Strategy by Design

It's remarkable how often business strategy, the purpose of which is to direct action toward a desired outcome, leads to just the opposite: stasis and confusion. Strategy should bring clarity to an organization; it should be a signpost for showing people where you, as their leader, are taking them -- and what they need to do to get there. But the tools executives traditionally use to communicate strategy -- spreadsheets and PowerPoint decks -- are woefully inadequate for the task. You have to be a supremely engaging storyteller if you rely only on words, and there aren't enough of those people out there. What's more, words are highly open to interpretation -- words mean different things to different people, especially when they're sitting in different parts of the organization. The result: In an effort to be relevant to a large, complicated company, strategy often gets mired in abstractions.

People need to have a visceral understanding -- an image in their minds -- of why you've chosen a certain strategy and what you're attempting to create with it. Design is ideally suited to this endeavor. It can't help but create tangible, real outcomes.

Because it's pictorial, design describes the world in a way that's not open to many interpretations. Designers, by making a film, scenario, or prototype, can help people emotionally experience the thing that the strategy seeks to describe. If, say, Motorola unveils a plan to create products that have never existed before, everyone in the organization will have a different idea of what that means. But if Motorola creates a video so people can see those products, or makes prototypes so people can touch them, everyone has the same view.

Unfortunately, many people continue to think of design in very narrow terms. Industrial products and graphics are outcomes of the design process, but they do not begin to describe the boundaries of design's playing field. Software is engineered, but it is also designed -- someone must come up with the concept of what it is going to do. Logistics systems, the Internet, organizations, and yes, even strategy -- all of these are tangible outcomes of design thinking. In fact, many people in many organizations are engaged in design thinking without being aware of it. The result is that we don't focus very much on making it better.

If you dig into business history, you see that the same thing occurred with the quality movement. As business strategist Gary Hamel has pointed out, there was a time when people didn't know what quality manufacturing was and therefore didn't think about it. Nevertheless, they were engaged with quality -- they created products of good or bad durability and reliability. Then thinkers such as W. Edwards Deming deconstructed quality -- they figured out what it was and how to improve it. As soon as people became conscious of it, manufactured goods improved dramatically.

The same thing needs to happen with design. Organizations need to take design thinking seriously. We need to spend more time making people conscious of design thinking -- not because design is wondrous or magical, but simply because by focusing on it, we'll make it better. And that's an imperative for any business, because design thinking is indisputably a catalyst for innovation productivity. That is, it can increase the rate at which you generate good ideas and bring them to market. Where you innovate, how you innovate, and what you innovate are design problems. When you bring design thinking into that strategic discussion, you join a powerful tool with the purpose of the entire endeavor, which is to grow. Here is Ideo's five-point model for strategizing by design.

Hit the Streets

Any real-world strategy starts with having fresh, original insights about your market and your customers. Those insights come only when you observe directly what's happening in your market. As Jane Fulton Suri, who directs our human-factors group, notes in her book Thoughtless Acts? (Chronicle Books, 2005), "Directly witnessing and experiencing aspects of behavior in the real world is a proven way of inspiring and informing [new] ideas. The insights that emerge from careful observation of people's behavior . . . uncover all kinds of opportunities that were not previously evident."

Very often, you can build an entire strategy based on the experiences your customers go through in their interactions with your organization. Service brands have a horrible habit of focusing on the one interaction where they think they make money. If you're running an airline, there's an awful temptation to focus all of your attention on what it's like to fly a particular route on a particular aircraft. In fact, you can track backward and forward a whole series of interactions that consumers have with you that are very relevant. If you start to map out that entire journey, you begin to understand how you might innovate to create a much more robust customer experience.