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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
Abstract painting:

                                                       An artistic revolution
                                                       of the 20th century.




              Kazimir Malevich, Black Square, c. 1915. State Russian Museum, St. Petersburg

© 2009 Russian Design Research Consultancy Lumiknows                                          3
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
Do you know

                                                 how the first
                                                 abstract painting
                                                 was created?



© 2009 Russian Design Research Consultancy Lumiknows                 5
Wassily Kandinsky, Composition VII, 1913. The State Tretyakov Museum, Russia
© 2009 Russian Design Research Consultancy Lumiknows                            6
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
The Nine Dot Puzzle




© 2009 Russian Design Research Consultancy Lumiknows       8
The Nine Dot Puzzle




© 2009 Russian Design Research Consultancy Lumiknows       9
The Nine Dot Puzzle




© 2009 Russian Design Research Consultancy Lumiknows       10
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
http://www.flickr.com/photos/mllemathilde/1428593831/




           The point is in the way of seeing.
© 2009 Russian Design Research Consultancy Lumiknows                                                 12
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
The concept of the
                                                       “Emptiness” (= Nothing)
                                                          later turned into
                                                          Newtonian Space
                                                          as a Container for
                                                          things.




© 2009 Russian Design Research Consultancy Lumiknows                         15
The concept of the
                                                       “Invisible” (= Something)
                                                           later transformed
                                                           into Einstein’s
                                                           Relative Reality.




© 2009 Russian Design Research Consultancy Lumiknows                          16
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
How does it to do with the
                        Innovation Entrepreneurship?




                                                       Blue Ocean Strategy
                      Red Ocean Strategy


                         From New Product to New Market Development.

© 2009 Russian Design Research Consultancy Lumiknows                         20
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
The crux of the
                                                 problem is where
                                                 to look for these
                                                 prizes...



© 2009 Russian Design Research Consultancy Lumiknows                 23
http://www.flickr.com/photos/jwlphotography/508878373/




                                                         In people’s needs.




© 2009 Russian Design Research Consultancy Lumiknows                          24
Where to look for “the prizes”?




                Not in narrow defined
                customer experience,
© 2009 Russian Design Research Consultancy Lumiknows       25
Where to look for “the prizes”?




                Not in narrow defined                  But in total human
                customer experience,                   experience.
© 2009 Russian Design Research Consultancy Lumiknows                        26
© 2009 Russian Design Research Consultancy Lumiknows   27
http://www.flickr.com/photos/dogfaceboy/1095640322/

© 2009 Russian Design Research Consultancy Lumiknows                                                28
http://www.flickr.com/photos/dogfaceboy/1095640322/

© 2009 Russian Design Research Consultancy Lumiknows                                                29
From “Customer” to Total Human
                       Experience…




                                                       http://www.flickr.com/photos/dogfaceboy/1095640322/

© 2009 Russian Design Research Consultancy Lumiknows                                                30
From New Product to New Market
                       Development…




                                                       http://www.flickr.com/photos/dogfaceboy/1095640322/

© 2009 Russian Design Research Consultancy Lumiknows                                                31
Three business models of innovation |
                                  IBM CEO Global Study, 2008




© 2009 Russian Design Research Consultancy Lumiknows           32
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
http://www.flickr.com/photos/tonyshi/3079681907/




© 2009 Russian Design Research Consultancy Lumiknows   34
© 2009 Russian Design Research Consultancy Lumiknows   35
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
Is your product
                                                       ready to become
                                                       part of her life
                                                       experience?




 http://www.flickr.com/photos/artzyviv/2838577706/

© 2009 Russian Design Research Consultancy Lumiknows                      37
Do you really
                                                       understand her
                                                       needs and
                                                       values??




 http://www.flickr.com/photos/artzyviv/2838577706/

© 2009 Russian Design Research Consultancy Lumiknows                    38
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
Shift in customer research approach




                       From Market Research to “Design Research”.

© 2009 Russian Design Research Consultancy Lumiknows                43
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
When people talk
                                                       about innovation
                                                       in this decade, they
                                                       really mean design.

                                                       Bruce Nussbaum,
                                                       Business Week




© 2009 Russian Design Research Consultancy Lumiknows                          47
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

  • 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 © 2009 Russian Design Research Consultancy Lumiknows 3
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 4
  • 5. Do you know how the first abstract painting was created? © 2009 Russian Design Research Consultancy Lumiknows 5
  • 6. Wassily Kandinsky, Composition VII, 1913. The State Tretyakov Museum, Russia © 2009 Russian Design Research Consultancy Lumiknows 6
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 7
  • 8. The Nine Dot Puzzle © 2009 Russian Design Research Consultancy Lumiknows 8
  • 9. The Nine Dot Puzzle © 2009 Russian Design Research Consultancy Lumiknows 9
  • 10. The Nine Dot Puzzle © 2009 Russian Design Research Consultancy Lumiknows 10
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 11
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 13
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 14
  • 15. The concept of the “Emptiness” (= Nothing) later turned into Newtonian Space as a Container for things. © 2009 Russian Design Research Consultancy Lumiknows 15
  • 16. The concept of the “Invisible” (= Something) later transformed into Einstein’s Relative Reality. © 2009 Russian Design Research Consultancy Lumiknows 16
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 17
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 18
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 19
  • 20. How does it to do with the Innovation Entrepreneurship? Blue Ocean Strategy Red Ocean Strategy From New Product to New Market Development. © 2009 Russian Design Research Consultancy Lumiknows 20
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 21
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 22
  • 23. The crux of the problem is where to look for these prizes... © 2009 Russian Design Research Consultancy Lumiknows 23
  • 24. http://www.flickr.com/photos/jwlphotography/508878373/ In people’s needs. © 2009 Russian Design Research Consultancy Lumiknows 24
  • 25. Where to look for “the prizes”? Not in narrow defined customer experience, © 2009 Russian Design Research Consultancy Lumiknows 25
  • 26. Where to look for “the prizes”? Not in narrow defined But in total human customer experience, experience. © 2009 Russian Design Research Consultancy Lumiknows 26
  • 27. © 2009 Russian Design Research Consultancy Lumiknows 27
  • 30. From “Customer” to Total Human Experience… http://www.flickr.com/photos/dogfaceboy/1095640322/ © 2009 Russian Design Research Consultancy Lumiknows 30
  • 31. From New Product to New Market Development… http://www.flickr.com/photos/dogfaceboy/1095640322/ © 2009 Russian Design Research Consultancy Lumiknows 31
  • 32. Three business models of innovation | IBM CEO Global Study, 2008 © 2009 Russian Design Research Consultancy Lumiknows 32
  • 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%). © 2009 Russian Design Research Consultancy Lumiknows 33
  • 34. http://www.flickr.com/photos/tonyshi/3079681907/ © 2009 Russian Design Research Consultancy Lumiknows 34
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 36
  • 37. Is your product ready to become part of her life experience? http://www.flickr.com/photos/artzyviv/2838577706/ © 2009 Russian Design Research Consultancy Lumiknows 37
  • 38. Do you really understand her needs and values?? http://www.flickr.com/photos/artzyviv/2838577706/ © 2009 Russian Design Research Consultancy Lumiknows 38
  • 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) © 2009 Russian Design Research Consultancy Lumiknows 39
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 40
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 41
  • 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?’ © 2009 Russian Design Research Consultancy Lumiknows 42
  • 43. Shift in customer research approach From Market Research to “Design Research”. © 2009 Russian Design Research Consultancy Lumiknows 43
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 44
  • 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/ © 2009 Russian Design Research Consultancy Lumiknows 45
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 46
  • 47. When people talk about innovation in this decade, they really mean design. Bruce Nussbaum, Business Week © 2009 Russian Design Research Consultancy Lumiknows 47
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 48
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 49
  • 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) © 2009 Russian Design Research Consultancy Lumiknows 50
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 51
  • 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 … © 2009 Russian Design Research Consultancy Lumiknows 53
  • 54. 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
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 55
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 56
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 57
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 58
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 59
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 60
  • 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. © 2009 Russian Design Research Consultancy Lumiknows 61
  • 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 © 2009 Russian Design Research Consultancy Lumiknows 62
  • 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… © 2009 Russian Design Research Consultancy Lumiknows 63
  • 64. http://www.flickr.com/photos/deboraborialis/1809628289/ Thank you for attention. www.designresearch.ru Dr Ekaterina Khramkova, Lumiknows