08.11.2019Blog

6 areas of strategy that benefit from design

Design wave has taken over many functions within businesses but we have yet to see it raising to a strategically significant level. Of course, there have been numerous arguments for the relevance of design to companies and some companies see design or design competences as strategic assets. However, actual strategizing – that is strategy formulation and implementation –  is still pretty much the same as it has been for the past decades. 

Fortunately the landscape in strategy work is starting to change. As service design is becoming the standard approach for developing new services and even traditional consultancies are acquiring design agencies, design thinking is sweeping over. That has introduced organizations to user centricity, ethnographic methods, rapid prototyping, accelerated learning and benefits that are just too valuable to be left out of strategic management.

Working at the intersection of design and business with forerunner clients, we have identified six meaningful areas of strategic management that would especially benefit from a touch of design.

Six meaningful areas of strategic management that would especially benefit from a touch of design

#1: Ensure broad input to strategy through thick, big and wide data

Strategies are always formulated in a context: what are the surroundings of an organization, what are its inner capabilities and what is its history. Strategy research has shown that company behaviour depends on what issues decision makers focus their limited attention on, so attention-based theory. In our experience, typical data sources of a strategy process include competition, market insights and trends, organizational factors such as competencies and processes, and so on – all good and necessary for strategy process. However, the issue is that management’s focus is rarely where it should be: on customers, their changing needs and the wider cultural phenomena driving change. 

In comparison, multidisciplinary design teams bring in new points of view, new data and new assumptions of the surrounding world, creating a richer and more nuanced view of the firm’s strategic context. A key role is played by human and social sciences such as ethnographers through cultural and human insights. In terms of strategy research, attention of the firm is broader and more varied, bringing new insights and reducing the impact of confirmatory bias

Key questions to ask: 

  • Who do we include in strategic planning? What are their backgrounds? How do they think and how are they biased?
  • What are the inputs and information sources for our strategic planning? Do we have a way of incorporating true human and cultural insight into the mix?
  • What kind of analyses do we conduct?

#2: Challenge the logic of your thinking

Strategy formation is typically an area of deliberate, rational thinking, of logical argumentation, of reductionist analysis and of deductive reasoning, resulting in strategies that are communicated as inevitable. Generation of truly unique points of view is limited and unlikely.

Often called abductive thinking, the way designers work, the tools they use and the mindset they have all differ from traditional ways of strategy creation and business development. Design-infused teams think in extremes and put together insights and points of data in novel ways, resulting in creative combinations, or strategy hypotheses, to be tested.

Key questions to ask: 

  • What kind of argumentation do we value in synthesizing our view of available information?
  • What kind of tools and frameworks do we use?
  • Are we explorative, bold and creative enough in our thinking? do we think in extremes?

#3: Visualize and crystallize key decisions and assumptions

With the separation of strategy formulation and implementation comes the need to communicate and realize strategic intent to the rest of the organization. This is the traditional domain of strategic communication, transformation programs and change consultants.

Design approach addresses these issues in two ways. First, the core principle in designers’ way of working is to create and test hypotheses that often take a visual and/or tangible form. Designers are experts in crystallizing and simplifying complexity, making communication of strategic issues more approachable. Second, design thinking makes the whole formulation-implementation dichotomy redundant, of which we’ll touch in the next area.

Key questions to ask: 

  • How do we share our strategic intent within the whole organization?
  • How do we we articulate our assumptions?
  • How do we deal with complexity?

#4: Create scenarios and validate strategy assumptions

If typical strategy projects end with explicit strategic decisions, a complete implementation plan and a roadmap for the next years, a design-infused strategy process does the opposite. Its end results can best be defined as new and unique insights, explicit strategy hypotheses and a piloting plan, driven by key assumptions to be tested. In strategy terms, these are often referred as scenarios. The contrast is stark. 

Designers embrace ambiguity and readily accept that before testing the insights in real context, we shouldn’t lock down the roadmap or investments too far ahead. We make a clear plan to validate our learnings and gradually expand from insights to large-scale action. In a complex situation, we create different scenarios on how a company should change its direction when assumptions are validated or rejected.

Key questions to ask: 

  • How distant are strategy formulation and implementation for us?
  • Do we have a strategy experimentation plan? 
  • How do we identify and track our strategic assumptions?
  • Are we prepared for different contingencies? Do we make scenario plans to prepare for alternative futures?

#5: Learn along the way and pilot before scale

In major corporations, change is often driven through major programs, with dedicated teams following detailed rollout plans country by country and business line by business line. Almost everything is set in stone at the start and the sheer volume of concentrated effort makes adjusting course difficult, once it is set in motion. On another note, practice has shown that middle management has very few, sometimes actually negative, incentives to raise concerns or doubts about the chosen course. 

As designers we see this differently. First, we continue our hypothesis-driven, iterative learning process even when working on concrete outcomes. We are flexible in our thinking and aim to validate our hypotheses or prove them wrong early, in order to fix things before they are fixed. Second, we’ve seen that major changes in practices and processes in global organizations take a lot of local tweaking, adjusting and persistence. Too many change initiatives stall at the very moment when the engagement team’s plane takes off ground.

Key questions to ask: 

  • Do we have room for exploration and iteration?
  • Are we willing to change course and plans rapidly if and when we gain new insights?
  • Do we first plan meticulously and the implement blindly? Are we agile on a corporate level? 

#6: Ensure learning and adaptation with constant feedback loops

Learning happens when we gain new information or when previously held assumptions get challenged. How then does strategic learning take place? Full-scale implementation programs often leave little room for exploration, as discussed above. On the other side typical strategy documentation and communication is full of analyses, graphs and frameworks, all making it difficult to identify and remember the key assumptions behind chosen strategy. Finally, organizations rarely have media and mechanisms to channel feedback and responses from the whole organization into the formation of strategy.

We believe strategic learning becomes more conscious and efficient when the whole strategy work is built on hypotheses, at best visually communicated. And as described above, when iteratively building on hypotheses and experimentation, the whole organization becomes adaptive. We have to make this adaptation conscious and consistent enough. Key area for strategic adaptation is to create feedback loops that enable insights from day-to-day business to rise to challenge or confirm strategic assumptions. These loops require a culture to support them, right tools to collect data and a process of forming strategic insight.

Key questions to ask: 

  • How does your organization enable feedback on strategy assumptions?
  • What mechanisms does your organization have in place for strategic adaptation?
  • When making strategic changes, how do you ensure consistency?

In summary

Design thinking supports companies to be future proof by ensuring their strategy is kept in a direct contact with its context – especially customers and all the trends changing their behaviour. By working with scenarios, strategic experiments and crystallizing complexity, design thinking gives organizations a fighting chance in fast-paced market environments.

Join us on the journey to improve businesses and societies through transforming strategy with design and sign up in to Designed Strategies webinar

This article has been written by Jaakko Luomaranta and Tiina Korvenoja. They both work as Business Designers at Solita. Through their experience from strategy consulting, design thinking and strategy research, they help Nordic businesses to stay relevant and transform in complex business environments.

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