This is an updated version of an article I wrote in 2007 while waiting for a flight. I think it is time to revisit and update this article, as “design thinking” is in a very different state today than it was 10 years ago, with organizations practicing it to different degrees of maturity.
Before my book Design Thinking for Strategic Innovation was published in 2013, I was often asked, “What does design thinking have to do with business strategy? Does it mean teaching business people to design or to appreciate design, or does it simply mean promoting white-collar creativity?”
It is neither. When talking about design thinking, most people are referring to aesthetics (mainly highly stylistic design or usability), and they generally cannot relate design thinking to strategy (which, for many, means only spreadsheets and PowerPoint). As I’ve always explained, design thinking is crucial to any innovation effort if a company wants to break out of its current competitive structure. Today’s management concepts are heavily based on the ideas of optimization and scale economics, meaning that organizations are focusing on making better use of their resources and on exercising their market power to gain a competitive advantage. This approach does not really address the other side of the problem, which has to do with size. Large organizations experience their own set of problems, such as when legacies and bureaucracy hinder imagination and opportunities for growth.
Over the last century, we saw the perfection of the bureaucracy – a form of organization that has been enormously successful and is the result of hundreds of years of evolution. German sociologist and political economist Max Weber is best known for his work on the “Protestant ethic,” relating Protestantism to capitalism, and for his ideas on bureaucracy, the key characteristics of which are outlined below. Today, many of these principles are common practice. However, organizations did not always have these features; they are all human inventions.
/ Specification of jobs with detailed rights, obligations, responsibilities, and scopes of authority (i.e. the M-form organization).
/ Systems of supervision and subordination.
/ Unity of command (for efficiency).
/ Extensive use of written documents.
/ Application of consistent and complete rules (i.e. a company manual).
/ Work assigned and personnel hired based on competence and experience.
The idea behind these principles is that hierarchical authority is required in bureaucracies so that highly trained experts can be properly used as managers. For example, it does little good to train someone as a software engineer to then have that employee receive orders from an accountant. As Weber argued, rational bureaucracies can only be operated if the managers deployed at each level have been selected and trained for their specific jobs.
Bureaucracy often holds large companies back from being innovative. Do you see what’s wrong with this? Most think bureaucracy is part of what we consider “management.” However, management was originally designed to meet very different needs, like managing repetitive tasks, improving economic efficiency, and increasing labor productivity. Today, organizational management needs are vastly different, as they are centered on speed and multidisciplinary collaboration. This is where design thinking can play a major role. Let’s revisit the list with design thinking in mind:
/ Specification of jobs. The need for multidisciplinary thinking forces us to rethink how we help employees develop multiple competencies rather than one specialty. By using a multidisciplinary approach to management, we can remove boundaries, redefine problems, and reach solutions based on a more well-rounded understanding of complex situations.
/ System of supervision and subordination. In today’s knowledge-based economy, the level of supervision is being minimized. The challenge now is learning how to empower employees, not to supervise them.
/ Unity of command. Today’s organizations are moving beyond the matrix structure to become task and project based. The idea that each employee is accountable to only one supervisor – who in turn is accountable to only one supervisor, and so on – is becoming irrelevant.
/ Extensive use of written documents. Millennials are used to instant, on-demand learning. With this generation less likely to go through massive paper documents, many of the texts companies produce end up going unread.
/ Application of consistent and complete rules. Although companies want their managers to stick to the rules, when they ask them to think outside the box, they are also forcing them to break those rules. When innovation is the goal, the company manual becomes useless.
/ Assign work and hire personnel based on competence and experience. This makes sense and is still relevant to some degree. Today, there is an emphasis being placed on employees’ ability to learn and unlearn, as it is not always possible to hire people with the experience required to handle something that has not been done (as is the case with most innovation projects).
For Weber, the goal of a bureaucratic organization was to suppress the human in order to ensure a strict set of rules was followed; in other words, bureaucracy helps keep things predictable. In this way, bureaucracy was the natural descendent of social engineering that emerged when large modern organizations were developed. Many companies have risen to the top of their industries by adopting bureaucratic processes to avoid any suffering caused by rapid growth.
For companies to function and advance in today’s competitive and fast-moving business landscape, managers and strategists must not only be collaborative, but also empathetic. The key is to bring this empathetic mindset to explore a landscape of innovation that has everything to do with people, their needs, their lifestyles, their technologies, and how they make brand choices. It is in fact a process of applied imagination and creativity.
The bigger question is this: How do companies apply design thinking to inspire exploratory processes in corporate strategy development? Many companies fail in their attempts to innovate because they lack the balance between business discipline and imagination.
One last time: Design thinking is not about design.