The Design of Business: Why Design Thinking is the Next Competitive Advantage |  | Author: Roger L. Martin
Publisher: Harvard Business School Press
Category: Book
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Sales Rank: 5967
Media: Hardcover
Pages: 256
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Dimensions (in): 9.1 x 6.3 x 0.8
ISBN: 1422177807
Dewey Decimal Number: 658.4063
EAN: 9781422177808
ASIN: 1422177807
Publication Date: November 9, 2009
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Product Description
Most companies today have innovation envy. They yearn to come up with a game-changing innovation like Apple's iPod, or create an entirely new category like Facebook. Many make genuine efforts to be innovative-they spend on R&D, bring in creative designers, hire innovation consultants. But they get disappointing results.
Why? In The Design of Business, Roger Martin offers a compelling and provocative answer: we rely far too exclusively on analytical thinking, which merely refines current knowledge, producing small improvements to the status quo.
To innovate and win, companies need design thinking. This form of thinking is rooted in how knowledge advances from one stage to another-from mystery (something we can't explain) to heuristic (a rule of thumb that guides us toward solution) to algorithm (a predictable formula for producing an answer) to code (when the formula becomes so predictable it can be fully automated). As knowledge advances across the stages, productivity grows and costs drop-creating massive value for companies.
Martin shows how leading companies such as Procter & Gamble, Cirque du Soleil, RIM, and others use design thinking to push knowledge through the stages in ways that produce breakthrough innovations and competitive advantage.
Filled with deep insights and fresh perspectives, The Design of Business reveals the true foundation of successful, profitable innovation.
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Showing reviews 1-5 of 20
 How to "gain fluency in both the allusive poetry of intuitive discovery and the precise prose of analytical rigor" October 9, 2009
Robert Morris (Dallas, Texas)
9 out of 11 found this review helpful
In one of his previously published books, The Opposable Mind: Winning Through Integrative Thinking, Roger Martin explains that all great leaders possess "the predisposition and the capacity to hold two [or more] diametrically opposed ideas" in their head and then "without panicking or simply settling for one alternative or the other," were able to "produce a synthesis that is superior to either opposing idea." Integrative thinking is a "discipline of consideration and synthesis [that] is the hallmark of exceptional businesses [as well as of democratic governments] and those who lead them." Great leaders develop a capacity to consider what Thomas C. Chamberlain characterizes as "multiple working hypotheses" when required to make especially complicated decisions. They do not merely tolerate contradictory points of view, they encourage them.
In his latest book, Martin explains why "design thinking is the next competitive advantage." In fact, it may well be the most valuable application of integrative thinking, in part because, that successful business innovation is the result of collaboration and proceeds through a "path" or (as Martin describes it) a "knowledge funnel." The model for value creation that he offers in this book requires a balance - "or more accurately a reconciliation - between two prevailing points of view on business today." One is analytical thinking that "harnesses two familiar forms of logic - deductive reasoning and inductive reasoning - to declare truths and certainties about the world." The other is intuitive thinking - "the art of knowing without reasoning. This is the world of originality and invention...Neither analysis nor intuition is enough," however. Martin presents a compelling argument in support of reconciling the two modes of thought, asserting that the most successful businesses in the years to come will balance analytical mastery and intuitive originality "in a dynamic interplay [he calls] design thinking."
How so? "Design thinking is the form of thought that enables movement along the knowledge funnel, and the firms that master it will gain an inexhaustible, long-term business advantage. The advantage, which emerges from the design-thinking firms' unwavering focus on the creative design of systems, will eventually extend to the wider world. From these firms will emerge the breakthroughs that move the world forward [because] design-thinking firms stand apart in their willingness to engage in the task of continuously redesigning their business." And, I presume to add, because their leaders have mastered integrative thinking, without which creative and productive collaboration cannot be achieved, much less sustained.
So, what is "the design of business"? It is the process by which business leaders apply design thinking within the current knowledge stage and hone and refine what is known so that they can "generate the leap from stage, continuously in a process I call the design of business." Citing the pioneer insights of Charles Sanders Pierce, Martin duly acknowledges that it is not possible to prove any new thought, concept, or indeed in advance. In fact, "proof" must be redefined. "the answer, Pierce said, would come through making a `logical leap of the mind' or an `inference to the best explanation' to imagine a heuristic for understanding the mystery."
Although all this may sound highly theoretical and hypothetical, in fact the bulk of the material that Martin provided in this book addresses two separate but related questions: How to master design thinking? And How can it help to create a decisive competitive advantage? He focuses on a number of exemplary companies those initiatives help to provide an answer to each of these two questions, especially to the second. They include Cirque du Soleil, Research in Motion (RIM), Procter & Gamble, Steelcase, IDEO, Apple Inc., Toronto's Hospital for Sick Children, Herman Miller, and Target. Led by an enlightened and determined, when necessary tenacious CEO and management team, each of these companies embraced design thinking and overcame three major forces of resistance whose objectives were to "enshrine reliability and marginalize validity": the demand that an idea be proved before it is implemented, an aversion to bias, and the constraints of time. There can also be cultural barriers, the result of what James O'Toole characterizes as "the ideology of comfort and the tyranny of custom." One of the less-recognized benefits of integrative thinking is that it is more inclined to respect, perhaps even welcome dissent. At least some of those who oppose change will be less inclined to do so if they and their concerns are treated with what they perceive to be appropriate respect.
Readers will appreciate Martin's focus on what works, what doesn't, and why. His own mastery of integrative thinking is reflected by the scope and diversity of different perspectives on how to achieve and then sustain successful business innovation. He reminds his reader that the key tools of design thinkers are observation that is "deep, careful, and open-minded," imagination that consists of "an inference and testing loop," and configuration that enables translation of an idea into "an activity system that will produce the desired outcome." In the previous chapters, he had discussed dozens of real-world examples of effective applications of these tools. the critically important challenge of enlisting the active support of those who are "reliably-driven analytical thinkers who dominate the hierarchy and the validity-driven intuitive thinkers who are often brought in to `get the organization out of the box,'" Martin suggests and then discusses five specific initiatives (Pages 168-177). With all due respect to the power of integrative thinking, Martin correctly stresses the importance of what is generally referred to as "emotional intelligence." That is, being willing and able to appreciate legitimate differences between and among groups as well as individuals; to empathize; to seek to communicate on others' terms, not one's own, using tools with which they are familiar; and to stretch out of one's comfort zone to those of others.
In this brilliant book, Roger Martin has shared all he has learned about what design thinking is and can do; also, he has suggested specific initiatives that can help to enable his reader to become an effective design thinker while maintaining an appropriate balance by gaining "fluency in both the allusive poetry of intuitive discovery and the precise prose of analytical rigor"; and finally, while creating value for a business, his reader is urged to discover how design thinking can create meaning for one's life. Bravo!
Intuitions' Role in Strategic Thinking October 12, 2009
Jim Estill
6 out of 7 found this review helpful
I start by declaring my conflict. Roger martin is a friend. I sit on the RIM board with him.
Dr. Martin is Dean of the Rotman School of Business. One of his previous books was Opposable Minds: Winning Through Integrative Thinking. The theory of that book was that the ability to hold 2 opposing thoughts in mind often lead to a third superior view. The Design of Business has some of this "opposable" view thinking.
From The Design of Business book:
"What is Design Thinking Anyway?
Design thinking, as a concept, has been slowly evolving and coalescing over the past decade. One popular definition is that design thinking means thinking as as designer would, which is about as circular as a definition can be. More concretely, Tim Brown of IDEO has written that design thinking is "a discipline that uses the designer's sensibility and methods to match people's needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity." A person or organization instilled with that discipline is constantly seeking a fruitful balance between reliability and validity, between art and science, between intuition and analytics, and between exploration and exploitation. The design-thinking organization applies the designer's most crucial tool to the problems of business. That tool is abuctive reasoning."
Dr. Martin is a big advocate of strategy. I have found that good strategy in business can make successful business almost look easy. Of course you need good tacticians to execute but it is the strategy that takes a company to the next level.
Design of Business suggests that we do not use enough intuition in business. The book advocates using intuition combined with analytical thinking to devise strategy. (The opposable - intuition and analytics can co-exist to the better good)
My experience is that people are more comfortable with neat and tidy analytics but often the more messy intuitive strategy and design works better. Successful business is a bit messy.
Martin suggests that Design Thinking can be learned, fostered and developed which is indeed a hopeful thought.
I found the book interesting because it uses RIM as an example (among others) and I am close to that one so can see exactly where Martin is saying when he says Design Thinking yields competitive advantage.
Dr. Martin argues that time bias - short term thinking (often caused by the public markets) can kill good decision making. I heartily agree. Long term thinking is key.
Good book.
The Design Of Business - Why Design Thinking Is The Next Competitive December 7, 2009
Roy A. Luebke (Milwaukee, WI, USA)
2 out of 2 found this review helpful
Roger Martin, Dean of the Rotman School Of Management, University of Toronto, recently released his new book titled, "The Design Of Business - Why Design Thinking Is The Next Competitive Advantage." This book does an excellent job of articulating why innovation in corporations seems to be incredibly difficult and how Design Thinking must co-exist with analytical thinking to lead a business into new opportunities and business growth.
Businesses are organized to be a factory, whether they are product or service- focused. Their objective is to maximize efficiencies and produce the highest profits possible on existing creations. Nearly all of the people hired to join an existing organization have been done so to increase the reliability and consistency of the organization.
Martin writes that the main reason companies find it difficult to realize innovations is that most people in corporations are trained in analytical thinking and focused on reliability and consistency. They are focused on making the "factory" and related processes better, faster, and cheaper to produce existing offerings. Based on this approach, culture and processes become the biggest killers of innovation.
The opposite of reliability is a focus on validity. Martin defines validity as seeking to find the "correct" answer to a complex problem, not the most reliable or predictable, and to find new knowledge that will lead to the development of new markets, new business models, new products, etc. Seeking valid answers to mysteries is the crux of Design Thinking according to the author.
The author's basic proposition is that a "knowledge funnel" exists in all companies which takes a complex problem (a mystery) and drives it down to an algorithm (i..e. a process or formula) that allows the company to maximize profit on existing products or services. The issue that evolves is the people in the company then work to protect the existing, known set of processes and suborn or discontinue the search for new knowledge and finding new customer needs that could be met with new solutions.
The book describes abductive reasoning (i.e. intuitive thinking) and how it needs to balance against inductive and deductive reasoning (i.e. analytical thinking). In order to be a Design Thinking organization, a company needs to balance exploitation of existing offerings and processes against exploration of unmet customer needs in order to both profit from existing intellectual property but also to find new problems to solve that lead to solutions that create new business value.
The goal of reliability is to produce consistent, predictable outcomes by eliminating subjectivity, judgment, and bias. Conversely, the goal of validity is to produce outcomes that meet desired objectives. Over time validity will show that a resulting outcome is correct versus what is consistent.
With a persistent view of the past, business managers look backward to prove something is true or false. Daily work is a series of permanent, continuous tasks to ensure tomorrow is the same as today. The overriding organizational goal is to manage to the highest possible reliability. The key management skills that are built and rewarded are those that achieve reliable outcomes. Finally, rewards and status flow to managers who analyze past results and refine the processes, and senior managers who provide reliable return on investment, revenue and profit.
The author writes that in the long term, a reliability focus fails because of increased risk to cataclysmic events that occur when the future no longer looks like the past and the reliability factors are no longer relevant.
The opposing focus to reliability and decision-making based on past evidence is a future-oriented view. The future is based on "what could possibly be true" and a different set of intuitive and abductive reasoning skill will be needed to make sense of an observation, inferences to the best explanation of unknowns, and wondering why something is occurring. This view is beyond the reach of data from the past.
As managers build their skills and oversee larger and larger operating groups, they will see any move to the future as a threat to their turf.. Their loyalty is to the status quo.
In order to transform the organization to be more future oriented, the author writes that leaders need to think differently about their company's structures, processes, and cultural norms. One key organizational change to be considered is to move the knowledge discovery effort into a project-based structure. Permanent jobs discourage all but most senior people from seeing "big picture" and keep people task-focused on today's issues, with little or no time to focus on the future.
The author defines a set of processes that will give innovation a chance to succeed. These process changes include the way to perceive innovation through new financial planning and reward systems. New processes will need to accommodate exploration and iteration, and reward systems are most meaningful when they are tied directly to company strategy.
At the end of the book, Martin provides guidance on how individuals can develop themselves as design thinkers. In addition to developing a better understanding of one's own personality and working styles, people need a set of tools and experiences to help envision possible future states. The average person finds it very difficult to envision something that does not yet exist.
Tools that are discussed include observation, imagination and configuration. These tools will help a person recognize patterns that others do not see; deal with data that is inconsistent with and does not fit current models; iteration and prototyping; and translating ideas into activity systems that will produce the desired business outcome.
Finally, Martin offers suggestions for working effectively with analytical thinkers. He states there are five key elements to working with analytically focused, historically oriented people:
1. Reframe extreme views as a creative challenge (find creative ways to help others see your valid approach).
2. Empathize with colleagues on the extremes (respect them as a user, their hopes, wishes, worries, drivers).
3. Speak the language of reliability and validity (for reliability, use analogies and use the past as proof. This approach is less threatening, less risky. For validity people, encourage sharing of data and reasoning but not conclusions. They don't want to feel hemmed-in by preconceived notions).
4. Put unfamiliar concepts in familiar terms.
5. When it comes to proof, use size to your advantage (for reliability people, have them bite off small pieces of change. For validity people you need a piece big enough to show the innovation can succeed by developing the right-sized experiment).
In conclusion, this book does not talk about tools and methods of discovery, creativity or prototyping, but rather it defines the type of thinking required to support and balance the requirements of both exploration of future opportunities and exploitation of existing knowledge. This type of thinking, referred to as Design Thinking, is key to advancing new knowledge, new solutions, and increased business value.
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Overcoming Organization Constraints in Thinking June 14, 2010
Tony Deblauwe (San Francisco, CA)
2 out of 2 found this review helpful
The great divide between the practical operational demands of business and the more "loose" work of creativity and innovation comes together in the well structured, and logical flow of thought in Design of Business. The book builds it's premise on the idea of thought stages that businesses go through - a knowledge funnel - that seeks to move the questions of what a business is trying to do down to an algorithm that has repeatable results. The challenge surrounds how individuals move back and forth in the funnel and keeping pace with a predictable structure, but always leaving room for the what could be.
The "camps" of thought are well defined by those who cling to the comfort zones of proven algorithms and process (reliability) and those who focus on visualizing what could be and are less worried about the trifles it takes to get there (validity). Martin outlines the cultural norms within organizations and the constraints they apply to bridge the Yin and Yang of design thinking whether its financial structures (what do we track and why), reward systems (can failure be the intent and therefore the reward?) and other day-to-day key operations that focus purely on rational elements and squeeze out any variance.
The overlap between analytical and intuitive thinking is where design thinking lives. Martin proves the existence of such a "happy medium" with Proctor and Gamble's R&D approach which was an initiative that did things differently by using outside innovators to integrate in with existing design teams. It helped to shake things up, build a network of knowledge, and catapult earnings and new product designs.
Martin offers several methods to bring design thinking into organizations. Practically speaking, the techniques focus heavily on negotiation and clarifying potential outcomes that satisfy some of the reliability needs without crushing the validity orientation. As a guide to help cultures in organizations, Martin's guidance emphasizes the need for proof in endeavors - both from the perspective of taking a risk on something uncomfortable, but also the room to make calculated failures that don't completely disrupt the business. It's the classic tolerance scheme for trial and error and Martin's proposal helps this conversation.
While the battle of thinking and approach in the Design of Business may not be a new one, Martin weaves a well crafted narrative to how companies need to rethink their thinking and jumpstart legacies of the past so that organizations can ultimately leapfrog the competition. He backs his assertions with well researched interviews where the change has taken place. It's worth distributing this book to a mix of analytics and visionaries and having a dialogue - it will be worth the debate that ensues.
Organizations are only sustainable if the are able to blend in design thinking November 1, 2009
Steven Forth (Cambridge MA)
1 out of 1 found this review helpful
Every few years I run into a book that I want to give out to many people. The most recent candidates for this have been Peter Drucker's How to Manage Oneself and Cradle-to-Cradle Design by William McDonough and Michael Braungart. Roger Martin's new book one is another. I plan to buy copies for all three of my children, for the CEOs of companies I have shares in, and additional copies to scatter amongst my staff at LeveragePoint. This book is that good. I also hope it will direct people to another of Roger Martin's books, The Opposable Mind.
Why does this book matter? It provides a simple way of thinking through the flow of innovation from Mystery through Heuristics to Algorithms in an organization. It then looks at the role of understanding the why (validity) as well as the what (reliability). The stories from companies as varied as McDonalds and P&G to Hermann-Miller, Research in Motion and Cirque de Soleil are fascinating and informative and give a real business context to the general model. The lateral move to include Charles Sanders Pierce and abductive logic is a creative blend (and I use the term in the technical sense of Mark Turner) that is an important piece of design thinking in its own right.
I believe that Martin is correct, only companies that embrace design thinking as a core capability have any hope of long-term sustainability and competitive advantage. What he is proposing is an alternative and ultimately powerful solution to Clayton Christensen's Innovator's Dilemma.
Some will argue that the book is shallow and that it fails to uncover the essentials of design thinking. This is true, but the book is intended to motivate people to think more deeply about the role of design in business and not to be a primer on design thinking itself. In any case, design thinking is a nascent discipline and it is hard to point to anyone book that really unfolds its power. Candidates would be Bill Buxton's Sketching User Experiences, John Maeda's Simplicity and the book from Bruce Mau's great exhibition Massive Change. People who need to go deeper, anyone engaged in design writ large, will need to read widely and engage in many passionate discussions. My own essential texts on design thinking include various works from the Adolf Loos, the Bauhaus crowd, Baldwin & Clark's Design Rules, Stuart Kaufmann's The Origins of Order, Christopher Alexander's Pattern Language and of course Edward Tufte's books beginning with The Visual Display of Quantitative Information. I am also working to broaden my thinking by bringing in other cultural traditions (Japan and Russia for example have deep design traditions) and disciplines (especially architecture, urban planning and software engineering). More important than reading books, though, is to develop the habit of observing how things are designed and used in the world and uncovering the choices (often unconscious) that the designers made. One way to do this is through conversations, and one place these conversations are taking place is on the Design Thinking group at LinkedIn.
Showing reviews 1-5 of 20
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