Selected analytical information
What is design thinking?
Design Thinking is a methodology that helps organizations effectively solve complex problems and create innovative solutions that are focused on customer needs. This approach is based on the inclusion of creative thinking, data analysis, and a strong focus on the user.
Design and conquest:In years past, the word “design” might have conjured up images of expensive handbags or glossy coffee tables. Now, your mind can go straight to the point. Design and design thinking are buzzing in the business community more than ever. Until now, design has focused mostly on what something looks like; these days, it’s a dynamic idea used to describe how organizations can adjust their approaches to problem solving to respond to rapidly changing environments and create maximum impact and shareholder value. Design is a journey and a destination. Design thinking is the primary way to start a journey and arrive at the right destination at the right time.
design thinking, companies can develop products, services and strategies that better meet the needs and expectations of their customers. This allows organizations to be more agile and innovative in a rapidly changing environment and achieve high performance.
Design thinking, is “the greatest competitive advantage you can have if your customers are loyal to you, because if you solve their needs first, you will always win.”
А good design – it’s good business. The Value of Design to Business shows that the best designers increase their revenues and investor returns almost twice as fast as their industry peers. Moreover, over a ten-year period, design-oriented companies have outperformed the S&P 500 by 300+ percent.
Exhibit 1
As you may have already seen in the illustration, design thinking goes far beyond how something looks. And incorporating design thinking into your business is more than just setting up a design studio and hiring designers. Design thinking means fundamentally changing the way you design your products, services, and, in fact, your organization itself.
How do companies build a corporate culture based on design?
Success in business is more than just developing a great product or service that generates financial returns. Empathy and purposefulness are basic business needs. Design thinking means that customers, employees and the planet are at the center of problem solving.
Marrbery Design has found that design-oriented organizations start with a design-based culture. Here are four steps to success with design:
1. Understand your audience. Design-focused companies go beyond asking what customers and employees want and truly understand why they want it. Design-focused companies often turn to cultural anthropologists and ethnographers to delve into how their customers use and experience products, including what motivates them and what pushes them away.
One example is a well-known cosmetics retailer. When marketing leaders actually observed customers using the company’s website, they realized that customers often went to YouTube as well as TikTok to watch videos of people using the products before making a purchase. Using this information, the cosmetics retailer developed its own line of demo videos, keeping customers on the site and therefore more likely to make a purchase.
2. Bring design to the executive table.
This leader can be a design director, a digital director, or a marketing director. In general, this leader should be the best advocate for the company’s customers and employees, bringing the perspective of people, planet, and company goals to strategic business decisions. The project manager also has to build bridges between multiple functions and stakeholders, involving different groups in the design iteration process.
3. Design in real time. To understand how and why people – both customers and employees – use processes, products, or services, organizations must develop a three-pronged design thinking model that combines design, business strategy, and technology. This approach enables business leaders to identify trends, co-create using feedback and data, prototype, test, and create governance models for ongoing investments.
4. Act quickly.
Good design depends on agility. This means delivering the product to users quickly and then iterating based on customer feedback. In a design-driven culture, companies are not afraid to release products that are not quite perfect. Designers know that there is no end to the design process. The power of design, on the other hand, lies in its ability to accept and adapt as needs change. When designers are embedded in teams, they are uniquely positioned to gather and digest feedback, which can lead to unexpected discoveries. Ultimately, this approach produces more efficient and profitable results than following a prescribed path.
Take Instagram, for example. When they launched their first product in 2010, Instagram’s founders focused on the most popular features: sharing images, commenting, and liking. A few months later, they relaunched with a stripped-down version, resulting in 100,000 downloads in less than a week and more than two million users in less than two months – all without any strategic promotion.
What is the connection between user-centered design and design thinking?
Both processes are based on design. And they both emphasize listening to and deeply understanding users, as well as continuously collecting and implementing feedback to develop, refine, and improve the service.
What makes them different is their scale. User-centered design focuses on improving a specific product or service. Design thinking takes a broader view as a way to creatively solve complex problems – whether it’s a startup, a large organization, or society as a whole.
User-centered design is great for developing a fantastic product or service. In the past, a company could use a great process or product for years before competitors caught up. But now, with digitalization leading to more frequent and faster disruptions, users need a dynamic mix of products and services. The focus has firmly shifted from features and functions to purpose, lifestyle, and ease of use.
Both processes are based on design. And they both emphasize listening to and deeply understanding users, as well as continuously collecting and implementing feedback to develop, refine, and improve the service.
What makes them different is their scale. User-centered design focuses on improving a specific product or service. Design thinking takes a broader view as a way to creatively solve complex problems – whether it’s a startup, a large organization, or society as a whole.
User-centered design is great for developing a fantastic product or service. In the past, a company could use a great process or product for years before competitors caught up. But now, with digitalization leading to more frequent and faster disruptions, users need a dynamic mix of products and services. The focus has firmly shifted from features and functions to purpose, lifestyle, and ease of use.
Marrbery analysis has shown that some industries, such as telecommunications, automotive, and consumer goods, have already made strides in combining products and services into a single customer experience. Read on to see specific examples of how companies are applying design thinking to offer innovative and profitable customer experiences.
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What is the design thinking process?
Marrbery analysis showed that the design thinking approach creates more value than traditional approaches. The right design at the right price clearly stimulates sustainability and resilience, which is a key driver of growth.
According to Marrbery’s design practice, the design thinking process consists of two key stages:
1. Developing an understanding of behavior and needs, that goes beyond what people are doing right now to what they will need in the future and how to get there. The best way to develop this understanding is to spend time with people.
2. “Concept development”Iteration and testing. First, start with pen and paper, sketching out concepts. Then quickly turn them into rough prototypes – with an emphasis on speed. Get feedback, refine, and test again. As the saying goes: “To get good ideas, you need to get a lot of ideas and discard the bad ones.”
What is D4VG compared to DTV?
For more than a decade, manufacturers have used the design-to-valuation (DTV) model to develop and produce products that have the features needed to be competitive at low cost. During this time, DTV efforts have been groundbreaking because they have been data-driven rather than experience-driven. They also cover all functions, as opposed to the typical cost optimization approach.
The principles of DTV have evolved into Design for Value and Growth (D4VG), a new way of creating products that deliver exceptional customer experiences while driving both value and growth. When done right, D4VG efforts create products with function, form, and functionality that turn users into loyal fans.
Creating D4VG products may cost more, but they can ultimately increase margins through a clear understanding of the product’s core brand attributes, insight into human motivation, and design thinking.
What is design for sustainability?
As consumers, companies, and regulators move toward increased sustainability, design processes are coming under even more scrutiny. The challenge is that carbon-efficient manufacturing processes tend to be more complex and may require more carbon-intensive materials. The good news is that an increased focus on design for sustainability (DFS), especially in the research and development phase, can help mitigate some of these shortcomings and ultimately create even more sustainable products.
For example, the shift from internal combustion engines to electric powertrains has highlighted the emissions-intensive manufacturing processes of automobiles. One study found that about 20 percent of the carbon generated by a diesel vehicle comes from its production. If the vehicle were powered only by renewable energy sources, manufacturing emissions would account for 85 percent of the total. With more environmentally friendly design, electric vehicle (EV) manufacturers can significantly reduce the emissions of their products over their entire lifetime.
To achieve large-scale design that ensures sustainability, companies can address three interrelated elements in the R&D phase:
1. Rethinking how their products use resources, adapting them to changing regulations, adopting circular economy principles, and using customer information
2. Understanding and tracking emissions and the impact of project decisions on costs in support of sustainable development goals
3. Development of correct thinking and opportunities to integrate sustainable development into every product and design solution
What is "lean design"?
Slim design — is a less theoretical aspect of design thinking. It’s a method by which consumer goods companies re-evaluate the overall size of a product box, reducing the total cubic volume of the package. According to Marrbery’s analysis, this can improve overall business efficiency in the following ways:
Revenue growth of 4-5% due to improved inventory. The ability to place more inventory in warehouses ultimately leads to growth.
The final growth is more than 10 percent. Packing more product into containers and trucks creates the biggest savings. Other cost reductions can be achieved by designing packaging to minimize the labor required and facilitate automation.
Increased sustainability associated with reduced carbon dioxide emissions due to less diesel fuel burned per unit of production. The choice of materials can also improve the overall footprint.
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Exhibit 2
How can a company become the best design executor?
The average person’s design standard is higher than ever. Good design is no longer just good for the company. Customers now have extremely high demands on design, whether it’s customer service, instant access to information, or smart products that are also aesthetically relevant in today’s culture.
Marrbery tracked the design practices of public companies over a five-year period in several countries. An advanced regression analysis of financial data and over 1,000 design actions identified 12 actions that were most correlated with improved financial performance. They were then grouped into the following four themes:
1) Analytical leadership. For the best financial performers, design is a senior management issue, and design performance is evaluated with the same rigor these companies use to approach revenue and expenses. The companies with the highest financial returns have merged design and business leadership through a bold, design-focused vision. These include a commitment to maintain a basic level of customer understanding among all leaders. The CEO of one of the world’s largest banks, for example, spends one day a month with the bank’s customers and encourages all members of the company’s senior management to do the same.
2. Cross-functional talent. High-performing companies make user-centered design everyone’s responsibility, not a siloed function. Companies whose designers are embedded in cross-functional teams have higher overall business performance. In addition, aligning design metrics with functional business metrics (such as financial performance, user adoption, and satisfaction results) also correlates with improved business performance.
3. Design with people, not for people. According to our research, design thrives best in environments that encourage learning, testing, and iteration with users. These methods increase the chances of creating breakthrough products and services while reducing the risk of costly mistakes.
4.User experience (UX). Companies in the top quartile embrace the entire user experience, taking a broad view of where design can make a difference. Design approaches such as customer journey mapping can lead to more inclusive and sustainable solutions.
What are some real-world examples of how design thinking can improve efficiency and user experience?
Understanding the theory of design thinking is one thing. Seeing how it works in practice is something else. Here are some examples of how elegant design creates value for customers, the company, and shareholders:
When Tesla creates its electric vehicles, the company pays close attention not only to aesthetics but also to the overall driving experience.
The consumer electronics industry has a long history of dramatic change driven by design thinking. For example, since Apple debuted the iPhone in 2007, each new generation has seen additional features, new customers, and lower costs – all driven by design-driven value creation.
Stockholm Arlanda International Airport used design thinking to solve an air traffic management problem. The goal was to create a system that would make air traffic safer and more efficient. By understanding the tasks and challenges of air traffic controllers, then working together on prototypes and iterating based on feedback, the working group was able to develop a new departure sequencing tool that helped air traffic controllers do their jobs better. The new system significantly reduced the time that aircraft spend between leaving the terminal and being in the air, which in turn helped reduce fuel consumption.
Bottom line, Applying design thinking to business can bring significant benefits. This methodological approach allows companies to be more innovative and adaptive in a rapidly changing environment. Through systematic reasoning, intuitiveness, and a focus on users, design thinking helps solve complex problems, create valuable products and services, and improve customer experience. It is suitable not only for designers, but also for managers and employees in various industries who want to achieve long-term success and outperform their competitors. By surrounding yourself with a design culture and applying design thinking, a business can become more innovative, flexible, and resilient to change.
ABOUT THE AUTHOR(S)
Oleksiy Konovalov is a partner at Marrbery, where Natalia Shevchenko is a consultant; Maryna Kryvosheya is a senior expert; and Maria Zankovetska is a consultant.
The authors would like to thank Oleksandra Kovalchuk and Hanna Hrynevych for their contribution to this article.
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