Creativity, Design Thinking and How These Have To Do With Innovation & Entrepreneurship

Creativity Thinking, Or the ability to connect to what is outside the box when you are inside it. Dr Ekaterina Khramkova, Russian Design Research Consultancy Lumiknows 24 April 2009, International Center for Innovation and Entrepreneurship

Creativity Thinking Today: 1. What is Creativity; 2. Why is it that important for Innovation Entrepreneurs; 3. Why this is equal to “Design Thinking”. © 2009 Russian Design Research Consultancy Lumiknows 2

Art clearly implied expression of ideas concerning the spiritual, Do you know the unconscious and the how the first abstract mind. painting was created? Fernand Léger, The Railway Crossing, 1919. The Art Institute of Chicago Jackson Pollock, Full Fathom Five, 1947. Museum of Modern Art, New York City Piet Mondrian, Composition with Yellow, Catherine de Zegher, Hendel Teicher Blue, and Red, 1937-42. (eds.). 3 X Abstraction. NY: The Drawing Center & /New Haven: Yale University Tate Gallery, London. Press. 2005. © 2009 Russian Design Research Consultancy Lumiknows 4

One evening in the summer of 1909, Wassily Kandinsky became aware of the power of abstract art after he saw “indescribable beauty with an inner glow” in a painting. “I was startled momentarily, then quickly went up to this enigmatic painting in which I could see nothing but shapes and colours and the content of which was incomprehensible to me.” The answer to the riddle came immediately: it was one of his own pictures leaning upside down against the wall. But from then on, Kandinsky was bewitched by the idea that “subject matter was detrimental to my paintings”. Pioneer spirit of an artistic revolution, The Times, June 3, 2006 © 2009 Russian Design Research Consultancy Lumiknows 7

Is the point in the “boundary”? …The puzzle only seems difficult because quot;we imagine a boundary around the edge of the dot arrayquot;. Prof. Daniel Kies © 2009 Russian Design Research Consultancy Lumiknows 11

Western “seeing”: there is a boundary… Aristotle wrote about Pythagoreans that for them emptiness serves to divide things and define their boundaries. © 2009 Russian Design Research Consultancy Lumiknows 13

Eastern “seeing”: there is no boundary. Thirty spokes coverage upon a single hub; It is on the hole in the centre that the use of the cart hinges. We make a vessel from a lump of clay; It is the empty space within the vessel that makes it float. Thus, while the visible has advantages, It is the invisible that makes it useful. Lao-Tzu, Tao The Ching, 6th cent. B.C. © 2009 Russian Design Research Consultancy Lumiknows 14

Two different modes of solving problems: Nothing, Emptiness Something, Context • Shift of focus to the “Big Picture”; • Focus on what is already known; • There is “Something” behind it, even • “Nothing” behind what is seen; if we don’t see this right now; • Limited possibilities. • Abundance of possibilities. © 2009 Russian Design Research Consultancy Lumiknows 17

How does it to do with the Innovation Entrepreneurship? Red Oceans are all the industries in existence today—the known market space. In the red oceans, industry boundaries are defined and accepted. As the market space gets crowded, prospects for profits and growth are reduced. Blue oceans, in contrast, denote all the industries not in existence today—the unknown market space. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored. A conversation with W.Chan Kim and Renee Mauborgne. INSEAD, 2005. © 2009 Russian Design Research Consultancy Lumiknows 18

How does it to do with the Innovation Entrepreneurship? Blue Ocean Strategy Red Ocean Strategy Search for the market instead of in the market is a key to success in today’s Innovation Economy. © 2009 Russian Design Research Consultancy Lumiknows 19

http://www.flickr.com/photos/32194657@N06/3467932128/sizes/l/ Assuming that structure and market boundaries exist only in managers’ minds, practitioners who hold this new view do not let existing market structures limit their thinking. To them, extra demand is out there, largely untapped. Kim, Chan, Blue Ocean Strategy. © 2009 Russian Design Research Consultancy Lumiknows 21

In order to get to the future first, there is no need to excel competitors trying to get the same prize because the number of prizes may be the same as the number of runners. G. Hamel & C. K. Prahalad, Competing For The Future. © 2009 Russian Design Research Consultancy Lumiknows 22

Outperformers take on the industry model innovation • 39% Collaboration imperative drives enterprise model innovation; • 23% Revenue model innovators: nine out of ten are reconfiguring the product, service and value mix. Half are working on new pricing structures; • 18% Industry model innovation: redefining their existing industries (73%), entering or creating entirely new industries (36%). © 2009 Russian Design Research Consultancy Lumiknows 33

BumpTop starts with a 3D view of a cubicle-like desk with vertical walls at the sides and back. Objects—pictures, documents, songs, sticky notes, program icons—can be moved freely around the desktop or stuck up on the walls. BumpTop is a natural for a touchscreen, but it also works satisfactorily with a mouse. © 2009 Russian Design Research Consultancy Lumiknows 36

Statistics say no…. 96% of all innovation attempts fail to meet financial goals (Institute of Design Strategy, USA, 2005) Every year brings 30,000 of new products. About 90% of them fail despite thorough and highly expensive market research (Clayton Christensen et al, Marketing Malpractice: The Cause and The Cure / Harvard Business Review, Dec 2005) 8 out of 10 NPD projects fail (Product Development & Management Association, USA, 2004) © 2009 Russian Design Research Consultancy Lumiknows 39

The main reason behind new product failure: 24% Inadequate market analysis (i.e. analysis of customer needs); 16% Product problems of defects; 14% Lack of effective marketing effort; 10% Higher costs than anticipated; 9% Competitive strength and reaction; 8% Poor timing of introduction; 6% Technical or production problems; 13% All other causes. Robert Cooper, Winning At New Products © 2009 Russian Design Research Consultancy Lumiknows 40

http://www.flickr.com/photos/32194657@N06/3467932128/sizes/l/ Management will increasingly have to be based on the assumption that neither technology nor end use is a foundation for management policy. They are limitations. The foundations have to be customer values and customer decisions on the distribution of their disposable income. Peter Drucker, Management Challenges for the 21st century. © 2009 Russian Design Research Consultancy Lumiknows 41

Shift in marketing strategies Technology- Driven Strategy Consumer-Driven Strategy ‘What technical / organization / ‘What else does our customer financial / manufacturing want?/How can we empathize possibilities we possess’. with him?’ © 2009 Russian Design Research Consultancy Lumiknows 42

http://www.flickr.com/photos/seier/2400908319/ http://www.flickr.com/photos/lorenzodom/420366606/ Design research understands people and http://www.flickr.com/photos/frizztext/2786498308/ practices in context of their total human experience. © 2009 Russian Design Research Consultancy Lumiknows 44

At the heart of this approach lies Design Thinking – one of the best examples of “thinking in context”, “thinking outside the box”. http://www.flickr.com/photos/25434820@N00/444530871/in/set-72157601913739362/ © 2009 Russian Design Research Consultancy Lumiknows 45

Design has evolved from a narrow discipline dealing with the form and function of products into a major new approach to developing business models. Business Week © 2009 Russian Design Research Consultancy Lumiknows 46

Design thinking, a way of thinking that parallels other ways of thinking - like science thinking - but offers a way of approaching issues, problems and opportunities almost uniquely suited to innovation. Design Thinking: Driving Innovation, Charles L. Owen, Distinguished Professor Emeritus, Institute of Design, Illinois Institute of Technology © 2009 Russian Design Research Consultancy Lumiknows 48

…Companies have to focus on innovation to be competitive. That driving need makes design thinking the hottest trend in business culture today. If engineering, control, and technology were once the central tenets of business culture, then anthropology, creativity, and an obsession with consumers' unmet needs will inform the future. The Talent Hunt, BusinessWeek, 2006 © 2009 Russian Design Research Consultancy Lumiknows 49

Companies have a “targeted” intelligence to track issues that strategically important but lack an “open” process to recognize emerging patterns and issues that no one has yet identified as strategic. Corporate Radar: Best-Practices Survey Results /SRI Consulting Business Intelligence – formerly Stanford Research Institute) © 2009 Russian Design Research Consultancy Lumiknows 50

We need perceptual thinking, creative thinking and design thinking: none of these is part of our traditional system of logic and analysis. Edward de Bono © 2009 Russian Design Research Consultancy Lumiknows 51

Today perceptiveness is more important than analysis. Peter Drucker

MBA programs which included design thinking in its curriculum Stanford University; The University of California at Berkeley; The Rotman School of Management at University of Toronto; McDonough School of Business at Georgetown University; Darden School of Business at University of Virginia … © 2009 Russian Design Research Consultancy Lumiknows 53

MBA programs which included design thinking in its curriculum Deep consumer understanding, The ability to test product variations rapidly, New market strategy formulation © 2009 Russian Design Research Consultancy Lumiknows 54

Redesign of business education MBA students at INSEAD (Paris) + design students from the Art Center College of Design (Pasadena, California). Rotman School of Management has allied with the Ontario College of Arts and Design to launch a series of joint courses; The Illinois Institute of Technology’s Institute of Design launched a 9-month executive master’s degree program in design methods. © 2009 Russian Design Research Consultancy Lumiknows 55

Redesign of business education – By using sketching and diagramming techniques, the MBAs mapped customer experiences in ways that fundamentally reshaped their strategies and led to the creation of many new business models. – A B-school class would have started with a focus on market size and used financial analysis to understand it. This D-school class began with consumers and used ethnography, the latest management tool, to learn about them. – Business school students would have developed a single new product to sell. The D-schoolers aimed at creating a prototype with possible features that might appeal to consumers. – B-school students would have stopped when they completed the first good product idea. The D-schoolers went back again and again to come up with a panoply of possible winners. Sources: Design-Thinking and the MBA Curriculum, Darden School of Business, 2008; The Talent Hunt, BusinessWeek, 2006. © 2009 Russian Design Research Consultancy Lumiknows 56

Redesign of business education Nike, General Electric, McDonald's, Intel, Procter & Gamble and many others are looking beyond traditional sources of leadership to a new set of schools and programs to find innovative managers. © 2009 Russian Design Research Consultancy Lumiknows 57

Whether your goal is to develop new products or services, a new way of marketing to your customer, or to reinvent your entire business model, “design thinking” holds valuable clues as to how to get to bigger ideas, faster and more efficient. Roger Martin, Dean of the Rotman School of Management, University of Toronto, Canada © 2009 Russian Design Research Consultancy Lumiknows 58

Today’s business people do not need to understand designers better. They need to become designers. Roger Martin, Dean of the Rotman School of Management, University of Toronto, Canada © 2009 Russian Design Research Consultancy Lumiknows 59

To become a successful innovator You need the approach and mindset of designer. You need Design Thinking to Connect to Human Experience in all its sophistication & complexity. What skills should be taught in design thinking programs for entrepreneurs and innovators: • Collaboration in multidisciplinary teams. Engineering, business, design, social sciences should be combined as they are combined in our real life experience; • Ability to tackle ill-defined problems. Systematic approach to work with qualitative information – “finding it, gaining insights, organizing it optimally for conceptualization, evaluation and communication”*; • Co-creation with your customer new business models, new markets and, ultimately, a new world. * Charles L. Owen Design Thinking: Driving Innovation © 2009 Russian Design Research Consultancy Lumiknows 60

One day when the students were having a particularly difficult time with figure drawing, I handed around a reproduction of a master drawing and – on impulse – told the students to draw the image upside down. To our great surprise, the drawings were excellent. This did not make sense to me. Why should it be easier for the students to draw an image in that unusual orientation? Working with negative space provided more clues – and more questions. I found students could draw better by looking not at the form they wanted to draw but instead by looking at the space around the form. Betty Edwards, Drawing on the right side of the brain. © 2009 Russian Design Research Consultancy Lumiknows 61

Two ways of thinking, two modes of seeing Analytical Thinking Design Thinking If I’d ask people what they wanted, they Without changing our patterns of thought, would have said a faster horse. we will not be able to solve the problems we Henry Ford created with our current patterns of thought. Albert Einstein © 2009 Russian Design Research Consultancy Lumiknows 62

http://www.flickr.com/photos/deboraborialis/1809628289/ So, let’s shift a focus from “object” to the “space” behind it and see how far it leads us… © 2009 Russian Design Research Consultancy Lumiknows 63

http://www.flickr.com/photos/deboraborialis/1809628289/ Thank you for attention. www.designresearch.ru Dr Ekaterina Khramkova, Lumiknows

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Creativity, Design Thinking and How These Have To Do With Innovation & Entrepreneurship

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