Design Thinking: A User-Centered Framework for Driving Innovation

 

Written by Alexandra Stanciu

Innovation has been called the “lifeblood of successful organisations”. On a strategic level, it is considered an important catalyst for business growth, because new products and services can lead to differentiation and a competitive advantage. On a more practical level however, developing or improving these can be challenging for many companies. A newly released product might sometimes fail due to a series of external factors, such as a highly competitive business environment or rapidly changing technologies. Other times, the product simply fails to meet the real needs and expectations of end users.

In recent years, leading global companies have understood the necessity to drive innovation from inside out and think about new products from the customer perspective. This concept is known as design thinking and occurs in the early stages of product development.

Tim Brown, President of IDEO, a design and consulting firm, defines design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.”

The Design Thinking Process: Five Steps to Innovation

According to Hasso Plattner Institute, the design thinking process comprises five distinct stages. It starts with empathising with product users, followed by a process of clearly defining the design challenge, ideating possible solutions, prototyping and testing. Every design thinking project benefits from in-person workshops which bring together members of different departments. Workshops enable multi-disciplinary teams to communicate and shape the product development process in an active and creative way (“innovate collaboratively” approach). The sequence that design thinking teams proceed through these five stages is iterative – new variations of the product are proposed, refined or rejected. Each stage is accompanied by a specific set of methods and tools, as described below.

1. Empathise – In this initial stage, one must recognise and understand the customers’ pain points and identify their needs. This can be achieved through a mix of primary and secondary research techniques, such as ethnographic research , focus groups, in-depth interviews, document or Big Data analysis (e.g. web analytics).

2. Define – Next, “design thinkers” summarise the findings into a clear and concise statement. Projective techniques such as sentence completion or the development of fictional customer profiles (i.e. buyer personas) have proved to be useful techniques for synthesising research findings and defining the design challenge.

3. Ideate – The goal is to generate a wide range of ideas in order to develop solutions. Lateral thinking techniques through which workshop participants are encouraged to think of worst possible ideas or come up with 100 ideas in 10 minutes are particularly appropriate in this phase.

4. Prototype – Next, the design thinking teams build real, tactile representations of the most promising ideas. Paper-pencil sketches or 3D prints are frequently used at this stage.

5. Test – Finally, the prototypes undergo a live test by the target groups. Online communities, ethnographic research or a variety of usability techniques such as thinking aloud or cognitive walkthrough are appropriate tools to get rapid insights on how real users interact with the product. At the end of this stage, results are re-discussed within the team and the product concept is revised accordingly.

Delivering Customer-Centric Business Solutions through Design Thinking

Although design thinking has been first used to create or improve physical objects, its principles are transferable into the business context. The five-stage framework can be applied successfully to almost any challenging and complex issue a company might face in the innovation process: from developing new services, to enriching the customer experience, optimising customer journeys or defining value propositions.

The Role of Market Research in Design thinking

Designers put human needs at the centre of their approach to problem solving. Market researchers also strive to understand consumers by closely investigating their behaviours and underlying motivations. Market research can therefore support design thinking at all stages and ensure the process runs efficiently. For example, it can significantly improve the quality of interviews, surveys, observations and data collection. Experienced market researchers can also advise “design thinkers” in selecting the right methods needed to solve the challenges and identifying suitable target groups.

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How Design Thinking Can Help Drive B2B Innovation

 

In today’s business environment, there is mounting pressure for B2B marketers to do more with less. The pace of business is fast, teams are lean, competition is fierce, and the need to remain innovative is higher than ever.

Yet, what many should remember is that innovation doesn’t necessarily mean creating “the next best thing”. Innovation is a continual process of improvement and seeking to better understand new and different ways of satisfying the needs of customers.

There is a lot that B2B marketers can borrow from consumer-oriented businesses to rev up their innovation efforts. One effective way is leveraging the principles of design thinking and applying it to product development / innovation initiatives.

The AMA defines the 5 steps in design thinking as:

1. Empathize – gain a deep understanding of your customers / end-users’ behaviors and needs
2. Define – clearly frame the problem to solve
3. Ideate – cross-functional brainstorming
4. Prototype – rapidly bringing ideas to life
5. Test – experimenting and capturing quick feedback from customers / end-users

In this article, we will look at each of the 5 steps in the design thinking process and how B2B organizations could apply them to their businesses – specifically for product development so that as new products are developed, they are desirable (customers want it), feasible (the company can do it), and viable (the business can scale it).

Empathize – Understanding the Customer’s Needs

Design thinking is often associated with terms such as “human-centered design” or “user-centered design”. This underscores the clear link between the business and people – after all, businesses serve people.

The first step in the design thinking process is to bring a deep understanding of the customer or more importantly, the end-user, into the process. Oftentimes, B2B organizations rely on internal customer-facing functions such as the sales teams or customer service to act as the voice of the customer. While helpful, this provides a limited view of the true customer experience.

It is therefore crucial to capture the customer’s point of view in an unbiased way and to step into their shoes to better understand their goals, motivations, behaviors, challenges and unmet needs. Leveraging primary research such as ethnographies, focus groups, or in-depth interviews with customers and developing decision making eco-systems, buyer personas, and customer journey maps are excellent tools for building foundational knowledge about B2B customers.

Define – Identify the Problem to Solve and Develop a Clear Brief

Famous inventor, Charles Kettering, once said “A problem well-stated is half-solved.”. Truer words have not been spoken when it comes to innovation. To inspire creative ideas, there needs to be a clear problem to solve. By gathering customer insights from the empathy stage (and other resources) and looking for common trends or themes, teams may start to identify certain opportunity areas to plan to innovate around. It’s not uncommon for several opportunity areas or unmet needs to exist.

However, it’s important for organizations to prioritize which to attack first. This step could also help to build a pipeline of opportunities to explore over the near, mid, and long term. The output from the ‘Defining’ stage is typically a well-crafted brief with a strategic focus, clear objectives, and inspiration that can guide both design and research later in the process.

Ideate – Unleash Creativity and Generate Potential Solutions

Armed with a strong foundation of customer knowledge and a clear direction on what problem to solve, it’s time to bring together a cross-functional team to collaborate and generate ideas for solutions. The purpose of these sessions is to focus on the main problem to solve – per the brief coming out of the Defining stage – and to generate as many possible solutions as possible. During these collaborative brainstorming sessions, it’s critical to create an environment that encourages divergent thinking – where everything from mild to wild is acceptable. Once all ideas are on the table, the goal will be to begin converging on a few high potential ideas worth pursuing.

The converging process is often where the blue-sky thinking gets a dose of reality and constraints are applied. Using tools such as a SWOT, customer value proposition, or impact/feasibility frameworks can be helpful in prioritizing which opportunities to pursue first. By the end of the Ideation stage there should be several potential concepts (and alternatives) as well as hypothesis about benefits to further explore.

Prototype – Rapidly Bringing Ideas To Life

Quickly bringing new product concepts to life in a way that customers / end-users can engage and interact with is a critical component for how B2B organizations can leverage design thinking in their innovation process. This step is mostly led by the product design team who take inspiration from the ideation stage and think of ways that the company could feasibly bring a new product to market. Depending on the subject, prototypes could take the form of 3D printed models, renderings, concept statements, wireframes, etc.

The intent of the prototyping stage is to quickly design stimuli for testing that customers / end-users can understand, react to, and provide feedback on how it may / may not work for them or their organization. Often there are several concepts and alternatives developed that each represent a unique benefit. The purpose of this is to isolate variables and build upon what is working.

Early in the innovation process these conceptual prototypes don’t necessarily have to be perfect – a term that is often used in this space is Minimally Viable Product (MVP). That means if the prototype is at a high enough fidelity for the general idea to be understood, it should be good enough for testing. As the concepts move closer to commercialization, the need for higher fidelity prototypes increases (i.e., close to a final working product).

Test – Agile Feedback from Real Customers

The once conceptual ideas have been brought to life via prototyping and are now ready to be tested with customers / end-users. Although many associate product testing with quantitative benchmarking (which is appropriate at times), a qualitative approach can help product teams dive much deeper into the “why” and “how” of the feedback to truly understand how a potential product idea may be used in real world applications.

One common pitfall at this stage in the process is allowing customers to drive the innovation process. While customer feedback is extremely important, learnings need to be validated with business experts who understand both feasibility and strategy. This is especially true with upstream innovation (i.e., where product concepts are still in their infancy) and learnings are used as building blocks to continue informing the design process.

The key to the testing stage is to go in with a clear set of hypotheses and action standards / success criteria that can help inform go/no-go decisions for winnowing down the number of concept candidates to further pursue.

 

While there are 5 clear steps in the design thinking process, it is not always linear. In fact, the design and innovation process is meant to be agile and iterative, meaning teams might go back and forth between stages before moving forward (e.g., test, learn, ideate, prototype, test again) as new information may challenge ingoing hypotheses or lead to new ideas. The benefit of following this process is quite rewarding as innovation efforts are closely linked to customer needs and the design of products is strongly informed by customer feedback so products provide added-value, are differentiated, and commercially viable to produce.

References

https://www.ama.org/marketing-news/the-5-phases-of-design-thinking/

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Mapped: The Most Innovative Countries in the World in 2022

 

By

 Dorothy Neufeld

The Most Innovative Countries in the World 2022

Since 2000, global investment in research and development (R&D) has tripled to $2.4 trillion.

R&D spend is also casting a wider global net. In 1960, the U.S. made up nearly 70% of global R&D spending, and by 2020 this had fallen to 30%. From job creation and public health to national security and industrial competitiveness, R&D plays a vital role in a country’s economic growth and innovation, impacting nearly every corner of society—either directly or indirectly.

Along with R&D spend, other key ingredients play an important role in driving progress and innovation. These include technological adoption, scientific research, and venture capital activity, among others.

The above infographic ranks the world’s most innovative economies using data from the UN’s WIPO Global Innovation Index.

What Defines an Innovative Economy?

Innovation is inherently challenging to quantify, but the Global Innovation Index is a longstanding attempt to do just that.

The framework used for the index was designed to create a more complete analysis, comprising of 81 indicators across seven categories to calculate a country’s score:

7 Categories	Example Indicators
🧳 Business Sophistication	Business R&D spend, net inflows of foreign direct investment
📈 Market Sophistication	Size of economy’s GDP, intensity of local market competition
🛣️ Infrastructure	Road, hospital, school construction, energy efficiency
👩‍🏫 Human Capital & Research	Government funding per pupil, quality of scientific and research institutions
🏛️ Institutions	Political stability and safety, ease of starting a business
💡 Creative Outputs	Most valuable brands, industrial design applications, trademark applications
👨‍💻 Knowledge and Technology Outputs	Patent applications, increase in labor productivity, spending on software

As the above table shows, the framework aims to identify indicators that foster an innovative environment and breakthrough technologies.

It’s worth noting that each country’s overall innovation score is a mix of these categories, and countries with similar scores can be strong in different areas.

The 50 Most Innovative Countries in 2022

Switzerland ranks at the top⁠ for the 12th year in a row—above the U.S., South Korea, and Israel.

For many, this may come as a surprise. However, the country’s intellectual property rules are considered world-class, and they are complemented by strong collaboration between universities and industry. In addition, the country attracts top talent thanks to its high quality of living.

At second is the United States, which is a top spender on R&D at over $700 billion per year. Globally, four of the five top R&D spending companies are in America: Amazon ($42.7 billion), Alphabet ($27.6 billion), Microsoft ($19.3 billion), and Apple ($18.8 billion).

Rank	Country / Region	Score
1	Switzerland	64.6
2	U.S.	61.8
3	Sweden	61.6
4	United Kingdom	59.7
5	Netherlands	58.0
6	South Korea	57.8
7	Singapore	57.3
8	Germany	57.2
9	Finland	56.9
10	Denmark	55.9

11	China	55.3
12	France	55.0
13	Japan	53.6
14	Hong Kong	51.8
15	Canada	50.8
16	Israel	50.2
17	Austria	50.2
18	Estonia	50.2
19	Luxembourg	49.8
20	Iceland	49.5

21	Malta	49.1
22	Norway	48.8
23	Ireland	48.5
24	New Zealand	47.2
25	Australia	47.1
26	Belgium	46.9
27	Cyprus	46.2
28	Italy	46.1
29	Spain	44.6
30	Czech Republic	42.8

31	United Arab Emirates	42.1
32	Portugal	42.1
33	Slovenia	40.6
34	Hungary	39.8
35	Bulgaria	39.5
36	Malaysia	38.7
37	Turkey	38.1
38	Poland	37.5
39	Lithuania	37.4
40	India	36.6

41	Latvia	36.5
42	Croatia	35.6
43	Thailand	34.9
44	Greece	34.5
45	Mauritius	34.4
46	Slovakia	34.3
47	Russia	34.3
48	Vietnam	34.3
49	Romania	34.1
50	Chile	34.0

Countries across Europe also feature prominently in the top 10, including Sweden (#3), the United Kingdom (#4) and the Netherlands (#5).

South Korea (#6), is known for its high R&D intensity. This is driven by its industrial conglomerates, known as chaebols, that are generally family-owned. Samsung and LG are among its largest companies, known for their high degree of corporate-academic collaboration.

Below, we will take a closer look at the most innovative countries by region.

North America

In North America, the U.S. ranks highest. The country has long been known as a global leader in innovation, with a strong track record of introducing new ideas and technologies that have transformed the way we live and work. The U.S. ranks #1 in a number of indicators, including university-industry R&D collaboration and intangible asset intensity.

Ranking second in the region is Canada (Global rank: #15). Across all countries, it ranks first on measures of joint venture and strategic alliances per billion dollars of GDP (PPP) and number of venture capital (VC) recipients per billion dollars of GDP (PPP). In 2021, VC investment topped $14.7 billion across 752 deals.

Another interesting example is Honduras (#113). Driving innovation in the country is a new economic zoning experiment called Zones for Economic Development and Employment (ZEDEs).

To date, these zones have attracted about a quarter of a billion dollars in private investment funding and have created thousands of new jobs.

South America

Chile (#50) ranks first across the region, thanks to its promising tech sector. To date, it is home to an estimated 8,000 tech companies. The country also has the highest scale of mobile connectivity in the region. In late 2021, it launched the first 5G network in South America.

Following Chile is Brazil (#54), which saw a record number of IPOs in 2021 that were valued at nearly $7 billion.

Middle East and Central Asia

As the highest ranked in the region, Israel (#16) is the sole country globally that spends over 5% of GDP on R&D. Overall, it is a global leader in patent applications and information and communication technology (ICT) services exports.

For context, the country’s density of start-ups per capita is 16 times that of Europe.

The small island nation of Cyprus (#27) follows in second, supported by government funding focused on start-ups. Meanwhile, Turkey (#37) in third, is home to six unicorns*, fostered by its development of a megatech corridor through Istanbul to Izmir.

*A unicorn is a privately-held startup that has a valuation of over $1 billion.

Europe

With 15 of the top 25 economies in the world, Europe is a powerhouse for fostering innovative ecosystems.

The continent is also a leader in social progress, equality, and life satisfaction. The region scores 30 on inequality according to the Gini Index compared to 41 for America.

For many, technological output isn’t the first thing that comes to mind when they think of Europe, but VC deals surged over 53% in 2021. London, Berlin, and Paris were leading cities for VC activity.

East Asia and Oceania

South Korea (#6) ranks highest across East Asia and Oceania, and has established itself as a leader in technology and innovation on the global stage. Through its New Deal initiative, the government is spearheading projects on smart healthcare, AI, and smart industrial complexes. At the same time, it is accelerating the construction of eco-friendly infrastructure and renewable energy.

South Korea’s Hyundai and its subsidiary Kia have made considerable ground in electric vehicle (EV) production, comprising 9% of the U.S. EV market, the second-highest share after Tesla.

China sits just outside the global top 10, and now ranks #1 in multiple indicators, including labor productivity growth and trademarks by origin. China’s economic output per employed worker increased an impressive 4.2% annually from 2011 to 2019, on average.

Africa

The highest ranked in Africa is the island nation of Mauritius (#45).

Underscoring its rank is the strength of its institutions and market sophistication. Meanwhile, the government is accelerating investment in tech incubators, research-business collaboration, and tax incentives for R&D investment.

South Africa (#61) follows Mauritius on the list, with the city of Cape Town attracting a proposed $300 million Amazon headquarters.

Panasonic opened their headquarters in Cape Town in 2018. Oracle, IBM, Google, and Microsoft also have offices in the country’s expanding tech hub.

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