Design Thinking Bootcamp: Day II Your work has only just begun ‌
Problem Reframing: Point of View Do we actually solve the problem we think we do?
“
If I had an hour to solve a problem and my life depended on the solution, I’d spend the first 55 minutes determining the proper question to ask, for once I know the proper question to ask, I could solve the problem in less than 5 minutes.
„
Albert Einstein
2
T PU IN
Define Blind men and elephant?
3
UNDERSTAND
OBSERVE
POINT OF VIEW
IDEATE
PROTOTYPE
TEST
4
The Knowledge Funnel Mystery
Heuristic
Algorithm
Code
01100111001
Image Credit: adapted from Martin, R. L. (2009). The Reliability Bias - Why Advancing Knowledge is so hard. & Design of Business: Why Design Thinking is the Next Competitive Advantage (pp. 33-56) Mcgraw-Hill Professional.
5
Frame Creation: Defining the ÂťRight ProblemÂŤ Archaeology Paradox Stakeholders Problem Arena Themes Frames Futures Transformations Connections after Kees Dorst, 2012 (d.confestival Potsdam)
6
Problem Reframing = Synthesis Making Sense of the Âťmess of dataÂŤ.
Workspace @ d.school Potsdam
7
Problem Reframing: Tips & Tricks Making Sense of the »mess of data«.
8
Persona Construction Composite characters – the shortcut to empathy.
Image Credit: Cooper, A., & Reimann, R. M. (2003). About Face 2.0: The Essentials of Interaction Design (2nd ed.). Indianapolis: Wiley & Sons.
9
Point of View Framing and re-framing of the problem.
surprising anomaly
User + Need + Insight problem statement
10
User: Need: Insight:
Kids with cancer. Play and have fun. Feel like a normal child. Kids participate in everything once they perceive it as an adventure.
“How might we turn MRI scans for children (fearing »medical treatment«) into an adventure?” Image Credit: © 2011 General Electric Company (http://www.gehealthcare.com/promo/advseries/adventure_series.html)
11
User: Need: Insight:
Young moms in poor rural areas in developing countries. Always carry baby close to body equals being a good mother. Low cultural acceptance in many countries to »leave babies alone« (e.g. in incubators).
“How might we create an non-electrical infant incubator that keeps babies close to mother’s body?”
Image Credit: © Embrace (www.embraceglobal.org)
12
User: Need: Insight:
Kids equipped with hearing aids in rural india Charge them easily without elictricity grid Families reject them due to increased theft risk of expensive devices and accessories
“How might we design a solar charging system that reduces risk and perceived risk theft?” Image Credit: © Lynx Team @ MIT & RSID’s »Design that matters« course (http://designthatmatters.org/news/dtm-blog/2011/03/dtm_leads_first.php) 13
User: Need: Insight:
Stressed mother of kids Finally some time to recover and relax Wants to do sth. for herself
“How might we help Anna to relax more?� 14
User: Need: Insight:
Stressed mother of kids Finally some time to recover and relax Wants to do sth. for herself
“How might we help Anna to relax more?� 14
T PU IN
Prototype Ideas made tangible and testable ‌
Image Credits: Š NASA (Gemini Mission 1965); Control Stick: Steve Jurvetson (jurvetson) @ Flickr (http://www.flickr.com/photos/jurvetson/5227637637/sizes/l/in/photostream/)
1
Why Prototype?
Gain empathy
!
get deeper understanding
Explore
!
build to think
Inspire
!
catalyse inspiration
Test
!
learn and refine solutions
2
UNDERSTAND
OBSERVE
POINT OF VIEW
IDEATE
PROTOTYPE
TEST
3
Prototyping Prototyped artifacts may come in many forms ...
Image Credit: Š Klara Lindner for Mobisol GmbH Berlin
4
Prototyping Prototyped artifacts may come in many forms ...
Image Credit: Martin Jordan (http://www.service-design-berlin.de (http://www.service-design-berlin.de/)
5
Prototyping Prototyped artifacts may come in many forms ...
6
Prototyping Prototyped artifacts may come in many forms ...
7
Prototyping Prototyped artifacts may come in many forms ...
Image Credit: Elias Barrasch (http://www.blog.eliasbarrasch.de (http://www.blog.eliasbarrasch.de http://www.blog.eliasbarrasch.de/)
8
HUMAN CENTERED
BIAS TOWARDS ACTION
RADICAL COLLABORATION
SHOW DON’T TELL
CULTURE OF PROTOTYPING & EXPERIMENTATION
CRAFT CLARITY
MINDFUL OF PROCESS 9
ProtoTypes
Which aspects do you want to represent/test?
Choose testing variable ! Looks-like
! Works-like
! Interacts-like ! Feels-like ! etc.
10
Prototype Fidelity and Testing Context
“Make sure you are building the right »it« before you build it right”
FIDELITY
High »Mock-up« of the idea: representation as close as possible to the idea
Middle Representation of aspects of the idea
Conceptual representation
Image Credit: Embrace
Restricted
General
Partial
Total
Controlled Environment
Any user, any environment
Final user or environment
Final user + environment
CONTEXT LEVEL
Low
11
Prototype Fidelity and Testing Context
“Make sure you are building the right »it« before you build it right”
FIDELITY
High »Mock-up« of the idea: representation as close as possible to the idea
Middle Representation of aspects of the idea
Conceptual representation
Image Credit: Embrace
Restricted
General
Partial
Total
Controlled Environment
Any user, any environment
Final user or environment
Final user + environment
CONTEXT LEVEL
Low
11
Google Glass’ Lo-fi Prototyping
#1
: e c n e i r e p x E n o i t a t n e m g u A
Source: Tom Chi (Google X) @ TED (http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/)
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Google Glass’ Lo-fi Prototyping
#1
: e c n e i r e p x E n o i t a t n e m g u A
Y A D 1
Source: Tom Chi (Google X) @ TED (http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/)
12
Google Glass’ Lo-fi Prototyping
#1
: e c n e i r e p x E n o i t a t n e m g u A
Options Exploring: Gesture Control
#2
Y A D 1
Source: Tom Chi (Google X) @ TED (http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/)
12
Google Glass’ Lo-fi Prototyping
#1
: e c n e i r e p x E n o i t a t n e m g u A
N I M 45
Options Exploring: Gesture Control
#2
Y A D 1
Source: Tom Chi (Google X) @ TED (http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/)
12
Google Glass’ Lo-fi Prototyping
#1
: e c n e i r e p x E n o i t a t n e m g u A
N I M 45
Options Exploring: Gesture Control
#2
Try & Iterate : Shape, Size, Weight
#3
Y A D 1
Source: Tom Chi (Google X) @ TED (http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/) http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/) http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/
12
Google Glass’ Lo-fi Prototyping
#1
: e c n e i r e p x E n o i t a t n e m g u A
N I M 45
Options Exploring: Gesture Control
Y A D 1
#2
! HOUR
Try & Iterate : Shape, Size, Weight Source: Tom Chi (Google X) @ TED (http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/) http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/) http://blog.ted.com/2013/02/01/google-glass-prototyped-using-binder-clips-and-clay/
#3
12
You See: It’s no Rocket Science!
13
T PU IN
Iterate! Test! Ready for the ride?
Image Credit: United States Library of Congress, Prints & Photographs Division, Photochrom Collection, [Circus Rings, Luna Park, Coney Island]
1
HUMAN CENTERED
BIAS TOWARDS ACTION
RADICAL COLLABORATION
SHOW DON’T TELL
CULTURE OF PROTOTYPING & EXPERIMENTATION
CRAFT CLARITY
MINDFUL OF PROCESS 2
No Sales Pitch!
3
How to Test ‌
1. Let your users experience the prototype 2. Observe their experience 3. Engage them
5
Advanced Design-driven Innovation Bootcamp Follow-up Session I
You want »definitions« - eh? Management Perspective ! “A way to instill customer-centricity and empathy [...], to solve complex problems [and a] methodology to foster exploration and experimentation.” (Mootee 2011, p.3) ! “A person or organization instilled with that discipline is constantly seeking a fruitful balance between reliability and validity, between art and science, between intuition and analytics, and between exploration and exploitation” (R. L. Martin 2009, p.62) Therefore “[d]esign thinking is the application of integrative thinking to the task of resolving the conflict between reliability and validity, between exploitation and exploration, and between analytical thinking and intuitive thinking. Both ways require a balance of mastery and originality” (ibid, p.165). ! “Design thinking is the way designers think: the mental processes they use to design objects, services or systems, as distinct from the end result of elegant and useful products. Design thinking results from the nature of design work: a project-based work flow around ‘wicked’ problems.” (Dunne & R. Martin 2006) ! Temporal working definition from a business background (Weatherhead School of Management): “Design is the process of finding and solving non-routine (wicked) problems, often with a focus on bringing new products or services to market. Design is the intentional assembly of systems with interacting parts to achieve some objective. Design is a collection of methods and techniques, often drawn from the fine arts, to creatively solve problems.” (Collopy 2009)
4
You want »definitions« - eh? Learning and Process Perspective ! “Design is the creation process through which we employ tools and language to invent artifacts and institutions. As society has evolved, so has our ability to design. [Design thinking as a process has] recognizable phases, and these, while not always in the same order, nearly always begin with analytic phases of search and understanding, and end with synthetic phases of experimentation and invention” (Charles Owen, as cited in Beckman & Barry 2007, p.27). ! process of knowledge development, which has both analytical (finding and discovery) and synthetic (invention and making) elements and operates in both the theoretical and practical realm. Practice Perspective ! “Design thinking can be described as a discipline that uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity, [it] converts need into demand.” (T. Brown 2008)
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Design Practice and Design Management Perspectives 2000‘s
1990‘s
1980‘s
1970‘s
1960‘s
1950‘s
Innovation & Competitiveness
Brand building
Design Management
The rise of Ergonomics
Involving Industry
Promoting the Nation
„global competition and renewal“
„total experience design – from concept to retail“
„our product portfolio is consistent“
„the user (be it a child or an elderly) is the most important“
„design as part of the industrial product development process“
„We got a prize in Milano!“
„the Chinaphenomenon“
vision
design as a innovation driver
strategy
design for creating experiences for the customer
roadmaps
design as a co-ordinator
product definition
design for user understanding
entire product development process
design as part of a team together with mechanics and marketing
adapted from Valtonen, A. (2007). Redefining Industrial Design: Changes in the Design Practice in Finland (PhD Thesis). University of Art and Design, Helsinki, Helsinki.
product aesthetics „styling“
the designer as a creator
typical statement on design
proximity to the market
typical role for the designer
6
Design Practice and Design Management Perspectives 2000‘s Innovation & ? e u l a V Competitiveness hared
S
„global competition and renewal“ „the Chinaphenomenon“
vision
design as a innovation driver
1990‘s
1980‘s
1970‘s
1960‘s
1950‘s
Brand building
Design Management
The rise of Ergonomics
Involving Industry
Promoting the Nation
„total experience design – from concept to retail“
„our product portfolio is consistent“
„the user (be it a child or an elderly) is the most important“
„design as part of the industrial product development process“
„We got a prize in Milano!“
strategy
design for creating experiences for the customer
roadmaps
design as a co-ordinator
product definition
design for user understanding
entire product development process
design as part of a team together with mechanics and marketing
adapted from Valtonen, A. (2007). Redefining Industrial Design: Changes in the Design Practice in Finland (PhD Thesis). University of Art and Design, Helsinki, Helsinki.
product aesthetics „styling“
the designer as a creator
typical statement on design
proximity to the market
typical role for the designer
6
Design Practice and Design Management Perspectives ’s 20102000‘s
Innovation & ? e u l a V Competitiveness hared
S
„global competition and renewal“ „the Chinaphenomenon“
vision
design as a innovation driver
1990‘s
1980‘s
1970‘s
1960‘s
1950‘s
Brand building
Design Management
The rise of Ergonomics
Involving Industry
Promoting the Nation
„total experience design – from concept to retail“
„our product portfolio is consistent“
„the user (be it a child or an elderly) is the most important“
„design as part of the industrial product development process“
„We got a prize in Milano!“
strategy
design for creating experiences for the customer
roadmaps
design as a co-ordinator
product definition
design for user understanding
entire product development process
design as part of a team together with mechanics and marketing
adapted from Valtonen, A. (2007). Redefining Industrial Design: Changes in the Design Practice in Finland (PhD Thesis). University of Art and Design, Helsinki, Helsinki.
product aesthetics „styling“
the designer as a creator
typical statement on design
proximity to the market
typical role for the designer
6
Who is our customer and what does he value?
Who Know for whom to build.
Examples: Observation and integration of, or adaption to current user practices (e.g. repurposes or hacks)
Examples: Design discourse, design experiments, prototypes
Market Disclosing, User(s) segments, Individual needs
Innovate Value by Design
How
What Know what solutions to build.
Know how to profitably implement this.
How to create, deliver and capture parts of that value?
Business models, Value capture mechanisms
Products & services, new meanings, new experiences
Core principles, practices, processes and tools of higher order design (e.g. heavy collaboration and co-creation, permanent interaction, validity-seeking systems thinking, etc.)
What value do we actually deliver, a.k.a. which business are we in?
Examples: Existing tools and approaches for constructing new user/ experience journeys adapted from Sniukas, M. (2007). Reshaping Strategy: The Content, Process, and Context of Strategic Innovation.
7
T PU IN
Design in Business -orBusiness Design Why a HCD posture is the new competitive advantage
8
Progression of Economic Value
Differentiated
Relevant to Customization
Competitive Position
Stage Experiences
Make Goods
Extract Commodities
Commoditization
Commoditization
Commoditization
Undifferentiated Market
Needs of Customers
Customization
Guide Transformations
Irrelevant to Pricing
Premium 10
Stages of Experience
TRANSFORMATION
Differentiated
EXPERIENCE
Customization SERVICE
Competitive Position
Stage Experiences
PRODUCT
COMMODITY
Make Goods
Extract Commodities
Guide Transformations
Commoditization
Commoditization
Commoditization
Undifferentiated Market
Needs of Customers
Customization
?
Relevant to
Irrelevant to 1¢-2¢ Cup
5¢-25¢ Cup
Pricing !1.00-!2.50 Cup
!3.00-!4.50 Cup
What’s next?
Premium 11
“
If you charge for Stuff, then you are in the commodity business. If you charge for tangible things, then you are in the goods business. If you charge for the activities you execute, then you are in the service business. If you charge for the time customers spend with you, then you are in the experience business.
„
If you charge for the demonstrated outcome the customer achieves, then and only then are you in the transformation business. Pine & Gilmore (1999, p.194) Image Credit: Joe Pine & Jim Gilmore (Source: http://www.strategichorizons.com)
12
How do you strategize?
inside »
« outside
TRADITIONAL INSIDE-OUT VALUE CHAIN What are our core competencies?
What is our current business model?
What else could we o!er?
What other channel could we use?
What customers would we sell to?
Perceived Customer Value = Functional Benefits – Financial Cost
adapted from Peer Insight. (2007). Seizing the White Space: Innovative Service Concepts in the United States, Technology Review. Study, Helsinki: Tekes, the Finnish Funding Agency for Technology and Innovation.
13
How do you strategize?
inside »
« outside
TRADITIONAL INSIDE-OUT VALUE CHAIN What are our core competencies?
What is our current business model?
What else could we o!er?
What other channel could we use?
What customers would we sell to?
Perceived Customer Value = Functional Benefits – Financial Cost
CUSTOMER EXPERIENCE OUTSIDE-IN VALUE CHAIN What do we need to execute that design?
What business design would create defensible profits?
What could we o!er?
What ecosystem exists to meet those priorities?
What customers do we want? What are their priorities?
Perceived Customer Value = Emotional Benefit – Hassle Factor
adapted from Peer Insight. (2007). Seizing the White Space: Innovative Service Concepts in the United States, Technology Review. Study, Helsinki: Tekes, the Finnish Funding Agency for Technology and Innovation.
13
How do you strategize?
TOP-DOWN
Do we talk about the same thing here? Business Opportunities (Organisational, Technological)
Environmental Factors
Internal Change
Market Changes
Strategy & Brand
Competitors Moves
Providers Value Facilitation
Users’ Value Creation
INSIDE-OUT
OUTSIDE-IN Internal Change
Business- & Technology-driven Innovation
Value Creation & Innovation Opportunies
External Change
(Latent) Needs Discovery
Sta! Abilities
Alternative Practices & Solutions
Sta! Experience
Human-centric Innovation
Business Opportunities
Dispersed Knowledge
BOTTOM-UP
14
Reliability Bias?
Business People
Designer
Reliability vs. Validity
a fundamental predilection gap
100% Reliability
50/50 Mix
Martin, R. L. (2009). Design of Business: Why Design Thinking Is the Next Competitive Advantage. Mcgraw-Hill Professional.
100% Validity
15
The (Danish) Design Ladder th 4
3rd step
2nd step
st 1
step
step
Design as innovation The designer works closely alongside to the company’s management on complete or partial renewal of the total business concept.
Design as process Design is a method integrated early into the development process. The production outcomes requires contributions from several specialists.
Design as styling Design is seen solely as relating to the physical form of the product. This can be the work of a designer, but usually created by others.
Non-design Design is a negligible part of the product development process and usually performed by other professionals than the designer.
SVID. (2003). 10 Points. Attitudes, Profitability and Design Maturity in Swedish Companies (Study). Designs økonomiske e!ekter� (the economic e!ects of design). Stockholm: Swedish Industrial Design Foundation.
16
Correlation of Design Activities and Average Growth in Turnover
Design as innovation, 9.0%
Design as process, 8.9%
Design as styling, 6.5%
Non-design, 7.4% 0
1
2
3
4
5
6
7
8
SVID. (2003). 10 Points. Attitudes, Profitability and Design Maturity in Swedish Companies (Study). Designs økonomiske e!ekter� (the economic e!ects of design). Stockholm: Swedish Industrial Design Foundation.
9
10
17
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
Transformational
Create new markets/ target new customer needs
Extension / entering of adjacent markets and customers
Existing markets and customers
Adjacent
Core
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
Transformational
Create new markets/ target new customer needs
Extension / entering of adjacent markets and customers
Existing markets and customers
Adjacent
Core
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
Transformational
Create new markets/ target new customer needs
Extension / entering of adjacent markets and customers
Existing markets and customers
Adjacent
Core
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
Transformational
Create new markets/ target new customer needs
Extension / entering of adjacent markets and customers
Existing markets and customers
Adjacent
Core
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
Transformational
Create new markets/ target new customer needs
Extension / entering of adjacent markets and customers
Existing markets and customers
Adjacent
s u o u n i ont CCore l a t n e Increm
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
Transformational
Create new markets/ target new customer needs
Extension / entering of adjacent markets and customers
Existing markets and customers
ng i n i a t s u S Adjacent y r a n o i t Evolu
s u o u n i ont CCore l a t n e Increm
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
gh u o r h t k Brea y r a n o i t u l o v e R Transformational Radical ging n a h c e Gam etc. ‌
Create new markets/ target new customer needs
Extension / entering of adjacent markets and customers
Existing markets and customers
ng i n i a t s u S Adjacent y r a n o i t Evolu
s u o u n i ont CCore l a t n e Increm
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
gh u o r h t k Brea y r a n o i t u l o v e R Transformational Radical ging n a h c e Gam etc. ‌
Create new markets/ target new customer needs
Extension / entering of adjacent markets and customers
Existing markets and customers
Transformational 10% Adjacent 20%
ng i n i a t s u S Adjacent y r a n o i t Evolu
Core 70%
s u o u n i ont CCore l a t n e Increm
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
gh u o r h t k Brea y r a n o i t u l o v e R Transformational Radical ging n a h c e Gam etc. ‌
Create new markets/ target new customer needs
Extension / entering of adjacent markets and customers
Existing markets and customers
Transformational 10% Adjacent 20%
ng i n i a t s u S Adjacent y r a n o i t Evolu
Core 70%
10%
s u o u n i ont CCore l a t n e Increm
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
gh u o r h t k Brea y r a n o i t u l o v e R Transformational Radical ging n a h c e Gam etc. ‌
Create new markets/ target new customer needs
Adjacent 20%
20%
Extension / entering of adjacent markets and customers
Existing markets and customers
Transformational 10%
ng i n i a t s u S Adjacent y r a n o i t Evolu
Core 70%
10%
s u o u n i ont CCore l a t n e Increm
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation Ambition Be clear about your innovation intent. Balance your innovation portfolio.
WHERE TO PLAY
New markets and customers
gh u o r h t k Brea y r a n o i t u l o v e R Transformational Radical ging n a h c e Gam etc. ‌
Create new markets/ target new customer needs
70%
Adjacent 20%
20%
Extension / entering of adjacent markets and customers
Existing markets and customers
Transformational 10%
ng i n i a t s u S Adjacent y r a n o i t Evolu
Core 70%
10%
s u o u n i ont CCore l a t n e Increm
New capabilities
New business models
Use existing products and assets
Add incremental products and assets
Develop new products and assets
HOW TO WIN
Current capabilities
adapted from Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. May 2013.
18
Innovation ROI: »Black Hole« vs. Options-oriented Investment
Cumulative Cash Flow
+!
Time
Downside risk unlimited
-! adapted from McGrath, R. G. (2010). Business Models: A Discovery Driven Approach. Long Range Planning, 43(2-3), 247–261.; McGrath, R. G., & Macmillan, I. C. (2009). Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity. Harvard Business School Press.
19
Innovation ROI: »Black Hole« vs. Options-oriented Investment
Cumulative Cash Flow
+!
Time
Downside risk contained at any given time
-! adapted from McGrath, R. G. (2010). Business Models: A Discovery Driven Approach. Long Range Planning, 43(2-3), 247–261.; McGrath, R. G., & Macmillan, I. C. (2009). Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity. Harvard Business School Press.
20
Innovation ROI: »Black Hole« vs. Options-oriented Investment
Cumulative Cash Flow
+!
Time
Downside risk contained at any given time
-! adapted from McGrath, R. G. (2010). Business Models: A Discovery Driven Approach. Long Range Planning, 43(2-3), 247–261.; McGrath, R. G., & Macmillan, I. C. (2009). Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity. Harvard Business School Press.
20
Innovation ROI: »Black Hole« vs. Options-oriented Investment
Cumulative Cash Flow
+!
Time
Downside risk contained at any given time
-! adapted from McGrath, R. G. (2010). Business Models: A Discovery Driven Approach. Long Range Planning, 43(2-3), 247–261.; McGrath, R. G., & Macmillan, I. C. (2009). Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity. Harvard Business School Press.
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Business Model Management Danger zone COMPANY CAN: - Economy - Employees - Production facility - Flexibility - Core competencies
Company Can
Company Will
COMPANY WILL: - Business idea - Leadership preferences - Leadership vision - Goal - Declaration of intent
Primary area of effort
Area of position change
Area of competency development
COMPANY SHOULD: - Competitive situation - Client side - Supplier side - Distribution situation - Entourage factors
Company Should
Von Rosing, M., Rosenberg, A., Chase, G., Rukhshaan, O., & Taylor, J. (2011). Applying real-world BPM in an SAP environment (1st ed.). Bonn; Boston: Galileo Press.
21
Blue Ocean: Four Actions Framework
REDUCE Which factors should be reduced well below the industry‘s standard?
ELIMINATE Which of the factors that the industry takes for granted should be eliminated?
A NEW VALUE CURVE
CREATE Which factors should be created that the industry has never o!ered?
RAISE Which factors should be raised well above the industry‘s standard?
Image Credit: Kim, W.C., & Mauborgne, R. (2005). Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competiton Irrelevant (illustrated ed.). Boston, Mas: Mcgraw-Hill Professional
22
Strategy Canvas: Nintendo Wii (in 2007) Key Activities
Value Proposition
Nintendo Wii
Relationships
Microsoft Xbox 360
Sony PS3
Customer Segments
Va l ue
Ec
os ys
tem
tor
Revenue Streams Fa c
s me Ga
ch rR
Channels Us e
on on C Mo ti
ea
tro l
U GP
U CP
e Pri c
iy cti ne Co n
DV
Key Resources
vit
D
5.1 Do lby
isk
rd D Ha
Mo v
ies
s t s Co
Cost Structure
aise
/F un
e t a n i Elim
C re ate /R
e c u d e R /
Ux
Value Level & Price
Key Partners
23
KP
KA
VP
CR
KR
CS
Nintendo Wii (in 2007)
CS
CH
RS
eliminate
reduce
create
raise
unchanged
KP
KA
VP
CR
CS
state-of-the-art chip development
male Âťhardcore gamersÂŤ KR
CH
n e w p ro p r ie t ar y te c h n o l o g y
CS
passive immersion with high-end performance and graphics
RS
c o n s o le s e i d i s b su
Nintendo Wii (in 2007)
eliminate
reduce
create
raise
unchanged
KP
KA
VP
CR
CS
state-of-the-art chip development
g ame de ve l o p e r s male Âťhardcore gamersÂŤ
KR
game developers
CH
n e w p ro p r ie t ar y te c h n o l o g y
CS
passive immersion with high-end performance and graphics
retail distribution
RS
royalties from game developers
c o n s o le s e i d i s b su
Nintendo Wii (in 2007)
eliminate
reduce
create
raise
unchanged
KP
KA
VP
CR
CS
state-of-the-art chip development
g ame de ve l o p e r s male Âťhardcore gamersÂŤ
KR
game developers
CH
n e w p ro p r ie t ar y te c h n o l o g y
CS
passive immersion with high-end performance and graphics
retail distribution
RS
c o n s o le s e i d i s b su
technology development costs
Nintendo Wii (in 2007)
e l o s n co n o i t c u pro d s cos t
royalties from game developers
eliminate
reduce
create
raise
unchanged
KP
KA
VP
state-of-the-art chip development e v i t a n r a l te t p e c n o g ame c h re s e a rc
o r c i STM c s f o r i n o r e le c t EMS M s r e t e m o r e l ac c e
game developers
CR
mo t i o n c o n t ro l le d g am i ng , t u o y k r r o e w v , o t c r e o sp ic a l r s y h p
n o i t o m l o r t n co y g o l o te c h n
n e w p ro p r ie t ar y te c h n o l o g y
CS
g ame de ve l o p e r s
f un f ac t o r e x pe r , so cial ie n c e f am i l Âť y
physical activity, social get-together
KR
CS
male Âťhardcore gamersÂŤ
CH
c asua l g ame rs
passive immersion with high-end performance and graphics
families
retail distribution
gi r ls
RS
c o n s o le s e i d i s b su
technology development costs
Nintendo Wii (in 2007)
e l o s n co n o i t c u pro d s cos t
royalties from game developers
eliminate
reduce
create
raise
unchanged
KP
KA
VP
state-of-the-art chip development standard component hardware manufacturers
o r c i STM c s f o r i n o r e le c t EMS M s r e t e m o r e l ac c e
game developers
e v i t a n r a l te t p e c n o g ame c h re s e a rc
CR
mo t i o n c o n t ro l le d g am i ng , t u o y k r r o e w v , o t c r e o sp ic a l r s y h p
n o i t o m l o r t n co y g o l o te c h n
n e w p ro p r ie t ar y te c h n o l o g y
CS
g ame de ve l o p e r s
f un f ac t o r e x pe r , so cial ie n c e f am i l Âť y
physical activity, social get-together
KR
CS
male Âťhardcore gamersÂŤ
retail store involvement
CH
c asua l g ame rs
passive immersion with high-end performance and graphics
families
retail distribution
gi r ls
RS
c o n s o le s e i d i s b su
technology development costs
Nintendo Wii (in 2007)
e l o s n co n o i t c u pro d s cos t
royalties from game developers
eliminate
reduce
h a rd w s a le s a re pro f i t
create
raise
unchanged
KP
KA
VP
state-of-the-art chip development standard component hardware manufacturers
o r c i STM c s f o r i n o r e le c t EMS M s r e t e m o r e l ac c e
game developers
e v i t a n r a l te t p e c n o g ame c h re s e a rc
CR
mo t i o n c o n t ro l le d g am i ng
g ame de ve l o p e r s
Desirability , t u o y k r r o e w v , o t c r e o sp ic a l r s y h p
f un f ac t o r e x pe r , so cial ie n c e f am i l Âť y
physical activity, social get-together
KR
n o i t o m l o r t n co y g o l o te c h n
n e w p ro p r ie t ar y te c h n o l o g y
male Âťhardcore gamersÂŤ
retail store involvement
CH
c asua l g ame rs
passive immersion with high-end performance and graphics
Feasibility CS
CS
families
retail distribution
gi r ls
Viability RS
c o n s o le s e i d i s b su
technology development costs
Nintendo Wii (in 2007)
e l o s n co n o i t c u pro d s cos t
royalties from game developers
eliminate
reduce
h a rd w s a le s a re pro f i t
create
raise
unchanged
KP
KA
VP
state-of-the-art chip development standard component hardware manufacturers
o r c i STM c s f o r i n o r e le c t EMS M s r e t e m o r e l ac c e
game developers
e v i t a n r a l te t p e c n o g ame c h re s e a rc
CR
mo t i o n c o n t ro l le d g am i ng
g ame de ve l o p e r s
Desirability , t u o y k r r o e w v , o t c r e o sp ic a l r s y h p
f un f ac t o r e x pe r , so cial ie n c e f am i l Âť y
physical activity, social get-together
KR
n o i t o m l o r t n co y g o l o te c h n
n e w p ro p r ie t ar y te c h n o l o g y
male Âťhardcore gamersÂŤ
retail store involvement
CH
c asua l g ame rs
Best passive immersion Sustainable with high-end Equilibrium performance and
families
retail distribution
graphics
Feasibility CS
CS
gi r ls
Viability RS
c o n s o le s e i d i s b su
technology development costs
Nintendo Wii (in 2007)
e l o s n co n o i t c u pro d s cos t
royalties from game developers
eliminate
reduce
h a rd w s a le s a re pro f i t
create
raise
unchanged
Key Activities
Value Proposition
Relationships
Customer Segments
Key Partners
Cost Structure
Key Resources
Image Credit: JAM Visual Thinking, Amsterdam (http://www.jam-site.nl)
Revenue Streams Channels
25
Key Activities
Value Proposition
Relationships
Customer Segments
Key Partners
e t a n i Elim
C re ate /R
e c u d e R /
Va l ue
s t s Co
Cost Structure
Key Resources
Image Credit: JAM Visual Thinking, Amsterdam (http://www.jam-site.nl)
aise
Revenue Streams Channels
25
Key Activities
Value Proposition
Relationships
Best Sustainable Equilibrium
Key Partners
e t a n i Elim
Customer Segments
C re ate /R
e c u d e R /
aise
s t s Co
Va l ue
e u l a v . x ma r o f e r u t p a c y n a p m o c e th
m a x. v a l ue f or t he u se r
Cost Structure
Key Resources
Image Credit: JAM Visual Thinking, Amsterdam (http://www.jam-site.nl)
Revenue Streams Channels
25
Business Model »vs.« Strategy: Business Model Portfolio
Tactics:
BUSINESS MODEL OPTIONS
Tactical set A
A l e
s s e
d o M
competitive choices enabled by each business model
n i s
Bu
B l e d o ss M
e n i s u B
FIRM
Busin
ess M
Bu
sin
odel
Tactical set B
C Tactical set C
es
sM
od
el
D Tactical set D
Strategy: plan of which business model to adopt
Strategy
Tactics
stage
stage
Casadesus-Masanell, R., & Ricart, J. E. (2010). From Strategy to Business Models and onto Tactics. Long Range Planning, 43(2-3), 195–215.
28
Apple’s Business Ecosystem Ž
Other Stakeholders Lowest Production Costs Sponsoring / Discounts High Volume and Planning Certainty
Manufacturing Knowledge
Service Contract Infrastructure Management IP royalties / Commission
Core Value Proposition
Bulk Purchases
???
Reputation and Awareness
Digital Sales Channel with DRM and wide Spread
Media Delivery
Apple on Campus ???
New Business Ideas
IP royalties Personal Data
Apple Platform
Price Premium (Hardware, Media and App Sales) Reputation
Comission
Complementary Offerings
App Purchases Sales Platform
Seamless User Experience
Technical and Sales Training Higher Margins : Apple Price Premium Enriched User Experience
Broad Service Station Covering
Supplying and Enabling Network
Higher Margins via Apple Price Premium TM
Goods & Services Money & Credits Information Intangible Value
31
Value Proposition(s)
y t ie
Transformation
m e st
Doing good
n o i t a s
Or ga ni
Ec os y
So c
Levels of Value
Us
Doing Well
r e
Value for Money
Belonging
Stability Core Values
Wealth
Shared Drivers Wellbeing
Perspectives on Value
EcoE!ectiveness
Happieness
Profit
Economy
Experience EcoFootprint
Psychology
Sustainability
Social Responsibility
Livability of the Environment
Reciprocity
Meaningful Life
Sociology
Ecology
Value Proposition(s)
y t ie
Transformation
m e st
Doing good
n o i t a s
Or ga ni
Ec os y
So c
Levels of Value
Us
Doing Well
r e
Value for Money
Belonging
Stability Core Values
Wealth
Shared Drivers Wellbeing
Perspectives on Value
EcoE!ectiveness ectiveness
Happieness
Profit
Economy
Experience EcoFootprint
Psychology
Sustainability
Social Responsibility
Livability of the Environment
Reciprocity
Meaningful Life
Sociology
Ecology
Value Proposition(s)
y t ie
Transformation
m e st
Doing good
n o i t a s
Or ga ni
Ec os y
So c
Levels of Value
Us
Doing Well
r e
Value for Money
Belonging
Stability Core Values
Wealth
Shared Drivers Wellbeing
Perspectives on Value
EcoE!ectiveness ectiveness
Happieness
Profit
Economy
Experience EcoFootprint
Psychology
Sustainability
Social Responsibility
Livability of the Environment
Reciprocity
Meaningful Life
Sociology
Ecology
Sounds logic? It often seems it isn’t …
n o i t a v o n In Design has to
be conceived as …
Then it creates …
design for, design with, and design by
value for, value with, and value from
… users and other »interpreters«.
… users and other stakeholders. 34
Sounds logic? It often seems it isn’t … DESIGN-LED Generative Design Research
Critical Design ?"3)"+$3& B+*26,
EXPERT MINDSET
Design + Emotion
User-Centered Design
“users” seen as subjects (reactive informers)
C6%6+$)0>6 5**3,
Participatory Design
“ users” seen as partners (active co-creators)
?*%)6@"$3 =%A"0+4 1,$2030)4 56,)0%/
PARTICIPATORY MINDSET
;6$9<1,6+ =%%*>$)0*%
DE($%90%$>0$%F G6):*9,
!"#$%&'$()*+, -&.+/*%*#0(, 7883069 .):%*/+$8:4
RESEARCH-LED adapted from Sanders, L. (2002). From User-Centered to Participatory Design Approaches. In J. Frascara (Ed.), Design and the Social Sciences: Making Connections (1st ed., pp. 1–8). London: Taylor Francis.
35
Some References this Workshop/Presentation was based on: Beckman, S. L., & Barry, M. (2007). Innovation as a Learning Process: Embedding Design Thinking. California Management Review, 50(1), 25–56. Boland Jr., R., & Collopy, F. (2004). Managing as Designing (1st ed.). Stanford: Stanford Business Books. Brown, T. (2009). Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation: How Design Thinking Can Transform Organizations and Inspire Innovation. New York: Harper Business. Buchanan, R. (1992). Wicked Problems in Design Thinking. Design Issues, 8(2), 5–21. Cooper, A., Reimann, R., & Cronin, D. (2007). About Face 3: The Essentials of Interaction Design (3rd ed.). Wiley. Kelley, T., & Littman, J. (2001). The Art of Innovation: Lessons in Creativity from IDEO, America’s Leading Design Firm (1st ed.). New York: Crown Business. Kelley, T., & Littman, J. (2005). The Ten Faces of Innovation: IDEO’s Strategies for Defeating the Devil’s Advocate and Driving Creativity Throughout Your Organization. New York: Doubleday. Kimbell, L. (2009, September). Beyond Design Thinking: Design-as-practice and designs-in-practice. Presentation Paper, Saïd Business School, University of Oxford. Krippendor!, K. (2005). Semantic Turn: New Foundations for Design. Boca Raton, Fla.; London: CRC. Kuhn, T. (2012). The Structure of Scientific Revolutions: 50th Anniversary Edition (50th anniversary ed.). University of Chicago Press. Kumar, V. (2012). 101 Design Methods: A Structured Approach for Driving Innovation in Your Organization (1. Auflage.). John Wiley & Sons. Kumar, V., & Whitney, P. (2007). Daily life, not markets: customer-centered design. Journal of Business Strategy, 28(4), 46–58. Liedtka, J. (2000). In Defense of Strategy as Design. California Management Review, 42(3), 8–30. Liedtka, J., & Ogilvie, T. (2011). Designing for growth : a design thinking tool kit for managers. New York: Columbia University Press - Columbia Business School Publishing. Martin, R. L. (2009a). The Opposable Mind: How Successful Leaders Win Through Integrative Thinking. Mcgraw-Hill Professional. Martin, R. L. (2009b). Design of Business: Why Design Thinking Is the Next Competitive Advantage. Mcgraw-Hill Professional. Nagji, B., & Tu!, G. (2012). Managing Your Innovation Portfolio - Harvard Business Review. Harvard Business Review. Retrieved May 1, 2013, . Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st Edition.). Springer London. Owen, C. L. (2005a, May 14). Societal Responsibilities. - Growing the Role of Design. . International Conference on Planning and Design, National Cheng Kung University Tainan, Taiwan. Owen, C. L. (2005b, October 21). Design Thinking: What It Is, Why It Is Di!erent, Where It Has New Value. . Presentation Paper, Gwanju, Korea. Owen, C. L. (2007). Design Thinking: Notes on its Nature and Use. Design Research Quarterly, 2(1), 16–27. Simon, H. A. (1996). Sciences of the Artificial (0003 ed.). The Mit Press. Suri, J. F. (2005). Thoughtless Acts?: Observations on Intuitive Design (Ideo, Ed.). Chronicle Books. Ulla Johansson, J. W. The emperor’s new clothes or the magic wand? The past, present and future of design thinking. . Conference paper - peer reviewed, Verganti, R. (2009). Design Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean. Harvard Business Press. Wetter Edman, K. (2011, September). Service Design - A Conceptualization of an emerging Practice. Licentiate Thesis (PhD), Göteborg: Göteborgs Universitet. Konstnärliga Fakulteten. Retrieved November 4, 2011, from http://gupea.ub.gu.se/handle/2077/26679.
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Credits & Attributions This slideset was developed via fruitful exchanges of ideas, thoughts and photo material from and with the following organizations and people: LaunchLabs速 Berlin Softgarden速 Berlin Service Design Berlin Schach&Matt速 Kira Kraemer Klara Lindner Mia Sun Kjaergarrd Elias Barrasch Martin Jordan Holger Rhinow 47
Design-driven strategic business planning Jan Schmiedgen // Fidicinstr. 41 // 10965 Berlin // GERMANY // +49 173 3 83 15 26 // kontakt@schmiedgen.eu
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