out from the center; and the creation of superquandra – large apartment complexes containing standardized family units intended to break down traditional socioeconomic barriers. The resulting design is specified by a set of pre-existing principles, rather than emerging from a more open-ended process of experimentation. Brasilia’s design consciously resists attempts at adaptation, rather than encouraging them. It is meant to stay true to what it is – a ‘model’ city.

The Visionary Approach: IKEA

Consider the pronounced similarities and differences between the above process and the story of Ingvar Kamprad and his creation, IKEA. Kamprad’s personal ethic of thrift and simplicity provided the underlying values behind IKEA’s defining intention: “To create a better everyday life for the many by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.”

Opportunities exist in the white spaces between divisions, regions, and functions of every company.

In the IKEA story, we observe a more organic design process at work. Kamprad was more the visionary than the expert, more attuned to learning and adapting than to knowing and controlling. In a sense, he had no choice – he started without the power of bulldozers or a body of principles. He had, at best, the equivalent of a small number of people with shovels and only a general notion of what they were setting out to build. And so he adapted to the constraints he could not eliminate. Nearly every element of IKEA’s now legendary business model – showrooms and catalogs in tandem, knockdown furniture in flat parcels, massive stores readily accessibly by automobile, and customer pick-up and assembly – emerged over time as responses to urgent problems that the struggling furniture company faced. “Regard every problem as a possibility,” was Kamprad’s mantra.

Interestingly, the IKEA story also shares some characteristics of Brasilia. Both are intensely possibility-driven, with the designer’s hand evident and dramatic. Yet Kamprad’s visionary design process parts company with formulaic design by relying upon personal creativity, rather than formulaic technique, affording less control but more responsiveness to opportunity. The resulting design is never really fixed; it is meant to be flexible and adaptive. The fallible person – the visionary – takes over from the ostensibly infallible technique, enhancing the potential to experiment and learn.

The Conversational Approach: Seaside

This approach opens up the design process – making it a conversation among many people, all of whom should be recognized as designers. Two of today’s leading proponents of involvement in the design process are Andrea Duaney and Elizabeth Plater-Zyberk, founders of New Urbanism. Their first and best-recognized project, designed more than 20 years ago, was Seaside Florida, an 80-acre beachfront town on the Gulf of Mexico. Architecture Week called it “one of the most influential design paradigms of its era”; and Newsweek, “the most influential resort community since Versailles.”

What distinguishes New Urbanism from other architectural approaches is not only a different set of principles, but also its insistence on wide participation in designing, through the use of a process called a charrette. In the words of Duaney and Plater-Zyberk, “The charrette brings together all interested parties who are invited to offer direction and feedback while the plan is being created. It provides a forum for ideas and offers the unique advantage of giving immediate feedback to the designers while giving mutual authorship to the plan by all those who participate.” By convening a conversation that puts the entire system in the room, the architects control the boundaries, but not the conversation itself. Those involved are not merely consulted; they are engaged, and they become members of the design team. Put differently, all kinds of ‘quiet designers’ enter the process – bringing with them their local knowledge.

With the Seaside charrette, the architects created a context in which experts and users learned together, and out of which the design appeared. This process can be admittedly chaotic, which must be tolerated if creativity and consensus are to emerge. Like Brasilia, however, the design itself is eventually fixed. The charrette ends, and our quiet designers go home. Designing stops and construction starts.

The Evolving Approach: Linux

In this approach, designing in the traditional sense – as practiced by identified designers at specific points in time and resulting in fixed designs – disappears. We now enter the world of evolving, or never-ending design, not by experts, but by communities in the course of living their collective lives.

This evolutionary design is found in the Linux operating system and the open source software process it pioneered. Linux is being designed with almost continuous adaptation in mind. In recounting the story of its origins, software designer Eric Raymond opens with a question: “Who would have thought that a world-class operating system could coalesce as if by magic out of part-time hacking by several thousand developers scattered all over the planet, connected only by the tenuous strands of the Internet?”

Successful leaders in both management and the physical fields of design have an acute sense of the particular, the potential, and the possible.

Linux’s success challenged many of the basic premises of traditional software design – foremost among them, that large projects need to be built like Gothic cathedrals, carefully controlled by a small band of experts who specify every detail and release their design to users only upon completion. Linus Torvalds, the originator of Linux, created this revolution by starting with a basic scaffolding offered by another programmer, sharing the source code, and inviting anyone interested to participate. He released revisions early and often, and above all, treated users as co-developers, building a “self-correcting system of selfish agents” whose pace of ongoing improvement was unprecedented. “The closed-source world cannot win an evolutionary arms race with open-source communities that can put orders of magnitude more skill time into a problem,” Raymond observed, because “given enough eyeballs, all bugs are shallow.”

Like Duaney and Plater-Zyberg, Torvalds leads the conversation rather than writes the code. The ‘community’ does the designing, and designers and users become almost indistinguishable.

Lessons for Business

The four approaches outlined above reveal some of the core tensions of design and the various trade-offs that each approach makes. Following are four core tensions that hold valuable lessons for business.

1. Who drives the design?

Who should drive the design? The expert who knows better, who has the global, explicit knowledge, or the user who understands better, who has the local, tacit understanding? The paradox around deciding who designs involves the apparent trade-off between a reliance on experts and visionaries capable of radically innovative – but potentially difficult to implement – solutions versus a reliance on users with a tendency to produce ‘me-too’ designs that they enthusiastically execute.

Designer-dominated processes can have a clear advantage when it comes to producing designs characterized by radical change. The creation of Brasilia, for instance, was an audacious feat – it is unlikely that engaging a community of potential users would have produced such a futuristic model city. As users, most of us crave familiarity, not novelty; radical designs alienate us.

But at what cost do we exclude user involvement? The extent to which Brasilia actually achieved its designers’ ambitions is mixed. The standardization intended to produce equality produced, for many, a feeling of anonymity instead. In place of gaining an enriched community, many residents felt a loss of privacy. Instead of appreciating the orderliness of the space, they missed the messiness of street life. Despite the homogeneity of the superquandra, the old class distinctions remain. The risks of a design process that relies too heavily on experts are evident here.

If this is reminiscent of strategic planning in business, that is because formulaic design has been the corporate world’s preferred approach. This approach, with its emphasis on the designer’s worldview and its disconnection from local knowledge, represents the ‘yang’ of designing. It is ambitious, aggressive, and intrusive. It relies on techniques and information that, if inaccurate, can be fatal. Its detachment from users – the people who must live with the design – is a potentially fatal flaw. Yet it is capable of great change if the bulldozers are powerful enough and the terrain is reasonably predictable.

To succeed at significant change, either the formulaic or visionary designer must persuade users to accept a radical design, or conversational and evolving designing must engage users in ways that generate more-innovative designs. Designers who persuade others offer novelty and familiarity in tandem because they understand how users see the world.

2. How does the designing happen?

This involves the tension between controlling a design process to achieve coherence and order versus opening up the conversation and risking some ‘messiness’ to achieve creativity and broader involvement. The inclusion of non-experts brings valuable ownership and local knowledge, but may also bring chaos and mediocre solutions. Getting more-innovative thinking from users themselves involves how this tension is resolved.

Successful leaders in both management and the physical fields of design seem to have an innate sense of when to allow flexibility into the conversation, when to tap the group’s potential for creating better solutions, as well as when to abandon the search for consensus to interject order from above. They have no formulas – just an acute sense of the particular, the potential, and the possible. These leaders/designers seem able to give up enough control to find creativity without losing coherence. Kamprad’s vision seems exemplary in its capacity to hold tight and let loose at the same time, in order to engage the collective creativity of the company’s employees and customers. There are enormous opportunities to bring this kind of conversational design into business.

Business leaders seeking better design thinking should pay careful attention to the challenges of preventing premature consensus emerging in the face of fear of chaos, and of maintaining the fluidity that is a prerequisite for breakthrough designs. Architect Frank Gehry notes that clients are rarely comfortable with the indeterminacy of an iterative process; they almost always push hard to fix the design and ‘end the uncertainty’. Conversational design challenges leaders in ways that formulaic and visionary design do not. Business cultures that centre on hierarchy, expediency, and authoritarian leadership get in the way of good conversations. We all know about opportunities that exist in the white spaces between divisions, regions, and functions of every company; what we do not know is how to tap these opportunities. Recognizing the role of conversations in exploring new possibilities can produce dramatic innovation.

3. When is the designing ‘finished’?

The world does not stand still, but designs must – at least for a time: buildings have to be built, products brought to market, strategies implemented, and structures established. The dilemma in each case is how designs can be built to adapt, yet preserve their integrity. In other words, how can designing deal with change and continuity concurrently?

Former Intel chief Andy Grove has said that his firm’s strategy process evolved in alternating cycles of chaos and single-minded focus – sometimes adapting, sometimes closing. Companies that do nothing but change – constantly reorganizing, always envisioning some new strategy or other, bringing in yet another team of change consultants – never reach closure, and so are no better off than companies that never change. Even the most evolving designs have to be fixed for a time.

The key, we believe, is to get the basics right so that the specifics can easily be changed. As Raymond observed about software design, “You often don’t really understand the problem until after the first time you implement a solution. If you want to get it right, be ready to start over at least once.”

In closing

Design is not just a metaphor for management, but, as Simon said, the very essence of it. Cities, products, services, systems, structures and strategies all face the same need to combine expertise, insight, engagement and adaptation. To design, and to manage in general, is not to resolve the tensions among different needs so much as to function within them. To appreciate this will be to get more of those great designs that so enhance our daily lives.

 

Jeanne Liedtka is the United Technologies Corporation Professor of Business Administration at the University of Virginia’s Darden School of Business and the former chief learning officer at United Technologies. She is the author of three books, most recently Solving Problems with Design Thinking: Ten Stories of What Works (Columbia University Press, 2013).

Henry Mintzberg is the Cleghorn Professor of Management Studies at McGill University. This is an excerpt of an article that appeared recently in the Design Management Review, a publication of the Design Management Institute.

By Tony Golsby-Smith

How Design Offers Strategy a New Tool Kit

A FRIEND OF MINE WITH A BACKGROUND IN MEDIA recently found himself in the role of CEO of a major government department. One of the first things he noticed is how abused the word ‘strategy’ is: everything has to be a strategy in order to get noticed. He was sure someone would have a strategy for visiting the restrooms. But the second thing he noticed was that no-one was actually thinking strategically: the more the word was used, the less meaningful it became.

It should not be like this. Strategy should be the process that enables organizations to create new futures and engage their people in exciting tasks. Instead, it mostly weighs an organization down with more data and inputs.

Arguably the strategy process is one of the weakest processes in most organizations. They are far better equipped with the tools for operational management and ‘defending the status quo’ than they are for inventing and shaping new futures, and there is a good reason for this: modern organizations exist at the ‘delivery end’ of the thinking life cycle, not at the discovery end.

Once an organization becomes mature and viable, it stabilizes ideas into structures, and ‘efficiency’ becomes its overriding goal. But strategy is not about delivery and efficiency: it is about discovering alternative possibilities. Inherently, this will challenge the hypotheses on which the organization is built. Seen in this light, strategy will threaten the organization’s stability, so the organization will immunize itself against it. The budget process is a practical example of how this ‘immune system’ works: it hardwires yesterday’s assumptions about inputs and outputs into plans and commitments, and so habituates organizations into preserving the status quo.

We need a new approach to strategy that can unlock fresh energy and make it more innovative and less data driven. This is what design thinking can offer.

The Two Roads Story

The heart of the Two Roads story is that the western world bought the wrong thinking system from Aristotle. This ranks as one of the worst investment decisions our civilization has made, and it has led us into using the wrong toolkits for our enterprises ever since. The thinking system we invested in was Aristotle’s ‘analytics’, and we made the choice around the era of the Enlightenment, which ushered in what we today call the Scientific Age. That decision has proven so sweeping that it now monopolizes what most people characterize as ‘thinking.’ Thinking processes are dominated by the culture of the sciences, and you get no better evidence of this than our universities, the home of thinking, where any subject must position itself as a science to be taken seriously. Traditional approaches to strategy sit fairly and squarely at this table of logic and Science.

What few people realize is that Aristotle conceived two thinking systems, not one. We made the big mistake of just buying one, and allowing it to monopolize the whole territory of thought. We should have bought them both, and used them as partners. Instead we have only one thinking tool in our hands and we are using it for all the wrong purposes. Here is how it happened.

Aristotle was the first person to codify thinking into a system. He did this for a reason: he lived in perhaps the most dramatic social experiment of human history, the invention of democracy by the Greek leader Kleisthenes around 450 BC. This political system did what no other had tried to do: it delivered decision making into the hands of human beings. Prior to that, regimes were governed by the king or the gods. That meant that no matter how sophisticated they might have been in terms of Engineering or Mathematics, they were not sophisticated about human reasoning, especially where decision making was concerned. Clearly, Kleisthenes’ political reforms created a great need to codify the processes by which humans think and can arrive at ‘truths.’ If ever there was a do-it-yourself manual, this was it! Ordinary humans were playing god in Aristotle’s Greece.

The Logic Road

In answer to this demand, Aristotle invented the great ‘truth making’ machine of logic, and he brilliantly described it in his books on the Analytics. The heart of the machine was the ‘syllogism,’ and it dominates the works: if a=b, and b=c, then a=c. This formula could take inputs and compute them into truth claims that were universally true and incontrovertible.

In one brilliant essay, Aristotle laid down the path for deductive reasoning that has dominated the western mind for the last 300 years. With it, we have built what I call the ‘logic road,’ and it carries pretty much all of our intellectual traffic these days. The reason for its appeal is not so much the method but what it offers – control and certainty. If I can pull apart any system into its working parts and then explain it in cause-and-effect relations, surely I will be able to fully know the truth about this system. That knowledge will give me control; there will be no surprises, and I will be in the box seat. And with control I will also get certainty: I can predict outcomes and guarantee results.

The logic road convinced us more than it convinced Aristotle. He was always uneasy about the inputs into the system. He was confident that his inference-making engine worked well, but what if we could not trust the inputs? He never answered that question to his satisfaction (consider the last two pages of his Analytics, where he confronts this worry); but centuries later, two great minds conspired to apparently clean up the inputs question.

Firstly, Galileo pioneered the use of numbers to represent reality. Rather than represent the data of the universe as fable or story, he turned all its mystery into numbers – cold, hard, concrete numbers. Then Descartes, who hated uncertainty and ambiguity, elevated Mathematics to the head of the table as ‘the only true Science.’ Descartes famously hated the ‘soft’ humanities and declared that only numbers were unambiguous and ‘true.’ With this they conspired to patch up the inputs question and thus ‘logic’ became apparently water tight.

The logic road underpinned the era of Science, which delivered us technologies and made the Industrial Revolution possible. The Revolution delivered us untold wealth and capitalism, and sitting at the end of this beneficial trail lays modern management and its strategic processes, deeply indebted to the logic road. But the logic road has run into all sorts of trouble, mainly because it has failed to deliver on its main promise of control.

I often say to management groups that I work with, “We have never had so much information available to us as we have today, so who feels we have never been more in control of our world and our destiny?” Nobody does. So what has gone wrong?

The Second Road

For the answer, we can begin by going back to Aristotle. He was smarter than we were in rushing in and over-investing in his logic product. He significantly limited the application of his analytics engine to a certain domain of truth: he called this domain ‘where things cannot be other than they are.’ By this he meant the realm of Natural Science. If you have a truth question concerning the realm of nature or any realm where things do not change, by all means use the logic road. But he said that this domain was not the only domain for truth making. There was a second domain which he characterized in the memorable phrase, ‘where things can be other than they are.’ By this he meant the whole domain of human decision making, where we in fact ‘play god’ and determine alternative futures.

For this second domain, Aristotle conceived an entirely different thinking pathway that combined invention, judgment and decision wrapped up in a social process of debate. He called this process ‘rhetoric’ or ‘dialectic’, and I call it the Second Road to truth. Aristotle described it just as fully, as his analytic engine in various books including the Rhetoric and the Topica. The critical difference between the two roads is always best understood by the different domains of question that they address: rhetoric was the road by which humans designed alternative futures; analytics was the road by which we diagnosed what already exists.

 

We cannot analyze our way one inch
into the future, for the simple reason that
the future does not exist yet, so it is not
there to analyze.

As Richard Buchanan of Carnegie-Mellon University has brilliantly demonstrated in a series of landmark essays, design is the modern rhetoric. The significance of this cannot be overstated: if strategy is in fact a design process, it has been using an incomplete tool kit to date.

Human beings do not analyze their way into the future. In fact, we cannot analyze our way one inch into the future, for the simple reason that the future does not yet exist, so it is not there to analyze. Let me demonstrate this to you quite simply. At the heart of the logic road lies the idea of proof and empirical reasoning. This is hard wired into our culture by the common challenge, “Prove it!” If we cannot ‘prove’ a hypothesis, we are undone.

Suppose I propose a dream for our organization in which I imagine an alternative situation, different from and much more desirable than the present situation. When management challenges me to “prove it!” I cannot do this, for the simple reason that my dream lies in the future and thus is beyond proof. Yet if I am so challenged and I reply, “Sorry I cannot prove it…but I believe it!” I would feel weak and defensive in most organizational cultures. The reason I would feel so defensive is that our whole paradigm is dominated by the analytic system – and it is out of this dominant thinking system that the challenge to ‘prove it’ flows.

The Power of Argumentation

If we cannot analyze our way into the future, how do we move ahead? The answer is ‘by arguments,’ and it is the art of argumentation that lies at the heart of the Second Road.

Arguments are the engines by which humans create alternative futures. The great Roman leader, Cicero, was an avid follower of Aristotle and quite possibly the greatest rhetorician of all time. He claimed that all human civilization was built on the pathway of rhetoric and memorably imagined uncivilized tribes arguing their way out of caves and into villages. Picture the first natives to start the argument:

“We don’t have to keep sheltering high up in these caves forever. I reckon we can live happier lives way down by the river close to the water and our hunting grounds.”

“So how do we do that, praytell, without freezing to death in the winter months?”

“Good question, but I have this idea – let’s call it a ‘hut’ – which we could make out of the timber from old trees…”

“You are always dreaming, you fool…but the idea of huts has some attraction…take it further for me.”

In that dynamic of argument lies the whole momentum of progress, according to Cicero: if Cicero’s cave dwellers used Aristotle’s logic road to improve their lives, they would still be there today analyzing the rock structures of caves. But they are not, because the human genius for argumentation enables us to craft alternative destinies.

Every strategy is an argument, every plan is an argument and every design is an argument. The concept of ‘argument’ opens a door onto a new landscape of tools and pathways to craft strategy and make it the ‘design’ process that it naturally is.

Following are three critical elements of the Second Road tool kit that have proven transformational for the managerial groups I have worked with. I name each with both a classical term of rhetoric and a modern term of management.

1. Agency (Corporate Intent)

The first element of a compelling argument is ‘agency.’ In the scientific process, you aim to keep people out of it: we are taught to be ‘objective’ and not bring ourselves into the thinking process. This confines the scientific thinking process to being merely cognitive. In the Second Road, the opposite is the case: we humans become the ‘causes’ that create ‘effects.’ We must become ‘agents’ if we want to change things. This repositions strategy as an act of the will, not just of cognition. Strategy crystallizes the corporate will. This fundamentally changes how we view strategy: it is as much a matter of the will as the intellect.

However, most people don’t feel like agents, and the modern organization does not help that feeling with its emphasis on compliance, hierarchy and command/control relationships. If we want to get people to design their futures, our first task is to emphasize their ‘agency.’ They must feel that the world is not an accident, nor is it ‘determinate’: it is putty in their hands and they are its authors.

There are two stances we can take into life, as indicated in Figure One. We can see ourselves as ‘readers’ in which case we believe that someone else ‘writes’ the text of life and our job is to read it. Ironically, the more educated we become, the more we feel like readers, since most education is framed in the analytic paradigm and literally enforces a disposition of ‘readers’ on the students. The alternative disposition sees us as ‘authors’: life is a canvas and our job is to write the story, not read it.

I ran a workshop recently for the leaders of a major newspaper organization with a great past but an uncertain future in the online world. They had pages of analysis before them, and most of it was depressing. We began the workshop by asking, “Do you believe that this organization has a credible future? Is it worth the effort of creating a strategy or do you feel that long term decline is really inevitable?” The question surprised them and evoked a spirited and open discussion for two hours. When we finished they agreed that there was a hopeful future, and it lay in nobody’s hands but their own. They had moved from being ‘readers’ to ‘authors.’

2. Possibility (Invention)

The second element of a compelling argument is ‘possibility.’ True design is the art of invention, not analysis. You cannot analyze your way to invention. So how do we do it? Whereas analysis is a process that works like a formula, invention is an art that works like a forge. We must melt down fixed ideas and views, allow them to swirl around and then shape them into new combinations. The process is one of immersion and emergence, not analysis. Sound strange to you? Watch a painter paint a landscape or a poet exploring ideas and you will see it happen in practice. This is design thinking at work. It does not work like a spreadsheet.

In my work I try to stimulate this kind of thinking by shifting the dynamic of the strategy process from documentation to conversation. Most strategic processes rely far too heavily on documentation; but documents were not made to generate ideas, they were made to codify and communicate them. Furthermore, documents are primarily an individualistic tool, not a social one. People write documents alone and they read them alone. Conversation is different: it is a melting pot of ideas – a living, organic process. It is a perfect way to generate possibilities and create arguments.

My team and I have mapped the conversation process in an image we call the ‘Design Wave™’ (see Figure Two). Arguments are developed by advancing topics across this wave. Things start out foggy, but then crystallize as we transform confusion into arguments that can mobilize action. But conversations need some structure, or they will unravel and achieve nothing. We do this by using the writing process (rather than documents) to structure the dialogue. Good writers explore ideas by sketching them with maps and models. We create virtual design studios where groups start with a blank sheet and ‘write’ their strategy by a process of dialogue. We shape and guide the energy that the conversation creates by mapping and modeling in real time on an electronic whiteboard. This effectively transforms the group into designers who are using heavily right-brain tools of visualization, modeling and prototyping ideas.

If I could turn on a video camera and show you one strategic conversation that we facilitated recently for instance, you could have watched Australia’s aboriginal leaders design a way forward for our indigenous community that aims to rewrite 200 years of sorry history. You would have seen the swirl of dialogue melt down fixed positions and transform them into new possibilities. Immersion and emergence happened before our eyes. The Second Road is not just theory for us; it is an art of action. And rhetoric was not a theory for Cicero and his friends. It was an art of action and design.

3. Persuasion (Community of Action)

The third element of an argument is ‘persuasion.’ In the scientific road, persuasion is not the goal – proof is. In the Second Road, persuasion is the goal because the aim of the argument is to mobilize people to create a new future. This has two significant consequences for strategy as design. Firstly the criteria of a good strategy changes; we cannot look for the ‘right’ strategy, we must instead look for the ‘compelling’ strategy. Good arguments compel belief. The second consequence is that an effective strategy process will not just produce a ‘plan’, it will produce a community of action: that is our real goal. Nothing is stronger than a persuaded community: they will create alternative worlds.

A New Theory of Language

Underpinning this whole Second Road of rhetoric/design lies a fundamental new belief about the nature of language. In the analytic paradigm, language is descriptive. It is a tool to put labels on the world. Its role is passive: it merely enables communication. Little wonder that the analytic world has now passed the baton of power to Mathematics as the underpinning tool of trade.

The rhetoric road operates from a fundamentally different and emerging belief that language creates new realities, it does not just describe them. If I name a situation as ‘hopeless’, that will create hopelessness; if I name a situation as ‘promising’, that will create promise. In this view, language is an agent of design.

Design begins with language that creates proxies for alternative futures long before they exist in material form. Viewed that way, language is the raw material we use to create our current and future realities. The Second Road builds arguments or designs out of the playground of language; the first road of analytics has narrowed the whole playground to the skimpy perimeter of empirical reasoning and spreadsheets.

In closing

My work always takes me to groups facing uncertain, often troubled, prospects. They have a choice: ‘keep operating as normal and let the future happen to us’ or ‘design our world.’ In every case, a tool kit comprised only of analytic tools would have been at least inadequate, or at worst, counterproductive.

Design offers organizations a new paradigm of thought and a whole set of practices that can revolutionize how we ‘do’ strategy, and more ambitiously, how we build great organizations. The tool kit outlined herein does not stop there in its implications: it is relevant to the worlds of education, social design and human enterprise everywhere.

Tony Golsby-Smith is the founder and CEO of Second Road Pty Ltd. He has worked with the Australian Tax Office to introduce design thinking into the tax system – the first major attempt in the world to design a national system actively using design methodologies.

A longer version of this article appeared in the Journal of Business Strategy’s special issue on design and business, published in May 2009.

While it is less understood than scientific thinking, design thinking has characteristics of great value to teams dealing with complex, ill-formed problems.

by Charles Owen

THE HANDIWORK OF HUMANKIND has finally begun to impress itself on the global environment and on us, its inhabitants. It is news to no one that current rates of resource consumption cannot keep up with population growth as it exists. By 2050, world population is virtually certain to increase by half again from its present seven billion – with all that means for our dwindling resources. Coupled with that, it is now clear that global warming is fact, and its growing control over Earth’s climate and weather systems will unpredictably complicate problems already made serious by population pressures.

While the road ahead seems dark, there is hope: a profusion of new technologies is emerging, many with the potential to alleviate the problems induced by population growth. Key to the use or misuse of these technologies are the decision processes employed by those in power. History has shown that political decisions do not always favour the best interests of all, and when critical factors include information not easily understood by decision makers, that information may be disregarded or not even considered. The stakes are now too high for critical information to be unheard or ignored.

Science advisors have long been included among high-level governmental advisory staffs. How their advice is valued, however, has varied with the problem context, and political interests have almost always trumped scientific advice. More than ever before, scientific advice requires serious consideration.

But another kind of thinking deserves equal attention: design thinking is in many ways the obverse of scientific thinking. Whereas the scientist sifts facts to discover patterns and insights, the designer invents new patterns and concepts to address facts and possibilities. In a world with growing problems that desperately need understanding and insight, there is a great need for ideas that can blend that understanding and insight in creative new solutions.

Finders, Makers and Applied Creativity

A sensitive observer might notice an interesting thing about creative people: they tend to work in two different ways. Those who work in the first way might best be called ‘finders.’ They exercise their creativity through discovery and are driven to find explanations for phenomena not well understood. In professional life, they usually become scientists or scholars and are responsible for much of our progress in understanding ourselves and our surroundings.

Those who work in the second way are ‘makers,’ and they are equally creative, but in a different way. They demonstrate their creativity through invention. Makers are driven to synthesize what they know in new constructions, arrangements, patterns, compositions and concepts that bring tangible, fresh expressions of what can be. They become architects, engineers, artists – designers – and are responsible for the built environment in which we live and work.

Given the fundamental process differences between how finders and makers think and work, it is reasonable to believe that other factors might similarly reveal differences among professional fields and, therefore, help to define the nature of design thinking.

One such factor is the content with which a field works. A conceptual map can be drawn to address both content and process factors (see Figure Two). Two axes define the map: separating it into left and right halves is an Analytic/Synthetic axis that classifies fields by process – the way they work. Fields on the left side of the axis are more concerned with ‘finding’ or discovering; fields on the right with ‘making’ and inventing. A Symbolic/Real axis divides the map into halves vertically, according to content or realm of activity. Fields in the upper half of the map are more concerned with the abstract, symbolic world and the institutions, policies and language tools that enable people to manipulate information, communicate and live together. Fields in the lower half are concerned with the real world and the artifacts and systems necessary for managing the physical environment.

 

 

 

A sampling of fields illustrates how the map differentiates between fields (see Figure Three). The five chosen are highly recognizable with well-defined disciplines and well-understood differences. Every field has component elements in each of the four quadrants. What distinguishes one field from another is the degree to which a field positions its ‘centre of gravity’ away from the centre into the quadrants, and the direction that positioning takes. In Figure 3, fields close to the centre are more ‘generalized’ with respect to the axes; fields away from the centre are more ‘specialized.’

 

As a field that is heavily analytic in its use of process, Science is farthest to the left. Its content is also more symbolic than real in that subject matter is usually abstracted in its analyses. There are elements of Science, however, that are synthetic in process (as, for example, in Materials Science or Organic Chemistry), and it can deal directly with unabstracted, real content, particularly in the Natural Sciences.

Law, as a generalized field, is located higher on the map, concerned extensively with the symbolic content of institutions, policies and social relationships. It is also positioned more to the right, as a significant portion of its disciplines are concerned with the creation of laws and the instruments of social contract. Medicine, in contrast, is sharply lower on the content axis, vitally concerned with the real problems of human health. On the process scale, it is strongly analytic; diagnostic processes are a primary focus of medicine. Art is high on the content axis, strongly symbolic, and almost evenly divided on the process scale, still more synthetic than analytic, but very much involved with interpretation of the human condition.

Design in this mapping is highly synthetic and strongly concerned with real world subject matter. Because disciplines of design deal with communications and symbolism, it has a symbolic component, and because it requires analysis to perform synthesis, there is an analytic component – but Design is a field relatively specialized, and specialized nearly oppositely to Science.

Fields, of course, are just the tops of hierarchies, and the hierarchical nature of their subject matter opens a door to the examination of relationships among elements at finer levels of detail. For almost any field, a case can be made for movement to the left or right based on the variety of detailed interests the field subsumes, but absolute positioning is not what is important in this kind of mapping: relative positioning is. It provides a means for comparing multi-field relationships with regard to the two important dimensions of content and process.

Values and Measures

Science is driven by the need for understanding. To achieve this goal, it values correctness, in the sense that theories can be evaluated for whether they are correct, as best can be determined with current data. It also values thoroughness because understanding must be thorough to remove uncertainty. Testability is valued because closure demands that theories be tested and determined to be correct or incorrect. These values (and others) find expression in measures that expand the essence of the value into tools that can be incorporated directly or indirectly in frame-of good citizenship. Measures such as just/unjust, right/wrong, complete/incomplete, appropriate/inappropriate and fair/unfair draw out the evaluations appropriate to the field (see Figure Four).

Art, quite different in this kind of analysis, derives from the need for expression. Values such as insightfulness, novelty and stimulation highlight important aspects of expression as it is regarded today, and measures such as thought provoking/banal, fresh/stale and exciting/boring particularize these for the criteria to be used in the production and criticism of art.

Medicine shares much with Science, but has its own need for being in maintaining, promoting and regenerating health. Among its values, correctness is critical for diagnoses and procedures, and effectiveness, a value strongly shared with design, is relevant when something is better than nothing. Measures include correct/incorrect, works/doesn’t work and better/worse.

Design exists because of the need for form. The form giver, in the broadest use of the term, creates order. Because the world of design is the world of the artificial, the values of design tend to be ones associated with human needs and environmental needs created by human actions. Cultural fit is associated with aesthetic issues; appropriateness targets the wide range of physiological, cognitive, social and cultural human factors; and effectiveness gauges functionality and utility. For cultural fit, good measures are fresh/stale, fits/doesn’t fit and elegant/inelegant; for appropriateness, appropriate/inappropriate and works/doesn’t work (from the human factors perspective) are helpful. From a utility perspective, works/doesn’t work, sustainable/unsustainable and better/worse measure effectiveness.

Seen through the lens of their underlying values, differences among fields become clearer and more understandable. As a case in point, a major difference between Science and Design lies in the difference between ‘correctness’ and ‘effectiveness’ as important measures of success. Correct/incorrect (or true/false) is appropriate for a field in which there can only be one ‘true’ answer or correct explanation for an observed phenomenon. Better/worse is appropriate for a field in which multiple solutions can be equally successful because the conditions for judgment are culturally based.

From all this, it is easier to see why a combination of Science and Design thinking is better than either alone. While both are valuable, together they bring the best of skeptical inquiry into balance with imaginative application. Because both are well served by creative thinking, we will now look at the general characteristics of the creative thinker.

Characteristics of Creative Thinking

Despite considerable speculation, the nature of creativity – what makes one person creative and another not – and the creative pro-cess itself remain elusive. Nevertheless, a number of characteristics have been identified that can be useful in contemplating the nature of creative thinking and, in particular, creative design thinking.

In a special issue of Kaiser Aluminum News some years ago, editor Don Fabun assembled characteristics of the creative individual culled from the observations of a number of thoughtful writers. While they are not all-inclusive, they provide a good start for assembling a catalogue:

Sensitivity: a propensity for greater awareness which makes a person more readily attuned to the subtleties of various sensations and impressions.

Questioning attitude: an inquisitiveness, probably imprinted in early home training that encourages seeking new and original answers.

Broad education: an approach to learning instilled from a liberal education that puts a premium on questions rather than answers and rewards curiosity rather than rote learning and conformity.

Asymmetrical thinking: the ability to find an original kind of order in disorder as opposed to symmetrical thinking that balances everything out in some logical way.

Personal courage: a disregard for failure derived from a concern, not for what others think, but what one thinks of oneself.

Sustained curiosity: a capacity for childlike wonder carried into adult life that generates a style of endless questioning, even of the most personally cherished ideas.

Time control: instead of being bound by time and schedules, creative individuals use time as a resource – morning, noon and night – years, decades – whatever it takes, unbound by the clock.

Dedication: the unswerving desire to do something, whatever it may be and whatever the obstacles to doing it.

Willingness to work: the willingness to continue to pursue a project endlessly, in working hours and so-called free hours, over whatever time might be required.

In 1976, psychiatrist Silvano Arieti thoroughly reviewed what was then known about creativity. From his study, several additional characteristics can be included:

Fluency of thinking: word fluency – the ability to produce words containing specified letters or combinations of letters; associational fluency – the ability to produce synonyms for given words; expressional fluency – the ability to juxtapose words to meet the requirements of sentence structure; and ideational fluency – the ability to produce ideas to fulfill certain requirements.

Flexibility: the ability to abandon old ways of thinking and initiate different directions.

Originality: the ability to produce uncommon responses and unconventional associations.

Redefinition: the ability to reorganize what we know or see in new ways.

Elaboration: the capacity to use two or more abilities for the construction of a more complex object.

Tolerance for ambiguity: the capacity to entertain conflicting concepts for periods of time without the need to resolve uncertainties.

Mihaly Csikszentmihalyi, a renowned psychologist and anthropologist at the University of Chicago, sees the creative individual in terms of ‘pairs of apparently antithetical traits that are often both present in such individuals and integrated with each other in a dialectical tension’:

Convergent and divergent thinking: divergent thinking to generate ideas; convergent thinking to tell a good one from a bad one.

Playfulness and discipline: exploring ideas widely and lightly, but surmounting obstacles and bringing ideas to completion with doggedness, endurance and perseverance.

Fantasy and reality: breaking away from the present without losing touch with the past.

Extroversion and introversion: seeing and hearing people, exchanging ideas, and getting to know other peoples’ work to extend interaction; working alone to fully explore and master abstract concepts.

Humility and pride: humility in the awareness of those who worked before, the element of luck involved with achievement, and the relative unimportance of past achievements in comparison with a focus on future projects; pride in the self-assurance associated with accomplishment.

Masculinity and femininity: ‘psychological androgyny’ enabling the best traits of bold, assertive masculinity to be combined with the best traits of sensitive, aware femininity.

Conservatism and rebellious iconoclasm: being able to understand and appreciate a cultural domain and its rules, while at the same time being willing to take risks to break with its traditions.

Passion and objectivity: passion in the attachment and dedication to the cause or work; objectivity in the ability to stand apart, detached, to evaluate quality impartially.

Suffering and enjoyment: the heightened highs and lows that come with intense involvement and sensitivity, both to observed quality and to what others think.

Csikszentmihalyi notes that these conflicting traits are difficult to find in the same person, but “the novelty that survives to change a domain is usually the work of someone who can operate at both ends of these polarities – and that is the kind of person we call creative.”

Many of the above characteristics are not qualities to be taught: at best, they are natural personality traits that can be recognized where they exist or noted in their absence; but many can be developed or encouraged.

Characteristics of Design Thinking

Creativity is of major importance to design thinking, as it is to science thinking and thinking in any field. But as is truefor each field, characteristics other than creativity are also important. I would nominate the following as key aspects of design thinking:

1. Conditioned inventiveness: creative thinking for designers is directed toward inventing. Designers tend to be more interested in the ‘what’ questions than the ‘whys’ of interest to the scientist. Design creativity thus complements scientific creativity, but it brings to invention a concern that what is produced not only be inventive, but be so within the frameworks of human-centred and environment-centred measures governing the designer’s efforts.

It is easy to see why a combination of
science thinking and design thinking is
better than either alone: together they
bring the best of skeptical inquiry into
balance with imaginative application.

 

2. Human-centred focus: Science and, to a slightly lesser extent, Technology have few built-in governors. That is to say, as in the Arts, exploration proceeds where discoveries direct. Design, on the other hand, is client-directed. Design thinking must continually consider how what is being created will respond to clients’ needs.

3. Environment-centred concern: in recent years, design thinking has acquired a second, omnipresent client: the environment. Present-day thinking puts environmental interests at a level with human interests as primary constraints on the design process. Sustainable design is one very noticeable result. The ultimate value of human-and environment-centredness is a guarantee that the best interests of humankind and environment will be considered in any project.

4. Bias for adaptivity: in recent years, the emergence of adaptive processes in manufacturing and information technologies has greatly reinforced a practice historically followed by some designers: the design of adaptive products able to fit their users’ needs uniquely. Design thinking today has accepted that concept, approaching problems with the view that, where possible, solutions should be adaptive – in production, to fit the needs of users uniquely; and throughout their use, to fit users’ evolving needs.

5. Predisposition toward multifunctionality: solutions to problems need not be ‘monofunctional.’ Designers routinely look for multiple dividends from solutions to problems, keeping the big picture in mind while focusing on specifics.

6. Systemic Vision: design thinking is holistic, treating problems as system problems with opportunities for systemic solutions involving mixes of hardware, software, procedures, policies, organizational concepts and whatever else is necessary to create a holistic solution.

7. View of the Generalist: common wisdom holds that success will come more readily to those who choose to specialize early and plan their training accordingly. Design thinking, to the contrary, is highly generalist in preparation and execution. In a world of specialists, there is a real need for those who can reach across disciplines to communicate and bring diverse experts together in a coordinated effort. For inventive creativity, the wider the reach of the knowledge base, the more likely the creative inspiration.

8. Ability to use language as a tool: language is usually thought of as means for communication, but for designers it is also a tool. Visual language is used diagrammatically to abstract concepts, reveal and explain patterns, and simplify complex phenomena to their fundamental essences. Mathematical language is used to explore ‘what if’ questions where feasibility may be established by approximation – by calculations not exact, but close enough to support an idea. Verbal language is used in description where explanation goes hand in hand with the creative process, forcing invention where detail is lacking and expressing relationships that are not obvious visually.

9. Facility for avoiding the necessity of choice: the job of the decision maker is to choose among alternative proposals – usually the products of different problem-solving approaches. Design thinking takes the view that making that choice is a last resort: before moving to choice-making, the designer looks for ways to ‘have your cake and eat it too.’ The optimistic designer, however, searches the competing alternatives for their essential characteristics and finds ways to reformulate them into a new configuration. When this process is successful, the result is a solution that combines the best of both possible choices.

10. Self-governing practicality: in very few fields is there the freedom to dream that is expected in design. The best design thinkers understand this and learn to govern ‘flights of fantasy’ with a latent sense of the practical: the flight is to the outer reaches of what can be conceived; the tether is to ways that the conceivable might be realized. This is embedded in a style of thinking that explores freely in the foreground, while maintaining in the background a realistic appraisal of costs that can be met and functionality that can be effected.

In closing

Together, the characteristics of design and science thinking form a set of complementary thought processes able to add considerable strength to the advisory task. The ability to provide design thinking in an advisory capacity will require an evolution in design education and design research. For design education, new programs must be designed that bring the best of design thinking into the new context of policy planning. New content will be necessary; new processes must be developed and taught; and new ways of working will have to be learned.

It will be worth doing.

Charles Owen is a distinguished professor emeritus at the Illinois Institute of Technology’s Institute of Design, where he has taught design thinking since 1965.

 

A longer version of this article appeared in the January 2007 edition of Design Research Quarterly, published by the Design Research Society.

Interview by Karen Christensen

CogNexus Institute founder Jeff Conklin explains why the Age of Design requires a new approach to problem solving that is built on a foundation of shared understanding.

You believe that we are in the midst of a shift from the Age of Science to the Age of Design. Please explain.

In the Age of Science, the job of Science was to describe the universe. Once we had created a good description of the natural world, we could begin to exercise control, and the path was opened for technology – the art of harnessing, controlling and transforming our world. In the last century, organizations have borrowed heavily from the ethos of Science and technology: the goals of ‘management science’ were to describe (or predict) the future and control it. In the Age of Science, facts legitimized decisions – indeed, they were the only acceptable basis for decisions and actions. The goal of problem solving was to find the right answer, and the problems to which organizations devoted themselves were generally ‘tame’ ones: they may have been complicated and involved hundreds of people and years of effort, but the problems themselves were not wicked. The problem definition was well understood (i.e., ‘build a bridge across the widest river in the world’), the stakeholders were few, the constraints stable, and in the end, there was a concrete result that solved the problem. In this fading epoch, organizations rewarded individuals for predicting and controlling their environment; people worked separately, using a linear process, to gather all the facts so that they might formulate the right answer and deliver it for implementation.

Those days are gone. In the emerging paradigm, the Age of Design, something new is happening, and those who excelled in the former paradigm are no longer succeeding as they once did. In place of prediction and control, we seem to have nothing but chaos; in place of individual efforts, the problem-solving process is now clearly social; in place of basing decisions on facts, we base them on stories that give us a more coherent sense of meaning. In place of finding the ‘right answer’, we seek to gain a shared understanding of possible solutions. The skills and knowledge that were so important in the Age of Science are still important, but they are no longer sufficient. The focus of our activities has shifted to creation.

Whereas description is about what is, creation is about what might be. It is an organization’s ability to learn and innovate that now provides the greatest competitive advantage. Employees are being asked to throw off the shackles of past ways of thinking and doing, to think for themselves and invent new ways to increase customer satisfaction or decrease costs. In the Age of Design, getting something done depends on your social skills and your network, both formal and informal. Unfortunately, we are babes in the woods in the Age of Design, and the nature of our tool set is quite primitive.

Discuss the relation between ‘problem understanding’ and ‘solution formulation’.

When I first started out, the implicit assumption was that problems were stable and well defined, and most of the work in any major project involved coming up with the solution. The process of working out a solution was understood to be fundamentally linear – a sequence of steps which, if followed, would result in a successful outcome. Today, there is increasing awareness that a shared understanding of a given problem cannot be taken for granted, and that the absence of buy-in about a problem’s definition, scope and goals can kill a project just as surely as faulty implementation.

Organizations are beginning to embrace the idea that these two aspects of projects – problem understanding and solution formulation – are not distinct phases, but rather different kinds of conversations that must be woven together from beginning to end. Problem structuring is a critical aspect of the design process that takes into account the diversity of goals, assumptions and meanings among stakeholders. At the heart of this new understanding of organizational life is the recognition that project work is fundamentally social, and that communication among stakeholders must be managed and nurtured in order for the social network to cohere into a functioning entity. What is missing from our ‘social network tool kit’ is an environment or ‘container’ in which stakeholders can collectively step back to see the big picture.

You believe that the two most intense forces impacting organizations today are wicked problems and social complexity. Please explain.

When design theorist Horst Rittel first started writing about wicked problems, he characterized them as having 10 or 11 properties, which I think can be pared down to six essential ones (see Figure One). But in our post-modern world, things have become even more complex, and problems now take shape within a social framework that agrees that something is a problem. For a long time, there’s been a model – a pre-understanding – that what organizations needed to do was ‘identify the problem’ and then systematically work to develop a solution and appropriate implementation. What Rittel said is, it’s just not that easy. Problem understanding is actually the more important and evasive part of the process.

WICKED PROBLEMS

Figure One

Design theorist Horst Rittel defined wicked problems as having six characteristics:

1. You don’t understand the problem until you have developed a solution.

Every solution that is offered exposes new aspects of the problem, requiring further adjustments to the potential solutions. There is no definitive statement of ‘the problem’: these problems are ill-structured and feature an evolving set of interlocking issues and constraints.

2. There is no stopping rule.

Since there is no definitive ‘the problem’, there is also no definitive‘ the solution.’ The problem-solving process ends when you run out of resources such as time, money or energy, not when an optimal solution emerges.

3. Solutions are not right or wrong.

They are simply ‘better/worse’ or ‘good enough/not good enough’. The determination of solution quality is not objective and cannot be derived from following a formula.

4. Each is essentially unique and novel.

No two wicked problems are alike, and the solutions to them will always be custom designed and fitted. Over time we can acquire wisdom and experience about the approach to wicked problems, but one is always a beginner in the specifics of a new wicked problem.

5. Every solution is a ‘one-shot operation’.

Every attempt has consequences. This is the ‘Catch 22’ of wicked problems: you can’t learn about the problem without trying solutions, but every solution is expensive and has lasting consequences that may spawn new wicked problems.

6. There is no given alternative solution.

A host of potential solutions may be devised, but another host are never even thought of. Thus it is a matter of creativity to devise potential solutions, and a matter of judgement to determine which should be pursued and implemented.

The social complexity aspect of it is that you have different stakeholders with strongly-held beliefs about what the problem is. Dealing with wicked problems is not at all a matter of coming up with the best answer; rather, it’s about engaging stakeholders in a robust and healthy process of making sense of the problem’s dimensions. The current situation with respect to global warming and energy policy is a great example: people from the developed world have one set of views about what needs to be done, and the developing world has a completely different set of views. Nobody ‘owns’ the problem, nor has a clear idea of how to work out the answers. Because of social complexity, solving such a wicked problem is fundamentally a social process. This same kind of dynamic exists in a microcosm in most organizations around their critical strategic problems. As a first step, the distinction that the problem you are facing is wicked can help you get a handle on the fact that it will require a different style of leadership and a different approach.

You have said that “when you combine wicked problems and social complexity, you get fragmentation.” Please explain.

Fragmentation is a condition in which the stakeholders in a situation see themselves as more separate than united. The fragmented pieces are, in essence, the perspectives, understandings and intentions of the collaborators, all of whom are convinced that their version of the problem is correct. It is clear today that the forces of fragmentation are increasing, challenging our ability to create coherence, and causing more and more projects to flounder and fail. The antidote to fragmentation is shared understanding and shared commitment.

How do you define ‘shared understanding’?

The ‘Holy Grail’ of effective collaboration is creating shared understanding, which is a precursor to shared commitment. If you accept that the crux of effective action is agreeing on what the problem is, then the challenge for organizations is coming to a shared understanding about what their particular dilemma is. Plenty has been written about how to get people ‘on board’ and create buy-in for a strategy; but the business of how to craft shared understanding – a deep and robust understanding of the circumstances – hasn’t been well understood. Shared understanding means that the stakeholders understand each other’s positions well enough to have intelligent dialogue about their different interpretations of the problem, and to exercise collective intelligence about how to solve it.

The best way to grasp shared understanding is to consider what happens when it is missing. If you think about where teams or projects have failed, you often realize that what was missing was a shared understanding about what the process was going to be, or what the fundamental problem was to begin with, or the dimensions of the problem. There may have been a lack of shared understanding about roles and responsibilities, or there might have been a specific issue around which there was a lack of understanding. There are many aspects to shared understanding, and there is no shortcut to creating it. Any way you slice it, it entails heavy lifting, and you have to roll up your sleeves and have the hard conversations in order to expose where shared understanding is missing.

You believe that most of today’s problems have a significant ‘wicked’ component, even if it doesn’t appear at the outset. Please explain.

One criticism of the notion of wicked problems is that you can’t do a diagnostic that identifies a problem as ‘definitely wicked’. There are degrees of wickedness. What is clear is that the notion of business-as-usual that we inherited from the industrial era is a manufacturing-based, linear process-oriented approach, and if you are locked into that view, you will miss out on all the deeper problems. That’s what a lot of the attention to innovation is really about: it’s about being able to get outside of the limited framework of business-as-usual and sense and reflect on the bigger situation. Any time you do that in today’s environment, you’re looking at a wicked problem, because you’re confronting fundamental problems of identity: who is our company? What is our direction? What is our market? Who is our customer? These fundamental issues are always present, but it’s very easy to avoid them by focusing on immediate problems that are more tractable.

Two common organizational coping mechanisms are routinely applied to wicked problems: studying the problem and taming it. Please discuss.

While studying a novel and complex problem is natural and important, it is an approach that will run out of gas quickly if the problem is wicked. Pure study amounts to procrastination, because little can be learned about a wicked problem by objective data gathering and analysis. Wicked problems demand an opportunity-driven approach: they require making decisions, doing experiments, launching pilot programs, testing prototypes, and so on. One corporation I worked with, struggling to decide between two very different strategic paths for the future, studied and discussed the two options for so long that, by the time they implemented their choice, the chosen option was no longer viable.

Taming a wicked problem is a very natural and common way of coping with it. Instead of dealing with the full wickedness of the problem, people simplify it in various ways to make it more manageable and solvable. While it may seem appealing in the short run, attempting to tame a wicked problem will always fail in the long run. The problem will simply reassert itself, perhaps in a different guise, as if nothing had been done; or worse, the tame solution will exacerbate the problem.

What first steps can people take to better handle wicked problems?

There is no quick fix. Our education and experience have prepared us to see and solve tame problems, which is why wicked problems sneak up on us and create so much chaos. In times of stress, the natural human tendency is to find fault with others. If we step back and take a systemic view, we can see that the issue is not whose fault the mess is – the issue is our collective failure to recognize the recurring and inevitable dynamics of the mess.

Dr. Jeff Conklin is director of CogNexus Institute, based in Napa, California, and the author of Dialogue Mapping: Creating Shared Understanding of Wicked Problems (Wiley and Sons, 2006). He has worked on shared understanding with the World Bank, the United Nations, NASA, AOL, Verizon, BP and others. For more, visit cognexus.org.

It’s time for companies to push the ‘pause’ button, dig deep, and commit to the ‘tribe’ of consumers that is the best match for what they have to offer.

by Sohrab Vossoughi

RECENT ECONOMIC TURMOIL HAS FORCED COMPANIES around the globe to re-evaluate their core business strategies. In order to move forward and thrive – indeed, to survive – organizations have to carefully consider how to remain relevant going forward.

The power shift from companies to consumers in recent years has been undeniable. Globalization and the Internet have killed our affair with the mass economy – with mass production, mass markets and mass marketing. The consumer-driven world of segmented media and markets that has emerged calls for new terms of engagement.

It seems like just yesterday that a successful, sustainable business was a one-size-fits-all, mega-hit brand that could be efficiently replicated around the world. Think Starbucks: Wall Street sang its praises and shares rose from $11.06 in 2000 to $35.42 in 2006. But somewhere between the original handful of stores in 1982 and the over 15,000 in 43 countries today, the company’s strategy went from grass-roots to gimmicky.

Like so many other companies, Starbucks suffered from ‘efficiency-syndrome’, which occurs when a mass-produced brand attempts to be everything to everybody and in the process, dilutes its offering, its appeal and thus its value. In 2008, Starbucks shares fell to $13.58 in July and then $7.17 after September’s stock market turbulence.

Gone are the days when the master brand was king and companies were customer-focused only to the extent that customers generated sales. More than ever before, today’s savvy, choice-fatigued and cash-strapped consumers crave meaningful connections with brands that allow them to be more-authentically themselves.

Brands are now defined by consumers, not ‘positioned’ by companies. My colleagues and I have dubbed this new era ‘The Age of Meaning’, and it is imperative for business people to understand the new rules of engagement that come along with it.

In the Age of Meaning, a strong brand creates value and competitive advantage only when it delivers a compelling, holistic experience that is authentic, unique and relevant.

Where We’ve Been

Curious about how we arrived at this point in business history, my colleagues created an ‘authenticity timeline’ to illustrate the evolution of the marketplace, business values and consumers’ deepening desire for authentic engagement.

The timeline begins with what we call the Age of Representation, when advancements in manufacturing technology allowed people to create near-identical products. The invention of the steam engine in the late 1700s launched the Industrial Revolution and marked the beginning of the era of mass production. This era included Ford’s Model T and America’s first planned community. Modern production methods made the American dream of owning a single-family home affordable to millions, and business was finally able to accommodate the basic needs of the masses with relative ease.

Next came the Age of Simulation from the mid-1950s to the 1980s, when manufacturing excellence and know-how helped industry evolve from meeting people’s needs to satisfying their desires. This was the realm of fantasy, of making ‘dreams come true’. The opening of Disneyland in 1955 marked the start of this epoch, followed by the rise of adult playgrounds like Las Vegas. The era of the ‘knock-off’ had arrived, and China, Japan and Taiwan became hotbeds of low-price, high-volume manufacturing. This is the era that valued mass efficiency – ‘make as many products for as many people for as little as possible’. Market share, efficiency and quality were its measures of success.

The late 1980s and early 1990s marked a quantum shift in global marketplace dynamics as companies undertook re-engineering efforts to make themselves more efficient in order to compete globally. The first Web site went online, initiating the ‘flattening’ of the world and empowering consumers with choices and the ability to expose insincere brands and institutions. The turn of the century brought a U.S. recession, the Internet boom and bust, myriad corporate scandals and 9/11’s terrorism, leaving people searching for meaning. The Web answered the call with sites like epinions and YouTube and in 2006, TIME voted ‘YOU’ the Person of the Year. Consumers were now empowered to satisfy their every whim with goods from around the world, and then blog about their experiences online.

In the last ten years, we have entered the Age of Meaning, where abundance and transparency have created a demand for authenticity. Consumers now seek brands they can trust, and they won’t – because they don’t have to – accept anything less. The efficiency-minded, technology-driven mass economy has been replaced by an Experience Economy controlled by consumers. Core technologies and skills have become commoditized, and time-to-market has shrunk from two years to six months or less.

In the Age of Meaning, a strong brand creates value and competitive advantage only when it delivers a compelling, holistic experience that is authentic, unique and relevant. Recent behaviour on Wall Street has only deepened this trend and amplified the desire for authenticity and meaning on Main Street. Consumers will only put their limited budgets behind brands whose values and products are aligned with their own altruistic goals.

A Shift in Values

In December 2008, Brandweek reported on a study by MS&L Worldwide, conducted in partnership with GfK Roper that examined some of the corporate values today’s consumers find most important and the effects of such perceptions on maintaining long-term business. One of their most striking findings was that “while price and quality may be the primary purchase influencers in tough times, in the long run, it is values that matter the most.” Seventy-seven per cent of consumers in the U.S. said they either strongly agreed or somewhat agreed with that statement.

Starbucks exemplifies a company stalled at the crossroads of the Age of Simulation – when efficiency reigned – and the Age of Meaning, where effectiveness reigns. Having set out to design a ‘third space’ for its customers, Starbucks went on to repeat that experience around the world. By its own admission, it soon lost sight of who it was and what its customers wanted. Automated espresso machines made coffee-making more efficient, but at the cost of handcrafted beverages served with the care and engagement of the barista. Couches were replaced by coffee tables and chairs, dismantling the ‘third place’ feeling in favour of a fast-food feel. Merchandising ran amok and food, music and book clubs diluted the ‘Starbucks story’ until the experience felt like little more than a kit-of-parts that could be put together by anyone, anywhere. Word spread like wildfire on the Internet, helping to prompt Starbucks’ fall from grace.

What the Age of Meaning requires is a distinct priority shift from efficiency to effectiveness. Customer equity, rather than market share, is the new measure of success. This is an era characterized by intimate conversations with select consumers; by meaning-rich experiences that foster a sense of empowerment and belonging; and by design thinking that artfully crafts experiences that extend to every touch point of a brand.

What is effective – i.e. meaningful – for your tribe and unique and authentic to your brand is now far more valuable than being bigger, better or more efficient than your competitor. Here are a few approaches to consider when such effectiveness is your top priority.

 

1. Create Meaning

Effectiveness means doing what is right for your brand and for your tribe. Companies must be willing to define or redefine the relationship with their tribe in terms that are meaningful and relevant.

The 95-year-old Clorox company owns a handful of brands that aren’t necessarily known for their environmentalism – S.O.S. Pads, Formula 409 and Liquid Plumber, to name a few. CEO Don Knauss joined Clorox in 2006 from Coca-Cola and began to shift attention to environmental concerns like greener packaging and monitoring their carbon footprint. The company’s Green Works cleaning supplies line was a response to the evolving desires of its customers. Clorox hit the bull’s eye, and in the first year alone enjoyed $40 million in sales.

Green-business guru Joel Makower, who consulted with Clorox on the launch of Green Works, describes the evolution of the company’s new green brand on his blog, makower.typepad.com. He talks about how Clorox market research identified a “consumer market they dubbed ‘Chemical-Avoiding Naturalists’ – consumers who wanted greener cleaners but felt the incumbent products didn’t work well, came from brands they didn’t know or trust, were too expensive and weren’t always available where they shopped.”

Jessica Buttimer, Green Works’ director of marketing, described the opportunity as follows: “We were actually in a perfect position as a company. We had the Clorox brand; we had these distribution channels and great relationship with Walmart; we had the science to make an efficacious product; and we had the scale to charge just a 20 per cent premium, instead of the usual 100 per cent premium.” Listen closely: this is the language of effectiveness.

In just eight months, Green Works sold $3.4 million worth of glass cleaner, compared to $1.1 million sold by Seventh Generation and $947,000 by Method over a full 12 months. Green Works’ effect on the market has been so dramatic that in November 2008, Seventh Generation initiated a product redesign in response to the threat to their market supremacy and the extreme change within the sustainable products market in general. In the meantime, Clorox has effectively engaged a new generation of Clorox brand consumers and bolstered the green cleaning products market for a wider audience.

 

2. Less is More

Effectiveness also means considering practices that may have previously seemed antithetical to business success, like harnessing growth. For example, when sales were expected to surpass their projected target, Toyota decreased production on its Scion model. This protected the ‘specialness quotient’ and helped the product maintain, or even increase, its value.

Toyota clearly understands that one of the secrets to creating meaning lies in limiting the size of its success. Not only does bigger not necessarily mean better, it could mean the death of a brand. In 2006, the Wall Street Journal reported that the Scion was on track to beat its 150,000-car-a-year sales goal by 25,000 vehicles. “This is a big reason why Toyota surpassed DaimlerChrysler AG to become the No. 3 auto maker in the U.S. in sales. But instead of riding that momentum to increase sales even further, Scion plans to throttle back production to keep sales from going above 150,000 vehicles next year. This is part of its marketing strategy to keep the brand special and, above all, cool.”

Effectiveness means tailoring niche – rather than mass – brands that are relevant to your tribe.

This rule also applies to the total number of a firm’s product offerings. General Motors has recently come under fire for the ‘bigger, better, and more’ mentality that fueled its eight-brand, 70-model offering. While the company may have been trying to efficiently match different consumer segments or tribes with multiple brands and model options, the strategy was about as effective as throwing spaghetti onto the wall to see which strands stick. Meaning is rarely made from demographic data alone, and GM would have been better served by understanding its tribe’s deepest cravings and designing just a select few, relevant products.

In a December 2008 article titled “At GM, Innovation Suffers for Profits,” the New York Times reported that GM finally acknowledged that it had too many brands and it would scale back its offering to just four core brands – Chevrolet, Buick, GMC and Cadillac. The profit-over-innovation strategy is a pure efficiency mentality, and GM ran its business on an ‘earn it or cut it’ philosophy. For example, it cut back on an early hybrid offering, the EV1 electric car (too expensive) and a minivan (why would people need minivans if they had station wagons?) before either innovation had a chance to prove itself in the market.

Unique, custom, personalized and sustainable: these are the primary values in the Age of Meaning. When combined with a nuanced understanding of the hearts and minds of the tribe, businesses will be well on their way to a strategy of effectiveness.

 

3. Take a Platform-based Approach

Effectiveness means tailoring niche – rather than mass – brands that are relevant to your tribe. The key is to leverage back-end efficiencies for front-end success, similar to technology platforms that are leveraged to run countless software programs. Clorox’s Green Works is a successful platform-approach, utilizing the same back-end systems (distribution channels, production methods) and established brand equity to produce a new product targeted to a specific audience. The ‘price to play’ is therefore significantly less and, if done effectively, can only pay off.

Urban Outfitters is another such success story. The clothing retailer, which also owns Anthropologie and Free People, knows what it does best – merchandise and lifestyle brands that empower its tribe(s) to be more authentically themselves. Anthropologie’s customer, for example, is not a roughly-sketched demographic or price-point niche, like, say, GM customers or those targeted by the Old Navy, Gap and Banana Republic continuum. Nor does the company expect to sell a selection of products to everyone with a ‘one-size-fits-all’ approach. Instead, it demonstrates its understanding of the tribe by digging deep into the subtleties of the psychographic profile of a specific type of 30-something, married woman. Anthropologie stores are an extension of her adventurous, bohemian-chic self that doesn’t get as much play when juggling a career and kids. Anthropologie’s retail environment is an artful rendition of a French market, creating an air of discovery and whimsy. It tells a simple story and stays true to its brand DNA. For this, the average customer spends over an hour in the store and spends close to $80 per visit.

Urban Outfitters and Free People are equally zeroed-in to their respective tribes. Women’s Wear Daily reports that all three stores are selling between $800-1,000 per square-foot. The company leverages the same back-end systems, but tailors each brand experience with care. Urban Outfitters’ recent announcement that it is considering additional concepts is further evidence of effectiveness thinking.

In his book, ZAG: The #1 Strategy of High Performance Brands, Marty Neumeier calls the Urban Outfitters model a ‘house of brands’ and compares it to the ‘branded house’ model (i.e. Starbucks). For Neumeier, the advantage of a house of brands is that each one is “free to fight its battles on its own terms, unfettered by the meaning of the parent brand.” The advantage of the branded house, he explains, is that “all products and services can share the same budget, customer and market position.” However, it also runs the risk of getting bogged down by trying to be everything to everybody.

In the Age of Meaning, when the rate of change seems to only accelerate, a ‘house of brands’ has the ability to be more nimble and respond to shifts in consumer needs and market trends. Platform innovation, for example, can create an ecosystem of partner brands. Apple makes only four iPod products, but there are more than 3,000 products that other manufacturers and brands create around them. Companies can enrich the experience of their brands by extending utility, borrowing status or quickly leveraging new trends.

The key to success, however, lies in a company’s ability to create relevant experiences for their targeted tribes: a ‘House of Brands’ can only achieve success if it is a House of Meaningful Brands.

 

4. Consistency is Key

Effectiveness means that the brand experience is extended to every touch point – what we call a ‘360-degree experience’. There is no experience-killer worse than a story being told from only one aspect of a customer’s interaction with a company. There may be a great product or service hiding in there, but if customer service or a Web site doesn’t extend the brand experience, the brand is invalidated and there is a high risk of losing the customer. Every aspect of the brand must reflect the desires of your tribe.

Apple, of course, is the master of a platform-based, 360-degree effectiveness strategy. The story of Apple is told in every single detail of the experience, from elegant package design to the genius bar in Apple stores to their ads that say ‘Apple’ in a way that only Apple can say it. The Apple tribe continues to fall ever-deeper in love with the company that woos them with such care. Apple continues to produce a limited number of products that allow their tribe to more authentically be themselves; contrast this model with SONY, which produces hundreds of different products each year, only a handful of which are real profit makers. Every Apple product has a story and a meaning behind it, as well as a profit margin that is the highest in its industry. Clearly, an effectiveness mindset pays off.

In closing

During a recent conversation with leaders of a major food company, a senior executive said to the group, “In the early 2000s we became the most efficient food company in the world; but so have our main competitors. What now?”

In the end, every efficiency strategy has a natural limit, because it can be imitated. Competitors can leap-frog your business in a matter of months. What is truly effective – i.e. meaningful for your tribe, unique and authentic to your brand – is inimitable.

It’s time for organizations to push the pause button, dig deep and commit to their true DNA and to the tribe that is the best match for what they have to offer. Such effectiveness should be at the top of the agenda for every CEO today, and it should not stop there. Time should be set aside at regular intervals – every six-to-nine months – to take stock of trends and of the tribe’s shifting behavior, attitudes and values.

Change. Adapt. Innovate with soul. And worry about efficiency only after it is completely clear how to be effective. It will be hard work, but the potential payoff is great, and the Age of Meaning requires nothing less.

 

Sohrab Vossoughi is the founder and president of Ziba, a leading design consultancy based in Portland, Oregon, whose clients include Microsoft, Whirlpool, 3M and P&G.

Companies prosper when they tap into a power that each of us already possesses: empathy.

THE
EMPATHETIC
ORGANIZATION

By Dev Patnaik and Peter Mortensen

IN 1986, MANAGER Jack Stack and 12 co-workers staged a successful buyout of Springfield Remanufacturing Center from its parent company, International Harvester. The engine rebuilder had been losing money to the tune of $2 million a year, and Stack and his team believed that they could revive the moribund unit. Realizing the need to make massive operational changes, they revamped SRC’s system for financial reporting and decision making. In the process, they helped spawn a management revolution: open-book management.

Stack and his colleagues realized that the only way to successfully make a multitude of changes quickly was to enlist the help of every person in the company. Every employee needed to think and act like an owner. They needed to understand the business consequences of their actions and make better decisions. To achieve this, each employee was taught how to read the company’s financial statements, including all the numbers that were critical to tracking the business’s performance.

People in companies with a widespread sense of empathy possess a shared and intuitive vibe for what’s going on in the world that helps them to see new opportunities faster than their competitors.

Then the managers made the books public: Stack posted the company’s financials on the breakroom walls, in handouts, and on the computer network. Training courses and regular meetings taught everyone what the numbers meant. Suddenly, a machinist on the shop floor could see the effect of finishing a part faster, reducing raw material, or shaving some time off of a job. The results were astounding: SRC’s sales grew 40 per cent a year in the first three years, and operating income rose by 11 per cent. When other manufacturers heard of SRC’s turnaround, they too overhauled their decision structures. By 1995, Inc. magazine had devoted an entire issue to the phenomenon called open-book management.

As successful as open-book management has been, it’s clear that numbers aren’t everything. Short-term financial success doesn’t prevent a firm from being blindsided by new threats, especially in a fast-moving sector; operational efficiency doesn’t guarantee a firm’s ability to discover and leverage new ways of providing value to the customer; and acumen alone can’t mobilize a large group of people. For today’s companies, value creation depends on knowing as much as they can about the people they serve. More complex than providing an open book, creating value for people requires the creation of an open channel to the outside world.

Empathy = Growth

Companies prosper when they tap into a power that each one of us already possesses: empathy, the ability to reach beyond ourselves and connect with other people. Human beings are intrinsically social animals. Our brains have developed subtle and sophisticated ways to understand what other people are thinking and feeling. Simply put, we are ‘wired to care’. We rely on this instinct to help us make better decisions in situations that affect the people around us.

Unfortunately, this instinct seems to get short circuited when we get together in large groups. We lose our intuition, our gut sense for what’s going on outside of that group: corporations become more insular; colleges start to feel like ivory towers; and political campaigns take on a ‘bunker mentality’. This sort of isolation can have disastrous effects, because institutions depend on the outside world for revenues, reputation and votes.

By contrast, people in companies with a widespread sense of empathy possess a shared and intuitive vibe for what’s going on in the world that helps them to see new opportunities faster than their competitors, long before that information becomes explicit enough to read about in the Wall Street Journal. They have the courage of their convictions to take a risk on something new, and the gut-level intuition to see how their actions impact the people who matter most: the folks who buy their products, interact with their brand, and ultimately fund their 401(k) plans. That intuition transcends what’s traditionally referred to as market research.

A widespread sense of empathy starts to influence the culture of a place, giving it a sense of clarity and mission. People spend less time arguing about things that ultimately don’t matter. Empathy can even start to ensure more ethical behaviour in a way that no policies and procedures manual ever could.

The Open-Empathy Organization

The idea of creating an Open-Empathy Organization is to build and propagate a system of human information. It’s about every member of an organization having a first-hand sense of what people need, how their company solves those needs, and how what they do as individuals can add or subtract value. When employees can see that their daily activities have an impact on people outside the company, they often become inspired to create more positive impacts.

Most of us are reasonably good at figuring out how to make each other happier, but those instincts can’t kick in if we can’t see the people we’re trying to help. Widespread empathy restores that connection. That’s why, just as with open-book management, people in Open-Empathy Organizations make better decisions. When they can see who they’re really working for, they know why their work matters and how to do it better. Instead of realizing how finishing a project faster will make the company more profitable, people in Open-Empathy Organizations know exactly where value resides in the world of customers and potential customers.

In our research at Jump Associates, we’ve had the chance to meet a few such organizations. Harley-Davidson fills its head-quarters with tangible reminders of the shared story of motorcycle riding. Everyone who works at Harley need only look around them to understand exactly what riders genuinely value. Likewise, Nike has built an entire culture to celebrate the potential for athletic greatness in each of us. IBM helps its customers keep their information technology up and running, which is why the company stays as close as possible to its business clientele. The company uses its services division, direct sales force and online portals to connect employees with customers on a daily basis.

For these companies and others like them, empathy is an intangible-but-important asset, and a significant engine for growth. Open-Empathy Organizations outperform their competitors and consistently add value to the top line because they understand how the work they do affects the people they serve. Generating widespread empathy throughout a company requires the active involvement of senior leadership. It can demand changes in how employees are trained; what facilities look like; or even how managers are incentivized.

The goal is to improve the thousands of decisions people make every day. This might sound like a daunting undertaking, but any company can take steps in the right direction with a few small changes. Organizations that make empathy an easy, everyday and experiential part of the way that their employees work will succeed in making empathy widespread.

1. Make it Easy

Open-Empathy Organizations depend on having employees at all levels who are genuinely interested in other people. This can be difficult, especially since no one likes to take on a bunch of extra work. Everyone has enough to do as it is – mandating ethnographic field research visits for all employees simply adds to their workload. Open-Empathy Organizations don’t make their employees work hard to develop empathy for their customers – they provide lots of easy ways to interact. Although every business needs to walk many miles in the shoes of its customers, few have the time or budget to travel thousands of miles to take that walk. Here are some tips for developing empathy in your organization:

Use the language of your customers. One straightforward way to determine the level of empathy that an organization has is to listen to the language it uses. It’s easy for corporations to develop language and behavior that distances themselves from their customers. In fact, the more successful a company becomes, the more likely they are to be removed from “customer segments,” “consumers,” and “purchasing decision makers.” One company even refers to candy bars as “filled bars with inclusions.”

Open-Empathy Organizations instead always talk about their own work using the same terms that their customers do. Cars should be called “cars,” not “C-class Vehicles.” Chairs should be called “chairs,” not “seating.” And, more than anything, candy bars should be called by their right name. By doing that, any organization can get a little closer to their customers.

Dress like your customers. Another easy way to reflect the outlook of your customers is to dress the way they do. Target stores used to get this right. Target shoppers tend to be middle-class folks with an appreciation for both style and low prices. When they shop at Target, they wear the casual, fashionable clothes sold at the retailer. Target corporate headquarters used to be the same way. It wasn’t unusual to see executives wearing the same clothes that they helped put on the shelves. That changed in 2004 when Target created a strict dress code requiring formal business attire.

Changing the dress code created two obstacles to empathy. First, Targeteers no longer looked like their customers. Second, and more important, they now had to shop at other stores to buy clothing that was more suitable for work. Local newspapers even noted a marked increase in sales for menswear stores serving Target employees in need of sharper clothes. By becoming “more professional,” Target lost an easy way to walk in the shoes of their customers.

Use your own products and services. Ask your employees to use the company’s own products. Mail-order video rental service Netflix gets this right. When you start as a new coder, marketer, or even line worker at Netflix, you’re given a DVD player if you don’t own one. As an employee, you also get a free subscription to the company’s service. As DVDs begin to arrive in your mailbox at home, you experience what all Netflix subscribers experience. You learn how to change the order of the films that you want to watch on your online queue, you anticipate the arrival of new discs, and you learn how to repackage the discs to ship them back to Netflix. People at Netflix don’t have to wonder what it’s like to be a Netflix customer: they are customers, too. Subscribing to their own service allows everyone at Netflix to see constant areas for improvement and to envision new services to add value to their existing offering.

2. Make it Everyday

At first, the novelty of empathy-building activities can make the initiative seem special, a break from the usual routine. That’s a bad sign. Open-Empathy Organizations avoid the kind of “big empathy-building events” that leaders love to kick off. While they can create a lot of excitement, these one-off events rarely have lasting impact. It’s far more important to insert empathic information into the workplace on a daily basis. To really stick, empathy needs to be part of the everyday routine: accessible, quick and a constant presence.

Get senior leadership to model behaviour. One of the most essential characteristics of an Open-Empathy Organization is a leadership team that demonstrates empathic behavior in its everyday work. For example, when David Neeleman was the CEO of JetBlue Airways, he flew around the country several times per week. But he never flew on executive jets or in first class – he rode in coach class on regularly-scheduled JetBlue flights. Once the plane reached cruising altitude, David would get up and join the flight crew to pass out snacks and drinks. When the plane landed, he would pitch in to clean the plane after the flight. This first-hand exposure to his offering and his customers provided David with a strong sense of empathy. More importantly, his visible activities were well-known throughout the company, and people at all levels replicated his interest in the company’s customers. Even now that he has left JetBlue, David’s commitment to develop empathy for his customers has set the tone for the rest of the organization.

Hire your customers. There is no more effective way to get closer to your customers than to have them come to work alongside you. Every single day, you will have the opportunity to learn about the people you serve just by chatting with a co-worker. Better still, all such employees have a great intuitive sense for customers. Years ago, upon realizing that it didn’t understand a generation of kids who had grown up with PCs, cell phones, and the internet, Casio hired teenagers to help design its products. This gave the company instant, actionable feedback from its target group. Using the same logic, The Container Store figured its best holiday retail employees would be the same folks who regularly bought holiday products. The company sent invitations to its best gift-wrap customers to help sell wrapping paper and other holiday items and was greeted with an overwhelmingly positive response.

Surround yourself with empathic information. The final key to making empathy an everyday part of working is to fill the workplace with information about the company’s customers. We came across a good method for making empathy an everyday part of working several years ago while visiting semiconductor giant Intel. The company has a robust ethnography team that conducts extensive interviews with ordinary people in their homes to figure out what sorts of devices Intel and its partners should create next. But Intel is a large company, and the ethnography group is small. To widen its impact, the group translates what it learns about people into end-user ‘personas’ – fictional people whose demographics, personality traits, and habits are based on those of real people the team has met. Such personas can provide touchstones in the product development process, but they wouldn’t have any impact at Intel unless people read them. That’s why Intel’s ethnography group has created a unique method for spreading personas throughout the organization. The team has hit upon one of the rare moments when people sit down and have some time to themselves: in the bathroom. Intel posts the personas inside restroom stalls, where they’re easy to access and read. After all, people are going to spend time there anyway. Why not help them learn something in the process?

3. Make it Experiential

Finally, it’s important to make empathic information experiential. The emotional centers of our brains aren’t easily triggered by Excel spreadsheets. Open-Empathy Organizations work to create ways for employees to interact with customers and environments for themselves. Sometimes that means encouraging employees to get out into the world. Other times, it means bringing the outside world into the office.

Routinely visit real customers. Too many leaders only understand their customers in the form of market research about their purchasing habits. They don’t know them as people. Open-Empathy Organizations instead encourage employees to regularly meet the actual folks that they serve. When Lou Gerstner became IBM’s CEO in 1993, he launched ‘Operation Bear Hug’ to meet this goal. The program required each of his 50 top managers to meet with at least five of IBM’s biggest customers in the span of three months. Managers weren’t supposed to sell product in those meetings. Instead, they were to listen to customer concerns and think about how IBM might help. All of those executives’ 200 direct reports then had to do the same thing. Gerstner demanded short written reports on the outcomes of each Bear Hug meeting, and he personally read every single one. As a result of this process, Gerstner saw the opportunity to dramatically grow IBM’s business by moving into professional services, a shift that restored the once-beleaguered firm to profitability and growth.

Bring the outside in. Many companies are insulated to what life is like for their customers. Open-Empathy Organizations blur the line between the company and the rest of the world. One great way to do this is by finding ways to bring the outside in. Gardening tools company Smith & Hawken does a great job of this. Everyone in the company is required to take rotations working in the garden – to literally get down in the dirt. It’s the company’s way of helping its employees develop a better gut sense for how real gardeners view the world. The gardening program helped Smith & Hawken create an empathic connection that helped employees quadruple the company in size and expand from a mail-order business into one of the fastest-growing retail companies on the planet.

 

The first steps are simple: take the way that you already work today and add in experiential activities that put you in the shoes of the people you serve.

Communicate through high-bandwidth media. Though it’s easy to boil down information about customers’ lives to a single bullet on a PowerPoint slide, Open-Empathy Organizations recognize that too much gets lost in the process. Instead, they rely on storytelling, video, and even immersive spaces to communicate data about the people that they serve. No one does this better than Nike.

A major brand in the United States, Nike is also a big name in Japan, a notoriously difficult market for American companies to crack. Experiential empathy has made this possible. At the beginning of a project for Japan, Nike designers visit the country in person to gain inspiration by hanging out with teenagers. The designers see their homes, go to school with them and get a sense for what cool means to them. Upon returning home to Beaverton, Oregon, designers recreate the environments they’ve visited overseas: they build rooms that look like the teenagers’ bedrooms they saw in Japan, right down to the posters on the walls and the colour palette of the furniture. They even turn on the same Japanese TV shows that teenagers there like to watch. These rooms serve as an immersive space to help designers and marketers create offerings for Japan. They sketch, brainstorm, and debate a product’s look or positioning while immersed in the world of the people they want to connect with. This way, even someone who didn’t go to Japan can experience what they missed.

Use consumer-insight people as coaches, not experts. Consumer insight departments are often the keepers of information about the people a company serves. By contrast, in Open-Empathy Organizations these folks act as coaches and facilitators who create opportunities to learn about customers for everyone else in the organization.

Procter & Gamble exemplifies this principle. In 2001, it created the ‘Living It’ program, in which the consumer insight division arranges for managers and other employees to live for a few days in the homes of lower-income consumers. The same group also developed ‘Working It’, which allows employees to work behind the counters of small stores to see consumers up close and personal. On numerous occasions, P&G employees have come up with breakthrough ideas for products in response to needs that they discovered through time spent outside of the organization. While these experiences are set up by the insights department, the people who go through them work in every function and at every level of the company.

In closing

Creating an Open-Empathy Organization entails a long-term process of organizational change. But the first steps are simple: take the way that you already work today and add in easy, everyday, experiential activities that put you in the shoes of the people you serve. Companies can begin to change by filling just one wing of the building with fresh air. If even a single unit develops widespread empathy, that group’s enthusiasm for the people it serves can spread to everyone else in the company.

Over time, any organization can learn to hear what people outside its walls are talking about, feel what they are feeling, and see the world through their eyes. Open-Empathy Organizations see the world as it really is: rich with life and overflowing with unseen opportunities to grow.

Dev Patnaik is founder and CEO of Jump Associates, a San Mateo, California-based growth-strategy firm. Peter Mortensen is a Strategy Lead at Jump. They are the co-authors of Wired to Care: How Companies Prosper When They Create Widespread Empathy (FT Press, 2009).

From Blueprint to Genetic Code:

The Merits of an Evolutionary Approach to Design

Like everything else in life, design is evolving, forcing us to give up the very essence of the Newtonian notion of design: the blueprint.

Like most designers, I am quite comfortable with the notion of designing simple things. I can pick up just about any object and tell you how it was made, and I could probably have a reasonable crack at designing an equivalent of it, even though I’m not a particularly technical person. That’s because it is possible to definitively know everything important about a simple object: we can know its form, the market for it, and the best method of manufacturing it. We might even know what to do with it when people are finished using it. The traditional design process entails figuring all of this out beforehand and ‘making it so’ in the world.

 

Unfortunately, as the world’s problems have become more complex, the traditional design process has been challenged. Many of the products and services created today are more like complex systems than simple objects; they often involve a confluence of software, hardware, and human behaviour. And as systems evolve, so must our knowledge of systems design.

Take urban planning, for instance. Look around your city and you will see countless examples of the unintended consequences of a failure to understand a complex system. That’s because a traditional design process was likely used to create the sub-par products and services, and cities are like organisms – they evolve. It is very difficult to create a ‘planned’ city, as Chinese leaders are currently finding out through their attempts to create fully planned, top-down, large-scale cities.

In traditional attempts to design a service, we ‘script’ the service, creating a ‘user experience blueprint’ that attempts to describe everything that will happen to the customer during the experience. For a hotel, for instance, this would include everything from what the lobby looks like to what the check in service is like. Attention to all these details leads to a relatively complicated script, which makes us confident that we have covered all the bases. The problem is, even when we get these scripts right, it’s amazing how often things go wrong.

From Newton to Darwin

As designers become more involved in solving the world’s wicked problems, an ability to deal with complexity becomes all the more important. In my view, this indicates a paradigm shift for the world of design, because it demands a shift from thinking about the world in the way that Sir Isaac Newton encouraged us to think about it, to the way Sir Charles Darwin thought about it. Let me explain.

Newton’s world was based on the assumption that we have an ability to predict the world based on actions in the present. When we think this way, it encourages us to be top-down in our activities, to be predictive, to believe that we can imagine a complete system. I would argue that the complexity we often face today requires us to think more like Darwin, who encouraged us to think about constant evolution, emergent change, and the notion of unpredictability on a large scale, even if we understand things on a small scale.

As designers and as leaders, I believe that we need to start emulating Darwin a bit more and to stop emulating Newton. Following are some possible aspects of a more Darwinian approach to design.

1. We should give up on the idea of designing objects and think instead about designing behaviours.

Behaviours are about the interrelationships between people and the objects that exist in the world around us. To illustrate the difference between designing an object and designing a behaviour, take a look at this image:

This sign can be found on trains in Europe – a vain attempt to encourage the male of the species to create less mess in the public toilets. But because it is simply an instruction, it doesn’t work very well; anyone who has used a train toilet knows all too well the degree to which it doesn’t work. About 25 years ago, the fellow who managed the airport in Amsterdam had a much better idea:

He realized that if you printed a fly on the urinal – in just the right spot – you would give people something to aim at. And when you give a man something to aim at, he actually does a remarkably good job: this approach has reduced the mess in urinals by up to 80 per cent. That’s what it means to design a behaviour.

2. We need to think more about how information flows.

If you talk to people at the Santa Fe Institute, or read any of their books, you will learn that a key characteristic of a complex system is that the more complex a system is, the more information flows through it. If this is true, then we ought to be thinking more about these information flows when we are designing complex systems. In fact, before we work on designing a better solution, we need to get better at understanding the complex system as it is today, and what information is already flowing through it.

For example, Harvard’s Nicholas Christakis has studied the relationships between people with respect to their health, and one of the conclusions he has come to is that if you are in a network of obese people, you are three times more likely to be obese yourself. Conversely, if you are in a network of non-obese people, you are three times more likely to not be obese. This is a very important insight for design: that the behaviour of those around us significantly effects our behaviour. Intuitively we might know this, but we don’t necessarily always think about it when we’re designing systems.

3. We must recognize that faster evolution is based on faster iteration.

The faster we do things, the faster we learn and the faster we improve. The natural world deals with this truth very well. The reason viruses evolve so fast is that they reproduce every few minutes, which is why we have such a hard time keeping up with them. In contrast, humans evolve (i.e. reproduce) every 20 years or so, and in general, business is more like humans than it is like a virus. How can we make a business more like a virus? One way to move in this direction is to accept that we cannot know all the answers before we do things.

We recently worked with State Farm Insurance in the U.S. to launch Next Door, which provides coaching and financial advising to a new generation of customers. Next Door is a place for customers to come and learn about insurance and financial services, and at the same time it’s a place for State Farm to learn about them. The idea that we can launch things simply to learn from them is quite useful when we’re thinking about increasing the reproductive pace of iteration in business.

4. We must embrace selective emergence.

So far, natural biological systems appear to be way ahead of us in dealing with complexity, but we do have one advantage over them: with biological systems, all of the improvements are random – they are based on mutation. There are some guiding principles perhaps, but there is no guiding intelligence. We humans have the benefit of potentially using the best of both when we design something.

There are technologies out there that are already doing this – enabling us to use the idea of selective emergence to rapidly iterate things while nudging and guiding them towards some outcome that we want. For example, ‘genetic algorithms’. In software today it is quite common to build algorithms that reproduce themselves; certain rules are applied, but you don’t know in advance what the optimal version of that piece of code is going to be. Evolution gets you to it, and all you’ve done is apply certain rules to nudge it in the right direction. This idea can be applied in fields as varied as engineering, design and art.

The strange looking thing pictured below is called a strand-beest. These remarkable structures were created by Dutch sculptor Theo Jansen, and you can find them walking up and down the beaches in Holland. Made out of PVC plumbing pipe, they are ‘self-articulating’ – they move on their own. Jansen used a genetic algorithm to create the ‘hip’ and ‘foot’ joints. He didn’t know in advance what the right ultimate solution was, so he designed an algorithm and it kept iterating and iterating until it created the most efficient foot and hip mechanism to make these sculptures walk on their own. I believe we should be using this approach more often in design. We are already seeing it done in architecture, where architects use a similar kind of technology to create the facades of buildings – the ones you see that often look much more organic than a traditional structure.

As designers, we need to remember our relationship with science a little bit more. We’re often very good at exploration or divergence – asking questions without any real sense of a hypothesis. But I think we also need to relearn some good scientific methodology. Doing so will enable us to ask more of the right questions, come up with better hypotheses, design effective experiments and most importantly, share our learnings.

 

5. We need to focus on fitness.

Biological systems naturally focus on fitness; at its core, that’s what evolution is all about – striving for fitness, whatever the environmental context might be. All kinds of biological systems do this; but what is the equivalent of fitness in business and in design?

I believe one way of thinking about fitness in the organizational realm is the concept of purpose. Organizations that have a clear purpose tend to be able to design in a less top-down way. Many years before Apple took over the world, Steve Jobs spoke to his people about “being insanely great,” telling them: “What you create has got to be so good that you are shocked that you could actually create something that good.” This became the driving purpose of the organization, and it allowed many more people to contribute to the greatness of Apple than would have been the case if there were no such purpose. Imagine an organization that didn’t have this purpose, but still had a Steve Jobs in it; it would have been impossible for him to achieve what he achieved. I believe that his incredible vision plus an organization that believed in the notion of being insanely great are the keys to Apple’s success.

6. We must accept the fact that design is never done.

In the architectural world, there is a notion of ‘life after the open house.’ Architects see all sorts of perfect photographs of buildings just at the moment when they hand it over to the client, but very rarely does anyone see photographs of what happens afterwards. I think this is natural, and I do the same thing: I design a product and I take a perfect picture of it, before the manufacturers get their hands on it, never mind the user. This is that moment when the ‘thing’ is closest to my vision, and it’s when I think I’m done with it. Of course, this is a ridiculous notion, because in truth, it is now in the hands of users, where it will be adapted and used for things that I didn’t expect it to be used for.

In the world of video games, particularly in online games like World of Warcraft, design is going on all the time. Yes, there is an environment that was created, but the design of behaviour – of the events, the characters – all of this is done by users who are, in effect, participating in the design. I believe that design is going to look much more like this in the future, rather than the idea of unveiling a pristine ‘thing’ that we hand over to people.

Evolutionary Organizations

Embracing a more evolutionary approach to design can do more than enable us to create better products and services: I believe that we can use these ideas and principles to tackle some of the most important challenges of our time. In the field of chronic health problems, for instance, we’re beginning to see opportunities to hand control over to patients and enable us to design behaviours for ourselves that help to manage chronic disease. As a result, we’re starting to get past the idea that our bodies are mysterious ‘black boxes’. For example, there is a scale that comes out of Europe that does something very simple: each time you weigh yourself, it sends the data to your iPhone. Over time, you can build up a clear picture of the relationship between your behaviour and your weight, because you get to see it on a graph. Such devices could measure all sorts of things, potentially allowing us to equip people with the means to change their behaviour.

Another way of changing behaviour is to put the tools of design themselves into the hands of people delivering services. We’ve been working for several years with Kaiser Permanente, teaching nurses and doctors and technicians how to use design thinking to improve patient care, and Kaiser now has its own consulting group made up of nurses who have become expert at this. They go around to hospitals working on different problems, creating wards and hospitals of the future. Already, they’ve had some great success in increasing the efficiency of shift changes for nurses.

At IDEO we are particularly interested in applying design to issues of poverty. While it’s still early days, we are finding that the way to have the most impact is to give people tools rather than designing an end product. For example, we’ve been working for some time now on sanitation issues in Ghana, designing a low-cost toilet for people’s homes. The problem is, even if you design the lowest-cost toilet possible – in this case, about $30 – it’s still too expensive for most families. We looked at things like micro-finance to deliver the service, but what we found is that the really important design unit here was a service business model. The model allows room for entrepreneurs to set up service businesses where they rent toilets out to people and come to empty and clean them on a daily or weekly basis. The lesson we learned: the important part wasn’t the design of the toilet itself, but the whole business system around it.

We recently worked on a project with the Bill and Melinda Gates Foundation to create a Human-Centered Design Tool Kit, which is really a field guide for design for not-for-profits and NGO’s. It includes tools that enable them to understand their users better, to create ideas through prototyping, business model design, etc., and we’ve had some interesting success with it. Already, the tool kit has been downloaded over 70,000 times and it is being used on projects ranging from creating a new maternal hospital in Nepal to working with a cooperative of weavers in Rwanda to water distribution management systems in Malawi and hand-washing stations in Vietnam.

 

If you want to be involved in the ‘participation economy’, our old notions of designing in a controlled way just don’t make sense anymore.

 

In an effort to scale all of these efforts up, last September we launched IDEO.org, which is a sister organization to IDEO and a not-for-profit design organization that works on social innovation initiatives. Unlike IDEO’s core business – where we’re hired to solve problems for clients by designing new services or products – we’re doing something quite different with IDEO.org: we’re looking to build out the capacity for design in the social sector. This is a space where giving up control is necessary: if you want to participate and be involved in social networks – what I think of as the ‘participation economy’ – our old notions of designing everything in a controlled way just don’t make sense anymore.

Evolving as an organization means listening to not only your clients, but to what’s happening in the world around you. Our clients would often say to us, “You talk about how we should use innovation to disrupt ourselves, but how are you disrupting yourselves?” We thought about this for some time, and asked questions like, “What if we could solve problems collaboratively via a global network?” Basically, what would happen if IDEO had 50,000 people working on design challenges instead of the few hundred working within our walls?

We came up with Open IDEO, which is a platform for tackling social innovation problems. We do this in conjunction with various non- profits and sometimes with companies, as well. For instance, we teamed up the World Wildlife Fund and Sony on one challenge, and Unilever is helping us out on the sanitation challenge in Ghana. At the moment we have about 25,000 people in the design community working on projects in 178 countries. We are already seeing businesses getting launched through Open IDEO, and we’re seeing some really interesting ideas going back into the organizations that sponsor projects. But more importantly, we’re learning a huge amount about how collaborative design might happen in the future.

In closing

Like everything else in life, design is evolving, and in many ways we are being forced to give up the very essence of the Newtonian notion of design: the blueprint, which personifies control and defining every outcome of the design process.

Instead of focusing on designing blueprints, I believe there is something that better represents what we should be designing going forward: genetic code. At one level, genetic code represents the biological view of design I have described, because it is an ‘instruction set’ for biological behaviour. But more importantly, it represents the idea that code is only the beginning of something: it sets off a series of behaviours, but you can’t know the ultimate outcome in advance.

While most of us don’t understand how to work with genetic code, we have already begun to understand how to work with a different type of code: software code. The design and engineering of software has changed quite radically in the last 10 years to be much more ‘open-ended’ than it used to be. In a sense, this is a metaphor for how we as designers – whether we are industrial designers or designers of businesses – need to behave and work going forward.

Tim Brown is CEO and president of IDEO and the author of Change By Design: How Design Thinking Transforms Organizations and Inspires Innovation (HarperBusiness 2009). He blogs at designthinking.ideo.com