How Organisations can use Design Thinking to Develop Entrepreneurial People
Design thinking has become a favourite topic of thought leaders in business management due to its association with high-growth, disruptive technology development. Many articles explain the rudiments of the design thinking philosophy, and suggest that organisations should explore it further for the purposes of improving their innovation processes. But very few explain how design thinking can be used to develop the learning and innovation skills and entrepreneurial attributes of an organisation’s people.
This bespeaks something more significant. Despite its buzzword popularity, there is a general absence of the use of design thinking methods in business education, be that in the formal degree programmes offered by business schools or in the informal learning and development courses that most companies offer their staff. Reflecting on my own experience of business school, I gained a much greater understanding of ‘traditional’ business subjects such as marketing and finance, and had the opportunity to develop new perspectives on leadership, business ethics and change management. Yet we did not rigorously address the challenges around creating products, services, or processes that deliver value for an organisation, be it in terms of revenue generation or greater productivity. In the workplace, however, I saw time and again how successful organisations full of smart, well-educated people struggled with this. Projects were set up, consultants brought in, and great ideas generated. Somewhere along the line though, projects would too often be derailed, producing inadequate results that had cost more to develop than they would ever deliver.
It’s not a new refrain, but it truly is more imperative than ever that organisations develop the knowledge and understanding about how to cultivate and support more entrepreneurial people. By entrepreneurial, I mean the ability to define a business problem that they believe needs to be solved, and the fortitude to recruit and lead teams that research and validate the perceived opportunity, design and develop a solution, and test and constantly improve upon the model they’ve established, while minimising unnecessary cost and wastage. This is particularly true for large organisations and business schools that educate leaders with executive ambitions. Rapid advances in technology have made the means of production more accessible to small start-ups with low capital bases, that are able to easily experiment and get first generation products and services to market quickly and cheaply, with the flexibility to evolve to the needs of customers. Increasingly, large organisations can no longer rely on barriers to entry or brand power in the industries in which they’re established, but by virtue of their size are neither able to move as quickly nor develop products as cheaply as bootstrapping start-ups.
Establishing incubation units dedicated to experimentation, offering funding or purchasing equity in promising, emergent competitors that provide access to their intellectual property, and adapting product development lines and attendant decision-making processes to allow for greater experimentation without compromising core product lines are just some of the solutions that corporates have trialled in order to keep up. Regardless of the approach, the greater challenge is overcoming cultural barriers – the difficulty of accepting that some costs will be sunk without financial return (for not all experimentation produces saleable products); distractive tension between senior management who are accountable for investment and middle management who are responsible for making decisions about how to invest; the challenge for people who are directly involved in a project to think beyond the constraints of an organisation’s history, traditions and normalised values and imagine how the future might necessarily be different.
Experimenting with new processes is essential, but to do so in isolation is a short-term solution. If an experimental process yields measurable success, how are leaders to determine why it was a success, how that success might be repeated and, possibly, whether there was anything they did that prevented even greater success? It should go without saying that leaders understand why certain processes work for their organisations. But faced with a fast-changing, evermore competitive operating environment, there is a tendency to focus simply on the need to act. I am not advocating for a return to excessive planning before cautiously trialling a new approach, but I am suggesting that organisations should take a longer-term, strategic approach to experimentation. If we accept that knowledge is the greatest source of competitive advantage, then it makes sense to focus on developing people so that they can develop effective processes, rather than developing processes that people must then adapt to. It is important to experiment with new processes, especially those that are proven to work, but it is even more important to know why these processes work, so that it’s possible to refine and improve upon them for the purposes of your unique organisation.
At Scandinavia Stories, we’ve developed a method of problem solving that’s informed by design thinking and the power of storytelling, and that focuses people on the entrepreneurial attributes that are needed to successfully collaborate with others. This video provides a brief introduction to our method.
Four activities that help to develop learning and innovation skills and entrepreneurial attributes
Design thinking is not a new concept, nor is it absolute. My interpretation of design thinking is that it is a method for solving thorny problems for which there is no obvious single solution. Design thinking is as much an art as a science, and is not a straightforward, linear process; invariably, as one assumption changes or a hypothesis is disproved, so you must revisit previous ideas to test/question whether they still hold true now that something further down the line has changed. However, the steps to follow are:
Step 1 – Define the problem that needs to be solved and identify the people who are faced with this problem.
Step 2 – Pinpoint the traits or experiences that a potentially disparate group of people share in relation to the problem and truly understand their experiences.
Step 3 – Think broadly and widely about how to solve this problem in both a functional way and an emotional way, and design a solution that satisfies the functional and emotional needs of the people who are experiencing the problem.
Step 4 – Begin developing the solution immediately, as part of the design process, and test the prototype with people who are genuinely experiencing the problem, as well as with other people who are, to some extent, dispassionate about the problem you’re trying to solve.
Step 5 – Repeat steps 3 and 4, constantly referencing the work done during steps 1 and 2 to ensure your assumptions are correct, until user feedback suggests you’ve found a definitive solution.
Step 6 – Assess the financial requirements of creating or implementing the definitive solution, regardless of whether you are operating in a commercial environment. Everything costs money and time, both of which are finite, and the solution must be sustainable, otherwise it is not truly solving the problem.
The activities and tools that design thinkers use are not prescribed. Nevertheless, certain activities and tools are particularly useful for aiding the process because they encourage the application of skills, and help to elicit from participants the behaviours associated with productive collaboration. These same skills and behaviours are core to the entrepreneurial mindset because the design thinking process is synonymous with the process of new venture creation.
In the paragraphs that follow, I’ve explained how four activities and tools that are commonly used in design thinking engage and utilise these key skills and entrepreneurial attributes.
1. Visual communication
Drawing and sketching pictures to convey ideas and knowledge is often used throughout the design thinking process. Without excellent communication, people cannot move in-sync towards a solution. Regardless of a person’s preferred learning style (visual, kinaesthetic, auditory, tactile), drawing is a particularly effective means of communication for the following reasons:
It can speed up the understanding of different perspectives and the assimilation of new ideas. As the old adage has it, a picture is worth a thousand words.
It can help to show the connectedness and influence upon one another of many different, nonlinear elements in a particular scenario or construct.
It invites curiosity from observers and encourages disinhibition, invoking a primal urge in us all that precedes language and cognition.
It stimulates the imagination and evokes creative thought.
Steps 1 to 3 in the design thinking process I outline above are concerned with the generation of ideas and the conduct of research. They are fundamentally different pursuits, and require different skillsets. However, some of the behavioural attributes found in highly creative people and strong researchers are common to both. These attributes, such as curiosity, adaptability, and a capacity for lateral thinking, lead ideas-oriented and evidence-oriented people to respond well to visual communication.
2. Simulation games
From war games, to flight simulators, to business management tools, simulation games all have a common purpose – to help us understand how and why people behave in particular circumstances. In the context of the design thinking process, simulation games have three very powerful uses:
Through the creation of a ‘game world’ with clear boundaries and rules, participants in the activity are liberated from normal social rules and can more easily immerse themselves in a scenario that may be outside of their sphere of experience.
The immersive experience of the simulation activity encourages improved cognitive empathy and perspective taking in participants, enabling them to better understand the experiences of other people.
The decision about which opportunity to pursue will be made easier if you truly understand the problem – and therefore the opportunity – from the perspective of the person who experiences that problem.
Simulation games in the design thinking process require careful planning and should reference the ideation and research that has already been conducted. In this context, they are a form of prototyping, and can take place throughout steps 2 to 5 in the design thinking process. Regardless of the media through which they are facilitated, simulation games invariably involve role-playing and the use of core acting skills. Primarily, this requires participants to inhabit a particular role and to behave and respond to other actors and phenomena in a manner that is in keeping with the role. Acting is not easy, so the more realistic the scenario the more likely it is to provide observers with useful insights, simply because participants’ behaviour will be more genuine even if they are role-playing. This does not have to be as hard as it may sound. For example, most of us understand what it is like to be a driver of a vehicle in a city, surrounded by pedestrians, and also what it is like to be a pedestrian on the street in a city, surrounded by vehicles. It is quite conceivable, as a pedestrian, to be annoyed if a driver sounds their horn, but if the roles were reversed it is equally conceivable that, as the driver, we might feel it is acceptable to sound our horn in frustration with our environment. These are the types of scenarios that simulation games in the context of the design thinking process seek to recreate.
3. Story development
Story development and storytelling are different, but like the design thinking process, they are not linear, consecutive activities. Rather, they are inextricably entwined; storytelling is as much a part of the story development process as it is an outcome of it. In the context of the design thinking process, story development serves the following purposes:
It combines three separate activities that are intrinsic to product or process development – idea generation, idea organisation/categorisation, and the construction of a hypothesis – in an innately human way.
It encourages self-reflection on the part of participants, helping them to think more deeply about the problem they’re collaborating to solve.
It helps to sustain momentum when a project threatens to run out of steam or control, because the possibility to return to and iterate around a simple but powerful story is inspiring and motivating.
In a sense, design thinking is an elaborate and collaborative form of story development, and as such story development as an activity in and of itself is relevant in all of the steps of the design thinking process. Idea generation is a necessarily messy activity that is most effective when participants are open-minded and uninhibited enough to indulge in positive irrationality – the willingness to suspend disbelief in the interests of creativity. Of course, this makes the follow-on activities, the need to structure chaotic data in order to formulate a measurable hypothesis, all the more difficult. Our ability to reason is required to make these follow-on activities successful. Reason enables us to connect cause and effect and therefore to explain ideas and experiences, and justify decisions. Story development works in exactly the same way, although stories do not just draw upon our powers of reasoning. Stories are so powerful because they also appeal to our emotions, and it is this that helps us to understand the experiences being told in the story, even if we have not had, or are not having at that moment in time, the same experience. This emotional pull affects both the story creators and the audience. As long as design thinkers are always able to return to a simple storyline that underpins the project and that persuasively connects cause and effect, they are more likely to stay resilient during moments of despair and uncertainty about the direction of the project. Indeed, the darkest moments of ‘writer’s block’ often foreshadow a moment of clarity and a tangible breakthrough. Furthermore, as breakthroughs occur the story at the heart of a project or proposition will inevitably get stronger and more persuasive to stakeholders, be they investors, new collaborators or customers.
4. Scenario planning
Scenario planning is a method of forecasting that can be used to assess risk in relation to opportunity. Though a scenario planning activity is informed by rigorous research, its final form is that of a narrative outlining a series of alternative future possibilities. It works well in steps 2 to 6 of the design thinking process, and is particularly effective when it utilises the output from visual communication, simulation games and story development activities to construct a picture of the future environments in which a product, service or, indeed, an organisation will feature and be used.
The use of scenario planning allows entrepreneurs to demonstrate a range of decision-making skills:
The ability to assess opportunity cost in a multi-faceted way, particularly with regards to identifying the most appropriate business model for the chosen operating environment.
Impartiality, and the ability to recognise self-interest in contrast to the ‘greater good’.
Courage in the face of ambiguity and uncertainty, because no matter how detailed and well informed a set of scenarios are you will still be taking a risk.
Deciding how much to invest in a new venture, or which new venture to invest in, is difficult for individuals and for management teams. The output from a scenario planning exercise works well as a format for presenting options, and as such it serves as a common reference point around which a diverse group of stakeholders can have a productive discussion before making a collective or majority decision. Scenarios are informed by data and statistics, but are presented as a narrative that carefully positions cause and effect, making it easier to understand how each scenario has been construed than if presented solely in the form of charts and graphs. The purpose of presenting a series of alternative futures is to highlight the different possible outcomes from the same interacting phenomena, and it is important to acknowledge that it is highly unlikely that one particular scenario will occur (though not impossible). There will be opportunities and threats in each scenario, and together they serve to illustrate the complexity and turbulence of most operating environments, and the challenges inherent in trying to predict the future.