We've been talking about strategy formulation. And specifically, I've been describing several different approaches that an organization can take to strategy formulation. So we started by talking about sort of the typical formal strategic planning exercise that can be part of an annual budgeting cycle, for example. And then we started to talk about some alternatives to that, that might prompt some better strategic thinking. So we talked about the strategic War Room, we talked Rapid Prototyping. And so now, I want to talk about a few others. So, let's talk about design thinking. So what is design thinking? Design thinking is as you might guess, it's an approach that takes a different starting point to bring a different perspective to the strategy formulation process. And in thinking differently about strategy, it attempts to do something very specific. Instead of approaching strategy formulation from sort of a scientific standpoint, for example, trying to be analytical and reach some consensus about all of the assumptions that you're making about the future and then go from there. Design thinking, instead approaches it from the perspective of design. Essentially, the question here is, how would we approach this if managers, instead of thinking, like typical managers, approached the formation of strategy like designers, attempting to design a new product or work environment or something. So, this is a systematic approach to problem solving that begins from that design perspective. And again, the key question is what can we do differently if we approach it that way? Well, if we approach it that way, we'll essentially be enacting three core beliefs and the first of those has to do with empathy. What we would first be doing is establishing insights based on sort of a deep understanding of the human experience with our product or service or with our organization. And so instead of sort of planning everything out from sort of a board room, we want to understand in a very specific and sort of thick way. We want to understand, what's people's experience like as they interact with our products or with our services or there are ways that we can serve them in a way that we haven't thought of in the past. So, let me illustrate with an example. Let say, you are a company that makes appliances for the kitchen to be used in cooking and baking and that sort of thing. So instead of just starting with a sketches or ideas that might come out of an R&D department, a lot of times designers will actually simply just go and observe people. So in this this case, they would ask a bunch of folks if they could just go watch them in their kitchen. They'd watch how families interact in the kitchen, how the parents are preparing meals and they would try to take note of things that they might not notice if they were just starting with existing products and iterating from there. So again, this first core belief is about empathy and sort of deeply understanding the human experience with your particular product or service or with the world. And is there a way that we can serve those human customers better? So, that's the first core belief. I think the second thing you would do if you approached strategy from a design thinking standpoint, is you would then hopefully, that observation and that empathy would lead to invention. This is where we hope to discover new possibilities. Not just incremental changes to existing products or services, but we might push beyond sort of the conventional view of those things and see things that we didn't see before. Do we see higher order solutions and do we see opportunities to improve people's lives in way that we might not have thought of on our own? And then finally, the sort of third pillar here is iteration. In other words, once we decide on something and decide to go forward with manufacturing or with implementing and selling that product or service, it's an iterative process. So every time we arrive at a solution, if we're doing it from a design thinking standpoint, that's merely a starting point for another set of iterations and observation and trying to understand how it could be improved and we're looking again for those sort of insights and those inventive ideas. So, a good way to understand design thinking is sort of as a set of contrasts. So, if we think of sort of what would be a typical business approach to sort of thinking about some things as we try to formulate strategy, how would that differ if we approached it from a design thinking standpoint? So for instance, thinking about the underlying assumptions, about the marketplace or what not. Maybe traditionally, we might approach that and try to be as rational and objective as we can. Again, it's not that that's a bad thing, it's just that the design thinking approach is different. It's sort of more emotional, it's subjective. It's about trying to really understand each person that you sort of observe or interact with brings their own kind of reality to how they deal with your products and services or the need for those products and services. So again, it's just a different approach. Whereas, let's think about some of these other things, methods. A typical business approach might really employ analytical methods. We want to sort of see what the numbers reveal, we're shooting for trying to find out what the best answer might be, what the best solution or the best strategy. Whereas from a design thinking standpoint, it's more about sort of experimentation and iterating and we're really just trying to find a better answer, a better solution, a better strategy. So if a typical business approach involves lots of planning, design thinking, it's more about doing, it's more about trying stuff. So, you get the idea, where maybe a more traditional approach has more to do with logic and running the numbers and being analytical. Again, all of those things are important. They can reveal important things about strategy, but the design thinking approach is is sort of a contrast or that it. It's about purposely trying to see something you didn't see before by approaching it in this different way. So, that's design thinking and I think that's another way to approach strategy formulation in business organizations.
