What if I were to tell you that there’s an extraordinary means of unlocking trillions of dollars in new revenue for organizations around the world by utilizing a proven method to create new innovative industries, businesses, products, and services?
Got your attention? Sounds too good to be true, eh?
This “new” way of thinking has actually been around for almost 50 years, anyone can utilize it, and yet it’s also the most underutilized methodology in business, government, and non-profit organizations today. So why the hell is nobody using it?
Businesses Today Work Hard to Survive vs Thrive
Organizations today are hyper-competitive competing both locally and with everyone else in the world via the internet. And to make things worse, business cycles are rapidly shrinking where everyone needs everything last week.
Additionally, advanced technologies are rapidly disrupting all businesses – from banking to hospitality to retail – leaving no industry or company safe. Organizations can no longer bury their heads in the sand and hope for the best. The ones that succeed are the ones that are able to adapt and change. And the remaining organizations are either acquired or gradually lose relevance and die slow painful deaths, like Sears, Toys ‘R’ Us, Radio Shack (twice!), or thousands of others.
Definition of Crazy
The biggest problem is that we’ve been doing business pretty much the same way for the past 5,000 years since the beginning of trade. We continue to make incremental improvements to products and services while using the same old business methods to differentiate and remain competitive, e.g. cost cutting, layoffs, M&A, etc. It’s the definition of insanity, where businesses continue to do the same things and expect better results. Sears wasted $6 BILLION attempting to avoid bankruptcy by doing a share buyback. Wow. They’ve known for almost 10 years that they needed to change and did nothing new to innovate or compete.
This problem is just as evident in how schools are teaching business management today, which I discovered firsthand getting an MBA. While I loved the experience of attending Darden Graduate School of Business (ranked #1 by the Economist the last 7 years), I realized that it was a deeply flawed education because the business skills and knowledge are almost entirely devoid of any creativity. I was shocked that 90% of the 300+ case studies I worked on were written between 1960 – 1980, where we were literally learning the same things as those who attended Darden over 50 years ago!
Business today looks nothing like it did back then, so why aren’t we learning new approaches to business management? We’re essentially stuck in an endless self perpetuating system of learning and doing business the same old way. Seems like business itself is ripe for innovation!
A Radical New Approach for Innovative Organizations
At its core, it’s a top-down strategic approach for executives to radically design and establish all of the strategic components (see graphic below) of the modern organization for hyper-growth and innovation.
Additionally, Strategic Design unifies all design methodologies – along with Agile and Lean methodologies – into a cohesive framework for problem solving and operations throughout the enterprise.
The One Caveat of Strategic Design
Before we go any further, I should mention that Strategic Design won’t work for every organization. This is because all organizations have different goals and priorities, where it only works with organizations that meet these three simple criteria:
This criteria sets the bar high, but it’s absolutely necessary for Strategic Design. And you’ll see why once we dive into the specifics. But before I discuss these specific approaches in detail, I want you to develop a good mental model of Strategic Design, so let me start by sharing the guiding principles…
Guiding Principles of Strategic Design
Design is the Strategy
This is the single most important principle, and it requires establishing a “design first” approach by making design a central component of not only your corporate strategy, but your product and service strategies. This means your products and services are conceptualized, designed, built, and marketed utilizing one or more design methodologies and practices versus the typical business approaches. That’s the beauty of design methodologies, is that they can be leveraged for everything from creating companies and digital products to solving complex problems, forming new partnerships, even testing new sales and marketing approaches. From a tactical perspective, it means utilizing Design Sprints instead of a kickoff meeting, design principles instead of objectives, or prototypes instead of requirements, etc.
Establish a Design Culture
This goes beyond simply producing great design or hiring a bunch of designers. It’s the full embodiment of the first principle above of Design is the Strategy, where designers hold senior leadership positions, are involved – or lead – strategic planning and decision making processes. And everyone – especially non-designers – has deep knowledge and respect for the value of design as a holistic and process-driven discipline that should be integrated throughout the organization. It also requires diversity of talents and backgrounds in all roles, which leads to diverse opinions and ideas.
Utilize Empathy for All Initiatives
Typically used as the first step in Design Thinking because it’s a skill that allows us to identify and acknowledge what others are feeling in order to develop a shared understanding of users’ goals, needs, likes, dislikes, and unmet needs. Strategic Design emphasizes using this practice for all business initiatives, regardless if it’s for internal employees and stakeholders, or external partners and customers. It works for most situations in order to better inform decision-making and solve complex problems. For example, it will provide deeper insights to help you learn about employees’ healthcare needs before purchasing a plan, or partners’ expectations for a new technology collaboration, or customers’ needs that will inform your product strategy, etc.
Create an Entrepreneurial Environment
Awesome ideas come from anywhere, and the people that develop great ideas are extremely passionate about developing and launching them; reward those visionaries with opportunities to lead the development of their ideas. Even as a side project. You’ll get a much better product/service rather than handing it off to someone who didn’t conceptualize it, and has little interest in making it successful (i.e. the not invented here syndrome).
Iterative Design & Development
The goal of all teams within a company should be to iterate, build, and launch initiatives quickly, regardless of the output. This requires deploying iterative design skills, processes, and designers throughout the enterprise, not just in product or creative departments. This leads to faster and better insights and the ability to iterate and scale initiatives.
One key component of this is rapid prototyping and testing, where Strategic Design applies it broadly across the enterprise beyond product development. For example, it can be used to rapidly prototype and test team structure or composition, or even prototype a flat organizational structure or a new floorplan. An incredible way to employ rapid prototyping and testing is through a Design Sprint, which is a highly interactive design-focused workshop that utilizes a five-phase framework to solve problems and develop new solutions through rapid ideation, prototyping, and user testing.
Embrace Failure & Continuous Learning
If your company is iterating, building, and launching initiatives quickly, there’s going to be failures. That’s just part of the process, so embrace it. The goal of design and Agile methodologies is to ensure that failures are small (i.e. feature level, not product level), but often. Failure leads to continuous learning for your team – and broader organization – as you continuously learn about your customers’ needs, goals, and expectations. Which makes it easier to innovate. So don’t shy away from failures, celebrate them!
Promote Servant Leaders
Because Strategic Design is so different and unique, it requires unique leadership. Servant leaders are selfless and humble, value diverse opinions, team-oriented, and focus on encouraging and developing leaders (versus being a task-driver). They always shelter their teams from blame and consistently give credit to their teams instead of themselves. They are rare individuals, but only because the business world has falsely promoted the wrong values for so long. Servant leadership is required to ensure all the other principles above are respected and valued, and this in turn will make any organization truly dynamic and innovative.
Strategic Design is unlike any traditional approach to building and growing a business, where it requires a unique mindset that’s radically different from what you learned in Business 101. Only those that are dedicated to innovation, challenging the status quo, and a deep desire to be the leader in their market will be successful.
It’s critical that the executive team fully embraces Strategic Design from day one, because you can’t half*ss it or pay lip service to the notion of design if you want to see extraordinary results. That’s why I recommend startups and young companies utilize it early, because it’s more difficult – but not impossible – to fully incorporate Strategic Design within a company that is well established and mature.
Companies like GE, Sears, Kodak, Harley-Davidson, and Macy’s should embrace Strategic Design before it’s too late, because it’s the best framework to build and grow businesses to not only compete, but to innovate and dominate.
I kinda get it, but do you have any good examples of organizations utilizing Strategic Design? And how do I implement it?
Great questions! Here’s the next post on Strategic Design that includes an example about the greatest company of all time…