Leadership

Introduction

When I wrote the first edition of this book in 2012, enterprises around the world were wrestling with how to awaken their capacity to innovate. A lot has transpired since then. Increasingly, innovation is no longer seen as a stream of activity but rather the nature of business itself. To thrive and survive, an enterprise must be continually searching for new ways to create and sustain value to the market and capture value to fuel the enterprise.

To help unlock enterprise potential, many enterprises have evolved their ideology and practices. Design thinking has become all the rage, and innovation labs and incubators have popped up everywhere. Yet, despite these well-intended efforts to ignite innovation, some fundamentals are often missing in building an enterprise’s capacity to continually innovate and to more seamlessly integrate “business” and “design”:

• Embedding design thinking takes more than a few short boot camps and playbooks that oversimplify the complexities of turning ideas into business.
• New ideas must be explicitly linked to the enterprise strategy and integrated into the running of an enterprise.
• Integration of data analysis and validation is key to building a business case. Numbers matter when it comes to making a business investment. Fact-based reasons to believe build confidence in the innovation pathway.
• Innovation is a shared quest. It calls for engagement throughout the enterprise and of leadership at all levels.
• Innovation is much more than an application of methods. It calls for the right mindset and regulation of thinking modes.

These are the critical factors that have inspired this second edition. This book is intended to bring Business Design into the current context and reflect work in this discipline since the first edition and a broader view of how to create value, based on my thirty-nine-year career and the learning of others. My precept is that business is a very creative act, and that everyone in an organization can and should contribute to creating and delivering new value. I continue to believe that there is an opportunity to inject more “design” into business and more “business” into design.

Background

My personal background includes a decade at Procter & Gamble, where I listened to consumers, made prototypes to get executive input to product and marketing ideas early on, and crafted bulletproof business plans. Working across disciplines at P&G was always rewarding, because people across all functions in that company had something insightful and clever to contribute. Wondering what it would be like to be creative all the time, I decided to jump the fence and go into advertising and design.

In the next fifteen years, I learned a lot about the magic of imagination and the value of making ideas tangible. I also learned that strategy is often inspired by a novel idea. While I initially resisted that notion because I was a strategist, I came to appreciate the truth in that notion. As humans, we naturally begin with insights and ideas, not strategies, though we absolutely need to have a clear strategy to optimize our way forward.

I then met Roger Martin, the visionary dean of the Rotman School of Business with an ambition to transform business education. He offered me the opportunity to bring those two worlds together and contribute to an experiment in business education, centered on the notion of Business Design. The idea behind Business Design: to integrate the best practices of business with design-inspired mindsets and methods to help organizations tackle their innovation challenges. In collaboration with David Kelley (co-founder of innovation consultancy IDEO and Stanford’s d.school) and Patrick Whitney (dean of the Institute of Design, Illinois Institute of Technology), we set off to design a fresh approach to education and business innovation. Our approach would focus on how to best meet customer needs, generate breakthrough solutions for customers, and translate those big ideas into focused and actionable business strategies that would greatly increase the chances of innovation success. This was the inspiration for the 3 Gears of Business Design: Empathy and Deep Human Understanding, Concept Visualization, and Strategic Business Design, as you will read about in chapter 1.

In 2005, Roger brought an exciting opportunity to this group. One of the world’s most admired companies believed that design thinking could play a key role in unlocking innovation, defining more competitive strategies, and ultimately delivering greater value to the market and the enterprise. That company was my alma mater, Procter & Gamble. A.G. Lafley, P&G’s CEO at the time, wanted to propel P&G’s level of innovation and growth into the future by pushing the value of design beyond its current application in product and packaging. To lead this quest, he appointed Claudia Kotchka, a P&G business leader with a strong track record for results and a passion for design as the company’s first vice-president of Design Innovation and Strategy. Our integrated approach was first put to the test with the Global Hair Care Team in December 2005 and subsequently refined and rolled out to the enterprise globally to fortify P&G’s reputation as one of the most innovative companies in the world. Part 1 of this book ends with an interview with Claudia on her tips to lead such a massive global enterprise transformation.

Concurrent with scaling the P&G program, we launched a full-scale initiative to advance the practice of Business Design and formed a strategy innovation lab called DesignWorks at Rotman. Our ambition was to turn this design-inspired approach into a methodology that could be applied in a deliberate, rigorous manner to full-scale innovation projects. Over the next seven years, we engaged in a combination of teaching, research, experimentation, and practice activities aimed at advancing the discipline.

We worked with top industry executives and business teams across a,variety of sectors and companies, including P&G, Nestlé, Pfizer, Medtronic, Whirlpool, Frito-Lay and SAP, as well as public institutions and government teams. We applied Business Design to many sectors and countries, including extensive work in Singapore. There our program entailed a broad-scale program for business executives commissioned by the Singapore government agency, SPRING, an organization dedicated to developing a productive, innovative, and competitive small-to-medium-enterprise sector to create meaningful jobs for Singaporeans. We developed and delivered a comprehensive “teach the teachers” certification program to transfer Business Design knowledge and skills to the faculty of Singapore Polytechnic. Their ambition was to play an important role in Singapore’s national agenda to embed design broadly into their workforce. They have achieved remarkable results, as told in chapter 7 of this book.

All of these activities enabled us to build out our methodologies and test the value of Business Design with many different organizations and types of challenges. This work culminated in the first edition of the book, which captured the learning from those years at Rotman and the mounting evidence that Business Design

• is a learnable innovation discipline that can transform the way enterprise teams create new value, shape strategies, and mobilize support;
• has the potential to bring out the creative side of everyone without compromising the rigor required to make a meaningful market impact;
• helps get to bigger ideas faster by engaging teams in a common ambition, with the buy-in and know-how required to make important things happen; and
• brings a valuable balance to conventional business planning by expanding opportunities and devising breakthrough business strategies.

To test this premise outside the academic realm, I established a practice in 2012 called Vuka Innovation, to put Business Design to work, do research into what helps and hinders enterprise-wide innovation, and advance the discipline of Business Design. Some of that work is shared in this second edition to further demonstrate how Business Design can help create and sustain new value.

Thinking Like a Designer

How Design Keeps the Dutch Dry

Delft is a quaint Dutch city located about halfway between Rotterdam and The Hague. Sometimes called “little Amsterdam,” its canals, churches, and narrow streets have a way of transporting you back in time (Figure 1.1a). If you didn’t look too closely, you could be forgiven for thinking it unchanged since Johannes Vermeer immortalized it in his painting View of Delft in the 1600s.

From time to time, the city’s charms are less obvious. Winter storms batter the North Sea coast, bringing gale-force winds and driving rain, testing the patience of its residents – and the durability of their umbrellas, which tend to flip inside out in the high winds.

In a single week in March 2004, Gerwin Hoogendoorn lost three umbrellas to the elements. Frustrated by the experience, the industrial design student at the Delft University of Technology (TU Delft) set out to improve a product that had been essentially unchanged for 3,400 years. The ultimate result was Senz, a stormproof umbrella designed to withstand whatever nature could throw at the hapless Dutch pedestrian.

Hoogendoorn explored everything about umbrellas: their tendency to flip inside out, to block visibility, to poke people in the eye. Umbrellas were a boring utilitarian product that didn’t fulfil their function well – so boring, in fact, that Hoogendoorn had to endure the ridicule of his fellow design students, Gerard Kool and Philip Hess, for even working on such a product.

His early ideas included a magnetic field to repel the rain and a helicopter-like device attached to the user’s head. Eventually, however, he focused on the aerodynamics of umbrellas. With no background in aerodynamics, he sought out the help of university contacts with expertise in the field. To build prototypes, he bought a couple of umbrellas, tore them apart, and rebuilt them. He tested his ideas through computer simulation, wind tunnels, and “in-use” tests (i.e., taking them out in the Dutch rain).

With Kool and Hess – who, by now, had begun to come around to the idea – Hoogendoorn founded Senz in 2005. The first Senz umbrella was launched in November 2006; its original, quirky design captured the public imagination, and the initial stock of 10,000 units sold out in nine days. In its first year, Senz won almost every major design award and went global in 2007.

Hoogendoorn’s design school, TU Delft, is a venerated institution in the design world. A few years ago, I spent a sabbatical there, during which I experienced the Dutch rain on more than one occasion. As a former marketing executive and a professor of marketing at the Rotman School of Management in Toronto, I had been on a journey to explore “design thinking” for some years. I wanted to know everything I could about design and design thinking. What was design thinking anyway, and how was it different from any other kind of thinking? How was it practised in business and the public sector, and what happened when it was?

I felt the best way to conduct this exploration was to immerse myself in the world of design. I hung out with designers. I read deeply about design and design theory. I worked with designers on projects. I talked with designers, design educators, and design thinkers in organizations. I taught business strategy to designers and design thinking to executives. My design journey led me not only to Delft but also to many more places around the world.
I found that designers look at the world in a distinct and interesting way. I found not just creativity but also curiosity, rigour, and discipline. I found some answers – and many more questions.

To a designer like Hoogendoorn, what was design thinking? On the face of it, his idea of design sounds fairly simple: “I think good design is an object or a service that exceeds the user’s expectation,” he says in a promotional video.

But even if we had a good way of understanding what the user expects, how would we know which problem to work on? Flimsy umbrellas are just one of those everyday problems that seem to plague us. We take such problems for granted and don’t think much about them, much less about solving them. Hoogendoorn’s genius seemed to be in selecting the problem as much as in solving it.

Once he had decided to work on the problem, he went back and forth, drawing things, building rough models, testing them, redefining the problem, moving on from ridiculous ideas to more practical ones, and learning as he went along. His approach was exploratory, driven by curiosity.

For companies that make consumer products, the ability of designers like Hoogendoorn to find genius in the everyday is inspiring – and perhaps a little disconcerting. Hoogendoorn approached Impliva, a major umbrella distributor, and was turned down before embarking on his own project. It seems to suggest that designers see possibilities that companies don’t see.

Many organizations have taken this to heart, wondering what the “secret sauce” of design might be, and whether it could be applied to their own problems. Design thinking has been touted as an answer to this question and has grown from a fringe activity to a central weapon in the problem-solver’s arsenal. An army of consultants and management gurus now promote it as the long-awaited answer to the problem of innovation in organizations.

If only it were that simple.

Most of my career to date has been spent in large organizations. Exciting as design thinking is – and I still find myself passionate about it – it is not easy to apply. As I have explored design thinking, I have encountered many with a similar passion who struggle to make it work in a large organization. It is such a different way of looking at problems that it can pose a challenge to the prevailing culture and approach.

I’ve found that organizational design thinkers face common problems, tensions that they have to manage in order to survive. Fortunately, some are not merely surviving but are thriving. How they do so is the subject of this book.