Design thinking continues to be a hot topic. Many businesses have heard that design thinking is a good thing and understand intuitively that working with your customers can deliver better products and services. However, in my experience, the benefits of these approaches are discussed in highly ambiguous ways.
One thing that I have found to articulate the “value of design” more tangibly is this Frog publication. Generally, design thinking projects can accomplish one or two of the five values. The projects that disappoint are often misaligned with the type of value the team is aiming to deliver and the goals of key stakeholders in the business for the project.
Five Drivers of Value in the Private Sector
Value #1 – Speed to market
Speed to market is the amount of time it takes for a company to go from problem statement to in-market solution.
When it comes to the development of new products, businesses that strive to quickly launch have an increased chance of winning over their counterparts in ambiguous environments.
It is more important to execute a time-based strategy in an unfamiliar, emerging, or fast-changing market than in a familiar, existing, and stable market1.
Value #2 – Extend the market reach
Extending the market reach requires creating new revenue-producing opportunities with current customers or find new customers for current services. Even with well-mined customers or excelling products, opportunities for market extension are still available.
Uber, the ride-sharing service benefitted through the growth of Uber Eats. Uber made many bets through the years on different ideas to grow the customer base. Uber Eats has come out as the clear leader in scale and executive attention.
What’s most exciting to Uber executives is that many Uber Eats customers don’t even use the ride-hailing service. In 2018, four of every ten people who used Eats were new to Uber, giving the company access to fresh customers who might later be convinced to give the ride-sharing service a try.
Value #3 – Enhance internal capabilities
Enhancing internal capabilities requires developing processes and culture to become valuable assets for the firm.
By enhancing its internal capabilities, in areas such as experience design, product vision setting, and scenario planning, a company can reduce inefficiencies that lead to wasted time. The business can therefore channel more of its resources to the right areas that promise returns on investment.
Value # 4 – Drive Engagement and Loyalty
Driving engagement and loyalty requires finding ways to engage with customers, form a relationship with them and convince them to purchase.
A customer experience (CX) is the sum of all interactions a customer has with a company over time, through digital touchpoints like websites and physical touchpoints like the packaging. The more cohesive and meaningful the CX, the more customers are willing to engage, form a relationship, and remain loyal to a firm.
Companies in the US spend approximately $2 billion in loyalty-related programs every year. In addition, approximately $180 billion is spent on engagement and marketing alone, every year. A design thinking approach can create a repeatable structure for the development of marketing initiatives that stay connected to the needs of customers.
Value #5 – Visionary transformation
An organizational level transformation occurs when challenges are reframed, opportunities to bypass competitors are identified and customer expectations are reset.
If a company doesn’t transform itself fast enough, it is faced with the real possibility of extinction. Examples of companies that did not transform fast enough and are no longer in business include Kodak and Napster among others. Businesses need to be able to adapt.
Some companies focus on today’s challenges and opportunities, so much so that they forget that transforming themselves to be able to solve tomorrow’s challenges is also important at key moments in the life of a company.
Before launching into a design project, think clearly about the design value that can be obtained by the work. Then, start to share the message broadly and confirm it with key stakeholders in the business to avoid disappointment at the end.
For additional suggestions on how to methodically align stakeholder groups with complex and often competing interests read this blog.
If you are an internal design team looking to drive change using design thinking read this blog for some ideas that can lead to success.
For further questions on how design thinking can create value for your company, contact us.
- Jiyao Chen, Reilly, R. R., & Lynn, G. (2005, June). The Impacts of Speed-to-Market on New Product Success. ResearchGate; Institute of Electrical and Electronics Engineers. https://www.researchgate.net/publication/3076869_The_Impacts_of_Speed-to-Market_on_New_Product_Success