Understanding Design Thinking in Business

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RMIT University
School ofAccounting, Information Systems and
Supply Chain
BUSM4369Accounting Business Design Project 1
Topic 1: Introduction + Understanding Design Thinking in Business
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Introduction
• Welcome to BUSM4369 Accounting Business Design 1
• Staff: Victor Borg, Course Coordinator
• Rochelle Wilson, Lecturer
• Frank Maisano, Lecturer
• Course changes for 2023
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Introduction (cont.)
Canvas
Course guide
Course Schedule
Expectations
Learning materials and activities
Assessment and Groups
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Expectations
24/7 help desk service
Long emails
Emails sent late in the day or weekend
Attendance list
Late arrival
Collaborating in groups
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Why Design Thinking?
Design Thinking is a process to helps us integrate and apply creativity and skill
sets to solve problems and deliver value to a user or stakeholder.
This means that:
• Design is a creative process which utilises skill sets to transform information and
ideas into a tangible outcome, i.e. a solution for the user.
• Design produces a solution to a problem which results in a new or improved
product or service.
• An improved product or service means increase client/customer (internal or
external) satisfaction because you have solved their problem!
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Why Design Thinking?
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Why Design Thinking?
• Skill sets reflect our professional competencies. Common
competencies valued highly by employers (excluding technical
skills) are:
• Critical thinking
• Communication and interpersonal skills
• Customer knowledge
• World Economic Forum forecast that 50% of all employees will
need reskilling by 2025 as jobs are transformed because of
challenges emanating from the pandemic, increasing automation
and social change
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Why Design Thinking?
• Design thinking brings together skill sets to solve existing and
emerging problems, that is, design thinking is a template for
innovation. Anyone can innovate to solve problems!
• Innovation therefore is about delivering a solution to a problem
which provides value (benefits) to the consumer.
• Value or benefits can be related to increased efficiency, increased
profitability, increased happiness, lower costs, etc. Value is what
matters to the user and does not have to be expressed in
monetary terms.
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Activity – Reflections
Activity : Reflect and present the following experiences:
• Identify one problem that exists in your job (can be a past or
current job, co-op, internship, part-time, casual or full-time).
• Why does this problem exist?
• What skill(s) are required to solve this problem?
• How can these skills be applied to solve the problem?
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The innovation issue
“We need to grow x% pa”. This is the mantra of most
companies.
How are growth targets achieved?
Often uncertain, but not through ‘business as
usual’
Through mergers and acquisitions, but often
destroys rather than creates value
So innovation has become the way to grow. 80%
of US Fortune 500 companies list innovation in
their top 3 priorities.
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Innovation examples
Airbnb is an online marketplace that enables people to
list, find, then rent vacation homes for a processing fee. It
has over 4,000,000 listings in more than 100,000
locations in over 220 countries.
https://expandedramblings.com/index.php/airbnbstatistics/
Uber
Cryptocurrency and Blockchain
ChatGPT
EVs
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The innovation issue (cont’d)
The innovation issue has also become the mantra of many nations,
including Australia
The Australian Government recent push to motivate innovation
Key government websites, including Department of Innovation Industry
and Science – National Innovation And Science Agenda
http://www.innovation.gov.au/
http://www.industry.gov.au/Pages/default.aspx
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The innovation issue (cont’d)
Innovation is important for company survival as well
as growth.
The world is increasingly characterised by:
Consumers becoming more sophisticated
Increased competition on a global basis
Increased demand for user-friendly products
Increased demand that products take environmental
impact into account
Changing demographics.
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The innovation issue (cont’d)
What does innovation mean? How is innovation related to
invention?
Innovation’s true definition is newly introduced, (from the Latin verb Innovare, to
renew), whereas invention is to discover (Latin verb Invenire, to find). Where
innovation triumphs is in how it introduces inventions into the marketplace, and
disrupts convention. It is much more than coming up with clever new ideas, and its
success depends largely on economics, human behaviour and corporate culture.
(Brian Cooper, Invention v Innovation: why so much innovation goes wrong (9 April
2015),
https://medium.com/@thisisdare/invention-vs-innovation-why-so-muchinnovation-goes-wrong-e9bdd5e891d7
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The innovation issue (cont’d)
According to the Australian Innovation System Report , 2017, “innovation is about
novel ideas being put into practice. It drives long-term productivity growth and
underpins human progress”.
The key terms:
novel ideas. means something new. could be a product, process, service,
item, packaging, distribution, technology, etc
can be put into practice. means it can be used, provides benefits (can be
financial and non-financial or both, enjoyment, safety, security etc)
drives long-term productivity growth for the innovating firm. What is the
long- term?
underpins human progress. Increased knowledge, sophistication, improve
culture i.e. interactive human behaviour
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Disruptive Innovation
Disruptive innovation, a term of art coined by
Clayton Christensen, describes a process by which a
product or service takes root initially in simple
applications at the bottom of a market and then
relentlessly moves up market, eventually displacing
established competitors.
http://www.claytonchristensen.com/key-concepts/
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Disruptive Technologies
For example, a disruptive technology is one that displaces
an established technology and shakes up the industry or a
ground-breaking product that creates a completely new
industry.
Examples: iPhone vs Blackberry; radio evolution bottom up
Can you think of other examples?
http://whatis.techtarget.com/definition/disruptive-technology
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Design Thinking_what does it mean?
1. Design Thinking is a creative activity
2. Design is the process by which information and ideas are
transformed into a tangible outcome
3. Design is a tangible outcome – the new or improved end
product or service that results.
4. How an innovation has been designed is reflected in a Project
Proposal or Brief in order to introduce and get the innovation
off the ground.
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Design Thinking_what does it mean?
• A challenge to increasing innovation in an organisation is that
organisation culture and strategy traditionally fosters efficiency,
cost cutting, incremental changes and a focus on day-to-day
business. Innovation needs to become part of organisations’
culture and strategy.
• Many organisations amplify innovation and deal with day to day
issues in the workplace by engaging multidisciplinary teams.
• Multidisciplinary teams are made up of people with different
skill sets, backgrounds, experiences, knowledge
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Activity –How can a multidisciplinary team deliver this
project?
PROJECT SCOPE
We are looking to launch a new business and are keen to develop a financial business plan.
We can provide access to internal documentation and other information as needed as well
as access to key contacts.
We are a b2b and d2c company offering automated wildfire protection products to
homeowners in the California, USA. The b2b model will sell to partners such as contractors,
property developers, insurers etc. The d2c model will sell directly to home owners in the
USA and overseas.
We import electronic and other componentry from various suppliers around the world to
construct devices sold to homeowners and partners. The devices are linked to proprietary
software which monitors and detects the onset of wildfire based on an AI algorithm.
We would like to develop a strong, competitive financial business plan which reflects our
unique goals and constraints and which we can present to investors.
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Design_What does it mean?
(cont’d)
“Design thinking is a process for practical, creative resolution
of problems or issues that looks for an improved future
result. It is the essential ability to combine empathy, creativity
and rationality to meet user needs and drive business
success.”
“It is a discipline that uses the designer’s common sense
and methods to match people’s needs with what is feasible
and what a viable business strategy can convert into
customer value and market opportunity. Like Edison’s
painstaking innovation process, it often entails a great deal
of perspiration”. (Brown)
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Formal Definition
There are several different perceptions about what is design thinking
For Schön, good design is a prime example of reflective practice: the
flexible process of trial and error that a practitioner engages in to deal
with the “messy” problems of life.
For Krriprndorf “Design is making sense of things.” He argues that the
design profession undergo a semantic turn away from merely “shaping
the appearance of mechanical products” to “conceptualizing artefacts,
material or social, that have a chance of meaning something to their
users.”
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Design Thinking_What does it mean? (cont’d)
• Galle’s (2008) revised definition:
“Everyone designs who devises courses of action aimed at
the production of an artefact.” Galle uses the term artefact
to mean: “Artefact is an object that has been intentionally
made or produced for a certain purpose.”(Hilpinen, 2004)
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Everyone designs who devises courses of action aiming at
changing existing situations into preferred ones.” And “so
construed,” he says, “design is the core of all professional
training; [what] distinguishes the professions from the
sciences.”. (Simon, 1996)
Simon’s view of Design Thinking adopted by Stanford
University (d.school)
Sees Design Thinking as process involving five phases or
sub-processes
Design Thinking _What does it mean? (cont’d)
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Design Thinking_What does it mean? (cont’d)
• We will use the design thinking framework developed by
Haso-Plattner Institute of Design at Stanford University,
also known as d.school.
• The framework involves a five stage iterative process. An
iterative rather than a linear process may seem chaotic at
first but it makes sense to go back and forth between
stages as knowledge about the problem and its solution is
gained from reflection, testing and application.
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Design Thinking_What does it mean? (cont’d)
The five phases comprise an iterative process :
Empathise – know your users. Research to discover who is
the user.
Define – identify the problem to solve
Ideate – develop ideas for innovative solutions by
challenging assumptions
Prototype – develop a working model of solution
Test – test and deliver solution
Phases are not always sequential. Can occur in parallel or can
be repeated iteratively.
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Author/Copyright holder: Teo Yu Siang and Interaction Design Foundation. Copyright licence: CC BY-NC-SA 3.0
https://www.interaction-design.org/literature/article/5-stages-in-the-design-thinking-process
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Design Thinking_What does it mean? (cont’d)
• A light hearted look at design thinking
https://www.youtube.com/watch?v=vQytKCT563I
• The Double Diamond model of design thinking has
remerged in recent times
• Highlights the importance of leadership and engagement to
the design thinking process
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Double Diamond design methodology
Source: Design Council UK
https://www.designcouncil.org.uk/news-opinion/whatframework-innovation-design-councils-evolved-doublediamond
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Double Diamond
Reference: https://www.designcouncil.org.uk/news-opinion/whatframework-innovation- design-councils-evolved-double-diamond
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Design in Business!
Why?
“An urgent need to broaden their repertoire of strategies for
addressing the complex and open-ended challenges faced by
contemporary organisations”(K Dorst, 2011)
What can we learn from Design? Deloitte’s views
One thing to keep in mind is that design thinking needs to
be integrated with research, analysis and synthesis when
designing a solution to a business challenge.
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Design in Business
cont’d
Design Thinking can transform the way you develop
products, services, processes, policy, strategy and influence
behaviour(s)
Can you identify a practice/service that could have been
created by design thinking?
Assessment Tasks 1, 2 and 3