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Key MBA Models by Dr. Julian Birkinshaw, Ken Mark

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Design thinking

Design thinking is an approach to innovation that blends traditional rational analysis with intuitive originality. Rather than focusing on developing clever new technologies, or on hoping that someone has a ‘eureka’ moment, design thinking is an approach that involves iterating between these two modes of thinking. It is characterised by experimentation and rapid prototyping, rather than careful strategic planning.

When to use it

  • To understand how innovations emerge in a business setting.
  • To develop new products and services.
  • To create a more experimental and innovative culture in your firm.


The notion of design thinking has become extremely popular in the business world over the last decade. It has roots in two different bodies of work. One is the pioneering work done by Nobel laureate Herbert Simon on ‘artificial intelligence’. In his 1969 book, The Sciences of the Artificial, he wrote that ‘engineering, medicine, business, architecture and painting are concerned not with the necessary but with the contingent – not with how things are but how they might be – in short, with design’. The other is the world of industrial design and design engineering, in which designers sought to create buildings, town plans and products that blended form and function.

Design thinking was brought into the business world in the 1990s. IDEO, a California-based industrial design firm led by David Kelley, was one of the first proponents of this methodology. Kelley went on to lead the ‘D School’ (design school) at Stanford University. More recently, the idea has been formalised and popularised further, through books by Tim Brown, current CEO of IDEO, and Roger Martin, former Dean of the Rotman School of Business.

Design thinking builds on many established management tools, such as brainstorming, user-focused innovation and rapid prototyping. It offers a methodology for bringing these various tools together.

What it is

Design thinking is an approach to innovation that matches people’s needs with what is technologically feasible and what is viable as a business strategy. It can be viewed as a solution-focused approach to innovation, in that it seeks to address an overall goal rather than solve a specific problem.

Design thinking differs from established ways of thinking in some important ways. The analytical scientific method, for example, begins with defining all the parameters of a problem in order to create a solution, whereas design thinking starts with a point of view on the possible solution. Critical thinking involves ‘breaking down’ ideas, while design thinking is about ‘building up’ ideas. Moreover, rather than using traditional inductive or deductive reasoning, design thinking is often associated with abductive reasoning. This is a way of hypothesising about what could be, rather than focusing on what is.

Design thinking employs a different methodology to traditional innovation approaches (as described below). It also requires a different type of individual. Design thinkers need to be:

  • empathic – to see the world through the eyes of others;
  • optimistic – to assume that a better solution always exists;
  • experimental – to have a desire to try out new ideas and to see many of them fail;
  • collaborative – to be happy working with others and not taking personal credit for results.

How to use it

You can apply design thinking through a four-step process:

  1. Define the problem: This sounds simple, but usually it requires quite a lot of work to get to a clear statement of the problem that needs addressing. For example, if you work for a university, and you are getting feedback that the lectures are poor, you might conclude that the problem is (a) poor quality lecturers, who need training, or (b) the lecture rooms are badly designed and need a refit. However, a design-led approach to this problem would be to look at the bigger picture, and ask what the purpose of the lectures is in the first place. This reorientates the analysis towards providing students with a high-quality education, which may involve fewer traditional lectures. For example, it might need more online learning, or small group tutorials.
    To define the problem, you often have to suspend your views about what is needed, and instead pursue an ethnographic approach – for example, observing users of your products or services, and identifying the problems or issues they face. Another approach is to use relentless questioning, like a small child, by asking ‘why?’ multiple times until the simple answers are behind you and the true issues are revealed.
  2. Create and consider many options: Even talented teams fall into ingrained patterns of thinking, which often means jumping to solutions quite quickly. Design thinking forces you to avoid such shortcuts. No matter how obvious the solution may seem, many options need to be created for consideration. This might mean working in small groups of competing teams, or deliberately building a highly diverse team.
  3. Prototype, test and refine: Out of this process, you typically end up with a handful of promising options. These ideas should all be pushed forward as quickly as possible, often using crude prototyping methods so that people can see how the idea might work in practice. There are usually several iterations in this step, as you go back and forth between what is possible and what your users need. Sometimes, this process reveals flaws in the original specification of the problem, in which case you have to go all the way back to the beginning.
  4. Pick the winner and execute: At this point, you should be sufficiently confident that the idea works and that you can commit the significant resources needed to execute it. You should also have established, at this stage, that the idea is commercially viable and technologically feasible.

Top practical tip

Design thinking is a way of looking at the world that is subtly different to the traditional approach. The methodology described above does not sound radically different to what people are used to, so you have to work very hard to remind participants in a design-led project what the points of difference really are. This means, first of all, spending a lot of time getting the problem definition correct and, second, being prepared to go through multiple iterations in coming up with a solution.

Top pitfall

Sometimes a design-led approach to innovation leads to elegant ‘designs’ that are well received by users and technologically feasible, but they fail to pass the test of commercial viability. These are the most difficult cases to deal with. Sometimes it is possible to redesign them sufficiently that they become commercial viable, but if this is not the case, then you must drop them.

Further reading

Brown, T. (2014) Change by Design. New York: HarperCollins.

McKim, R.H. (1973) Experiences in Visual Thinking. Pacific Grove, CA: Brooks/Cole Publishing.

Martin, R.L. (2009) The Design of Business: Why design thinking is the next competitive advantage. Boston, MA: Harvard Business Press.

Simon, H.A. (1969) The Sciences of the Artificial, Vol. 136. Cambridge, MA: MIT Press.

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