Design thinking and strategy. Part two

Customers as a source of inspiration

Customers as a source of inspiration

Once I was conducting a strategic workshop for a company manufacturing accessories for heavy road machinery. All the team members were engaged and participated actively and effectively, except one C-suite manager, who was visibly disappointed. I asked him directly what was wrong.

– It is not a strategy! — he exclaimed.

– What do you mean?

– Why are we talking about customers? About their needs? About customers’ values? It is not a strategy! Strategy is about big moves, general directions, merges, and acquisitions! Why don’t we leave all this customers’ stuff for guys from the marketing department?

Design thinking won’t tell us who to serve, or why.

There is a chapter in Jeanne Liedtka’s wonderful book The Design For Growth Field Book: A Step-By-Step Project Guide called “Strategy and Design Thinking.” It starts with some sentences in which Liedtka shares her opinion on the difference between two things. “They are not the same thing — each has a different job to do… Strategy tells us where we want to contribute — who we will serve, what makes us uniquely suited to serve them… Strategy sets the boundaries of what kinds of problems we choose to try to solve. Design thinking helps us actually solve those problems by exploring how — it goes deep to help us craft a solution that really meets the needs of our stakeholders, that is feasible within our capability set, and that can be scaled. (in business, we call these value propositions.) But design thinking won’t tell us who to serve, or why.” (author's italics).

So, I believe that if that C-suite guy had ever met Jeanne Liedtka, they would have understood each other. But I beg to differ from her views. I use design thinking methods to derive a strategy.

Design thinking tools and strategy

Tools such as the Customer interview, the Stakeholders Map, or the Customer Journey Map, widely used in design thinking, are typically associated with product development. We dive deeply into customers’ experiences to identify their expectations, feelings, pain points, etc. It helps us look at a product, software, or service from a customer’s point of view. Then, based on this data and using a set of tools under the name of “ideation,” we try to convert these insights into new products and solutions. From this perspective, design thinking tools look applied, in accordance with Liedtka’s views. Strategy first, design thinking second.

But after using design thinking ideas in dozens of my strategic projects, I have concluded that they can be an inexhaustible source of inspiration for strategic decisions. Thus, traveling through the world of their customer’s expectations and impressions, one of my customer’s team invented a new business model for their chain of cafes. They called it “fast coffee”, and this idea was revolutionary for their country at that moment. While Mcdonald’s and Burger King were installing large self-service screens in their restaurants, and long lines were normal for Starbucks, these guys created a mobile app that let a customer order a coffee and a dessert even before they entered a cafe. Their cafes were mainly in big cities where people were always in a hurry, so they highly appreciated the idea of ordering a cup of coffee-to-go on their way, paying for it with an in-app payment service, and collecting it in a minute in a cafe. Add to it some other valuable features that many mobile apps offer, such as repeating one’s previous order. Moreover, an app is a two-way communication channel — customers can get special offers and discounts based on their previous purchases.

customers didn’t need excavators, they needed excavations

That accessories manufacturer also stumbled upon a new business model — thanks to design thinking tools. First, they began to rent the machinery out instead of selling it, and then they launched another strategic initiative — service instead of machines. They realized that their customers didn’t need excavators, they needed excavations, and there were many ways to get this job done (Clayton Christensen’s ideas were of much help as well in the course of this project).

Even if your goal is to expand your business to some other countries, if you consider taking over a rival, or contemplate buying a new equipment for your factory, all these and many other possible strategic moves at the end of the day boil down to a simple fact — your customers are the only source of your prosperity. And to make them satisfied you need to know everything about them. And design thinking tools are very helpful for this task.

If you need help identifying your customers’ needs or/and using design thinking tools for strategic purposes, send me a message. Follow me on Twitter. Watch video versions of these articles on my YouTube channel.