[column]For decades, IBM Corp. manufactured stuff. You know, computers and servers and things people could touch and feel and own. But in recent years, that changed. Like much of the U.S. economy, the behemoth—400,000 employees strong —shifted into selling business services. Sessions with consultants, software, process improvements. Important, profitable things. The problem was, these new products weren’t tangible.

“IBM was faced with a dilemma,” recalls Kevin Clark, a former program director in IBM’s corporate marketing and communications department who retired last year after 30 years with Big Blue. The fundamental question: “What does IBM mean in an era when you can’t own anything—when you’re moving from physical objects to an exploration of services and touchpoints and human interactions?”

Clark spent years of his career trying to figure that out. In one instance, the company hired cultural anthropologists to study how customers felt after spending the day at IBM’s client briefing centers. After discovering that customers were mind-numbingly bored by hour after hour of PowerPoint presentations, the company enlisted teams of designers to “design” a customer’s visit to IBM. Staffers were brought in from across disciplines. The teams created a giant flow chart chock full of fresh ideas to engage customers during their trips to one of the company’s 200 briefing centers. [/column] [column] They designed the visits as a series of touchpoints intended to connect customers to the IBM experience.

Clark and his team called the process “experience design”—based on the idea that they were, in essence, trying to understand the IBM customer experience and design steps to improve it.

He wasn’t alone in unleashing this new way of thinking. At the same time, a movement was rising across the business world, a movement that would come to be labeled “design thinking.” It grew up in conjunction with an increasingly interconnected world, one in which customers began to demand a greater connection with the products they purchase, and marketing shifted from an I’m-telling-you-to-buy-this, “Mad Men” model to listening to people’s problems and trying to solve them. Those who subscribe to the design thinking meme argue that approaching product development as a designer does—exploring consumer problems without preconceived notions of how to solve them, engaging in qualitative research, prototyping—can yield big results for companies, even companies that don’t make stuff that’s traditionally “designed.”

Proponents argue that design, despite being sidelined for years as the purview of moody, black-clad artists, is actually uniquely suited to the C-suite. [/column]

[column] “Great innovation is customer driven. And designers are taught to create things that do not exist rather than hone things that do exist,” says Roger martin, dean of the Rotman School of management at the University of Toronto and one of the first prominent voices in business to argue for a larger role for design in business.

‘A big change in business thinking’

In the last few years, fervor has arisen around design thinking. Tim Brown, the chief executive officer and president of the Silicon valley-based design consultancy IDEO, who’s often credited with giving birth to the movement, is a veritable celebrity in the business community. The media have jumped on the design thinking train, too. Fast Company, BusinessWeek, even Harvard Business Review have published breathless articles extolling design thinking’s virtues, painting it as a solution for tired companies looking for a new path to product development.

Where design was once strictly the purview of art schools, it’s moving into business classrooms. In March, the University of Virginia’s Darden School of Business opened a million dollar “innovation lab,” replete with glue guns and sheets of plywood, where MBA students learn how to think more like designers. [/column] [column]
“In the past, most people looked at design as a product and its aesthetic appeal,” says Thomas lockwood, Ph.D., president of the Design Management Institute in Boston, a trade group for designers, and the author of several books and articles on design thinking. “It is changing. Design is seen as a part of the experience. There’s a big change in business thinking.”

But not everyone believes design thinking is some kind of silver bullet for America’s languishing businesses. “Sprinkling design thinking, even done well, isn’t going to solve all of your problems,” says Peter Merholz, president of Adaptive Path, an experience strategy and design company in San Francisco. “There’s very little difference between design thinking and approaching problems in an intelligent fashion.”

“We should talk to our customers and prototype,” he says. “That’s not rocket science. The fact that it is, well that just shows how fucked those businesses are.”

Surgeons and Politics

But there are real success stories. Two years ago, Minnesota’s famed Mayo Clinic opened a Center for Innovation fueled by design thinking. At the Center, a team of physicians and designers works on solutions to deliver health care more efficiently and effectively. [/column]

[column] The center includes exam rooms and a clinical space that allows for patient observation, where designers can set up prototypes and configure and reconfigure, literally playing with ideas. Among the victories so far: after observing patient interactions with radiologists during the imaging process and discovering they were often isolated and uncomfortable, a team implemented new protocols, including a library of “normal” images for patients to use as comparison and creating new written materials to enhance patient understanding.

Several projects are ongoing, including a project designed for primary care physicians to get advice from specialists electronically—sometimes without the patient having to see the specialist at all. Some of the project ideas didn’t come from physicians. Mayo opened the brainstorm process—they call it an “idea capture”—to janitors, secretaries, and anyone else who wanted to contribute. The institution also hired an “innovation catalyst,” who is tasked with scanning business and design industry literature for new trends and developments.

Nicholas LaRusso, a physician who trained in gastroenterology and is the former chair of Mayo’s Department of Medicine, heads the design initiative. It sounds like a far cry from the design universe, but LaRusso, who started researching design thinking about five years ago, says he sees obvious parallels between design and medicine. [/column] [column]“Prototyping resonated with me,” he says. “It’s testing an idea by doing something,” and that’s not a huge departure from scientific research.

At both IBM and Mayo, those leading the charge admit it wasn’t always easy getting buy-in to move away from a more quantitative approach to research into the sometimes touchy-feely universe of design thinking. Key to the process was finding advocates in high places. When LaRusso and his team set out to improve operating room efficiency, they found a fan: a prominent surgeon who advocated for what they were trying to do. “The surgeon had the characteristics we look for: He was uncomfortable with the status quo, was not risk averse and was a change agent,” LaRusso says. “We are careful in who we partner with.”

Similarly, IBM’s Clark says, a big part of his job was what he calls “the political campaign”— the journey of getting the right people on board with a process that isn’t as bottom-line driven as many CMOs may prefer. “You have to get the ideas elected to office,” Clark says. “We had leadership involved. We sold it.”

Bounded Chaos

Though many people in the business world still think of iPods or Porsches when they hear the word “design,” some of the greatest [/column]

[column] opportunities in design thinking may lie with service-based companies and organizations, says IDEO’s Brown. Most service-based companies aren’t used to working with designers. Though sometimes there’s a learning curve, that also means they don’t have preconceived ideas about the touch-feely artists in the black turtlenecks. Service-based companies may be slowed down at first by their lack of history in research and development, but they’re also not tethered to more traditional ways of approaching a problem. “What’s interesting about service companies is when they do decide to adopt this idea, they’re very adaptable,” Brown says.

One of IDEO’s recent projects was its work with Bank of America. IDEO and BofA researchers traveled across the United States interviewing women with kids to see how they approached money and savings. The result of that qualitative research was the “Keep the Change” program that launched in 2005 and rounds up debit purchases to the next dollar, automatically transferring the difference to the user’s savings account. It’s been a wildly successful program for BofA, with more than 12 million new customers since it began. (Of course, there’s no way to know how many of those customers would have selected BofA regardless of the program.)

The fundamental difference between an ethnographic, design-centered research program like BofA’s and a traditional market [/column] [column]research program is that the researchers aren’t testing a certain product or service idea. Instead, they’re “looking to understand how the consumer thinks so we can create a solution,” Brown says. “It inspires people to have new ideas.”

But that type of thinking also costs money and takes time. For a business, it “requires a certain amount of letting go,” says Brown. You can’t create a neat spreadsheet for design thinking projects; they tend to be a bit messy, with false starts and lots of brainstorming, and constant shifting and idea evolution. Not every company is willing to accept that. Some are too rigid, too focused on quarterly profits and immediate ROI metrics. Some companies are too hierarchical, or too focused on certain people getting credit for ideas, as opposed to a collaborative environment like Mayo’s, where everyone is invited to contribute—a process LaRusso calls “bounded chaos.”

Indeed, one of the most challenging aspects of his job, Brown says, is working through that culture shift with a big, lumbering organization. “One has to be very patient. But the rewards of seeing the kinds of things that result are tremendous.” [/column]

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