the value of design thinking for businesses
Post on 27-Jan-2017
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?Dr Ekaterina KhramkovaLumiknows
Russia
WHY
Business people in corporations and SME struggle with the notions of
‘design thinking’ & ‘design research’. Here are 8 ‘business’ figures to explain
the value of DT & DR.
THINKINGDESIGN
Version 1.0
&DESIGNRESEARCH
Lumiknows, Ekaterina Khramkova 2
?What are all these ‘design thinking’ / ‘design research’
about?
The value of design thinking & design research for organizations
Lumiknows, Ekaterina Khramkova 3
All together, it’s about developing new products with higher:
1. success rate & 2. speed-to-market.
The value of design thinking & design research for organizations
Design thinking is a processDesign research is a tooling
Lumiknows, Ekaterina Khramkova 4
1. ABOUT SUCCESS
The value of design thinking & design research for organizations
Lumiknows, Ekaterina Khramkova 5
REVENUE
The value of design thinking & design research for organizations
POSITIVE. FIGURE №1
New products bring in higher sales, increased customer loyalty, and ultimately higher profits
Launching new products & services is the N1 driver of revenue growth.Deloitte Research
Almost half of total revenue comes from new products.Aberdeen Group
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REVENUE
The value of design thinking & design research for organizations
Oracle
Half of the revenue for Best-in-Class companies comes from new products, a clear gap between their peers.
New products bring in higher sales, increased customer loyalty, and ultimately higher profits
POSITIVE. FIGURE №1
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FAILURES
The value of design thinking & design research for organizations
NEGATIVE. FIGURE №2
New Product Development is a highly complicated process
Every year brings 30,000 of new products. About 90% of them fail despite thorough and expensive market research. Harvard Business Review
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FAILURES
The value of design thinking & design research for organizations
NEGATIVE. FIGURE №2
New Product Development is a highly complicated process
The main reason behind new products failure: 24% Inadequate market analysis (i.e. analysis of customer needs); 16% Product problems of defects; 14% Lack of effective marketing effort; 10% Higher costs than anticipated; 9% Competitive strength and reaction; 8% Poor timing of introduction; 6% Technical or production problems; 13% All other causes.Robert Cooper, Winning At New Products
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FAILURES
The value of design thinking & design research for organizations
NEGATIVE. FIGURE №2
New Product Development is a highly complicated process
Management will increasingly have to be based on the assumption that neither technology nor end use is a foundation for management policy. They are limitations. The foundations have to be customer values. Peter Drucker, Management Challenges for the 21st Century
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FAILURES
The value of design thinking & design research for organizations
NEGATIVE. FIGURE №2
New Product Development is a highly complicated process
All too frequently, marketers' focus on the customer causes them to target phantom needs. Clayton M. Christensen et al
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?Is there any technique to identify real
needs for NPD?
The value of design thinking & design research for organizations
Lumiknows, Ekaterina Khramkova 12
REAL NEEDS
The value of design thinking & design research for organizations
POSITIVE. FIGURE №3
Marketing research techniques:Customer needs
Design research techniques:People needs
Number of people 100 10Number of things 1 100
Design in Technology program, University of Cambridge, Judge Institute of Management
Design research tools used in design thinking is an effective approach to identify new product ideas
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IDEAS-TO-MARKET
The value of design thinking & design research for organizations
NEGATIVE. FIGURE №4
Why so many ideas?? Because of a dropout rate…
D. L. Babcock, Managing Engineering Technology
60ideas
1 successf
ul product
Lumiknows, Ekaterina Khramkova 14
?Why to use such sophisticated tools to generate new product ideas?
There is business analytics…
The value of design thinking & design research for organizations
Lumiknows, Ekaterina Khramkova 15
DATA VS. KNOWLEDGE
The value of design thinking & design research for organizations
NEGATIVE. FIGURE №5
Machines cannot generate new product hypotheses
Despite an abundance of data, most companies do a poor job of predicting the behavior of their customers. Even companies that take the greatest trouble over their predictions are correct only 55% - a result that hardly justifies the costs of having a CRM system in the first place.Harvard Business Review
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2. ABOUT SPEED
The value of design thinking & design research for organizations
Lumiknows, Ekaterina Khramkova 17
SPEED-TO-MARKET
The value of design thinking & design research for organizations
POSITIVE. FIGURE №6
While both cost and quality come in high, launching products before competitors has always been a top focus for manufacturers.
Every year for the past five years, Time has been the number one pressure identified by companies surveyed… Products that are released on-time result in 72% higher profit margins.Aberdeen Group
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ALL TOO LATE…
The value of design thinking & design research for organizations
NEGATIVE. FIGURE №7
In today’s fast moving environment, when the product reaches the market, it may find it already dramatically changed
If it takes you 9 months to develop and launch a new product and then another 9 months before it begins delivering significant revenue, your development cycle time is 9 months but your time-to-revenue is 18 months.Industryweek.com
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?How can design thinking help to
speed up the NPD process?
The value of design thinking & design research for organizations
Lumiknows, Ekaterina Khramkova 20
PROTOTYPING
The value of design thinking & design research for organizations
POSITIVE. FIGURE №8
Design thinking is about creating prototypes of new product ideas asap.
In our practice, when companies are used to spending up to 1 year to produce a well elaborated product which may be already obsolete by the time of launch, we spend about 1 month to create rough prototypes refined due to several iterations based on customer feedback.Lumiknows
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PROTOTYPING
The value of design thinking & design research for organizations
POSITIVE. FIGURE №8
Design thinking is about creating prototypes of new product ideas asap.
We had this idea of ‘adaptive script’, but it was all at the level of thinking. We had been asking our divisions for about 3 months if that was possible to implement. But everybody kept silence… And here, suddenly, we have realized it and within a very short time! …And I like the definition of ‘prototype’ as a ‘visualization of business requirements’.Department of customer experience modernization, Sberbank. Design thinking project executed by Lumiknows, 2015
Lumiknows, Ekaterina Khramkova 22The value of design thinking & design research for organizations
REVENUE FAILURES
REAL NEEDS IDEAS-TO-MARKET
SPEED-TO-MARKET DATA VS KNOWLEDGE
PROTOTYPING ALL TOO LATE…
Why design thinking & design research:
value for business
Lumiknows, Ekaterina Khramkova 23
Contacts
Ekaterina Khramkovae.khramkova@lumiknows.com
Lumiknows, Moscow, Russiahttp://www.lumiknows.com
Lumiknows is a Russia based product design & innovation consultancy.
The value of design thinking & design research for organizations
?Dr Ekaterina KhramkovaLumiknows
Russia
WHY
THANK YOU!
THINKINGDESIGN
Version 1.0
&DESIGNRESEARCH
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