Innovation, design thinking, and competitive advantage

INNOVATION, DESIGN THINKINGAND COMPETITIVE ADVANTAGE

Phil BarrettAssociate director, Deloitte Digital Africa

@philbuktoo

WORLDWIDE DIGITAL REVOLUTION

San Francisco Orlando

Denver

SeattleLos Angeles

Mexico City

Cape Town

Johannesburg

Washington DC

Toronto

Brussels

Amsterdam

Camp Hill

Sao Paulo

New York

Belfast

Edinburgh

Lisbon

Paris

Madrid

Zurich

Milan

Dublin

BengaluruDelhi

Mumbai

Hyderabad

Gothenburg

WarsawMunich

Łódź

Stockholm

London

Perth

Singapore

Luxembourg

Shanghai

Adelaide

MelbourneBrisbane

Canberra

Auckland

Sydney

Tokyo

Studio

Delivery CenterHub

24Countries

26Studios

5500+GlobalHeadcount

1100+USHeadcount

1500+US IndiaHeadcount

41K+APAC

71K+EMEA

89K+Americas

202K+Global

150+Countries

Deloitte Digital Footprint Deloitte Footprint

LOCAL SOUTH AFRICAN TEAM.

LOOKING AT PROBLEMS THE OTHER WAY UP

Amazon’s warehouse robots move the shelves to the packers. This

means no pickers, and a continually optimised storage layout.

The rate of change in technology is faster than it has ever been.

And it is increasing more steeply than it ever has.

IT’S EXPONENTIAL CHANGE.

ORGANISATIONS DYING OFF, CHANGING, GROWING…

FASTER THAN EVER

Machine learning Genomics

Biometrics Internet of Things

Blockchain

Robotics3D Printing

Drones

VR

Wearables Connected Cars

Mobile

Analytics

Social

Cloud

Web

Content

EXPONENTIAL TECHNOLOGIESSuper Disruptors… Exponential Disruptors…

EHANG 184 PERSONAL DRONE

“Tim Brown, IDEO

Innovation has become nothing less than a survival strategy.

EXPONENTIALS DEMAND INNOVATION

INNOVATION: CREATIVITY IN THE SERVICE OF PROFITABILITY

Finding worthwhile new things to do.

Finding better ways to do what we already do.

10%

10x“Optimisation?”

“Disruption?”

“DISRUPTIVE INNOVATION: YOUR PERSONAL MONOPOLY

Creative monopoly means new products that benefit everybody and sustainable profits for the creator.

Competition means no profits for anybody…

Peter Thiel, Co-founder of PayPal

THE TROUBLE WITH INNOVATION

INNOVATION. IT SURE IS DIFFICULT.

OPERATIONAL BUSINESSES ARE NOT INTENDED FOR INNOVATION

THE CORPORATE IMMUNE SYSTEM KILLS INNOVATIONDisruptive innovation jeopardises existing margins and the tried and tested recipe.

“

SO CORPORATIONS NEED STARTUPS • Invest to help grow promising businesses • Acquire successful new businesses • Partner to drive new thinking • Invent in their own innovation outposts • Incubate by supporting new businesses with resources

COMPLEX SYSTEMS ANDWICKED PROBLEMSMany systems, markets and organisations are beyond complicated - they are complex.

• A lot of diverse elements, interconnected.

• Unpredictable: Doing the same thing twice doesn’t necessarily get you the same result.

• Can’t be solved, only improved.

+ + = ??

+ + = ??!!

EXPONENTIAL TECHNOLOGIES COMBINE IN UNPREDICTABLE WAYS

THE PEOPLE IN OUR COMPLEX SYSTEMS ARE EMOTIONALIdealised “econ”: Optimal decisions. Actual Human: Emotional decisions.

DESIGN THINKING CAN HELP

The process of design squiggle

DESIGN THINKING

“FOR SUCCESS, INNOVATE CUSTOMER-FIRST

You’ve gotta start with the customer experience and work backwards to the technology.

Steve Jobs

IF YOU’RE BUNGEE JUMPING…

…USE A CORD!

DESIGN THINKING USES A STRUCTURED, HUMAN-CENTRED PROCESS

The “human-centred design” process (HCD).

EMPATHISE

DEFINE

IDEATE

PROTOTYPE & TEST

Diverge

Converge

Diverge

Converge

Ready to start….

KEY INGREDIENTS FOR DESIGN THINKING

Make things

Observe people

Test and improve

Collaborate

Think broadly, decide precisely

“Companies that use design strategically grow faster and have higher margins than their competitors.

Apple, Coca-Cola, Ford, Herman-Miller, IBM, Intuit, Newell-Rubbermaid, Procter & Gamble, Starbucks, Starwood, Steelcase, Target, Walt Disney, Whirlpool, and Nike…

Jeneanne Rae, Writing in HBR

DESIGN-LED COMPANIES ARE OUT-PERFORMERS

COST

WHY GOOD DESIGN MAKES SUCCESSFUL BUSINESSES

REVENUEDrive uptake Convert more new customers Keep customers with you Charge more for your products

Lower marketing costs Lower customer service costs Lower training costs Lower delivery costs Less wasted effort building the wrong stuff

SEE FROM THE CUSTOMER’S POINT OF VIEWTechniques: Immersive research, diaries, interviews with games and storytelling.

EMPATHISE

IDENTIFY THE PROBLEMS TO SOLVETechniques: Maps, models, stories, principles, problem statements.

DEFINE

THINKING DIFFERENT TO FIND NEW SOLUTIONSTechniques: CVP and ideation workshops, with tools to drive lateral thinking.

IDEATE

MAKE MOCKUPS AND TRY THEM OUTTechniques: Mockups of interfaces, artefacts and environments. User testing sessions.

MOCK & TEST

“A prototype is worth a thousand meetings.

Todd Wilkens Design Principal at IBM Design

YOU HAVE TO DO IT WITH 110% CONVICTION• Immerse yourself: think in the shower.

• Face the discomfort of identifying problems with existing ideas.

• Keep practising: Just like for every new skill you want to truly master.

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DESIGN THINKING IS JUST THE STARTStage 3

SCALE AND EXTEND

Build and test to prove the right concept, target

customers, business

model…

Roll out to more users, and

roll out extended features

PRODUCT MARKET FIT

Stage 2

Human-centred design

Lean startup

Lean UX

Stage 1

By Hugh McLeod: www.gapingvoid.com

DON’T SLIP INTO THIS KIND OF THINKING

DESIGN THINKING COMBATS POOR DECISION MAKING

Availability bias: Only consider what’s in front of you.

Confirmation bias: Look for information that confirms our beliefs.

Status Quo bias: Consider any change as a loss.

Discover new insights.

Try out new ideas and demonstrate their potential

Iterative testing, well defined target outcomes force you to face uncomfortable evidence.

“Assume that your strategy may be wrong.

Develop plans for learning what needs to be known - a much more effective way to confront disruptive technologies successfully.

Clayton Chistensen The Innovator’s Dilemma

THANKS.@philbuktoo