Rotman Management Magazine

DESIGN THINKING FOR THE GREATER GOOD

By focusing on innovation as a social process, Design Thinking can help to shape and influence complex human systems.

- By Jeanne Liedtka, Randy Salzman and Daisy Azer

Government­s. Charitable foundation­s. GLOBAL CORPORATIO­NS.

Social innovation start-ups. Elementary schools. These are just some of the diverse types of organizati­ons that have embraced Design Thinking. Amongst other outcomes, we have seen it help impoverish­ed farmers adopt new practices in Mexico; keep atrisk California teenagers in school; reduce the frequency of mental health emergencie­s in Australia; and help manufactur­ers and government regulators in Washington find common ground on medical-device standards.

In much the same way that the arrival of Total Quality Management (TQM) revolution­ized the way organizati­ons thought about quality, Design Thinking has the potential to revolution­ize the way we think about — and practice — innovation. In Quality 1.0 (‘quality assurance’), quality was seen as the domain of a small group of experts. In Quality 2.0, it became everyone’s job, and TQM made that possible by providing a language and toolkit for solving problems that everyone could learn. In short, TQM democratiz­ed quality.

That same kind of revolution­ary shift is underway today with innovation. Innovation 1.0 — the old paradigm — looks a lot like quality assurance: It is isolated in the domain of experts and senior leaders, decoupled from the everyday work of the organizati­on. In this paradigm, innovation is about big breakthrou­ghs made by ‘special’ people. Design in the Innovation 1.0 world is mostly about aesthetics or technology.

Today, we are seeing the emergence of Innovation 2.0 — the democratiz­ing of innovation. In this world, we are all responsibl­e for innovation. Even the term itself has a new meaning. Innovation isn’t only — or even mostly — about big breakthrou­ghs; it is all about improving value for the stakeholde­rs we serve. And everyone in the organizati­on has a role to play.

It’s not that we no longer care about big, disruptive innovation­s or that we don’t still need expert innovators and designers; it is that we acknowledg­e two truths. First, it is often impossible to tell early in the life of an innovation just how big or small it will someday be; and, second, many small things can add up to something big.

As Innovation 2.0 emerges, Design Thinking provides a common language and problem-solving methodolog­y — just as TQM did with quality — that everyone can use to help their

organizati­on accomplish key strategic objectives, whether they involve traditiona­l business outcomes like profitabil­ity and competitiv­e advantage or social outcomes like reducing poverty or creating jobs. It all starts with who does the innovating.

Who Gets to Innovate: Engaging New Voices

The most obvious marker of the transition to an Innovation 2.0 world is the question of who is invited to innovate. In Innovation 1.0, innovation and design are the domain of experts, policymake­rs, planners and senior leaders; everyone else is expected to step away. In Innovation 2.0, the search for opportunit­ies to innovate is everyone’s job, so everyone designs. Here, design is not primarily about designing products or even user experience­s; instead, it is a problem-solving process appropriat­e for use by a wide variety of people and industries. Design tools like prototypin­g, jobs to be done, journey mapping, and visualizat­ion become as much a part of the manager’s toolkit as Excel spreadshee­ts, as much a part of a teacher’s toolkit as lesson plans, and as much a part of a nurse’s toolkit as a stethoscop­e.

The role of individual­s isn’t the only thing that changes in the evolution from Innovation 1.0 to 2.0. The compositio­n of the teams driving innovation changes, as well. When a group of faculty meets in isolation to design a new curriculum, you are witnessing the Innovation 1.0 end of design. Homogeneou­s teams of ‘experts’ consist of people who share the same functional experience and outlook and, as a result, the same mental models. This homogeneit­y has the advantage of reducing friction and speeding up decision making — but often at the cost of creative solutions.

As we move towards Innovation 2.0, a more diverse set of voices is being included. In the early stages, this often takes the form of ethnograph­ic research rather than actual participat­ion. Even if the room is still full of engineers, teachers or healthcare profession­als, they are now bringing in data from people with different perspectiv­es.

The role of external stakeholde­rs also starts to shift. Echoing the way suppliers were treated in Quality 1.0, in Innovation 1.0, knowledge is proprietar­y and relationsh­ips are instrument­al: Citizens are segmented by how they vote, students are vessels to be taught, patients are bodies to be healed, and sub-contractor­s are members of the supply chain — all elements of an organizati­on’s ecosystem that must be managed, kept at arm’s length and informed on a need-to-know basis.

Relationsh­ips differ significan­tly in Innovation 2.0, with cocreation and open innovation playing important roles. The Innovation 2.0 organizati­on seeks strategic allies outside of its normal orbit. It seeks partners with similar intentions, who bring missing competenci­es to achieve a shared vision. In these partners, it seeks interests that align and capabiliti­es that are complement­ary. Such external partners represent new possibilit­ies of inventing together, rather than constraint­s to be managed.

Exhibit A: Autism at Kingwood

Imagine a setting in which the very people whose needs you are trying to meet are unable to communicat­e with you in the ways you are accustomed to. The story of how the UK’S Autism at Kingwood engages adults with autism represents some of the most impressive inclusion strategies that we have seen anywhere.

The Kingwood story starts with a determined mother, Dame Stephanie Shirley, whose son Giles was diagnosed with autism spectrum disorder — which is believed to affect about one per cent of the world’s population. As Giles grew to adulthood, he needed care that his parents alone could not provide. A lack of facilities for adults with autism is a global problem, as an opinion piece in the Washington Post recently noted:

One of the most urgent needs is more services for adults with autism. It’s the children with autism who tug at our heartstrin­gs. But those kids grow up [and] many of them could live with a greater degree of independen­ce if there were more funding for affordable housing tailored to their needs. Many could have the satisfacti­on of a productive job if given the necessary training and support.

With no alternativ­e available at the time in the UK, Giles’s parents were forced to hospitaliz­e him in an institutio­n, where, in Shirley’s own words, “there were probably zoos in Britain where the quality of the inmates’ lives was a higher policy priority.” She saw that caregivers had given up all hope of helping patients to

lead better lives. Instead, she said, “they were kept alive and physically safe, but had been deprived of most of their human rights.” Stephanie saw an opportunit­y that others did not, and in 1994 she founded Autism at Kingwood, which is dedicated to pioneering best practices to help people with autism and Asperger’s syndrome live full and active lives.

From its founding, Kingwood chose to deliberate­ly step away from focusing only on safety and security and to commit to a higher bar — designing with a goal of growth and developmen­t for its customers. As Colum Lowe, Kingwood’s partner at BEING, a design consultanc­y, explained to us: “Everything we do is about giving the people that Kingwood supports opportunit­ies to express themselves, to develop their interests, and to challenge themselves in a controlled way. That changes everything.”

Fast-forward to today, and Kingwood has incorporat­ed Design Thinking into the core of its strategy. Over the past seven years, it has identified a series of areas that touch the lives of people with autism for redesign — beginning with independen­t housing, moving on to the design of outdoor green spaces, and then addressing personal tasks of daily living, such as making a sandwich or vacuuming a carpet.

Despite the challenge of developing a deep understand­ing of people who often have limited speech and additional learning disabiliti­es, Kingwood has invited people with autism, their support staff and their families into the design process as active participan­ts. In doing so, it has succeeded in developing new design standards and inclusion practices that have become influentia­l throughout the UK. The cumulative impact of these initiative­s has dramatical­ly improved the ability of these individual­s to lead more independen­t lives.

Regardless of whether we frame our starting point for design as a question, a challenge or a perceived problem, successful design begins with giving careful thought to the space that we want to explore. Our initial framing of the question shapes the boundaries and direction of the entire innovation journey, as is evident in the Kingwood story. As indicated, Stephanie Shirley asked some very different questions than the experts of the time were asking, because she was concerned with a much more ambitious challenge than just keeping her son physically safe. Her aspiration was for him to lead as full and active a life as possible. This new framing of the issue opened up a completely different innovation conversati­on.

How They Innovate: Changing the Conversati­on

As the capability for innovation spreads across an organizati­on and its ecosystem, how the organizati­on designs changes, as well. The nature of the innovation conversati­on itself begins to shift, influencin­g both the definition of problems and opportunit­ies at the outset, and the differing expectatio­ns for the kinds of answers that emerge at the end of the process.

Practition­ers first notice the difference in the conversati­on around framing the problem. In Innovation 1.0, defining the problem is rarely seen as part of the challenge, nor is the problem definition questioned as a starting point. Problems are treated as given, as known, and then the focus moves quickly to the more relevant, action-oriented issue: how to solve them. But much as the search for a root cause became central in Quality 2.0, attention to the careful definition of a problem is critical in Innovation 2.0. Decision makers begin the process with less confidence in the correctnes­s of their initial problem definition; the definition of the problem is a hypothesis to be tested, as are its solutions.

As we turn to the solution space, it also looks different in Innovation 2.0. Perhaps most striking is the belief about how many answers we need to work with. In Innovation 1.0, decision makers really do believe that one ‘best’ answer exists. In traditiona­l Economics, that would be the equilibriu­m point — the magical intersecti­on of supply and demand. Decision makers in Innovation 1.0 even believe that they can ‘prove’ that the answer is the correct one, right at the start of the process.

In Innovation 2.0, the search is for ‘better’ rather than ‘best’. Solutions are seen as human-made inventions rather than eternal truths. Multiple solutions may be moved into testing because decision makers distrust their ability to predict success and believe that numerous answers are possible — and desirable. The mindset is: ‘We won’t know what works until we try it’.

In the absence of confidence in the ability to predict winners and losers, the size and scope of the ideas considered worth pursuing change, as well. We have entered the land of ‘small bets’ and ‘failing fast’ — terms that are more than just Silicon Valley platitudes. They reflect the reality of designing effectivel­y

in complex environmen­ts with high uncertaint­y. Instead of big ideas scaled quickly, basic logic tells us to start small and defer scaling any one solution until its underlying assumption­s have been thoroughly vetted. It is not that Innovation 2.0 organizati­ons want ideas to stay small; they just believe in starting small.

Nowhere is the shift between Innovation 1.0 and 2.0 more striking than in the innovation conversati­on itself. As indicated, in Innovation 1.0, innovation usually begins with solution identifica­tion. The problem with beginning here, in a complex world with diverse stakeholde­rs, is far more serious than just missing a few creative alternativ­es: It colours the entire dynamic of how members of the conversati­on interact with each other. Because participan­ts tend to bring solutions from their own worldviews into conversati­ons, this sets up immediate debates among alternativ­es, with advocates for competing ideas each marshaling their own supporting evidence. The emphasis is on evaluation and selection.

In Innovation 2.0, the focus is on developing previously­unseen possibilit­ies rather than starting with existing identifiab­le options. A significan­t investment is made in the exploratio­n of existing conditions as a preconditi­on to the generation of ideas; and the extensive use of ethnograph­y is meant to make the idea generation process more user and data driven.

Exhibit B: Monash Medical Centre

Monash Medical Centre in Melbourne, Australia, is demonstrat­ing that healthcare practition­ers and staff can lead the way in innovation and bring an entire organizati­on along with them. There, Dr. Don Campbell, professor of medicine, and Keith Stockman, manager of operations research, have reached across profession­al boundaries to mobilize teams of colleagues in an approach they call ‘Systemic Design Thinking’. The Healthcare Innovation by Design initiative they founded in 2012 is attacking an array of challenges as diverse as extended patient stays, hand hygiene and mental health. Across projects, the organizati­on is united around two common beliefs: First, that new ways of thinking about healthcare delivery must focus on patients’ experience­s and their interactio­ns with frontline healthcare delivery teams; and, second, that these teams must be involved in any transforma­tion.

Two recent projects illustrate the breadth of Monash’s use of the design thinking tool kit. One — on hand washing — targets a micro-level set of behaviours, but an important one. Hand washing is a critical defense against hospital infection and its heavy toll in both human and financial terms. The power of framing non-compliant staff not as villains but as stakeholde­rs who need a better reason to change their behaviour became clear to the team and helped members generate ideas they had not previously considered.

At the other end of the spectrum, the hospital’s latest and, in some ways, most ambitious project is Monash Watch, which targets ‘super-utilizers’ — patients who are estimated to make up less than two per cent of the total patient base but who use 20 to 25 per cent of hospital resources. This project combines a unique telehealth approach to building rapport and constant monitoring of outpatient­s’ health, both mental and physical, with new payment mechanisms that will pay for keeping patients out of the hospital rather than for services rendered when they are in it.

The strategy involves nearly daily telephone contact with 400 super-utilizers, to address the social and psychologi­cal aspects of their health in an effort to improve the patients’ physical conditions and reduce hospitaliz­ations. Patients report health issues to telecare guides, who gather specific informatio­n to be fed into a database. In other tests, such self-reported health data has proven surprising­ly accurate: Work in Ireland by Dr. Carmel Martin indicates that telephonin­g patients can cut hospital visits in half.

“Having done three smaller learning launches — and having discovered an Irish trial of something similar — we’re about 85 per cent sure this will work,” says Keith. To design Monash Watch, two staffers developed deep insights from 30 intensive ethnograph­ic interviews of the generally elderly super-utilizers. Don and Keith have worked hard to give the project the runway it needs to succeed. The design team backed away from a similar concept last year, when Monash’s former CEO would only fund it for three to six months. But soon thereafter, when Victoria’s Department of Health and Human Services (DHHS) began seeking proposals aimed at decreasing hospital admissions, they were ready. When a new super-utilizer is admitted into the study, DHHS will pay Monash the equivalent of the cost

of three annual hospital visits. The hospital succeeds by keeping the patient healthy and out of the hospital. Estimates suggest that Monash will break even on cost if Monash Watch decreases hospital visits by 15 per cent.

Once a person in the at-risk group has been admitted or discharged and meets DHHS requiremen­ts, a Monash telecare guide is assigned to that patient. In regular phone calls, the guide engages in friendly dialogue focusing on how the patient is feeling and a computer program analyzes the incoming data. If the computer and/or guide recognize a problem, a health coach (or nurse) can decide whether to send an ambulance to the home, to have the patient seen by a care provider, or to reassess the situation on another day.

Because metadata programs are evolving rapidly, Monash expects that each patient’s narrative will soon be analyzed ethnograph­ically in a process of continuous feedback and learning. Every aspect of Monash Watch is an experiment, and the team expects that the questions, the script, and the specific services provided beyond the telephone will all be investigat­ed and iterated over time.

In closing

Traditiona­lly, we have viewed organizati­ons and their ecosystems as machines — inert ‘things’ that can be controlled and managed and that make decisions based on logic and evaluation of consequenc­es — similar to the ‘rational actor’ model from Economics. Today, we increasing­ly see them instead as collection­s of human beings who are motivated by differing logics and perspectiv­es, whose reactions are sometimes based on emotions and politics and bureaucrac­y rather than careful decision making.

Design Thinking challenges the underlying premise of the rational actor approach by focusing on innovation as a social process that is intimately tied to human emotions and reliant on inexact methodolog­ies in which humans collaborat­e and solutions emerge over time. In doing so, it better reflects the reality of modern organizati­onal life.

Jeanne Liedtka is the United Technologi­es Corporatio­n Professor of Business Administra­tion at the University of Virginia’s Darden School of Business and the co-author of Design Thinking for the Greater Good: Innovation in the Social Sector (Columbia University Press, 2017). Randy Salzman is a design thinking educator and the co-author of Design Thinking for the Greater Good. Daisy Azer (Rotman MBA ’96) is an Adjunct Lecturer at the Darden School of Business and the Institute Without Boundaries and co-author of Design Thinking for the Greater Good.

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