Home Uncategorized Wk 3 - Aspects of Design Thinking Presentation

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Wk 3 – Aspects of Design Thinking Presentation

Company Name is Apple Inc. Due in 36 hours. 10 Slides with speaker notes.

Resources: Page 109 of Managing Innovation and Entrepreneurship, Ch. 6

Prepare a 10- to 12-slide Microsoft® PowerPoint® presentation with speaker’s notes using a Fortune 500 organization. You must gain instructor approval for your choice, no duplicates across the class so first come, first serve.

Apply the five key elements of design thinking to analyze the organization’s effectiveness in design thinking and innovation.
Evaluate where the organization excels in design thinking.
Detail where the organization needs improvement.
Make specific recommendations that the organization can undertake to improve design thinking and innovation.

Format your presentation consistent with APA guidelines.

Submit your assignment.

Deliver Presentation – during class Blackboard Collaborate session.

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Chapter 6 Design Thinking and Innovation

What is design thinking? How can it be used to create significant innovation? Are there
steps that can be followed to implement design thinking on an individual or company
basis? Are there good examples of the successful use of design thinking in an
organization?

Scenario:

IKEA

Ingvar Kamprad was born in southern Sweden on March 30, 1926, and was raised on a
farm called Elmtaryd near the small village of Agunnaryd. Even as a young boy, Kamprad
had an entrepreneurial spirit. At the age of 5, he discovered a good profit could be made by
buying matches cheaply in bulk in Stockholm and then individually reselling the matches
to his neighbors in the country. He started by selling matches to his closest neighbors, but
by the time he was 7, Kamprad put his growing match business on wheels, using his
bicycle to sell matches to customers farther and farther from Elmtaryd. Gradually,
Kamprad expanded his business offerings from selling only matches to also selling flower
seeds, greeting cards, holiday decorations, pencils, and ballpoint pens.

In 1943, when Ingvar Kamprad completed school at the age of 17, his father gave him
some money as a reward for doing well. Kamprad, the eternal entrepreneur, used this
money to establish IKEA. The name IKEA was formed from his initials (I and K) and the
first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up. Initially,
IKEA focused on the products Kamprad was already selling, but gradually the company
expanded the product offerings to include wallets, watches, and jewelry. Within 2 short
years, IKEA grew to such an extent that Kamprad could no longer make individual sales
calls, and he launched a mail order service to continue meeting the growing customer
demands for his products.

In 1948—just 5 years after starting IKEA—Kamprad introduced his first line of furniture
using local manufacturers in the forests close to his home to supply the finished goods.
The furniture line was a huge success, and Kamprad believed IKEA could become a large-
scale furniture provider. In 1951, Kamprad decided to discontinue all other product lines in
order to focus the company’s attention solely on producing furniture. He launched the IKEA
catalog strategy, which today remains one of IKEA’s major advertising strategies. However,
around this same time, IKEA became embroiled in a pricing war with its main competitor.
As the two companies continued lowering prices, Kamprad became concerned about the
quality of the furniture and the image customers would have of their quality. To address
these concerns, in 1953 IKEA opened its initial furniture showroom to demonstrate the

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function and quality of IKEA’s low-priced products. Located in Älmhult, Sweden, this first
showroom was well received by customers because, for the first time, they could see the
products in real life before purchasing them. The showroom concept worked, and it
became a competitive differentiator with customers choosing IKEA over its competitors,
leading to greater sales volumes.

In 1956, IKEA embarked on another mission that would change the company forever. In
response to a supplier boycott organized by their competitors, IKEA began the process of
vertically integrating their company by designing their own furniture. Coincidentally,
around this same time, a local draughtsman realized that if he took the legs off an IKEA
table, he could fit the table into the trunk of his car. Kamprad recognized the advantages
of shipping furniture in such a way, and almost overnight, IKEA launched the flat pack
model and revolutionized the company and the furniture industry. Going forward, IKEA
designed furniture that could be shipped in flat packaging and assembled by customers
after purchase, leading to easier transportation of furniture to customer homes as well as
lower prices.

Throughout the next decade, IKEA expanded its stores from Sweden to neighboring
countries including Denmark, Germany, and Switzerland. As increasing numbers of people
showed up at IKEA showrooms, Kamprad decided to change the layout of the stores from
that of a showroom to a self-service warehouse model that allowed customers to select
and load their own furniture. This helped IKEA to further improve the customer experience
and drive costs down even further. Wherever IKEA expanded to, it was successful in
creating a cult-like following from its customers. IKEA opened its first store in the United
States in 1985 and has grown today to be a global retail brand with over 131,000
employees. As of August 2011, the IKEA group operated 287 stores in 26 countries.

Kamprad’s vision has been the driving force behind IKEA’s continued success. In 1976,
Kamprad wrote and published The Testament of a Furniture Dealer, documenting IKEA’s
vision and business idea, which had a strong influence on the development and vitality of
IKEA’s corporate culture. From inception, IKEA has been dedicated to meeting customer
demands and providing them with high quality, well-functioning products at low prices.
IKEA in its design thinking has intentionally kept product lines simple to minimize the
potential for damage during transport and make it easier for customers to take their
furniture home themselves. Kamprad believes his company exists not just to improve
people’s lives but to improve the people themselves (“Famous Entrepreneur Advice,” n.d.).
By allowing customers to select their furniture from the self-service warehouse store and
to easily assemble their furniture at home, Kamprad believes he is improving customers’
self-sufficiency and self-confidence. The vision of IKEA helping people to improve
themselves is reinforced in IKEA’s advertising and catalog.

Despite being one of the richest people in the world, Ingvar Kamprad also has a legendary
reputation for thriftiness. He has always tried to set a good example for his employees by
working hard and cutting costs wherever he can. He is the personification of the company

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he created and inherently understands that his workers look to him for direction.
Kamprad’s level of frugality is matched only by his desire to make the most of his time.
One of his most important maxims that he outlines in his The Testament of a Furniture
Dealer is that “most things still remain to be done.” It is with the goals of efficiency and
persistent work that the corporate philosophy of IKEA is built upon. An example of this is
IKEA’s focus on strictly maintaining a flat management structure within the organization.

Kamprad has repeatedly refused to take IKEA public, stating that it would slow the quick
decision-making processes that allowed for IKEA’s phenomenal growth. In 1982, Kamprad
established IKEA Group and gave his shares to Stitching INGKA Foundation, a charity
supporting “innovation in the field of architecture and interior” (“IKEA: Flat-Pack
Accounting,” 2006). Kamprad made this move for the express objective of avoiding high
taxes in Sweden and to ensure the company he worked so hard to build could not be
ruined or sold by future members of the Kamprad family. In 1986, Kamprad retired from
the CEO position and has since taken up an advisory role to the holding company.

Through working hard, having a keen ability to turn obstacles into competitive
advantages, and encouraging what is now labeled as Design Thinking, Kamprad
successfully built one of the largest and most profitable companies in history and
distinguished himself as one of the most savvy and successful entrepreneurs of our time.
Although his career has not been without its share of controversy, Kamprad has always
owned up to his mistakes and is famous for saying, “Only those who are asleep make no
mistakes” (“SUCCESS Quotes by Legendary Billionaires,” n.d.).

Definition of Design Thinking

Design thinking is a new approach to create breakthrough innovation and promote high-
performance collaboration. It is quite different from analytical thinking and is a process
for action. It is a method for discovering new opportunities and solving problems. While
there are a variety of techniques and tools that can be used, the core process is somewhat
universal.

Aspects of Design Thinking

It is generally understood that there are five key elements in design thinking: (1) defining
the problem, (2) developing the options, (3) determining the direction, (4) selecting the best
solution, and (5) executing. The steps have some degree of similarity to those in the
scientific process. Each of these will be discussed in turn.

Defining the Problem

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This first step, correctly defining the problem, while sounding simple is often the most
difficult of design thinking. If the right problem is not defined, then of course the solution,
if obtained, is for something else. Defining the problem is usually a team effort with a
significant amount of participation by each team member.

Defining the problem usually involves observation—discerning what individuals actually
do versus what they may say they do. It also involves cross-functional thinking trying to
find the real issues involved. Any preconceived notions or judgments need to be
abandoned so that the right problem can be defined in such a way that creative solutions
can occur. If the problem is a sitting apparatus, the problem is not to design a chair but to
design something to suspend a person from the floor.

Developing the Options

Once the problem is defined, the second element—developing the options—takes place.
Care should be taken not to take the same approach as has been used in the past. Design
thinking requires the creation of several solutions to the problem for consideration even
when one solution seems obvious. For this to occur, multiple perspectives and team
involvement are important. Multiple people involved develop a far richer range of
solutions.

Determining the Direction

This third stage—determining the direction—requires that the most promising solutions are
carefully nurtured. An environment in the organization needs to be created so that each
solution can be allowed to develop and grow. This environment of experimentation and
testing allows the best solution to emerge. Often during this stage, ideas are combined to
form an even better solution.

Selecting the Best Solution

From the many solutions maturing from the previous stage, the best solution can be
selected. Prototypes of this solution are created and tested. This vigorous testing helps to
ensure that the final solution is the best possible one.

Executing

Once the optimal form of the solution to the problem is found, the solution needs to be
implemented. This execution element may prove difficult particularly when significant
change is involved. Design thinking involves the acceptance of change and risk, which is
often not easily embraced both by individuals and organizations. Execution also involves

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implementing design thinking on a continual basis as it is a repeatable process that will
result in creative solutions to problems defined.

Organizational Barriers

Even when the best methodology and techniques are employed, for design thinking to
succeed, there is a need for organizational commitment. When first understanding design
thinking, an organization should be prepared to fail at the beginning. Most people find it
difficult to use their imaginations and react to distractions. In design thinking, failure is not
necessarily bad as it can often lead to success. Design thinking focuses on and nurtures a
number of alternatives until the best solution emerges. Some common organization
issues develop the following barriers to the successful implementation of design thinking.

Lack of Management Commitment

This barrier is a significant one that occurs in organizations. Top-level management must
openly endorse and practice design thinking. Without this, employees at lower levels of the
organization will not embrace and practice it themselves. In many cases, there is
resistance at some level in the organization. This permafrost or resistance to using design
thinking needs to be unfrozen through training and education. In some cases, the only
method of removal is eliminating or reassigning the source of the permafrost.

Lack of Performance Indicators

Another barrier to the successful use of design thinking is due to the lack of measureable
indicators of success. The lack of a quantifiable framework to measure the output of
design thinking makes it difficult for some organizations to accept and implement it as a
problem solving methodology. In some organizations, it is important to begin design
thinking by focusing on a small problem with a significant upside potential.

Resistance to Change

As with anything new, people and organizations are resistant to change even when they
think it is a good thing. This is particularly the case when it causes discomfort and a
change in behavior. The more radical the change in behavior that is required in an
organization to adopt design thinking, the more the resistance to this change will occur.
When this is the case, it is often easier to start the first design thinking process on a
problem that is totally outside the usual domain. Once individuals become familiar with
the technique, it can then be used to focus on solutions to problems in their usual domain.
Three companies will be discussed that have overcome these and other organizational
barriers and successfully implemented design thinking: (1) IDEO, (2) Redbox Automated
Retail LLC, and (3) IKEA.

1123696 – SAGE Publications, Inc. (US) ©

Table 6.1 Characteristics of a Design-Thinking
Organization

Supports people
Protects people
Tolerates mistakes
Advises people
Takes risks
Shares a vision
Delegates to those closest to the problem
Tolerates internal competition
Stimulates creativity
Actively searches for ideas
Tolerates disorder
Encourages experimentation and tests
Trusts people
Tolerates ambiguity
Does not interfere

Overall Culture

The overall culture of the organization can either support or inhibit design thinking. An
organizational culture that is guided by a vision, encourages freedom, and has such
characteristics as trust, belief in people, expandability, people growth, and job ownership
allows more creativity to occur and increases the quality and output of design thinking
versus a more traditional organizational culture. This type of organization provides an
environment for employees to want to own their jobs and do everything possible to make
the organization and the results of their position world class. A list of the characteristics of
this type of organization is found in Table 6.1. The overall cultural climate is one of
sharing, trying something new, suggesting and experimenting, and feeling responsible.

IDEO

The company that is probably most well known for successfully implementing design
thinking to solve problems in a variety of company situations is IDEO. These applications
include designing the Pilates Allegro 2 Reformer, building the ultimate utility bicycle,
designing Walgreens’ community pharmacy, designing the Steelcase node chair,
developing Gannett Company’s bold italic, designing Changi General Hospital’s orthopedic
clinic patient experience, and designing the ideal home for the Wounded Warriors.

In one project for Bank of America, IDEO worked with a team from the bank focused on the
consumer behavior of putting their change received in a jar at home. Once the jar is full, it
is either spent on something special or else deposited in a bank account. To mirror this
behavior, in 2005, Bank of America launched a new savings account service called “Keep

1123696 – SAGE Publications, Inc. (US) ©

the Change.” Customers who apply for and use their new debit card to make purchases
can round up the purchase to the nearest dollar and have the difference deposited directly
in their savings account. While this design thinking output encourages people to save,
appealing to each individual’s instinctive desire to put money aside in a painless way, the
real payoff is an emotional one—seeing an increase in the monthly savings account
statement without much effort.

IDEO also used design thinking with a team from Kaiser Permanente, a large health care
provider. Kaiser wanted all of its administrators, doctors, and nurses to use design thinking
in providing solutions to problems encountered and inspire new ideas. One project was to
reengineer nursing shift changes at several Kaiser hospitals. The team from IDEO and the
hospital working with frontline practitioners from each hospital first identified the
problems occurring during shift changes. Potential solutions were explored through
brainstorming and service prototyping. The options were evaluated to determine the best
solution to shift changing, which was then implemented.

Besides services, IDEO has worked on a variety of products in the health care area. When a
group of surgeons were describing the ideal product for sinus surgery and all its
characteristics and features, the team from IDEO created some initial designs and
prototypes. These were then tested and evaluated and a final prototype was developed,
which was followed by the final product for sinus surgery. These examples of IDEO using
design thinking show the one basic rule for success: Keep as many options in play as long
as possible so that the best possible solution can emerge.

Redbox Automated Retail, LLC

Redbox Automated Retail, LLC, a wholly owned subsidiary of Coinstar, Inc., provides Blu-
ray discs, newly released DVDs, and/or video games for rent through conveniently located
kiosks. The over 35,400 kiosks, designed with the assistance of IDEO, are located in places
where individuals shop, making renting and returning a convenient, simple, timely process.
The new self-service kiosk, developed through the design thinking process, enhances the
consumer experience in making an average $2 rental by moving them through stages in
the decision process: attract, educate, and engage. The layered signage attracts the
consumers to the red box where they can browse (educate) through the changing titles
and easily make the purchase decision (engage).

The new kiosks are in locations throughout the United States inside and outside of leading
grocery, drug, and convenience stores such as Walgreens and Walmart as well as fast-
food franchises such as McDonald’s. Redbox contributed to the increased market share in
this rental market from kiosks and achieved its 2 billionth rental at a McDonald’s
restaurant in Philomath, Oregon. The company feels the new kiosk created through the
design thinking process contributed significantly to its success and growth.

The company appropriately featured as the scenario to this chapter, IKEA, is a great
example of the design thinking process. As stated earlier, IKEA was founded in 1943 in a
small village (Agunnaryd) in Sweden; their vision is to create a better everyday life through
modern yet not trendy home furnishings. The vision transferred into a wide range of
uniquely designed home furnishing products that are very functional in nature. Each
product reflects the Swedish approach to design thinking. Each is attractive yet functional,
human-oriented, and environmentally friendly. The unique design thinking apparent in
each home furnishing product represents the healthy, fresh Swedish lifestyle. The carefully
chosen colors and materials are part of this design thinking allowing IKEA to be a major
retail player in over 45 countries. By maximizing the functionality, use of raw materials,
and efficient production, IKEA can meet the needs and desires of the market at a low cost.
This low cost and resulting lower retail price allows the home furnishings to appeal to a
broad market.

IKEA’s vision is evident in its outreach and promotional efforts. In 2011, the company
launched Share Space—a community photo-sharing website where individuals can share
photos using IKEA products in their own living spaces. Customers are encouraged to share
their own design thinking by sharing their personal solutions to design challenges in their
living rooms, kitchens, or other areas in the home. One room will be selected by IKEA
design experts as the “Pick of the Week” and is then featured on the Share Space
homepage and in the company’s blog.

Another unique project is the Life Improvement Project (LIP) to inspire consumers to create
a better life for themselves. This program communicates the brand and the vision of the
company. One feature of the LIP is the Life Improvement Sabbatical contest. The winner
receives one year off from work and $100,000 to advance any project that improves the
lives of others.

Future

As is evident in each of these examples as well as in many organizations around the
world, design thinking has provided many benefits and interesting results. Through this
new process format, design thinking allowed organizations to expand their ideas and
offerings resulting in many successes but also many failures. Some organizations turned
the process into a linear step-by-step methodology that often delivered nothing creative
and at best incremental change and innovation. While design thinking will of course
continue to be used with mixed results in the future, two other approaches also offer a
way to switch between multiple perspectives and institute creativity—(1) futures thinking
and creative intelligence (CQ).

Futures Thinking

Futures thinking combines data, trend analysis, intuition, and imagination to develop
sustainable paths of action. It is a set of practices and principles for solving problems
regardless of their degree of complexity. It consists basically of four aspects: (1) asking
the question, (2) scanning the world, (3) mapping the possibilities, and (4) asking the next
question. Like design thinking, futures thinking is an iterative process to consider a range
of possibilities and outcomes. This new way of thinking is based on practical research
and analysis in challenging assumptions about the problem and its most favorable
solution.

Creative Intelligence

Since one of the major objectives of design thinking was to stimulate creativity, this is the
prime focus of CQ, framing problems in new ways in order to develop original solutions. It
is more of a sociological approach with creativity emerging from group activity. CQ is a
hybrid of design thinking, scenario planning, systems thinking, and gaming.

References
Famous entrepreneur advice. (n.d.). Retrieved March 17, 2013, from

www.evancarmichael.com/Famous-Entrepreneurs/825/summary.php

IKEA: Flat-pack accounting. (2006, May 11). The Economist, 379(8477), 76.

Kamprad, I. (1976). The testament of a furniture dealer: A little IKEA dictionary.
Netherlands: Inter IKEA Systems B.V.

SUCCESS quotes by legendary billionaires. (n.d.). Retrieved March 17, 2013, from
www.mycomeup.com/Success-Quotes/SUCCESS-Quotes-By-Legendary-Billionaires-
Updated-Version.html

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