Generating Value Through Design-Driven Innovation

According to a recent Conference Board survey of CEO's and board chairmen, executives' number one concern is 'sustained and steady top line growth. While internally focused and left-brain heavy R&D departments are reaching their limits in sustaining this growth, design is coming to the rescue.
Design is gaining popularity among business managers, who recognise the power of so-called 'design thinking' for its holistic problem-solving ability. By virtue of its integral, non-linear, forward-looking and iterative nature, design thinking has taken the centre stage at such corporate giants as General Electric (GE) and Procter & Gamble.

So what does design thinking do? Below are a rough list of the design thinking approach to solving any problem. This is a very useful process as it can be applied to any subject, it integrates both analytical and creative thinking and it emphasizes constructive thinking over factual retention.

• Intend (Intentional Thinking) - Establish needs, wants and goals
• Define (Referential Thinking) - Name, list and describe what is involved
• Explore (Relational Thinking) - Imagine, organise and analyse possibilities
• Suggest (Formative Thinking) - Decide, present and explain your proposal
• Innovate (Procedural Thinking) - Continually improve as you produce what is proposed through an iterative process
• Collecting (Evaluative Thinking) - - Judge, measure and evaluate your success
• Knowing - Remember, integrate and apply what you learn

What can design-driven innovation deliver? Design-driven innovation cannot be measured through traditional company-centric metrics such as return on investment (ROI) and earnings per share (EPS). It needs to be complemented by a 'return on user experience' (ROX) and/or other metrics that measure user value (the value which the user receives or can expect to receive). Following this, the ROE (or ROX) of an individual experience equates to ‘benefits’ - ‘burdens’, and if you pick these apart even further, ‘benefits’ can be functional as well as emotional (being either mechanic or humanic in nature), and ‘burdens’ can be divided into financial and non-financial (such as the annoyance of waiting in a check-out line for too long). The sum of all individual experiences then would give you the total ROE/ROX.

I am not implying that all the contributing factors to ROE/ROX can be easily identified and/or quantified, but there is plenty of headway being made. The point is not necessarily to quantify, but to list and evaluate all contributors and inhibitors. By the same token, ROI has just as many parameters, flaws and uncertainties, except one always end up with a (seemingly) straightforward monetary value for it since it is only one-dimensional: it doesn’t involve behavioural and emotional dimensions - which, in turn, makes up the bulk of ROE/ROX.

That's were design-driven innovation can help, because what design really can do for a company is to generate value. This it can do on three levels: aesthetic is the most commonly appreciated and easily perceived value, but it also delivers two additional dimensions, that remain less well recognised: economic value for business (e.g return on investment and profitability) and social value for people (products and services being responsive to user needs and having to possess social qualities that are positive and reinforcing). This sum of value dimensions can be powerful: beyond looks, and even economics, design-driven innovation has the power to enhance life.

American authors like Joe Pine and Dan Pink have clearly documented the rise of The Experience Economy and the Conceptual Age, in which the conceptualisation and design of nearly everything will need re-thinking in the light of the fact that it is no longer only the effect on the outside world, but the effect on our inner selves, our experience that is driving our decisions and therefore shaping our consumption patterns.

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