Design Thinking Bootcamp II

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/)

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

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)

5

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.

20

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.

46

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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