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Design thinking for business, and how it can benefit SME’s

Every new business or new product initially starts as an idea. An idea that the owner(s) of it hope can become successful. Unfortunately the statistics don’t show promising news with up to 95% of new products failing each year and reports stating (depending on the country) that anywhere between 50 – 90% of new businesses fail in their first four years. There are a number of causes attributed to these failures including, but not limited to, problems with cash flow, poor marketing campaigns, inadequate competitor analysis, unsatisfactory products and poor understanding of customer needs.

Design Thinking For Business, And How It Can Benefit SME's

Design Thinking For Business

Focusing on the last two problem areas, I will show how following a process called ‘Design Thinking For Business’ can help to identify and increase understanding of potential customer’s explicit and latent needs and in turn increase the likelihood that a new product introduced into the market will add value and fulfil those customer’s needs.

SME’s, where the majority can be characterised as having a lack of available funds and resources when it comes to new service or product development, are under increasing pressure and financial strain, especially in the current economic climate, to deliver successful innovations. Following the Design Thinking Methodology, for the purposes explained above, can be a viable and less expensive option for SME’s than alternatives which can include hiring a consultant or simply introducing a new product and hoping that a good sized share of the market will purchase it.

The Design Thinking For Business process has been around for a good number of years but was introduced to people and companies outside the design world through the success of the innovation and design firm IDEO and later the Stanford d School, which was co founded by the founder of IDEO, David Kelley. The design thinking process has five distinct but interconnected phases which include, Empathy, Define, Ideate, Prototype, and Test. The overall goal of the process is to make people mindful of their own personal innovation process or as George Kembel, also a co-founder at Stanford d School, put it, to awaken peoples dormant ability to be creative.

Design Thinking For Business, And How It Can Benefit SME's

So how can this Design Thinking For Business process be of benefit to a new or existing business wanting to develop and introduce a new product or service? The most important reason, I think, is that it helps to get people talking with and observing their potential customers; the people who, at the end of the day, they hope will buy their product or service. As we look into each phase in more detail, we will see how this can achieved.

Design Thinking For Business, And How It Can Benefit SME's

The Empathy phase

It’s important to build empathy with the people you want as customers. In order to do this you will need to go out and spend time with people in their daily lives, observe how they interact with what’s currently out in the market (for example if you are planning to introduce a new service, observe how people currently interact with the current service you want to compete with). Identify any areas where you could improve their experience, this can be achieved by mapping their journey when using the service. This phase also requires that you engage with people to uncover and discover what their actual needs are. The values or emotions tied to their behaviour. There is no point working on a new product / service if it isn’t going to fulfil a need for a lot of people. The key here is to try and uncover insights; insights that haven’t yet being realised will lead to innovation.

The Define phase

Defining the problem you are trying to address is the next step. As described by Stanford d School, there is two important goals in this phase. (1) To build a deep understanding of your customer and then based on that understanding (2) develop an actionable problem statement. This is called your Point-Of-View. This helps you to focus on the problem at hand, the customer’s needs that you are trying to fulfil, and helps to guide you to generate a wide number of solutions, which brings us to the next phase. Before we move on however it’s worth noting that if you had an idea for a product or business before going through these two phases, the insight you have gained so far will have either reinforced your idea or has helped you to see that the solution you first identified isn’t going to solve the real underlying customer need.

Design Thinking For Business, And How It Can Benefit SME's

The Ideate Phase

This phase is all about idea generation. The goal is to generate a large number of possible solutions to your problem statement. It’s important to not just generate solutions but to make sure you have many alternative ways of solving the problem. Idea generation can be difficult when only a few people are involved. If you are a sole trader, or a business with only a few employees, I suggest persuading a number of your close and trusted friends from different disciplines to help out. The value of different perspectives for generating ideas cannot be overemphasised. Get any obvious solutions out of the way and push each other to generate not so obvious solutions. For this to be successful it is important to leave negativity and the ‘you can’t do that’ attitude outside the door. At this stage every idea is good and positive encouragement will help promote an open flow of ideas.

Design Thinking For Business, And How It Can Benefit SME's

The Prototype Phase

We are now at the stage where you bring your ideas out into the world and try and see what impact they would have on someone’s life when using them. Prototyping can take any physical form including, models, storyboards, role playing etc… This is where you get feedback from your potential customer that helps build an even deeper understanding of their needs and values are and helps to reframe the problem statement if required. An important point to make here is to not spend a lot of time building or making prototypes. If you do it can cause you to become attached to them and in turn become defensive of the idea when getting valuable feedback. This Prototyping phase can bring the process back to any of the previous phases. As can any of the phases. It is important to remember that the Design Thinking For Business methodology is not a linear process but a cyclical process whereby you are able to return to a previous phase over and over again as you uncover new insights and gain valuable feedback from potential customers.

Design Thinking For Business, And How It Can Benefit SME's

The Testing Phase

The Final Phase of the process is about seeing what works and what doesn’t, which helps to refine or improve your solutions. It involves testing your solutions in the appropriate environments of your potential customers and seeing the results. This can lead to you having to return to the ideation phase, and it can also help build empathy with the customer as you observe and engage with them as they interact with your solutions.

If you find your solution works then you are in a good position to introduce a new product or service to the market that will fulfil a valuable need. If not, don’t get discouraged, as stated earlier this is a cyclical process and you may need to go through some of the stages again to build a deeper understanding of your potential customer’s latent needs and in turn develop a more accurate problem statement they needs to be solved.

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