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Innovation by Design Thinking:
DENIS DENNEHY
Business Model Innovation
DIETER DE SMET
Any designers present?
Individuals whose personality includes
1. Empathy – imagine the world from multiple perspectives – those of colleagues, clients, end-users, and
customers (current and prospective).
2. Integrative Thinking – do not rely only on analytical processes (those that produce either/or choices)
3. Optimism – no matter how challenging the constraints of a given problem
4. Experimentalism – pose questions and explore constraints in creative ways that proceed in entirely new directions
5. Collaboration – design thinker does not simply work alongside other disciplines; many of them have
significant experience in more than one. (Brown,2008)
What is Management?
“equated managing with decision-making and argued that there are three essential aspects of decision-making: intelligence,
design and action” Herbert Simon (The Sciences of the Artificial)
Knowledge Funnel
(source: Martin, 2009)
Characteristics of Knowledge Exploration and Exploitation
Exploration Exploitation
Organisational focus The invention of business The administration of business
Overriding goal Dynamically moving from the
current knowledge stage to the
next
Systematically honing and
refining within the current
knowledge stage
Driving forces Intuition, feeling, hypothesis about
the future, originality
Analysis, reasoning, data from
the past, mastery
Future orientation Long-term Short-term
Progress Uneven, scattered, characterised
by false starts and significant leaps
forward
Accomplishment by measured,
careful incremental steps
Risk and reward High risk, uncertain but potentially
high reward
Minimal risk, predictable but
smaller rewards
Challenge Failure to consolidate and exploit
returns
Exhaustion and obsolescence
(source: Brown, 2009)
Reliability & Validity
(source: Brown, 2009)
What is Design Thinking?
“a process for developing numerous practical alternate solutions to specific problems or issues fully using the individual and group capabilities
and ideas of employees, customers, vendors, and the general public”
(Oster, 2008)
Why Design Thinking?
New approach to dealing with complex (wicked) challenges in business • business management strategy
• development
• sustaining a unique competitive advantage (Clarke and Smith, 2008; Dorst, 2011; Fraser, 2006; Raney and Jacoby, 2010)
Can make an influential difference in human-centred activities • communication and collaboration
• business model innovation (Brown, 2008; Fraser, 2006)
Assumes the human experience is always messy (Liedtka and Ogilvie, 2011)
Solving Tame & Wicked Problems
Well-defined Traditional linear process of
problem-solving methods understand the problem
which can include data gathering and analysis,
then formulate and implement a solution
(Conklin and Weill ,2007)
Multiple stakeholders - many decision-makers with conflicting values
Dependence on human cognitive abilities (creativity) & social abilities (teamwork) (Hevner et al., 2004)
Big Picture Time
“A problem cannot be solved by people who are concerned with only one or
another of its parts” Japanese philosopher Fukuoka
Benefits of Visualisation
Improves problem solving
Balances participation and reduces the dominance of certain participants
Facilitates the decision-making process
Ideally suited for communication
Provides a visual means to assure mutual understanding
Creates involvement of participants
Evidence of Benefits… Promoted
Visibility
Provided a
Common
Platform
Promoted
Interaction
Encouraged a
Shared
Commitment
Promoted
Discussion
Encouraged
Problem-Solving
Created a Shared
Understanding
“Better
visualisation of
roles and
responsibilities
to be shared
with new
partners joining
the ecosystem”
“Common
language and
focus good for
all
stakeholders’
understanding
of the process”
“A vehicle for
brainstorming”
“Main one was
team-building”
“Everyone had a
voice”
“Helped to
identify
customer value
proposition
and to focus all
stakeholders
on issues”
“Identification
of gaps and
could be used to
exclude some
stakeholders?”
“Ability to see
each partner’s
contributions
and
motivations”
“Ability to listen
to others,
ability to
contribute
objectively,
people's ability
to negotiate”
“Good
interactions
amongst
partners”
“Collaboration
amongst team
was better”
“Good discussion
tool and looking
at specifics of
problem”
“Discussion,
clarification,
communication”
“The visual
ability to be
able to work as
a team
collaborating,
challenging
each other’s
skills”
“Able to agree
more and very
good grounding
on the project
for all partners”
Business Model Canvas
What are we talking about?
Retail Bank (Innofin 2014)
Key Partnerships Key Activities Value Propositions
Key Resources
Cost Structure Revenue Streams
Customer Relationships
Channels
Customer Segments
IT
Operations
IT
Operations
Deposit Products
(Lower interest
rates)
Deposit Products
(Lower interest
rates)
Interest income Interest income Fee income Fee income
Retail/
corporate
customers
(depositors)
Retail/
corporate
customers
(depositors)
Loan
Assets
Loan
Assets
Call Centre
Operations
Call Centre
Operations
Automation
(where
possible)
Automation
(where
possible)
Retail/
corporate
customers
(borrowers)
Retail/
corporate
customers
(borrowers)
Channel costs Channel costs
Physical & IT
infrastructure
Physical & IT
infrastructure
Investment
Partners
Investment
Partners
Technology
Vendors
Technology
Vendors
Regulators Regulators
Branches Branches ATMs ATMs
Call
centres
Call
centres
Interest
expenses
Interest
expenses
Branch
Operations
Branch
Operations
Loan Products
(Higher Interest
Rates
Loan Products
(Higher Interest
Rates
Personnal
Assistance
Personnal
Assistance
Internet &
Mobile
devices
Internet &
Mobile
devices
Visa Business Model (Innofin 2014)
Key Partnerships Key Activities Value Propositions
Key Resources
Cost Structure Revenue Streams
Customer Relationships
Channels
Customer Segments
Technology
alliances
Technology
alliances
Sponsorships
(Fifa Worldcup/
Olympics)
Sponsorships
(Fifa Worldcup/
Olympics)
Network, EDP &
communications
Network, EDP &
communications
Improved
sales &
consumer
experience
Improved
sales &
consumer
experience
Personnel Personnel
Convenience Convenience
International
revenues
International
revenues
Visa brand Visa brand
Security Security
Commercial
partners
Commercial
partners
Payments
network
management
Payments
network
management
Rewards
associated
with card
payments
Rewards
associated
with card
payments
Transaction
processing
Transaction
processing
Payment
product card
programs
& cashless
payments
Payment
product card
programs
& cashless
payments
Financial
Institutions
(issuers)
Financial
Institutions
(issuers)
Financial
Institutions
(Acquirers)
Financial
Institutions
(Acquirers)
Payments
product
platform
Payments
product
platform
TV
advertising
TV
advertising
Trade
Shows
Trade
Shows
Litigations
Provision
Litigations
Provision
Value-added
services
Value-added
services
Cardholders Cardholders
Merchants Merchants
Service
revenues
Service
revenues
Data
processing
services
Data
processing
services
Brand
Promotion
Brand
Promotion
Google Business Model
Key Partnerships Key Activities Value Propositions
Key Resources
Cost Structure Revenue Streams
Customer Relationships
Channels
Customer Segments
Intellectual
Property
(IP)
Intellectual
Property
(IP)
Distribution
Partners
Distribution
Partners
Manage IT
infrastructure
Manage IT
infrastructure
Global
sales and
support
teams
Global
sales and
support
teams
Targeted
Advertising
using
Adsense
Targeted
Advertising
using
Adsense
Data
Centres
Data
Centres
General And
Administrative
Expenses
General And
Administrative
Expenses
Enterprise Enterprise
Open Handset
Alliance
(80+ technology/
mobile companies
Open Handset
Alliance
(80+ technology/
mobile companies
Advertisers &
agencies
Advertisers &
agencies
Original
Equipment
Manufacturers
(OEMs)
Original
Equipment
Manufacturers
(OEMs)
R &D - Improve
existing products
/services
R &D - Improve
existing products
/services
Dedicated sales for large
corporate accounts
Dedicated sales for large
corporate accounts
Mobile device
users
Mobile device
users
Targeted
Advertising
using Adwords
Targeted
Advertising
using Adwords
OS &
Platforms -
Android,
Chrome OS
OS &
Platforms -
Android,
Chrome OS
R & D -
New
product/service
development
R & D -
New
product/service
development
Hosted
Google Apps -
storage,
shared
calendars,
video
Hosted
Google Apps -
storage,
shared
calendars,
video
Advertising Advertising
Data centers Data centers
Free Free
Branding Branding
Staff Staff
Internet users Internet users
Sales &
Marketing
Sales &
Marketing
Web search,
Gmail/
Google+/
circles
Web search,
Gmail/
Google+/
circles
Automation Automation
Developers Developers
Sales to
enterprise
Sales to
enterprise
R&D R&D
Traffic
acquisition
costs (TAC)
Traffic
acquisition
costs (TAC)
Workshop Challenge
Design an m-payment business model for a retail bank
OR
Is there a business model that you want to explore?
INNOFIN 2014 INTERACTIVE WORKSHOP
Key Partnerships
Value Propositions
Key Resources
Cost Structure
Revenue Streams
Customer Relationships
Channels
Customer Segments
Key Activities
Concluding Thoughts
• Effective collaboration and innovation can provide significant opportunities for any business
• Use of visualisation tools can lead to shared understanding shared commitment of all stakeholders.
• Requires an organisational culture of a positive design attitude