Business Today

Why CEOs Must Delve into Design Thinking

As traditional silos break down, companies require innovative solutions to transition from industrial to digital organisations.
Ranjan Banerjee   New Delhi     Print Edition: March 11, 2018
Why CEOs Must Delve into Design Thinking

Over the past two months, I had some unusual conversations with senior leaders. During an interaction, the HR leadership of a conglomerate wanted to see how it could use design thinking to frame more user-centric HR policies. In another, a leader of an IT organisation wanted to know if design thinking could improve the effectiveness of performance appraisal processes in his organisation. Another friend had just taken over as the CEO of a large organisation, had seen a video I had shared on design thinking, and wanted to know if it could be used to drive change management. So, what is design thinking? Why does it matter so much to business leaders today?

Simply put, design thinking is an approach to creative problem-solving, especially suited to semi-structured and unstructured problems. For instance, if you want to know how to make citizens of Mumbai respect the environment more, that would be an unstructured problem. You do not know who litters and who does not, you do not fully know the reasons why, and you do not have clear, a priori information on the methods, resources and tools required to solve the problem. Defining the problem is, in itself, a major part of the problem. We need to understand it more to solve the problem better, and this is how design thinking helps:

Eclectic, non-hierarchical team: First, the team required to solve the problem is often eclectic and non-hierarchical. An ideal team to solve the environmental problem described above might include a municipal corporation leader, a ragpicker, a consumer activist, an ethnographer, an anthropologist, and so on. The team has to bring diverse perspectives to bear on the problem at hand. It is not necessary that every team member has prior exposure to the problem, but diversity of perspective and curiosity are prerequisites.

Human-centric design: Second, the solution involves understanding the problem from a user's point of view. Human beings do things for specific reasons. We need to step into their shoes to see the problem from their perspective. In this case, a user is someone who experiences the problem or leverages the solution. For example, users of an appraisal process could be HR executives, middle manager appraisers, appraisees, the person who runs the HR information system and so on. The question is: Who is associated with the problem as a user/creator/designer, and can offer a distinctive perspective on the problem?

For this, talking to users should be done deeply. Our goal is to find insights, ways of looking at the problem that would be 'retrospectively self-evident', obvious when you see it but fuzzy before that. It means observation and deep conversation become important tools to derive insights. The rationale: When it comes to innovation, conventionally structured questionnaires with multiple choices are limited because the most important information is buried in a category called 'others'.

After taking an integrated view of user perspective, we develop insights, which enable us to frame the problem. A reframed problem could be something like: Users do not see value in appraisals because anxiety about rewards overpowers the developmental component of the conversation. Or it could be: Employees tend to sit on the fence in change initiatives because they have seen change being treated as a flavour of the month in the past and are scared of being early champions of an insincere effort.

The quality of insight leads to the next stage of ideation where divergent and convergent creativity techniques are used, with the insight and the reframed problem as a context of reference. It leads us to the third distinctive dimension.

Rapid prototyping: Once an idea is formed, a design-thinking approach talks of rapid prototyping, that of quickly creating a working model of an idea and putting it in front of users. The fundamental principle here is to 'fail fast to succeed early'. It makes sense because, in case of an unstructured problem, a user does not exactly know what he/she wants but can react to or experience a solution that is presented. It requires a significant mindset shift because leaders must have the courage to present 'half-formed' solutions in front of users and move away from the mindset of 'one correct solution' that can be predetermined through extensive analysis.

Why Design Thinking

A large number of problems that we face are unstructured with some critical features and, hence, would require innovative handling. For instance, the pace of technology change is faster than the rate at which human beings are currently adapting to technology. However, research suggests technology in itself does not guarantee progress. Technology amplifies social construction. Human and cultural dimensions of organisations need to be well understood to leverage technology for change. The reliance on gadgets often implies lack of human connection at home and workplace, and this can be both an enabler and an impediment to successful teamwork.

Why is design thinking needed in the boardroom? We are moving towards a VUCA world - volatile, uncertain, complex and ambiguous. It means traditional silos are breaking down. As far as organisational structure and management theory go, managerial thoughts and practices are still driven by the industrial organisation, an organisation characterised by specialisation and hierarchy, with finance, marketing, manufacturing and technology as its key verticals. Today technology is no longer just a vertical but something that is diffused across every element of the organisation. The transition from the industrial organisation to the digital organisation is before us. How we would make decisions if we could have the right information at the right time is a pertinent question, differentially enabled by intelligent objects, cloud-based information systems and the ability to analyse complex and large data sets.

what Leaders must do

First, they should embrace 'design thinking as a mindset'. Andy Grove, the former CEO of Intel, famously said, "The CEO is the last to know," implying a lot of critical information does not reach the top. The 'design thinking mindset' means leaders must be aware of their ignorance and actively seek out people, both down the line and outside the organisation, to stay abreast of the changing world.

Acknowledging that leaders do not have all the answers is an important first step.

The willingness to experiment, both as a demonstrated leadership attribute and an attitude that is encouraged by leaders in problem-solving settings, is a corollary and, hence, the second step.

The willingness to go beyond 'the usual suspects' and construct diverse teams with outsider input is the third step.

The entire exercise needs board support. A basic level of design thinking awareness at the board level and the senior leadership level will be an important fourth step.

Finally, setting the vision and socialising it happen to be truly unstructured problems. Applying design thinking to the omnipresent question - how I can make my employees own my vision and values, and live those values - may not be a bad place to start your organisation's design thinking journey.

The writer is Dean, SP Jain Institute of Management and Research

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