The Competitive Advantage of Design Thinking

The ideas around design thinking are not strikingly new, but they are now beginning to rise to the level of the boardroom. Even executives at large, traditional, and sometimes sluggish companies are starting to wake up to the customer focus that is encouraged by the practice of design.

One question that I often hear from our strategy clients is, “What is the real value of spending time on design?” The answer to this question varies widely depending on the client, the market, and the type of problem that you’re solving. But, there are certainly some common value patterns that I see when organizations take a design approach to heart.

Product-Market Alignment

The techniques of design thinking are geared toward collecting insights directly from those who experience needs. In this model, customers are the primary source of inspiration and problem definition.

In some senses, the customer actually takes on the bulk of the mental effort in aligning the product to the market. The work on the supply side then is to capture these sentiments, synthesize them into insight, and return those insights to the product pipeline in the form of innovation.

To accomplish this, organizations must have two synchronous mechanisms in place:

  1. A method of involving customers early in the design of a product or service
  2. Strong instrumentation of customer behavior once a product or service hits the market

There is a lot packed into building these capabilities and we’ll explore both systems in future posts. The point here is that in order for a design thinking approach to flourish it needs the fodder of good customer insight and metrics.

Encouraging Simplicity

While complexity is relative, most people would agree that a well-designed service or product is likely to be simpler than a poorly designed one. As humans, we almost always gravitate toward what seems simpler, whether it be reality or perception. If good design leads to products and services that appear simpler but perform a valued function, they will win over competitors that appear more complicated.

The research on this is extensive and borders on conclusive. As humans, we crave simplicity and familiarity, often more than we crave better solutions. Taking a strong human-centered design approach to a product or service naturally removes complexity from the resulting solution.

Simplicity shouldn’t just be a hallmark of the product itself, but also the buying process, which should also be designed from a human perspective. For example, Warby Parker didn’t invent eyewear, but they did heavily analyze the buying process and found optimizations through a systematic design process.

The Systems View

Design encompasses numerous disciplines, some focused on the micro, and others the macro. One discipline in particular, service design, encourages a holistic vision for integrated applications, products, and value chains.

Positioning yourself at a high enough vantage point where the whole system is in view helps achieve a kind of stickiness with customers. Think about the way that Apple approaches products – they never look at them in isolation, but rather how they fit together. Or look at Tesla, which has had to create from scratch, not only the product, but the entire support and maintenance chain for its products.

Another shining example is the aerospace industry, where companies like Boeing are moving from pure products to services and platforms. Boeing no longer sells a jet engine; they “sell” uptime. They sell the physical turbine plus a global communication platform and data collection mechanism that allows them to get ahead of maintenance and safety issues. In cases like these, the system itself is as much the product as the physical elements.

A Bias Toward Innovation

As the old adage goes. “everything changes but change itself.” Whether it is a changing market, competitive landscape, or new technological capabilities, design thinking can mold our products to new environments. Companies with customer insight processes that incorporate design thinking approaches tend to favor innovation over the status quo. In fact, companies that lead with design tend to outperform others regularly and dramatically.

But building well-designed products is only half of the innovation story. Design must also be applied to business models for innovations to succeed. Looking to service design is one way to inject design into a value chain. Another is to use techniques such as the business model canvas to define a new business model (not strictly a design technique but one that is closely related).

These are just a handful of the ways that spending time on design can bring substantial value to any initiative. And, design is approachable in an incremental manner, it doesn’t have to be all or nothing. I would encourage you to spend some time considering how human-centered design might improve your next big effort.

JC is the founder and CEO of DevMynd and leads the company’s human-centered strategy practice.