When companies set strategy, they often stumble.
Either they collect a lot of backward-looking data,
which doesn't tell them what future customers really want.
Or they make risky bets based on instinct instead of evidence.
Design thinking is a strategy-making process
that avoids these mistakes by applying tools
from the world of design and shifting
the focus to human behavior.
Popularized by David M. Kelley and Tim Brown of IDEO
and Roger Martin of the Rotman School,
design thinking has three major stages.
First, invent a future.
Form a few theories about what customers
might want, but don't have by immersing yourself
in their lives.
Instead of polling them about specific products or services,
observe and ask questions about their behavior.
Next, test your ideas out.
Use iterative prototyping with good enough products
or services, and conduct a few quick experiments
to see how consumers respond.
Adjust the product, the pricing, or the positioning accordingly.
Finally, bring the new product or service to life.
When you've got a winner, identify the activities,
capabilities, and resources your company will
need to actually produce, distribute, and sell it.
For example, when senior managers at Procter & Gamble
wanted to turn around the skin care brand Oil of Olay,
they began by observing shoppers in both mass retail channels
and high-end department stores.
They realized that their industry
had been primarily targeting women over 50 who
were worried about wrinkles, while pretty much ignoring
those in their 30s and 40s who were concerned
about other issues.
This was a huge market to be captured.
So P&G experimented with new formulations that
would tackle multiple skin care goals then
tested different prototypes, price points,
and store displays.
Finally, the company launched a series of new premium,
yet broadly distributed products that
were well-received by a wide range of consumers.
By using imaginative, human-centered problem solving,
, design thinking can help you unlock new markets and identify
new strategies.
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