Design Thinking

Chapter 19Lean Start-up in Large Enterprises Using Human-Centered Design Thinking: A New Approach for Developing Transformational and Disruptive Innovations

Peter Koen

Stevens Institute of Technology

Introduction

Delivering breakthrough innovations often requires companies to reach beyond the technology itself to rethink the business model using an iterative or probe and learn approach which represents a key tenet of design thinking. Corning's optical fiber program, General Electric's development of computerized axial tomography, Motorola's development of cellular phones, and Searle's development of NutraSweet (Lynn, Morone, & Paulson, 1996) created entirely new markets to achieve success. The technical innovation in each of these cases was accompanied by a new business model, as these new products required different operational competencies, vendors, and customer channels than the companies' existing offerings.

However, large enterprises, which are particularly adroit at exploiting their existing business models, often have considerable difficulty in developing new business models. For example, Sony developed the Walkman audio player, establishing the market for portable music devices. But Apple displaced it in the portable audio space with a new business model that included a new delivery channel—iTunes. Kodak, which dominated the film photography market, failed to embrace the business models needed to support digital photography and ultimately ceded the market to companies ...