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What Is Design Thinking?

In today’s complex global marketplace, consumers have an unprecedented level of choice. Consequently, consumers have a great deal of (sometimes unrealized) power to shape the destiny of a specific product, and in some cases, entire companies. Protocols, procedures and best practices that place the customer experience at the heart of strategic decision-making are a must in such a business environment.

Design thinking is one of the primary methods thought leaders across a range of industries use to retain a customer-centric perspective. In the broadest sense, design thinking is a process by which new ideas are generated and shaped by various stakeholders into various applications. In the words of Stanford University professor and IDEO founder David Kelley, design thinking is “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.”

Design Thinking in the Real World

What does design thinking look like in practice? Consider PepsiCo’s experience under the design-intensive guidance of CEO Indra Nooyi. Since 2012, PepsiCo has employed a Chief Design Officer (Mauro Porcini). For Nooyi, creating this position was key to maintaining a competitive advantage and driving growth. At this time, PepsiCo was experiencing a relative plateauing of revenues. More health-conscious consumers, plus changes in demographics, translated into a reduced market share. As Nooyi saw it, PepsiCo had no choice but to experiment with various product line extensions. “The rule used to be that you’d reinvent yourself once every seven to 10 years. Now it’s every two to three years. There’s constant reinvention: how you do business, how you deal with the customer,” she says.

By investing in design thinking, PepsiCo ensured that this experimentation was conducted in a controlled, informed and financially responsible manner. In PepsiCo’s case, the impact of design thinking has been profound. Nooyi admits, “In the past, user experience wasn’t part of our lexicon. Focusing on crunch, taste, and everything else now pushes us to rethink shape, packaging, form, and function.” According to the Design Management Institute, PepsiCo isn’t alone in reviving itself through a commitment to design thinking. Over the past decade, the stocks of design-driven companies have outperformed the S&P 500 by over 200 percent.

Learning Design Thinking

Design thinking is a major focus of the Boise State University online MBA curriculum. BUSMBA 501, “Design Thinking and Strategic Management,” is a prerequisite for all degree candidates. In this course students are not just introduced to the core concepts of design thinking methodology; they are also given hands-on experience creating innovative business solutions in a collaborative environment. Design thinking goes hand-in-hand with cross-functional teamwork, and hiring managers are more likely to interview individuals who can demonstrate that they’ve been successful working in a team-based environment. One of the best ways to understand why is to examine how design thinking is integral to software development.

Teamwork and Design Thinking

The “Manifesto for Agile Software Development,” authored in 2001 by a group of engineers and designers, has proven to have influence far beyond the world of technology. Among the core principles of this manifesto are the following:

  • Business people and developers must work together daily throughout the project.
  • Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.
  • The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
  • The best architectures, requirements and designs emerge from self-organizing teams.
  • At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

Optimizing Performance

Design thinking, first and foremost, is about optimizing the organization’s performance. This process begins at the interpersonal level and extends to every area of business operations. Design thinking affects finance, accounting, IT, marketing and management. Students enrolled in BUSMBA 501 also gain experience using Balanced Scorecards as a measure of strategic performance. This tool, developed by Harvard’s Robert S. Kaplan and the Palladium Group’s David P. Norton, gives businesses a 360-degree view of their operations and prospects. The Balanced Scorecard is itself a design that integrates four critical business components: the company’s financial soundness, the company’s internal efficiencies, the company’s vital data (and ability to mine that data for insight), and the company’s capacity to satisfy its customers.

Design thinking is not just a matter of developing products. Design thinking inflects, penetrates and shapes the company’s brand and identity. Tomorrow’s business leaders are today’s design thinkers. Learn more about the Boise State MBA program’s approach to design thinking and how it can be of benefit to you in your career.

Learn more about Boise State University’s online MBA program.


Forbes: What Is Design Thinking?

Harvard Business Review: How Indra Nooyi Turned Design Thinking Into Strategy: An Interview with PepsiCo’s CEO

Design Management Institute: Design-Driven Companies Outperform S&P by 228% Over Ten Years – The ‘DMI Design Value Index’

Principles Behind the Agile Manifesto

Harvard Business Review: The Balanced Scorecard: Measures That Drive Performance

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