Design thinking is stimulating, inclusive and has been applied with tremendous impact in a number of countries, industries and companies, writes Paul Lee-Simion
In 1950, a group of mechanical engineers thought about adding something to their products in order to make them distinctive and more accessible to customers. This was the start of what we know today as ‘design thinking’. In view of today’s rapidly changing landscape, the adoption of design-thinking techniques is not an option, it is a must.
Fortunately, using design thinking to resolve issues is fun. It ticks the boxes for the inclusion of all stakeholders, especially those who are often forgotten and those who may be most impacted by the change in question.
The impact of design thinking
Design thinking has been applied with tremendous impact in many industries.
In consumer products, design thinking allowed Apple to sell more than 2 billion iPhones, enabling Apple’s profits to increase from approximately $3.5bn USD in 2007 to over $50bn USD annually in 2018.
In the education sector, design thinking was implemented to create a classroom layout that catered to the needs and desires of pupils; as a result, pupils are far more engaged. For example, Fidget Modules are said to increase attention spans of eight-year-olds from seven to 20 minutes.
In financial services, design thinking allowed banks to realise that their customers dictate the way business must be done. This resulted in a 150% increase in new investment product sales.
Design thinking in the transport industry increased passenger capacity by repositioning and synchronising trains, escalators, barriers and ticket offices, accommodating a 5% year-on-year growth in passenger footfall.
According to Forrester, a market research organisation, developing products with which customers have an affinity saved US multinational General Electric (GE), $15m USD in development costs when it first took a design-thinking approach in 2010. Design thinking also allowed GE’s maintenance costs to be halved, according to a study in 2017 by the Lucerne University of Applied Sciences and Arts.
Design thinking also allows for value-based pricing, a strategy where prices are set primarily in line with consumers’ perceived value of the product or service. For example, the manufacturing costs of an iPhone X are $370.25 USD, according to statistics and studies website Statista, yet customers are often willing to pay the retail price of approximately $1,000 USD. This contributed to Apple becoming the world’s first trillion-dollar company in 2018. Apple spends $10bn USD annually on research and product development, which is only 0.1% of Apple’s market capitalisation. Design thinking is at the core of everything Apple does and is commercially effective. Who wouldn’t spend 0.1% of the market capitalisation to be the world’s first trillion-dollar company?
Governments and design thinking
Embracing design thinking has been shown to be profitable. For example, organisations defined as ‘design-led’ were found to have outperformed those that were not by 228% over a period of 10 years to 2014, according to research from the Design Management Institute (DMI). When it comes to governments, the manner in which design thinking is embraced and supported helps create an innovative culture in their country, allowing it to attract more organisations (and therefore add to revenue) as well as promote social cohesion, a decrease in taxes, and save lives by delivering services that display an affinity to their citizens, who after all, pay for them.
Here are a few examples of the use of design thinking by governments around
the world:
Singapore: Design thinking employed by the Singaporean government has had a strong impact. In terms of law and order, it was used to make courts family-friendly with play areas for children and upbeat décor replacing the standard sombre environment.
In the Singaporean healthcare industry, design thinking allowed for all disciplines dealing with patient groups, such as the elderly, to be based around the same ‘island’ from which practitioners spread out. This has resulted in a 40% increase in daily patient treatment and has freed up space.
Design thinking is also used in relation to town planning in Singapore, minimising the distance anyone has to travel to reach public transport, health, shopping and social facilities, and making journeys accessible to the disabled.
Canada: The Canada Beyond 150 programme, which supports leadership and skills development, has introduced ‘cultural probes’. These engage people through their own recordings, drawings, notes and artefacts to make them comfortable about portraying their insights to the government. Through its Employment and Social Development Innovation Lab, Canada has bought together people from various disciplines to simplify the application process for, and the running of, the Canada Pension Plan.
Denmark: MindLab was the first government innovation lab, established in Denmark in 2002. MindLab closed in 2018, but its legacy and many of its activities live on in its replacement, the Disruption Task Force. Notable outcomes from MindLab include driving the Danish Government’s digitisation programme and knowledge transfer to the US, UK and Mexican governments in setting up innovation labs.
US: In the US, design thinking is prominent in the private sector and intergovernmental agencies, yet it is less prominent in federal agencies. Some federal agencies
have had success in the specific context in which design thinking has been applied.
These include call centres that make use of natural language search technology to remove the need for the public to know every form and detail in order to get the information they want; reimagining the US Air Force under the slogan ‘doing smarter stuff faster’, and simplifying federal tax forms.
South Korea: The South Korean government has taken the approach of partnering with commercial organisations to leverage available technology. One organisation with which it has partnered is German software multinational, SAP. Outcomes of this collaboration include an Internet of Things (IoT) solution to monitor livestock feeding, and a public service design model, increasing participation and literacy rates.
UK: The UK’s Government Digital Service delivers services through the domain name, GOV.UK. This includes ‘verifying’ users’ third-party data to determine people are who they say they are when accessing its services.
Colombia: In 2010, the Colombian military is said to have demobilised 331 guerrilla fighters, employing design thinking to influence the guerrillas. They understood and empathised with the fact that they missed their families and felt most emotionally vulnerable at Christmas. Over the holiday period, they installed Christmas trees with motion sensors programmed to light up with the banner: ‘If Christmas can come to the jungle, you can come home. Demobilise. At Christmas, everything is possible.’
Meanwhile, fintech is an industry area in which governments around the world are paying particular attention to the potential impact of design-thinking approaches. Government support for fintech projects and initiatives can be seen in Australia, Canada, Hong Kong, Singapore, South Korea, China, the UK and the US, through regulators and industry associations. The Monetary Authority of Singapore hosted the world’s largest fintech festival in November with more than 500 startups from 40 countries in attendance.
A paradigm shift
Organisations need a paradigm shift in understanding their clients, rapidly testing (and rapidly failing) products, and bringing products to market within months instead of years. Everything organisations do needs to have the client at the centre and to be continually evaluated by clients and ‘personas’ (fictional representations of clients).
Success is having customers availing themselves of products and services provided without necessarily knowing they are doing so. The product finds the client when and
where the client needs it. This requires a radical transformation in processes, controls, regulation, protection, technology and delivery.
Existing customer interactions with the organisation (whether that is in person, over the phone or online) should be captured. Their aspirations and challenges need to be understood, problem statements need to be formulated and personas developed.
Then teams involving people from all disciplines, including user experience, process and support, are assembled to come up with a range of ideas and to understand how these ideas will affect the customer through the development of multiple customer journeys.
After this, prototypes of the opportunities predicted to have the most impact are developed and the user experience is assessed. The team then agrees, by voting, on one or more opportunities to deliver as a product.
Finally, the team is expanded to deliver the product, releasing features and assessing these against the persona, clients and any other stakeholders. Where the features
are not well received, the user experience is captured, adapted and integrated
into the persona and the change delivered immediately.
Careers and design thinking
When today’s MBAs consider their future career paths, they would do well to challenge interviewers on how initiatives are pursued in their company to ascertain whether they follow design-thinking principles.
Why? Because design thinking embraces rapid change, providing stimulation and
‘fun’ at work, at least for those who thrive on variety. These are the type of companies that most MBAs seek and are the sort of the startup graduates want to create. Given that an estimated 80% of all startups fail and, according to a 2018 report by tech market intelligence platform, CB Insights, 42% of failures are due to a lack of market need – design thinking boosts the chances of success.
One cautionary example is Kodak, a major player in photographic film for more than 100 years and the inventor of digital cameras. It failed to understand the changing needs of its customers and opted to keep manufacturing film, before filing for bankruptcy protection in 2012. By contrast, Samsung has been morphing for over 20 years, from a contract manufacturer of cheap imitation electronics to a top innovative design brand, based on design thinking. Its mobile division now rivals Apple, while other former household names have disappeared.
Case studies such as these demonstrate the positive power of design thinking and the dangers of failing to innovate during an era of unprecedented technological and demographic change.
Paul Lee-Simion is Director, EVOLVE – UBS Centre for Design Thinking and Innovation.
