Presentation of CEO of Russian design research consultancy Lumiknows Ekaterina Khramkova at the international conference on innovation and entrepreneurship held in Moscow late April 2009. The event was organized by the International center for Innovation & Entrepreneurship of the Moscow State University together with the U.S. Russia Center for Entrepreneurship with support of Innovation Studio Intel, Tempus, Higher School of Economics.

1. 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

2. 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

3. Abstract painting:
An artistic revolution
of the 20th century.
Kazimir Malevich, Black Square, c. 1915. State Russian Museum, St. Petersburg
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4. 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.
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5. Do you know
how the first
abstract painting
was created?
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6. Wassily Kandinsky, Composition VII, 1913. The State Tretyakov Museum, Russia
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7. 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
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8. The Nine Dot Puzzle
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9. The Nine Dot Puzzle
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10. The Nine Dot Puzzle
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11. 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
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12. http://www.flickr.com/photos/mllemathilde/1428593831/
The point is in the way of seeing.
© 2009 Russian Design Research Consultancy Lumiknows 12

13. Western “seeing”: there is a boundary…
Aristotle wrote about Pythagoreans that
for them emptiness serves to divide things
and define their boundaries.
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14. 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.
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15. The concept of the
“Emptiness” (= Nothing)
later turned into
Newtonian Space
as a Container for
things.
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16. The concept of the
“Invisible” (= Something)
later transformed
into Einstein’s
Relative Reality.
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17. 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.
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18. 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.
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19. 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.
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20. How does it to do with the
Innovation Entrepreneurship?
Blue Ocean Strategy
Red Ocean Strategy
From New Product to New Market Development.
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21. 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.
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22. 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.
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23. The crux of the
problem is where
to look for these
prizes...
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24. http://www.flickr.com/photos/jwlphotography/508878373/
In people’s needs.
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25. Where to look for “the prizes”?
Not in narrow defined
customer experience,
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26. Where to look for “the prizes”?
Not in narrow defined But in total human
customer experience, experience.
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27. © 2009 Russian Design Research Consultancy Lumiknows 27

28. http://www.flickr.com/photos/dogfaceboy/1095640322/
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29. http://www.flickr.com/photos/dogfaceboy/1095640322/
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30. From “Customer” to Total Human
Experience…
http://www.flickr.com/photos/dogfaceboy/1095640322/
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31. From New Product to New Market
Development…
http://www.flickr.com/photos/dogfaceboy/1095640322/
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32. Three business models of innovation |
IBM CEO Global Study, 2008
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33. 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%).
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34. http://www.flickr.com/photos/tonyshi/3079681907/
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35. © 2009 Russian Design Research Consultancy Lumiknows 35

36. 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.
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37. Is your product
ready to become
part of her life
experience?
http://www.flickr.com/photos/artzyviv/2838577706/
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38. Do you really
understand her
needs and
values??
http://www.flickr.com/photos/artzyviv/2838577706/
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39. 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)
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40. 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
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41. 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.
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42. 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?’
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43. Shift in customer research approach
From Market Research to “Design Research”.
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44. 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.
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45. 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/
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46. 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
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47. When people talk
about innovation
in this decade, they
really mean design.
Bruce Nussbaum,
Business Week
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48. 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
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49. …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
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50. 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)
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51. 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
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52. Today
perceptiveness
is more important
than analysis.
Peter Drucker

53. 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 …
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54. MBA programs which included
design thinking in its curriculum
Deep consumer understanding,
The ability to test product variations rapidly,
New market strategy formulation
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55. 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.
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56. 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.
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57. 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.
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58. 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
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59. 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
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60. 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
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61. 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.
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62. 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
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63. 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…
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64. http://www.flickr.com/photos/deboraborialis/1809628289/
Thank you for attention.
www.designresearch.ru
Dr Ekaterina Khramkova, Lumiknows