Designed to Think Anew

It was Professor Roger Martin of the Rotman School of Management, writing in The Rotman, Best of Rotman, Winter 2005, who ushered in the phrase design thinking, when he called on managers to stop being managers and become designers. He observed that value creation in the 20th century was largely defined by the conversion of or transforming heuristics to algorithms. You took your fundamental understanding of ‘mystery’ a heuristic and drove it into a formula, an algorithm. You did so because it could be driven into a huge scale and scope. And change came about through fairly linear improvements such as reengineering. SCM, enhanced customer responsiveness, and cost control. This was fine for the 20th century. Today, the nature of competition has changed; it can arise from anywhere. As Professor Martin sees, competition is no longer in global scale-intensive industries, but in non-traditional, imagination-intensive industries. This has great significance, as value creation in the 21^st century will be driven by the conversion of mysteries to heuristics, and that as a result, we are on the cusp of a design revolution in business.

But our mastery is not complete unless we can capture the heuristic. In due course, therefore, heuristics may produce an algorithm, a logical, arithmetic or computational procedure. In the modern era, eventually some algorithm will get coded into software. Professor Martin emphasizes how this move has repeated itself over and over again throughout the 20th century. In a sense, from the middle and especially since the last quarter of 20th century, there has been a relentless march of this move.

Now there is a deep difference. This is the 21st century in which value creation is moving back to the world of taking mysteries and turning them into heuristics. It is the century where we need to find solutions to problems whose boundaries are changing. Professor Martin puts it arrestingly: ‘The 21st century presents us with an opportunity to delve into mysteries and come up with new heuristics. There is no algorithm for them, no coding to magically solve the problems they engender. There are mysteries galore: how can big cities actually work? Or how to make health care work? and so on.’

But we have to think in sync with the business we are in and understand its unique dimensions. Writing of the uniqueness of the software business, in his book “The Business of Software”, Michael A Cusumano, Sloan Management Review Distinguished Professor at the MIT Sloan School of Management, asks, “In how many businesses do many products companies eventually become services or hybrid companies (that is, providing some customization of product features and technical services such as system integration and maintenance), whether they like it or not”? Thus pricing, for example, is not just a technical issue.

So, what is the managerial skill we are looking at? To Professor Martin, it’s design skills, which is the ability to reach into the mystery of any seemingly intractable problem. In the software and services business, we might want to understand in very concrete terms how the varied growth of technology is influencing users’ estimate of future requirements. In this, we may want to emulate what some companies are doing in understanding customers. Professor Martin draws our attention to the practice that some companies follow. Kellog’s cereal and Hershey’s chocolate bars have 1-800 phone numbers printed on them, encouraging consumers to call them with feedback. Dell Computers collects a lot of information from customers in an attempt to understand what customers want.

Professor Martin is convinced that design skill and business skills are converging. The importance of design (in the 21st century) is the kind of thinking it ushers in. He calls it abductive reasoning. You add this to a proactive design approach of “Let’s try it, prototype it and improve it”, and work towards better and better solutions. You don’t wait endlessly for that perfect solution before you start.

Takeaways

Difference between 20^th and 21^st century

No guarantee of success by repeating hitherto successful solutions

Nature of problems has fundamentally changed

Design thinking the way to go ahead