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Innovation by Design Thinking: DENIS DENNEHY Business Model Innovation DIETER DE SMET

Innovation by design thinking

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Page 1: Innovation by design thinking

Innovation by Design Thinking:

DENIS DENNEHY

Business Model Innovation

DIETER DE SMET

Page 2: Innovation by design thinking
Page 3: Innovation by design thinking

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)

Page 4: Innovation by design thinking
Page 5: Innovation by design thinking

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)

Page 6: Innovation by design thinking

Knowledge Funnel

(source: Martin, 2009)

Page 7: Innovation by design thinking

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)

Page 8: Innovation by design thinking

Reliability & Validity

(source: Brown, 2009)

Page 9: Innovation by design thinking

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)

Page 10: Innovation by design thinking

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)

Page 11: Innovation by design thinking

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)

Page 12: Innovation by design thinking

Big Picture Time

“A problem cannot be solved by people who are concerned with only one or

another of its parts” Japanese philosopher Fukuoka

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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

Page 16: Innovation by design thinking

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”

Page 17: Innovation by design thinking
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Business Model Canvas

What are we talking about?

Page 20: Innovation by design thinking

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

Page 21: Innovation by design thinking

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

Page 22: Innovation by design thinking

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)

Page 23: Innovation by design thinking

Workshop Challenge

Design an m-payment business model for a retail bank

OR

Is there a business model that you want to explore?

Page 24: Innovation by design thinking

INNOFIN 2014 INTERACTIVE WORKSHOP

Key Partnerships

Value Propositions

Key Resources

Cost Structure

Revenue Streams

Customer Relationships

Channels

Customer Segments

Key Activities

Page 25: Innovation by design thinking

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

Page 26: Innovation by design thinking