University of Chicago –
Graduate School of Business
Design Thinking for Business Strategy
Date: January 25th, 2007
Harsh Jawharkar (GSB ’06) http://www.linkedin.com/in/harsh
Management Consultant – A.T. Kearney
• IDEO – Service Innovation & Human Factors
• HSBC – Consumer Insights & Experience Modeling
• Sapient – User Experience Modeling
• IPM – Management Consulting
• Service and product innovation models
• Business strategies driven by a design-thinking mindset
January 2007 2
Innovation … Buzzword, Fad, or Bellwether?
Main Entry: in·no·va·tion Main Entry: buzz·word
Pronunciation: "i-n&-'vA-sh&n Pronunciation: 'b&z-"w&rd
Function: noun Function: noun
1 : the introduction of something new 1 : an important-sounding usually technical word or
phrase often of little meaning used chiefly to
2 : a new idea, method, or device : NOVELTY impress laymen
2 : a voguish word or phrase -- called also buzz
something (as a device) created for the first time stock phrases that have become nonsense through
through the use of the imagination endless repetition
-- see INVENTION -- see hokum, nonsense, bunk
Innovation is a process … not an approach
Source: Merriam-Webster Online, thefreedictionary January 2007 3
The BusinessWeek effect … is it like the Sports Illustrated cover jinx?
January 2007 4
Innovation is catalyzed by an opportunity to close the gap
• Data driven
Left Brain • Outcome oriented
Sequential • Focused on the ‘end’
Looks at parts
• Empathic Looks at wholes
• Observation driven
• Experience oriented
• Focused on the ‘journey’
January 2007 5
Design thinking is an attitude, an approach – a mindset
Inside Out – Traditional Mindset Outside In – Design Mindset
Front-line Personnel Front-line Personnel
Customer Service Customer Service
Sales & Marketing Sales & Marketing
C – Level
C – Level
A design mindset is critical to successfully solving or creating
January 2007 6
Design firms currently occupy a less demanding space on the value
chain, thereby decreasing their leverage in corporate boardrooms
Stimuli Ideate Conceptualize Validate Operationalize Value
• Stimuli derived • Ideation requires: • Conceptualization • Validation requires: • Operationlization
from: requires: requires:
• Existing • Suspension of • Observation & • Prototyping the • A data driven
business disbelief Empathy offerings approach
• Ability to cross- • Identifying • Metrics and • Tactical and
• Perceived pollinate heuristics measurability organizational
demand for mindset
offerings • Faith in • Experiential • Assessment of
disruptive modeling capabilities and • Attitudes geared
• Market dynamics technologies competitive towards
• Visualizing a forces measurable
• Competitive story or outcomes
Management Consulting Firms
January 2007 7
Design firms are attempting to develop operational capabilities
Smart Design Jump Desired Skill-set
Herbst Lazar Bell ZIBA Continuum and
Booz Allen A.T. Kearney
Monitor Bain BCG
Source: Jess McMullin, bplusd.org January 2007 8
What can design-thinking do for you?
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What else can design-thinking do for you?
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Elements of design thinking
Conceptualization (Storytelling, Modeling)
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Observing people in their
• Behavioral Mapping
Photographing people within
a space, such as a hospital
waiting room, over two or
• Consumer Journey
Keeping track of all the
interactions a consumer has
with a product, service, or
• Camera Journals
Asking consumers to keep
visual diaries of their
activities and impressions
relating to a product.
Prompting people to tell
personal stories about their
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Simulated - this is not a test participant's desk
1 2 3
1. Moderately protected
2. Easily accessible
3. Staging area for major objects
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• Defer judgment
• Build on the ideas
• Encourage wild
• Go for quantity.
100 ideas in 60
• Be visual
• Stay focused
• One conversation
January 2007 14
Conceptualization (Building a Behavioral Model)
Sometimes Online & Often Offline Mostly Offline Almost Always Offline
Shop for Shop for Apply for Shop for Shop for
Credit Deposit Deposit The Bridge Loans & Service
Entrepreneurs Cards Products Products Entrepreneurs are credit hungry and LoC's products
inherit behaviors this is the point of reference they
from their seek in terms of business legitimacy
Personal Banking Pay Bills Apply for Apply for Apply for
and sustainability. Service
experiences Transfer Credit Loans &
Funds Cards LoC's products
Pay Bills Shop for
COMMERCIAL Deposit Review Shop for Shop for Shop for
Checks Statements Credit Cards Loans & Service
Need to transform into LoC's products
online conducive activities
Apply for Credit Cards Apply for Apply for
Loans & Service
Time to Make Need to Protect Privacy Clear Path & Choices
LOW The Need for : Simple Presentation HIGH
Need to Validate Level of Complexity & Usable Experience
Low Touch Infancy Adolescence Maturity High Touch
Fast Decision Slow Decision
Price Parity Checking Negotiable
Credit Card Insurance
Savings BUNDLE GROWTH
Line of Credit PRODUCT Retirement
Loan Employee Benefit
January 2007 15
Prototyping (Test and Validate)
But which way is up ? Is that a button or not?
0, 1, 2, 5, 6, 8, 9 - all digits look identical upside down
Most people were unable to identify
how to hold the device.
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Thinking Linking Doing
Observing Matchmaking Executing
Empathizing Cross-pollinating Implementing
Divergent thinking Synthesizing Specializing
Source: Creative Generalist blog, Steve Hardy January 2007 17
are goal directed sets POEMS –
which people want to • People
accomplish • Objects
OBJECTS USERS ENVIRONMENTS Experiential Framework1:
are building blocks of include the entire • Physical (e.g. small
the environment, key arena where vs. big)
elements sometimes activities take
put to complex or place • Cognitive (e.g.
unintended uses, understandable vs.
changing their confusing)
function, meaning and
context • Social (e.g. informal
• Cultural (e.g.
INTERACTIONS acceptable vs.
are between a shared vs. conflict)
person and someone
or something else, • Emotional (e.g. bored
and are the building
blocks of activities
vs. engaged, or
anxious vs. calm)
Source: 1. User Insight Tool, Vijay Kumar
2. Ethnography in the field of design, Christina Wasson January 2007 18
Anatomy of a design firm
• Pronounced “Eye-dee-oh”
• 500 designers
• HQ in Palo Alto
• Offices in San Francisco,
Chicago, Boston, London,
Munich, and Shanghai
• CEO – Tim Brown
• Cofounders – David Kelley
(Stanford) and Bill Moggridge
• Notable concepts –
– The first mouse
– Palm V
– Handspring Treo
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Service & Environment Design
Industrial Design and Engineering
January 2007 22
Innovation requires going beyond the realm of ‘pushing’ products
X Bank Dunkin
Products X Grocery
Trader Joe’s Volkswagen
Target In ‘n Out
Whole Foods Harley
January 2007 23
Windows Mobile vs. the potential iPhone
A collection of features does not ensure successful innovation
January 2007 24
Large Healthcare Insurer
• How do we engage our customers to take ownership of their health?
• Is there a mutually beneficial way to reduce healthcare costs?
Large consumer goods manufacturer – China strategy
• How do we re-launch our car care business in China?
• What options can we generate to create services based on our products?
Largest service employees union in North America
• How do we motivate our base?
• Can we reignite the grassroots movement?
HSBC Commercial Banking study
• Should we develop and launch this idea?
• How receptive (or not) will consumers be?
• What are the impacts to our brand?
January 2007 26
Case in Point – The Gap
• Opened in the summer of ’69 in San Francisco
• More than 3000 stores and $16 B in revenues
• Profit margins (6.5%) – half of industry average
• Same-store sales are 8% lower (Dec 2005-2006)
• Healthy Banana, sinking Navy, wider Gap
• Called Goldman Sachs to “explore all options”
How would you approach this?
• Traditional vs. Design Thinking
January 2007 27
• Pricing pressure
• Purchase frequency
• Transaction size
• Transaction value
• Product mix
• Customer mix & segmentation • Generate hypotheses
• Define data requirements
• Gather and organize data
• Analyze data to identify key
• Fixed real-estate footprint
• Size of stores
• Portfolio rationalization
Costs (Gap, Banana, Old Navy)
• Variable labor costs
• Material costs and sourcing
January 2007 28
Environments, Interactions, & Objects
• How do you plan a trip to The Gap?
• Is it scheduled or impulsive?
• What’s the trail between the desire and the
– Is it direct or does it involve browsing?
OBJECTS – Should it be accelerated or indulged?
• How do users interact within the store?
– With the merchandise?
USERS – With other shoppers, store personnel?
– With stimuli (light, sound, sense, smell)?
Users & Activities
• Who wants to shop at The Gap?
• When would you go to The Gap?
• What would trigger a trip?
– Who else is involved?
– Who influences this desire? Why?
January 2007 29
My Google Reader ‘Design’ Feed can be accessed from –
Comprised of the following blogs –
• Brand Autopsy
• Influx Insights
• Nussbaum On Design
• Putting People First
• Seth’s Blog
• Core 77
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