Design Thinking for Innovation

Design Thinking is a development that has recently attracted significant attention in the management discourse. The Institute of Information Management at the University of St.Gallen, the academic home of all three authors, has been conducting Design Thinking teaching and research for 10 years. In this study, Design Thinking is defined as: mindset, process, and toolbox. As a mindset, Design Thinking is characterized by several key principles: a combination of divergent and convergent thinking, a strong orientation to both obvious and hidden needs of customers and users, and prototyping. As a process, Design Thinking is seen as a combination of a micro- and a macro-process. The micro-process—as innovation process per se—consists of these steps: “Define the Problem”, “Needfinding and Synthesis”, “Ideate”, “Prototype” and “Test”. The macro-process consists of milestones manifested in prototypes that must fulfill defined requirements. As a toolbox, Design Thinking refers to the application of numerous methods and techniques from various disciplines: design, but also engineering, informatics, and psychology. Today, a growing number of companies, consulting firms, and universities use Design Thinking, continuously enlarging and re-defining its meaning. At University of St.Gallen, Design Thinking is taught as a problem-based course, together with research partner companies, with more than 40 projects successfully completed over the past 10 years. Research in Design Thinking at the University of St.Gallen focuses on aspects of modeling the Design Thinking processes and corporate entrepreneurship. In the near future, Design Thinking is expected to be deployed as an innovative method in corporations and also become an integral part of management education, particularly innovation. In addition, it will be developed further at the interface of design, design management and engineering sciences.

Design Thinking and corporate entrepreneurship are both topical in the contemporary innovation management discourse. This study outlines promising avenues for future research for the two concepts’ connections and synergies. Four research themes are identified and presented: Design Thinking and opportunity recognition/creation, Design Thinking and effectuation in corporate entrepreneurship, Design Thinking and corporate entrepreneurship strategy, as well as entrepreneurial design management. Promising avenues for each research theme are identified. Two of the research themes are on an individual level, while the other two themes are on an organizational level. The study contributes to the fields of corporate entrepreneurship and Design Thinking by conceptually linking the two, presenting research in the field and noting avenues for further research.

The overall structure and main characteristics of a future product are all decided in the front-end phase, which strongly affects subsequent new product development activities. Recent studies indicate that these early front-end activities represent the most troublesome phase of the innovation process and, at the same time, one of the greatest opportunities to improve a company’s overall innovation capability. In this paper dealing with criteria, we concentrate only on the objectives viewpoint and leave the attributes discussion for future research. The two most crucial questions are:

Based on the theoretical part of this paper, our framework of the Balanced Design Front-End Model (BDFEM) for measuring the innovation activities front-end contains five assessment viewpoints; input, process, output (including i), social environment and structural environment. Based on results from our first managerial implications in three Finnish manufacturing companies, we argue that the developed model is flexible and can also be used extensively for companies other than manufacturing, like the service sector.

In the age of globalization and intensified competition, there is a need to develop not only new products and processes, but to rethink today’s business models. How can firms re-invent their industry to create and capture value successfully? How can firms overcome the dominant industry logic and develop successful and sustainable business models? In our previous research, we found that 90 % of all business model innovations within the last 50 years were based on 55 core patterns. The resulting Business Model Navigator is a systematic methodology comprising four phases of business model innovation: initiation, ideation, integration and implementation. The whole process makes strong use of Design Thinking elements and has been continuously improved by St.Gallen’s innovation team, Stanford University’s Center for Design Research and several business model innovators in leading corporations within the last 5 years.

Many see the primary impact of Design Thinking in the area of industrial innovation. Given the engineering background of the methodology, this is definitely the most straightforward approach, with its practice-oriented nature. We claim, however, that Design Thinking—defined as the mindset as well as the toolset—can significantly contribute to the success of academic research in the Information Systems area. While building on the notion of inquiry from a philosophy of science, as well as the concept of a mindset from psychology, we offer an extended view of Design Thinking as a malleable paradigm. We argue that implementing Design Thinking phases in Information Systems research projects will contribute to a better traceability and understanding of the creative processes, as well as to the credibility of their results. We postulate that Design Thinking will also contribute to new findings, thus leveraging the knowledge contribution. We, provide proven and tested practical guidance on how Design Thinking can be embedded in research projects. While this paper primarily addresses an academic audience, practitioners and facilitators in the field of Design Thinking may benefit from a philosophical perspective on this paradigm.

In this chapter, we propose a visual, diagrammatic approach to Design Thinking and innovation practices that we call Dynagrams. Dynagrams are dynamic, graphic, interactive thinking and deliberation tools that innovators can use to design joint (digital) solution spaces, taking the contributions of all participants into account. Dynagrams are based on three principles from diagram theory: law encoding, representational guidance and free riding. We show how these principles can be applied in design thinking and illustrate their use through design thinking application examples. We present three specific kinds of dynagrams: the Roper dynagram (to better understand client preferences), the Sankey dynagram (to match needs and solution features) and the Confluence dynagram (to explore and design prototype features). We conclude the chapter with an outlook on future development needs in this area.

Strategy making is confronted with a flow of issues and challenges, simultaneously implying fundamental uncertainties and strategic opportunities for current and future enterprise performance. For entrepreneurial strategizing, it is important to successfully translate such issues and challenges into value-creating initiatives, businesses, solutions, and products. In this chapter, we argue that strategy design is essential under these conditions, because it allows proactive creation and realization of promising strategic opportunities, while at the same time establishing organizational pre-conditions for future opportunity creation and realization. Specifically, we identify 10 strategy design practices and show how they shape entrepreneurial strategizing and enterprise performance. Additionally, we identify specific steps to introducing such practices into the strategy process of an enterprise.

Entrepreneurship is a core process in business innovation. In fact, entrepreneurship and innovation are two sides of the same coin and both create value for society and for the individuals involved. The ingredients for successful value creation are not part of the genetic makeup of super entrepreneurs like Richard Branson of Virgin Group or Mark Zuckerberg of Facebook but instead they comprise a method that anyone can learn. The cookbook for the entrepreneurial method provides useful patterns of entrepreneurial thinking and acting employed by successful entrepreneurs to develop innovative products and business models in the midst of uncertainty. And innovation does not stop once a new business is founded. Established enterprises can be revitalized through innovation and the creation of entrepreneurial opportunities. This chapter presents the elements of the entrepreneurial method “effectuation” and identifies ways in which start-ups and managers in large and small enterprises can learn from experienced entrepreneurs how to control an uncertain future, instead of predicting it.

Strategic thinking involves a creative, divergent and synthetic mindset and associated practices often seen as a useful way to achieve direct involvement in strategizing processes, as well as highlighting sensitive organizational and strategic issues that challenge conventional planning. How can we make strategic thinking, as a core component of organizational strategy, work more effectively? Firmly grounded in Richard Sennett’s cultural materialist approach on crafting, this chapter offers a conceptualization strategy work as design practice of crafting embodied metaphors. The chapter demonstrates the approach with a case example of CellCo’s postacquisition sensemaking and concludes with discussing benefits of strategizing as a design practice.

Design research at Stanford’s Center for Design Research (CDR) has always been user-centric. Over time, the focus has been extended beyond user needs and product specifications to include the “human-machine-experience”. A recent wave of research on the autonomous-car/driver experience has focused our attention on the role of “complex adaptive machine systems” in defining the human-experience. The pursuit of a unified model for interaction design has yielded a surprising three-factor concurrent experience framework. Our intention in this article is to give readers insights into context dependency as the defining requirement of the model for autonomous-car/driver experience. As design researchers, we have observed that communication between the autonomous-car and driver takes place through three concurrent dialog channels: information, emotion and learning exchange.

Marketing and Design Thinking are rarely associated with each other because they stem from very different fields of science and application sources: thus, different paradigms. In this paper, fundamental similarities between the two approaches are discussed and it is shown systematically how the two points of view can benefit from each other. Design Thinking can effectively help accelerate learning processes in marketing—and marketing science can help ensure that in Design Thinking one does not neglect fundamental knowledge from the social sciences.

The innovation challenges for a foreign business-to-business company in China are huge. It has to quickly respond to the diverse and rapidly changing customer needs in the large emerging market, while facing strong competition from both local newcomers with disruptive threats and other established global players. To build up its innovation capability, Siemens Corporate Technology China has developed a practical innovation methodology adapted from Design Thinking and integrated with the best practices of other user-driven approaches, to adjust to both China’s and industry requirements. A training/coaching program has also been created to support real business projects and other innovation activities at Siemens. The article includes (a) the overview of the Industrial Design Thinking (i.DT) program and methodology at Siemens and a highlight of its uniqueness compared with traditional ways of research; (b) the step-by-step i.DT process and methods explained with project examples; and (c) knowledge about critical i.DT innovation projects success factors at Siemens in China. By sharing the i.DT practices at Siemens in China, we hope to provide valuable insights into the development of creativity and innovation capability, as well as the adoption of Design Tinking or other user-driven approaches in industry.

The Design Thinking method is often applied as a process for innovation. Innovation, however, also always means change and requires a culture open to change. To what extent can Design Thinking be used to implement change in organizations?

Design Thinking is actually more than just a process; it stems from the classical disciplines of design and engineering. People with a professional background in these disciplines—who had not only applied the practices and steps of Design Thinking, but who had also internalised them—developed the method from their daily work procedures. Today, we would call them “Design Thinkers”. The companies where Design Thinking was formulated, especially the design agency IDEO, had an established corporate culture. The components of this culture shaped the characteristics of Design Thinking and are the foundation for every Design Thinking process.

Organizations interested in using the method should differentiate between the following two aspects and decide how far down the road they wish to go in a change process:

These two aspects can not only be used together, but can also work separately from each other; as the process can not only be a fixed part of the culture, but can also help in its transformation. Design Thinking can be used beyond products and services to change organisations and create new corporate cultures.

In the last decade we have witnessed vibrant interest in Design Thinking that certainly has surpassed other important debates in management, such as on disruptive innovation or business model innovation (Google Trends or references listed in Google Scholar portray an impressive picture!). This development is remarkable insofar as research on Design Thinking is still in its infancy, generally lacking in robust findings. Moreover, the great outpouring of interest has rather simplified our current knowledge of Design Thinking, instead of deepening our understanding of its operative nature and possible applications. The purpose of this article is to take stock of Design Thinking by pinpointing a central feature that has been explicated, but not consistently developed further within current debates on the subject. I sense a great necessity to restate Design Thinking in ways that make it more future-oriented and less of a process that embraces today’s immediate challenges. This key enhancement provides a basis upon which to build future research that can offer a wider scope of application of Design Thinking and direct attention to leadership required to embed Design Thinking in organizations, to create desired futures for business or society as a whole.