How the innovation method has developed into a leadership strategy for change processes and how it can be implemented by Annie Kerguenne

Annie Kerguenne Programm-Managerin bei der HPI Academy

What is Design Thinking?

If you ask 100 people, you can expect to get just as many different answers.

A sampling of responses include:

"A structured creation process",

"A method for developing innovative products, services and processes in a team",

"A toolbox for more efficient work"

or even

"A human-centered solution for complex problems".

For some, it is an innovation method with defined phases and tools, for others a user-centered orientation or philosophy.

Recently, more and more executives have discovered Design Thinking as an effective aid in change processes. A brief look at the history of Design Thinking provides insight as to why leadership is looking to Design Thinking for solutions:

Originally, Design Thinking was based on the designer's process of developing new products: a structured approach to tasks that focuses on the value of the solution for people. Through precisely defined phases of exploration, analysis, creation and learning as a result of continuous feedback loops, the innovator gradually approaches the right solution. This is exactly the strategy that system researchers recommend for solving complex tasks. After products, Design Thinking was used as a way of developing new services, with the experience of the user at the center of the design. From services, it seemed natural for companies to extend user-centred approaches to improving customer and partner relations.

Checklists, fixed procedures, best cases and expert knowledge are perfect for solving familiar tasks, for example the promotion of an employee (simple) or the formal execution of a company merger (complicated). However, when it comes to transformation processes, company leaders are on unknown, complex terrain. What works for one organization is not a "recipe for success" for all others. Companies themselves and their specific situations are too complex, dynamic, volatile and unique for prefabricated grids that define the linear starting and ending points, as well as the corresponding milestones and the necessary budget. Currently, Design Thinking is being enlisted to help meaningfully and safely navigate this unknown terrain.

"For the first time in history, we are not only looking for competence and experience, but also for candidates with learning potential" 1). This is how Claudio Fernández-Aráoz, Advisor at Egon Zehnder, one of the leading companies in the field of executive search, describes this paradigm shift in leadership. Design Thinking has been shown to foster learning abilities for its practitioners.

What challenges does the era of digital transformation present for executives today and which Design Thinking principles can help them to move more safely in times of uncertainty?

1. Collaboration
The era of the "omniscient boss" is fading: markets, competitors, risks and technology change too quickly. "In the past, the head of a company was the driver behind innovation. He or she decided what needed to be re-established and this was what was done. Today, the world has become too complex. We need all the individuals throughout the company to be on board in order to be successful in the future. That's why we use Design Thinking to strengthen innovative, cooperative working in our company," says the co-director of a medium-sized company in the mechanical engineering sector.

2. Diversity
Design Thinking offers useful assistance for enabling change from a strongly inclined work-sharing organization to one that features collaborative work. Collaborative work requires the use of the entire innovation potential of "business intelligence".  With its principle of diversity, Design Thinking tools channel team dynamics and promote self-control. Through flexible interior design that activates creativity and interaction, Design Thinking spaces support the rules of interaction that maximize team performance.

3. Iteration
"The most difficult thing about my role as head of our current change process is that I don't know exactly where we will end up. My employees still expect me to provide them security. However, we simply have to try things out and learn what works for us and what doesn't along the way," explains the head of a global non-profit media organization. The Design Thinking principle of iteration - a learning forward movement - helps with this expedition.  
In small steps with close-meshed tests and feedback evaluations, the Design Thinking process offers orientation and certainty of action.

4. Prototyping
Even if the solution is open at the beginning, one thing is certain: there will be a tangible result that can be evaluated. The ideation and prototyping processes embedded in the iteration principle also make it easier for managers to resolve the traditional division of strategy and operationalization. This means not only talking about change, but setting a good - and reproducible - example. In so doing, the boss's multiplier effect can be used in the success of the change.

5. User-Centric
Design Thinking not only offers a well-assorted toolbox for the exploration and analysis of opportunities and problems of transformation, but also ensures positioning people's sensibilities at the center of the transformation before questions of economic efficiency and technical feasibility. Managers today see the strongest leverage point for starting and ensuring the sustainability of change processes in Design Thinking’s radical focus on users. This is due to the fact that without the people who make up an organization's complex ecosystem, no change will work.

The economic potential of digital technology can unfold freely if digital solutions create real benefits for employees, customers and partners of a company. Examples of this are schools that use games as a learning principle; or for cars that don't belong to anyone but can be driven by anyone; or city guides who transform their users from tourists into locals.

The adage that "the only constant is change" is already becoming part of everyday corporate life, and in the future digital technology will continually increase the pace of this change. In this transformation race, Design Thinking provides fixed coordinates for a roadmap that provides clear orientation but is flexible enough to adapt to the specific requirements of a culture and the respective economic ecosystem.

Taking the innovation model as a guide, the roadmap leads us to ask the following questions, which build upon each other and can be worked out step by step through Design Thinking sprints.

The Digital Transformation Leadership Cycle

The 7 steps in the creation of added value aid in providing orientation and focus in the change process

  1. What value does the corporate mission - the purpose - have for the people in the company in the context of digital transformation?
  2. What are the most leveraged needs in the various value creation areas (internal structures & processes, relationships with customers and partners, innovative products, services)?
  3. Which solutions offer pragmatic benefits in people's everyday lives?
  4. How can digital technology extend, amplify and multiply the effect of these solutions and turn them into engines of transformation?
  5. Which of these transformative solutions should be focused on the corporate culture to be promoted?
  6. Which solutions should be scaled and anchored in the business strategy?
  7. And finally: which leadership behavior will be the prototype, multiplier and meaningful symbol of the new culture?


Digital Transformation Leadership Cycle

Change can be challenging, but the use of Design Thinking as a leadership strategy helps things move along in a structured and secure manner within complexity. Design Thinking does so in a way that places people with their natural ability to learn back where it belongs: in the heart of the company. NEW LEADERSHIP can thus use "universal discipline" to promote and provide a secure foundation for creating a culture of innovation.

An exclusive executive education program by Stanford Center for Professional Development and HPI offers training using Design Thinking as a leadership strategy. 

More Information on the "Leading Digital Transformation and Innovation Program" you can find here.