2.4 Developing design thinking further (Impact & Measurement) |

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2.4 Developing design thinking further (Impact & Measurement)

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00:13Welcome to our openHPI course on Mastering Design Thinking in Organizations
00:19I'm Danielly and the topic of today is developing design thinking further
00:25By specifically, we will be looking into a research perspective
00:30on implementation and measurement
00:33The learning objectives of today's model are
00:37ONE - To learn about the different views on the topic of measuring design thinking
00:44TWO - To understand what you need to do before you start thinking about metrics
00:50And THREE - To understand what should be measured and how
00:56If we take a look at our Design Thinking Implementation Wheel
01:00we are on the topic of Impact and Measurement
01:04As part of this module, we have already talked with Prof. Jeanne Liedtka
01:09from the Darden University (Darden Business School) and also Prof. Pietro Micheli
01:13from the University of Warwick (Warwick Business School) who provided us with different
01:18perspectives on the topic. Considering that Prof. Pietro and Prof. Jeanne have
01:24already covered many relevant research aspects about the topic
01:28The goal of today's module is to share with you only the recent
01:33insights of our research team which are of course based on extensive literature review
01:41First of all, should we measure our innovation activities?
01:46What do you think?
01:49How do you do at your company?
01:53Do you have a clear set of key performance indicators?
01:59If you don't have a clear set of key performance indicators,
02:04why is that? There is a reason I'm asking you these questions, it's because
02:11there is some debate around whether we should measure our innovation activities or not
02:17Why are some petitioners looking for proof that shows the
02:22value of the investment for the innovation efforts? And also
02:27to provide guidance and alignment others are concerned that
02:32having metrics can diminish the flexibility of the innovation endeavor
02:37While attempts to quantify the impact of design thinking are
02:42seen to aid in building up the recognition of design as a driver for business
02:49Many academics and practitioners feel reluctant to focus on quantitative measures only
02:58they argued that there is a lot of value in design that cannot
03:03be grasped by quantitative metrics
03:07You can try to measure innovation efforts but the recognition of the impact
03:13has to come from individuals experiencing the concept
03:18Why are reports about the value of design can help?
03:22It's important to understand what context innovation teams are
03:28and what would be relevant to measure?
03:31For example, many experts argued that it should be more about whether teams
03:39have a serious interest in reflecting on the way they work
03:45and how this innovation efforts are changing the organizational culture
03:50and the mindset of the involved team, for example,
03:56designing things focused on empathy is perceived to be valuable
04:01in projects involving multiple stakeholders
04:05Here, design thinking is found to create a more participative way of working
04:12to foster alignment and also to notice a sense of ownership among the workforce
04:19In a recent study conducted by our research team this year
04:23in 2020, we identified a more specific challenge
04:28when measuring innovation activities that can lead to some
04:32directions that can be further explored
04:36Considering that design thinking is normally used for exploratory projects,
04:42these projects normally aim to identify new opportunities for the organization
04:48Since these activities are exploratory in nature they can lead to different outcomes
04:55then what was planned in the beginning. Even though these are exploratory projects,
05:02companies try to measure the progress of the project based
05:06on metrics used to compare and evaluate exploitative activities
05:12Based on these metrics, early innovation projects cannot provide evidence of progress
05:19and under-perform which creates disappointment on both sides
05:25This situation indicates that the team lacks the right metrics
05:30to prove and monitor their activities while management applies metrics
05:37that do not fit the project's intent
05:40Based on that the first challenge is although design thinking is normally used
05:47for exploratory activities,
05:50metrics used commonly for exploitative activities are applied
05:57Another challenge would be that even though design thinking contributes
06:02to the aim of internal transformation, metrics of the overall
06:07revenue or specific innovation products are used
06:12For example, innovation activities especially in the development
06:17of human centred products and services contribute to transforming
06:23the mindset of the team
06:26For example, design thinking is well known for promoting mindset change
06:32in terms of creativity, collaboration, and user-centredness
06:37Even though design thinking has demonstrated to have a clear impact
06:42on changing the mindset and respectably working modes of teams
06:48Management would still use revenue-related metrics
06:53on a larger scale, this can mean that long term transformation endeavors
06:59normally gets stopped
07:01due to a decrease in revenue
07:04In this way activities related to promoting internal transformation and cultural change
07:11are normally not assessed as a success metric
07:16Finally, a third challenge would be concerning the company's objectives and scope
07:23when there is no or unclear intent of what innovation teams
07:29are supposed to achieve for the organization
07:34In large organizations, there are multiple priorities and even
07:38political opinions at play
07:41making it hard for the innovation teams to identify their supposed goals
07:48because many organizations that implement design thinking remained far
07:53from their intended impact
07:56They often generate a lot of ideas and employee engagement however
08:01workshops tended to remain colorful posted parties
08:07In many cases, design and implementation lacks an established connection
08:13between design thinking and the business strategic intent
08:17As a consequence, many companies do not manage to achieve implementable solutions
08:24that have an impact for the organization
08:27We define a strategic intent as the rationale that guides the
08:32implementation of design thinking within an organization. To
08:37leverage its full potential, we believe that every organization
08:41needs to define its strategic intent before starting to implement and later on
08:49to measure design thinking
08:51The two dimensional matrix that you see defines the space for the strategic intent
08:58underlying the implementation of design thinking
09:02This matrix reflects the strategic intents of organizations
09:07that implement design thinking
09:10Those with no intention of implementing design thinking are not included in the matrix
09:16The horizontal access aims to capture organizations that are
09:21looking for using design thinking to focus on internal transformation
09:26in a sense of changing the organizational culture
09:30The vertical access reflect companies that implement design thinking
09:35with the goal of having an external orientation focused on the customer
09:41Considering the axis of the matrix as continuous
09:46organizations or their entities can position themselves on them freely
09:51Based on that we define and introduce 4 archetypes of strategic intent
09:58that cover the extremes of the matrix - Creative Co-operation, Collaborative Co-creation,
10:05Creative problem setting and solving, and Innovation with meaning
10:09Organizations with low internal and low external focus
10:15aim at a strategic intent of creative cooperation
10:19They want to mainly use methods of design thinking to bring employees
10:25and or customers together and let them work with creative methods, for instance,
10:33to express themselves through sketches and prototypes. Building on creative confidence
10:39they can move the strategic intent from a low to high internal focus
10:45leading to the strategic intent of collaborative co-creation
10:51Now, teams process both the work task skills and their digital collaboration skills
10:59necessary to making knowledge of their domain available to others
11:04In contrast, a very high external focus and a lower internal focus
11:11leads to a strategic intent of creative problem setting and solving
11:17This is reflected in a high customer orientation to fully understand the customers' problems
11:25eliciting latent needs and then creating superior, sometimes surprising solutions
11:31Lastly, companies with a high external and high internal focus have realized
11:38that they need to both build the internal mindset cultures and skills
11:44and have to be open to their external and first identify and
11:49then solve a customer's problem
11:52Also in seeking to balance these two types of companies mostly follow
11:59a deeper purpose and achieve radical innovations with meaning
12:04The theoretically derived matrix helps us to categorize the
12:09strategic intents of companies that want to implement design thinking
12:14The first step when measuring innovation effort is to understand
12:19the strategy underlying the activities
12:23With that in mind, we can then start thinking about what
12:28exactly should be measured?
12:32Why are many companies proposing to measure the process of design thinking?
12:37The practices that are part of the process, the inputs that
12:42go into the process and the outputs derived from the process, we propose that
12:48since design thinking is exploratory in nature, companies should first look
12:54into the strategy and then what are the principles of design thinking
12:59that can support them to achieve that
13:03In this way instead of focusing on traditional management metrics,
13:08companies should look at what is the impact of design thinking
13:12from a culture and mindset change perspective. If you want to
13:16know more about design thinking principles, you can watch our module
13:21on processes and practices. One example of a principle is user-centered
13:28We will now look into an example of how exactly companies could measure
13:34the design thinking principle of user-centricity
13:38For example, in this figure, we show an illustrative example
13:44of a fictional company that has a focus on external transformation
13:49with a strategic intent of creative problem setting and solving
13:55Since this fictional company has an external orientation, they
13:59want to become more customer centered
14:03The principle of user-centered can be operationalized by the
14:08practice of running user research
14:12One possible way to measure the progress of the team could be
14:17to measure the number of hypotheses that were derived from
14:22the need-finding and later on positively tested as part of the user research
14:29This particular metric is an example of how companies could measure
14:34the principle of becoming more user-centered
14:38It's important to say that further investigations should be conducted to understand
14:44in what context this metric would make sense
14:48To sum up, existing metrics are often found to be inadequate
14:54in light of the exploratory nature of design thinking
14:58When analysing the challenges that we found together with the
15:02possibilities of the company's strategic intent,
15:06we identified some guidance on different approaches towards
15:11measurement that academics and practitioners can explore
15:15If you want to measure your innovation efforts it's recommended to first
15:22look into what is the strategy,
15:25then you should position yourself on the matrix that I showed
15:30here to you today. Based on that you will be able to identify
15:35what are the design thinking principles that can support you
15:40to achieve your goals
15:43Finally, you should initiate the discussion around creating
15:47a performance measurement system that can capture the operationalization of the principle
15:54I hope today's module opened up new possibilities for you on
15:59how you can measure your innovation efforts
16:02It's important to say that we are further developing the results
16:07that are shown to you, new findings will be released in a timely manner
16:13If you want to learn more about design thinking principles, I
16:17recommend towards our module processes and practices from
16:21where you can derive what are the practices and capabilities
16:26that you could use to measure whether these principles are
16:29becoming more embedded in your company
16:34Thank you for your attention
16:36and see you again as part of our next module. Ciao!