When Srikant Datar wrote Rethinking the MBA, the Harvard Business School accounting professor concluded that business schools did an excellent job of teaching operational skills — decision-making, marketing, distribution, procedures. But the students lacked training in innovation.
Innovation is about "experimenting, connecting, connecting dots, exploring, prototyping, trying, and this is a different set of skills," Datar told his students in a Harvard seminar. Recognising this, he said, he created a design-thinking course to help students become more creative thinkers.
Design thinking is a method that developed in architecture, urban design, and engineering in the 1970s and '80s. It uses a standardised process that emphasises empathy, observation, ideation, and prototyping as core processes leading to out-of-the-box thinking.
To be creative requires uncovering insights about customer needs by putting oneself in the customers' shoes and experiencing what they feel. This phase, called empathy, is where a design thinker conducts ethnographic research and listens to what a customer is saying, watches what they are doing, ponders what they are thinking, and imagines what they are feeling.
This process helps overcome fixed-mindedness, which hinders innovation. "The more expert you are on a subject, the more fixed you become," Datar said in an interview with the Association to Advance Collegiate Schools of Business.
Datar describes different types of fixedness. For example, functional fixedness is thinking there is only one function for a car, and that is to transport you or your family. Uber and Lyft break functional fixedness.
Structural fixedness is believing something must be done in a particular order, such as how to clean a plane between flights. Southwest Airlines breaks this mold by sometimes asking customers to place the seatbelts a certain way and cleaning the seats as they are unloading.
Relationship fixedness is believing interactions between companies and customers are fixed. For example, interactions between insurance companies and customers occur only when there is trouble. Interacting with customers with a rewards program for wellness breaks this traditional relationship.
One company that uses design thinking to break relationship fixedness is Fidelity Investments. The privately owned financial services company, with revenues of $15.9 billion and 45,000 employees, wants all its employees to have a design-thinking mindset. Fidelity uses design-thinking teams to tackle problems and to devise unique solutions that meet customers' needs.
Andrea Leitner, design strategist at Fidelity Labs, a division of Fidelity Investments, explains her background and how Fidelity uses this multidisciplinary approach to solve business problems:
How would you describe the design-thinking process?
Leitner: I prefer to think of design thinking as a mindset more than a process. It is really about having a deep understanding of your customer and the people you serve. We speak a lot about empathy for the customer in our practice and the importance of bringing that understanding to the decisions that we make. If we speak in terms of the process we employ at Fidelity, design thinking is critical in understanding the problem we are trying to solve. That is true for both internal business partners and for understanding the problems of our clients.
In Fidelity's search for a new design director, the job description says, "You will make sure the human voice is never lost in decision-making." What is so important about the human voice?
Leitner: It is so important to first understand the problem you are trying to address from the human/customer perspective but then also keep that front of mind throughout the development of a product. Throughout the process of designing a new product or service, I think it can be easy to be consumed by other factors. It is the role of the design thinker of our teams to bring the voice of the customer into all the decisions we need to make throughout the development. It is critical to the success of a product.
How do you do that?
Leitner: We first determine who we should be talking to regarding the problem space. Oftentimes in design thinking we use extreme users to understand the thinking and recognise behaviours of people. As an example, we could speak to early adopters or potential adopters of a technology. As a team, led by a design thinker at that point, we will go out to the field to listen and observe people. We want to understand what is happening for them. As we say, "We meet them where they are." Throughout the design process, we go back into the field to test our prototypes and ideas to understand if they are addressing the needs of the customer and resonating with the user. Design thinking as a process is iterative — always going back to the customer, but also always keeping the customer front of mind.
Can you give us an example?
Leitner: We did a round of research with what we refer to as the young family — a family with young children that is likely experiencing a high level of financial complexity. The hypothesis was that they do not have a lot of time to inform themselves and make financial decisions. With children under 5 years old, they are potentially changing their 401(k) [retirement plan] contributions, maybe purchasing a large home, or deciding how best to contribute to their child's education. In that research, we speak to both parents, if there were two, in the home. We met, listened, and observed what is truly happening in the lives of these families.
What are potential pitfalls?
Leitner: One of the mindsets of design thinking is to fall in love with the problem, not the solution. One of the pitfalls is that people get really excited about what they [think] the solution might be. Often it can be an allure of a new technology capability that has a team solution-focused, instead of understanding the real problem. That is why the design-thinking process constantly brings it back to the customer.
Can you tell me how design thinking is being integrated at Fidelity?
Leitner: We have one team of design thinkers within Fidelity Labs, but we work to integrate it into Fidelity in different ways. A part of the team works to bring the customer into the process of new product and service development, and a part of the team propagates the design-thinking mindset and customer-first mentality throughout the firm. In our new product space, there are major projects that address the student loan crisis, as well as initiatives in the financial wellness space. The team that promotes design thinking throughout the firm often works to bring in outside perspectives, and a huge success they have had recently is the launch of a Design Thinking Club. The club allows associates from across the firm to participate in hands-on learning and speaking events.
Is design thinking appropriate for all companies?
Leitner: I believe it is, yes. It is obviously imperative for a business-to-consumer company. I think it is interesting as well in a business-to-business context, as in the mindsets of understanding the problem and having empathy for your users is always important. It is about people.
Marsha Huber (firstname.lastname@example.org) is an associate professor of accounting at Youngstown State University in Youngstown, Ohio.