Is Human-Centered Design Thinking Really the Future Of Business?

Whether tactic or strategy, it is having a moment. The question is whether it is sustainable given the unrelenting pressure on profits and growth. JL


John Stoll reports in the Wall Street Journal:

Design thinking, with roots in Silicon Valley, puts a customer’s needs above all else when creating a product or service. Understanding how a customer experiences a product or service trumps concerns about profitability, manufacturing and logistics. Apple’s iMacs, child-friendly MRI machines and open-office plans are products of design thinking. So are a lot of tech startups worth billions on paper even as they bleed red ink. Leaders are employing design thinking to disrupt an industry, reinvent a product or minister to an ailing company. Is it just a fad destined for the biz-blab boneyard?

As long as we’ve been doing business, somebody’s been peddling a strategy for how to do it better.

Vertical integration was the rage, then the outsourcing wave hit. Japan’s “lean” management techniques surged, until Six Sigma rose in the U.S. Now, the ultimate in chic business trends is design thinking.

Boot camps, such as Stanford’s four-day, $13,000 “d.school” seminars for working professionals, have become the must-have on an executive’s résumé. Companies as large as Ford Motor Co. are creating entire design-thinking departments to shake up the organization.

Design thinking, with roots in Silicon Valley, puts a customer’s needs above all else when creating a product or service. It often begins with the question “how might we?” For it to really work, it needs a different kind of CEO: a chief empathy officer.

Understanding how a customer experiences a product or service trumps concerns about profitability, manufacturing and logistics. Apple’s iMacs, child-friendly MRI machines and open-office plans are products of design thinking. So are a lot of tech startups worth billions on paper even as they bleed red ink.

“We’re having a moment right now as a field,” Kate Canales, the chair of the University of Texas at Austin’s design department, told me this week. Ms. Canales is a design-thinking expert, having previously worked at the two firms credited with sparking the movement: IDEO and Frog Design Inc. “It’s like someone poured lighter fluid on the subject,” she says. Her colleague, Julie Schell, has tracked the boom in design-thinking interest specifically and notes a sharp increase since the early part of this century.

A ROKA team go over eyewear production details. PHOTO: BILL MCCULLOUGH FOR THE WALL STREET JOURNAL

Ms. Canales, however, points out it’s difficult to rigidly measure design thinking’s immediate impact on the bottom line. Is this practice really driving revenue and adding to profits, or is it just an excuse for corporate self-indulgence? Can we really say design thinking is a long-term strategy for running school systems, corporations and hospitals? Is it just a fad destined for the crowded biz-blab boneyard?

These are important questions for the corporate bigwigs spending oodles to embrace a process they often know relatively little about. Especially when those leaders are employing design thinking to disrupt an established industry, reinvent a centuries-old product or minister to an ailing company.

Consider that of the CEOs running Fortune 50 companies roughly one-third have engineering backgrounds; nearly a quarter have finance or accounting backgrounds; about 20% studied business. Those with design degrees? Zero.

Skeptics worry that a broad and sometimes blind embrace of design thinking could dumb down the entire design process. In a 2017 talk, “Design Thinking Is Bullshit,” Pentagram Design Inc. partner Natasha Jen warned that armchair-design practitioners often avoid important steps, including subjecting their ideas to intense criticism, doing deep research or testing their gut instincts through trial and error.

Still, Ms. Jen sees virtue in nondesigners applying the principles of her craft. Apple Inc. founder Steve Jobs, she said, “applied his way of design thinking, which is intuition, on people’s desires and needs rather than business needs—by doing so he created some of the most iconic and cultural-shifting products ever.” And built an also-ran computer maker into the most valuable public company in history, raking in cash from retail, services and hardware.

Recently, CEOs of movie-theater chains, furniture producers, athletic companies and window manufacturers have taken me aside to extol the virtues of this human-centered approach. I’ve tested their products. I’ve toured their factories. I’ve dropped into design-thinking labs littered with Post-it Notes, Sharpies and pictures of far-out ideas.

One evangelist is Rob Canales, the husband of Kate Canales, the Texas professor. You may not be familiar with Mr. Canales’s company, ROKA, but anyone who has slogged through endurance races is. Eight years after its founding, ROKA’s swimwear, eyeglasses and running clothes are becoming as common on the triathlon circuit as Nike’s swoosh on the basketball court.

Mr. Canales’s company began when he applied his wife’s design-thinking concepts to wetsuits, a bugbear for many a triathlete.

The project began several years after his stint as All-America swimmer at Stanford University. Holding down a career and starting a family, Mr. Canales was egged on by former teammates to do a half-Ironman to discover the “best version of our out-of-shape selves.”

He found pricey neoprene wetsuits were advertised as “ideal for swimmers” but were too heavy and constricting. “I started from frustration, which is an ideal place.” Drawing inspiration and wisdom from his wife, Mr. Canales’ small team started in his garage, cutting up existing products and patenting designs that would eventually lead to a wetsuit line often top-ranked by reviewers.

Mr. Canales’ current crusade is to blend the sex appeal of killer sunglasses (think Ray-Ban) or trendy eyeglasses (think Clark Kent nerdy) with the functionality of athletic glasses that adhere to a sweaty face (think Oakley). Just like building a better wetsuit, crafting a better pair of specs or a sleeker pair of swim goggles takes hours of research, hoards of cash and endless prototyping.

Design thinking isn’t just the secret sauce for startups.

Last spring I traveled to northernmost Minnesota to tour 108-year-old Marvin’s window factory. I was so impressed by the employee bathrooms I wrote a column about them.

I was also impressed with a product I saw in the design lab called the Skycove, a space-age update to the picture-window benches where I’ve spent entire days reading or gazing at the lake. The Skycove kind of floats off the side of a house, and is billed as easier for builders to install than a customized window.

The product, unveiled for the public last week at the International Builders Show, was one of the big ideas the company invented after it started conducting design-thinking sessions (which included extensive time with IDEO in Palo Alto, Calif.,) in recent years. Among key insights was research showing about 90% of a person’s time is spent inside.

“At that moment, our conversations started to shift,” said Christine Marvin, the company’s strategy and design chief. It wasn’t good enough to just make windows and doors that customers consider interchangeable with other brands or styles. Marvin needed to start thinking about solving the problems that a life spent indoors poses to people who long to be outside.

There are plenty of design-thinking case studies that are still being written. Topping the list is a complex and costly effort by Ford CEO Jim Hackett (who fathered the much-embraced, much-maligned open-office concept while running Steelcase ) to use these relatively new principles to force a 116-year-old automobile company to act more like Tesla Inc. or even Mr. Jobs’s Apple.

The good news is Mr. Hackett can wiggle into a ROKA wetsuit, stare out a Marvin Skycove or wander a Steelcase-furnished office if he needs inspiration. The bad news is the problems Ford faces were here before design thinking was a thing and may linger long after its popularity peaks.