DesignThinkingbasedInnovation:howtodoit,andhowtoteachit? CarlosA.Osorio,PhD(carlos.osorio@uai.cl)AdolfoIbanezSchoolofManagement Version1.0.August8th,2009. Abstract Asinnovationbecomesthecornerstonefornewproblemsolvingandcreationofprivateand publicvalue,thispaperexplorestwoquestions:(i)whatmethodsandroutineshelpteamsto innovatebetterandfaster?and,iftherearesuchmethods,(ii)cantheybetaughtandlearned?I focusonthetheoryconvergingfromdesignthinking,newproductdevelopment,andsocial sciences,andonexperimentscarriedoutwithundergraduateandgraduatestudentsoncourses designedtotestthehypothesesthatinnovationcanbetaughttosolvecomplexbusinessand socialproblems.Findingshaveallowedcreatingframeworksandcoursestructuresthathelp teamstocreate,developandenhancenewsetsofskillsbyfocusingthenaturalchaosof innovationintosolvingcomplexproblems. Keywords:designthinking,innovation,sustainablesolutions,challenges,learning,risk, uncertainty,ambiguity,ignorance.

1. Introduction
Asinnovationgainsrelevanceintheworldassourceofvaluecreation,thereisincreasingneed tounderstanditbetterinordertobettermanageitandcreateit.Forthepurposeofthispaperit isusefultodifferentiatebetweeninnovationsasaresultandasaprocess,andtointroduce workingdefinitions.Idefineinnovationasaresultasanynew,ornontrivialchangein, product,service,process,orbusinessmodel,etc.,thatcreatesvalueforamarketand paybackforanorganization.Ialsodefineinnovationasprocessasanadaptiveand structureddevelopmentprocessthat,whileusedconsistently,allowsateamorcompany tocreateinnovationsinaconsistentandpredictablemanner(Osorio,2007). Mostearlyresearchoninnovationfocusedoninnovationsasresults,howtomanagetheir evolution,theircompetitiveeffects,andstrategydesign.Manyscholarshavefocusedonthe studyofinnovationfromtheperspectiveoftheconceptionoftechnologicalchange(Arthur, 1989;Dosi,1982;Kuhn,1970;Rosenberg,1969;Sterman&Wittenberg,1999;Tushman& Anderson,1986),lifecycleofnewtechnologies,theemergenceofdominantdesignsand survivaloffirms(Abernathy&Utterback,1978;Anderson&Tushman,1990;Huckman,2003; Snow,2004;Utterback,1994).Otherstudieshavefocusedonindustrydynamicsasresponseto innovation(Levin&Reiss,1984;Nelson&Winter,1982;Schumpeter,1934,1943),andonthe impactofinnovationsinmarketstructure(Bresnahan&Trajtenberg,1995;Utterback&Suarez, 1991). Thestudyoftechnologystrategyhasalsofocusedonrelevantinnovationthemessuchas modularity(Baldwin&Clark,2000;Ethiraj&Levinthal,2004;Fleming&Sorenson,2001),and therelevanceofstandardsandnetworkexternalities(David,1985;Shapiro&Varian,1999), andtheeffectofmarketsforknowhowandlicensingonmarketintegration(Arora,Fosfuri,& Gambardella,2001;Pisano,1990;Teece,1981,1986). 1

Fromtheperspectiveoforganizationsciences,somehavestudiedthereasonsforfirmfailurein thepresenceoftechnologicaldiscontinuitiesandinnovationassourcesofcreativedestruction (Abernathy&Clark,1985;ClaytonChristensen&Rosenbloom,1995;Clark,1987;Henderson& Clark,1990;Rosenbloom&Christensen,1994;Tushman&Anderson,1986).Othershave focusedonthecapacitiesoffirmstoabsorbnewknowledgeandpractices(Cohen&Levinthal, 1990),theirabilitytocontinuouslylearnandadaptindynamicways(Abernathy&Wayne, 1974;Levinthal&March,1993;March,1991;Pisano,1996;Tripsas&Gavetti,2000)andonthe relevanceofdynamiccapabilities(Kogut&Zander,1992;Stuart&Podolny,1996;Teece, Pisano,&Shuen,1997;Tripsas,1997). Insummary,thestudyabouttherelevanceandeffectsofinnovationsisabundant,unlikethe researchabouttheprocesses,methodsandroutinesthathelpfirmsandteamstoinnovate betterandfaster.Paradoxically,whileitisveryrelevanttounderstandhowtomanage innovationsandtheireffects,practitionersintheprivateandpublicsectorareincreasingly askingtoknowmoreaboutthelatter:howtocreatethem. Thispaperisanefforttohelpclosingthisgapmotivatedbytwoquestions.First,whatarethe methods,processesandroutinesthathelpfirmsandteamstoinnovatebetterandfasterin consistentandsystematicways?Second,iftherearesuchmethodsandroutines,howcanthey betaughtand/orlearned? Inthenextsection,Ipresentareviewoftheliteratureaboutinnovationprocessesfrom differentperspectives.Basedonthereviewoftheliterature,inSection3,Ipresentageneral methodforinnovationbasedonmyresearch.InSection4Iillustratethegeneralmodulesand outcomesofacoursedesignedtoanswerthequestionofhow(andwhether)onecanteach peopletoinnovate.Here,whenIsayteach,Imeanitinthesenseofenablinglearning,rather thanimpartinglecturesorcommunicatinginformation.

2. LiteratureReviewonInnovationProcesses
Inmanagementsciences,researchaboutinnovationprocessesisrootedonthemanagementof productandprocessdevelopment.RobertCooperproposedaninfluentialframework, commonlyknownastheStageGateprocessformanagingnewproductdevelopmentprocesses (Cooper,1986).Theframeworkwasbasedonthestudyofmultipleprojectsandfirms,which identifiedaseriesofproductdevelopmentactivitiesthatrangedfrominitialideascreeningto newproductlaunch(thestages)eachfollowedbyadecisionmakingpointofgonogo(the gates).Eachgaterepresentsascreeningreviewafteradifferentstepintheprocess.TheProduct DevelopmentFunnelcametocomplementthisapproach(Wheelwright&Clark,1992b).The authorsproposedanapproachtoidentifyandmanageinnovationportfolios.Atthebeginning, thefunnelacceptsmanyoptionsforideas,technologiesandmanufacturingprocesses,whichare reducedthroughphasesofconceptgeneration,productdesign,prototypingandtesting,piloting andmanufacturingandlaunch. Theseapproachesleadtoadifferencebetweenthemanagementofaninnovationportfolio,and themanagementoftheprocessofcreatinganinnovation.Whiletheformerisimportant,here wefocusonthelatter.However,thesearenottotallydistinguishableaswecanidentify(i)a planningphase,sometimescalledPhase0(Ulrich&Eppinger,2004),whichincludesatleast20 2

differentdecisions(Krishnan&Ulrich,2001),and(ii)phasesanddecisionsmadeduringthe processofdevelopment.Usually,thesephasesincludeatleastconceptdevelopment,system leveldesign,detaileddesign,testingandrefinement,andproductionrampup(Ulrich& Eppinger,2004).Otherscholarshaveproposedvariationsthatfocusonservices(Thomke, 2002,2003b),softwaredevelopment(Iansiti&MacCormack,1997),andnewdrugdiscovery (Bonabeau,Bodick,&Armstrong,2008),amongothers.Approacheslikethesearefocusedin helpingteamstomanagerisk,uncertaintyandambiguityacrossprojects(i.e.withinaportfolio) andwithinprojects.Here,wewillfocusonthelatter. Uncertaintyisagoodwordininnovation(Iansiti,1995;MacCormack,2005,2006;MacCormack &Verganti,2003;Thomke&Reinersten,1998),becauseitcreatesopportunitiesforfirmswhen theyaretoaddflexibilitytotheirprocesses.Uncertainty,however,hasmanysources:market, technology,platform,etc.AccordingtoMacCormack,asuncertaintyincreasesthedifferencein productqualityalsoincreases,allowingforgreaterdifferentiationanddifferencesin performance. Wecouldaddriskandambiguitytocreatealistofusefulconceptstomanageduringthe innovationprocess:themoreonecouldamplifyriskandambiguityinaparticularsetting,it wouldbelesslikelytohavemanyfirmsproposingsimilarconcepts.Asaprocess,innovationhas alsobeendefinedasasearchforinformation(Fleming,2001;Fleming&Sorenson,2004; MacCormack,2006).Thus,ignorancecanalsobeaddedtothelistalsoagoodword,becausewe candefineitaseverythingthatcouldbeknowninordertosolveaproblemthemostoptimal way.Ateamsignoranceincludes(i)alltheteamknowsitdoesnotknow,butmostimportantly, (ii)alltheteamdoesnotknowitdoesnotknow,and(iii)allitdoesnotknowitknows.Thus,an innovationprocesscanbeunderstoodasalearningprocessforsearchingaboutwhatateam doesnotknowforfindingthebestpossiblesolutiontoaproblem(Beckman&Barry,2007; Owen,1998). Whilethetendencyofmanyteamsistryingtofigureoutearlywhatcouldwork,researchshows theoptimalpathistolearnwhatmightnotworkintheearlieststagesofaproject,inorderto discardthembyprototypingandtestingrounds,andthusdiscoveringwhatcould(Osorio, 2009).Thisisdonethroughafrontloadingproblemsolvingapproach(Thomke&Fujimoto, 2000). This,however,requiresmethodsandcapabilitiesnoteasilyfoundinmanagement,butfoundon theverynatureofdesignthinking.Betteryet,itrequiresbeingcapabletotakeacreativeleap, whichcanresultfromtrainingandlearningtoenhanceopennessandwillingnesstotakethat leap(D.Kelley&Hartfield,1996).Moreover,astheauthorsstated,thereisadifference betweenproblemsolvingandcreatingbeyondwhattheproblemcallsfor.Vergantiexplains thisbydesigndriveninnovationasaprocessthatcanbeinexhaustibleinallowingcompaniesto createnewproducts(Verganti,2006). Thisisbasedonaspecialattitudetowardsproblemsolvingthatmakedesigners(i)lookatthe worldbeyondtheproblemandpatentneedsfrommultipleperspectives,(ii)thinkbeyondwhat isreasonableaslimitsoftheproblem,(iii)assumethereisalwaysabettersolutionthanthe statusquo,(iv)exploreandexperimentconstantly,and(v)workalongandwithinanother disciplines(Brown,2008).Furthermore,asexplainedbyBrown(2008),designthinkingisnot 3

onlyfocusedonachievingfunctionalityonfulfillinguserneeds,butalsohavinganemotional effect.Inotherwords,designthinkingbasedinnovationfocusesintransformingthecurrent userexperienceintothebestpossibleuserexperience(Beckman&Barry,2007;Buxton,2007; FultonSuri,2003). Thisrequiresfocusingtheinnovationprocessintothechallengeathandbytakingahuman centeredapproach(Brown,2008),experimentingasearly,fastandcheapaspossible(Brown, 2008;Osorio,2007;Owen,1998;Thomke,2001,2003a),andlearningfastfromoutsidersand workingalongwithotherdisciplines(Brown,2008;Owen,1998),amongotherthings.Whenall thisisdonetroughiterativeprocessesofanalysisandsynthesis(Buxton,2007;Laseau,1980; Owen,1998)andabstractandconcrete(Beckman&Barry,2007;Buxton,2007). Thiscanbeachievedthroughadesignthinkingbasedprocessthatgoesiterativelyfrom explorationanddiscoverytoalternativegeneration,thentosolutiondevelopment,andfinallyto launchandexploitation(Osorio,2007),whichisbasedontheworkofseveralauthors(Beckman &Barry,2007;FultonSuri,2003;T.Kelley&Littman,2001;Ulrich&Eppinger,2004; Wheelwright&Clark,1992a)andcompaniessuchasIDEO,Frog,Continuum,BankofAmerica, Google,Procter&Gamble,Apple,amongothers. Unlikeatraditionalstagegateproductdevelopmentprocess,theultimategoalofadesign thinkingbasedprocessisnotorientedtocreateaproductorservice,butapotentialspace foruserexperiencesthatisenabledbyaproductorservice(Buxton,2007;Osorio,2007).Here, theproductorserviceisthedoortoaspaceofpotentialuserexperiencesthat,accordingto MacCormack(2008),isachievedbyiteratingwithinandthroughdesignspaces. Learningthroughexperimentationiskeyforsuccessfullyiteratingthroughdesignspaces (FultonSuri,2003;T.Kelley,2001;Thomke,1998,2001,2003a;Tohidi,Buxton,Baecker,& Sellen,2006).Summarizingtheviewfromtheseauthors,andconsideringearlyresultsonthe differencesbetweensuccessfulandunsuccessfuldevelopmentprojects(Osorio,2009),onecan saythatlearningthroughexperimentationisachievedatitsbestwhenisdonethrough prototypingandtestingcycles,whicharefollowedbyenhancedlearningprocesses.This continuesuntilthepointinwhichateamfindsanewconceptthatisimplemented,then launchedandexploited(Andrew&Sirkin,2006). Basedonthisreview,nextsectionpresentsageneralmodelfordesignthinkingbased innovation.

3. DesignThinkingbasedInnovation
Followingfromtheprevioussection,designthinkingbasedinnovationhappensinaspace designthatiterates(i)betweenanalysisandsynthesis(creatingalternativesideasandchoosing fromthesealternatives),atthesametimethatiterates(ii)betweenabstractandconcrete(from aconcreteproblem,toabstractthinkingandlearningabouthowtosolveitthroughafinal concretesolutionthatisfinallyimplemented). HereIpresentageneralmodelofinnovationprocessdevelopedthroughmyresearchoverthe lasttwoyearsthatisbasedoncombiningdesignthinkingwithtraditionalproductdevelopment

processes(Osorio,2007).Themodelwasdesignedtobeagnosticofwhetherateamis developinganewproduct,service,ordesigninganewprocess. Theprocessstartswiththedefinitionofaninnovationchallengefromaproblem,ideaor businessopportunity.Then,themodelhasfourphases,eachfocusinginadifferentobjectivefor thedevelopmentprocess:(i)learninganddiscovery,(ii)alternativegeneration,(iii)system levelprelaunchdevelopment,(iv)launchandexploitation(SeeFigure1). Figure1:GeneralModelofInnovationProcess

Source:theauthor 3.1.DefiningtheInnovationChallenge AsresultofmyresearchoninnovationwithteamsandcompaniesIhavefoundthat,regardless thenation,industryorcompany,peoplegivetoomuchcredittoideasassourcesofinnovation. Manycompaniesfocusoncreatingandstructuringideafunnels,theyscanhundredsofideasfor newproducts,servicesandprocesses,startdevelopingsome,andimplementafew.However, therearemanyproblemswiththisapproach: 1. Anideacanbeunderstoodassomeonesconceptualizationforthemostvaluableand promisingsolutiontoaworthyproblem.However,regardlessofhowintelligentor accomplishedheorshemightbe,theprobabilityforhisorherideatobethebest solutiontothatproblemisverylow(insomecaseslowerthan0.01%). 2. Startinganinnovationprojectfromanideacaneasilyleadateamtoiteratearoundthat originalidea,whichleadstoanchoringthedevelopmenteffortsaroundtheoriginal

idea1.Someexamplesofdisastrousresultsfromtechnicallyoptimumideasarethe IridiumProject(implementedbyMotorola)andofTransantiago,thePublic TransportationSystemoftheCityofSantiago,(CHILE).Anchoringleadpeopletofocus toomucharoundtheoriginalidea,andriskingnotconsideringorexploringsuperior alternatives. 3. Asresult,developmentteamsthatstartdevelopingeffortsfromanideaeasilyfallinlove withtheidea,andlosecriticalperspective. Insummary,whiletheproblemunderlyingtheideamightbeworthy,andfindingthebest possiblesolutiontothatproblemmightbehighlyrewardedbythemarket,theoriginalidea mightnotnecessarilybethebest.Theideaapproachmightexplain,tosomeextent,thelarge percentageofnewproductsandservicesthatfailduringthesixmonthsfollowinglaunch (Zaltman,2003). Severalscholarshavefoundthatsourcesofinnovationsareworthyproblemsneedingbetter solutions,newregulations,obstacles,orsolutionsnotworkingsufficientlywellenough(Clayton Christensen,2000;C.Christensen,Scott,&Roth,2004;Sull,RuelasGossi,&Escobari,2003;Erik vonHippel,1988).Basedonthis,andonmyresearchwithfirmsanddevelopmentteams,Ihave foundthatabetterapproachistodefinetheinnovationchallengesfromproblems,obstacles, regulations,opportunitiesandideas.Here,ideasaretakenfromadifferentperspective:they areconsideredtoevaluatethemeritsoftheproblemorobstacletheyaimtosolve,orthe opportunityorregulationtheyaimtoface.Theidea,onandinitself,haslittlevalueatthispoint. Eachproblem,regulation,obstacleoropportunitymighthaveatleasttwodimensions:(i)value toamarketand(ii)urgencyofimplementation.Thusfirmsscantheirenvironmentfor informationabouthowmuchvaluecouldbecreatedbysolvingtheproblemandobstacle,facing theregulation,andtakingadvantageoftheopportunityinthebestpossibleway.Theycanalso assesstheurgencyforaction.ThisallowscreatinganInnovationChallengePortfolio(ICP) withinanorganization. Fromeachproblem,obstacle,regulationandopportunity,firmscandraftpreliminary innovationchallenges.Table1illustratesthispointbyshowingdifferentinnovationchallenges definedfromvarioussourcesofinnovationfordifferenttypesoffirms.Ihavefoundthat innovationchallengesfocustheattentionofdevelopmentteamsonhowtofindthebestpossible solutiontoeachand,insteadoffallinginlovewithoriginalideas,teams(i)fallinlovewith findingthebestpossiblesolutiontotheproblem,(ii)arenotconstrainedbyanchoringintoany onespecificsolutionexante,and(iii)developsuperiorsolutionsascomparedtoscenarios wherethechallengeisbasedonanoriginalidea.
1Anchoringisamongthemostcommondecisionmakingtraps.Forexamplesandmore

detailedexplanationseeHammond,KeeneyandRaifa(1998). 6

Table1:InnovationChallengesforDifferentFirms
SourceofInnovation (problem,obstacle,regulation,opportunity) Lackofpenetrationofamajorretailcompany inthelowermarketsegmentsofthe population Increaseinthefinancialcostoffinesbydelays infillingoilrequestsbyaircargofreightersata majorinternationalairport Lossofaudiencebyamajorbroadcasting companyinthesegmentofpeoplebetween 15and24yearsold IntensecompetitioninmobileInternetaccess afterderegulation InnovationChallenge Howtoimprovethequalityoflifeofpeople insegmentsD&Ewithaconsumer experiencethatisbothprofitableand sustainabletothefirm? Howtodecreasetheaveragedelaytoserve anairfreightcargofrom35tonomorethan 5minutes,withoutaffectingtheaverage timetoserveapassengerairliner? Howtobecometheleaderinaudiovisual andmediacontentusingallpossible technologiesandplatformsavailable? Howtobecomethenationwideleaderin mobileinternetaccess? TypeofFirm Retailcompany

Oilcompanyservingallpassenger andairfreightfirmsinan internationalairport Majorbroadcastingcompany Majortelecommunications company

Asresult,insteadofhavingideafunnels,firmscreateICP.Then,eachinnovationchallengehas itsowndevelopmentprocess,depictedinFigure1,whichleadstoafunnelthatisspecificto eachchallenge.Thisfunnelstartswithachallenge,thenisfilledtocreateaSpaceofPossible Solutions(SPS)andthen,rapidly,synthesizedintoaSpaceofFeasibleSolutions(SFS).TheSFS isasubsetoftheSPS,whichcontainsagroupofideasandalternativesthatareconsidered amongthebestforsolvingthechallenge.Then,throughiterativephasesofanalysisand synthesis,theteamgoesalongthefunneldiscardinginferioralternatives,andkeepingthe superiorones. ThemodelinFigure1wasbuilttoamplifytherisk,ambiguityanduncertaintyassociatedwith findingthebestpossiblesolutiontoachallenge,butdoingitwithinaprocessthatisbuildto mitigatetheirfinancialandmarketeffects.Thisisachievedby:(i)understandingthenon explicitandnonobviousaspectsofthechallengeanddiscoveringanomalies,andareasof opportunity,(ii)generatinghundredsofideasforcreatingthelargestnumberofpossible alternativesolutions,iterating,testingandrefiningthesesolutions,(iii)findingthebestpossible alternative,(iv)implementingitand,finally,(v)launchingandexploitingit. 3.2.LearningandDiscovery Theobjectivesofthefirstphasetheinnovationprocessare(i)understandingthenonobvious dimensions,needsandcharacteristicsofthechallenge,(ii)learningasfastaspossibleabout them,and(iii)discoveringanomalies,patternsandareasofopportunity.Thiscanbeachievedin foursteps:(i)identifyinglatentneeds,(ii)understandingthoseneeds,(iii)observation,and(iv) discovering. 3.2.1.IdentifyingLatentNeeds Focusingonachallengeeliminatessomesourcesofanchoring,butnotall.Achallengecanalso representabiasedconceptualizationaboutwhattheproblemis.Forthisreason,teamsneedto reframethechallengeinordertounderstanditfromdifferentperspectives,andgobeyondthe 7

explicitchallengeinordertoidentifyitsunderlying(andnonobvious)latentneeds.Thereare severalmethodsusefulforthisendeavor;eachallowsteamstoseparatethechallengeinneeds thatareMutuallyExclusiveandComprehensibleExhaustive(MECE)increatingthebest possibleconsumerexperience.Forinstance,theuserexperienceinasupermarketcouldbe separatedinto(i)findingwhatyouarelookingfor,(ii)shopping,(iii)security,and(iv) checkout. Theseneedscanbeexaminedseparately,andtheteamcouldassesswheretolookforsourcesof inspirationandunderstanding. 3.2.2.Understanding Theobjectivesofthissteparetounderstandthebreadthanddepthofeachneed,thewaythey relatetoeachother,theirrelevanceincreatingtheuserexperience,identifypeopletointerview andobserve,andsettingstoresearch. Thus,understandinglatentneedsallowteamstodeepentheircomprehensionaboutthe relevantdimensionsoftheinnovationchallenge,testtheirinitialassumptionsabouteach,and prepareapreliminaryroadmapforobservationandinterviewing. Manyteamsandcompaniesfeeltemptedtobenchmarkwithfirmsfromtheindustrytheyare workingon,andresearchhowothershavefacedandsolvedsuchneeds.Thisapproachisnot advisableformanyreasonsbut,mainly,becauselookingatwhatothersinthesameindustry havedonealsocreatesanchoring.ResearchonLeadUserInnovationMethod(Lutje&Herstatt, 2004;EricvonHippel&Sonnack,1999)suggestteamsshould,regardlessoftheindustry,look wherethedifferentneedsmighthavebeenfeltinsoexaggeratedwaysthatusersmighthave hadenoughincentivestoinnovate. 3.2.3.Observation Accordingtoresearchinmarketing,about95%ofconsumptiondecisionsresultfrom unconsciousthoughtsand,therefore,arenoteasilyarticulatedbyconsumers(Zaltman,2003). Thus,theeffectivenessofpolls,interviewsandfocusgroupsforgatheringinformationabout consumerspreferencesislimited.However,whilemostinformationisnotaccessiblethrough traditionalmethods,itcanbecollectedthroughobservationandethnographicmethodsoffield research. Teammembersshouldgatherinformation,data,andsourcesofinspirationandlearningfrom observationandotherfieldresearchmethodsappliedtoallstakeholders,situationsandplaces relatedtothechallengetheyaresolving.Here,theteamcollectsinformationintheformof photos,videos,newspaperandmagazinearticlesandpictures,descriptionsandethnographic fieldnotes,personalaccounts,interviews,etc.Theobjectivesare(i)learningasmuchas possibleaboutthedifferentdimensionsandlatentneedsidentifiedinthepreviousstages,(ii) identifyingleadusersthatcouldbesourcesofinnovations,and(iii)feedbacktheinitial understandingaboutlatentneeds,inordertorevisitandrefineit,ifneeded. 8

3.2.4.Discovering AsthefinalsteponthestageofLearningandDiscovery,theteamgatherstogetherinorderto shareeverythingthathasbeenlearnedonthefield.Theobjectivesare(i)redefiningthe innovationchallengeatthelightofnewfindingsandunderstandingofitsunderlyinglatent needs,(ii)makingsenseofitsnonobvious,counterintuitiveandparticularaspects,and(iii) identifyingparticularareasofopportunityordimensionsoftheuserexperiencethatcanbe exploited. 3.3.AlternativeGeneration ThesecondphaseoftheprocesstakestheoutcomesachievedduringthephaseofLeaningand DiscoveryandappliesittogenerateaSpaceofPossibleSolutionthroughiterativestepsof brainstormingandcyclesofprototypingandtesting.Thesecycleshelptheteamtostartfrom hundredsofideasinordertocreateroughconceptsdesigns,obtainaSpaceofFeasible Solutionsand,fromthen,iteratebetweenanalysisandsynthesisinordertoachieveasolution thatisaptforprelaunchimplementation(SeeFigure2). Figure2:PrototypingandTestingCycles

Source:theauthor 3.3.1.IdeaGeneration InthephaseofIdeaGeneration,theteamneedstogenerateasmanyideasaspossibletosolve theinnovationchallengeaccordingtothelatentneedstobefulfilled.Thisenhancesthe probabilityofhavingtherawmaterialrequiredtodiscoverasolutionthatdoesnotonlysolves theproblemathand,butalsoexceedsexpectationsabouttheconsumerexperience.Asresultof anchoring,traditionaldevelopmentteamswilltendtofocusonthecompetitivespaceinwhich thecompanyhasoperated(Hammond,Keeney,&Raiffa,1998).Thisisareasonwhyteams 9

shouldencouragemarginalideasandusethesourcesofinspirationgatheredthroughmethods suchasLeadUsermethod,andotherspointedtowardsfulfillingthelatentneedsfromvarious anddifferentindustriesandsectors. Fromastatisticalperspective,thehigherthesetofideasgeneratedbytheteam,thehigherthe probabilitythatbreakthroughideaswillbefoundwithintheset.Forachievingthis,several authorshavesuggestedvariouspracticesandcontextsforbrainstorming(T.Kelley&Littman, 2001;Parnes&Meadow,1959;Paulus,Brown,&Ortega,1996;Surowiecki,2004;Sutton& Hargadon,1996;Valacich,Dennis,&Connolly,1994). Itisimportanttonotethatideagenerationisafirststepofanalysisthatwillbefollowedby synthesisofideasintodesignconcepts,testing,learning,refinementandbyvariousroundsof brainstorming,conceptgeneration,prototyping,testing,learningandbetterunderstanding,and refinement.Thisisexplainedasfollows. 3.3.2.PrototypingandTestingCycles Prototypingistheshorthandofinnovation(T.Kelley,2001)becauseallowsteamstorefine, synthesize,concretizeandcommunicateideasaboutpossiblesolutions(Buxton,2007).The prototypeandtestcyclesiteratebetween: Prototyping(Analysis):startsbymodifyingunderstandingandlearning,andincorporating thatlearningintogenerationofnewideas.Theseideasareincludedintonewareasof opportunityandconceptdesignsthatarelaterrefinedintomanyprototypesfornew experiencesthataresupportedbyproducts,servicesandprocessesconcepts. Testing(Synthesis):takestheseprototypesandtestthemintomarketsthatcanbemoreof lesscomplete,regardingthetypeofprototype.Teamsthenobtainfeedbackusingsomeof theobservationmethodsusedinthephaseofLearningandObservation,analyzedata, discardsomeaspectsofeachprototype,andsynthesizethebestaspectofeachintoanew roundofanalysis.

Thesecyclesarerepeatedstartingfromvariouslowcostprototypeswiththeobjectiveof brainstorming(whatIDEOcallsinspirationalprototypes),tosomemediumcostprototypes withtheobjectiveofexperimenting(whatIDEOcallsevolutionprototypes),tofewhighcost prototypeswiththeobjectiveofvalidatingthefinalsolution(whatIDEOcallsvalidation prototypes).Iteratingfromlowcost,roughprototypestohighcostandrefinedprototypes allowsteamstorapidlyidentifydesignconceptsthatareinferioranddiscardthem,using learningthroughexperimentation,andonlyinvestseriouslyinthoseoptionsthathaveshownto besuperior.Ifprototypingistheshorthandforinnovation,rapidprototypingallowsfasterand moreeffectiveinnovationbecauseitenableslearningbyfailingassoon,asfastandascheapas possible. Prototypingandtestcyclesalsohavethebenefitofallowingfrontloading,andacceleratingthe discoveryprocessaboutwhatcangowrongwithadevelopmentprocess(Thomke&Fujimoto, 2000).Insimplewords,prototypingandtestcycleshelpteamstoreducerisk,ambiguityand uncertaintythroughlearningaboutmostifnotallofwhatcangowrongwithaproject.

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StefanThomkehasaddressedthequestionofhowmanyprototypesandexperimentstocarry out(Thomke,2003a).Inhisview,theanswerdependsonthecombinationbetweentheworst possibleoutcomebythelatestidentificationofproblems,andpotentialsavingsfromthe earliestidentificationofproblems,aswellastheaveragecostofaroundofexperimentation. 3.4.PreLaunchDevelopment Theobjectivesofthepreviousphaseshavebeenunderstandingthenonobviousdimensionsof theinnovationchallenge,learningasmuchandfastaspossibleaboutthem,generating alternativedesignconcepts,anditerateamongtheminordertoidentifyanddiscardinferior solutions.Insummary,theobjectiveshavebeentoreduceignorance,ambiguity,uncertainty andrisk.Onceateamhasreachedapointwherelearningthroughprototypingand experimentationdoesnotgeneratenewlearningand/ordoesnotrequiresignificantrefinement oftheprototype,itcanstartprelaunchdevelopment. Thisphasefocusesondetaileddesignofthenewproduct,relatedservicesandprocesses,design ofthesystemsthatwillallowandsustainthenewuserexperience.Itincludessystemleveland detaileddesign,andfinalroundsoftestingandrefinement,alongwithdesignformanufacturing (inordertoreducemanufacturingcosts),designingdistributionchannels(inordertooptimize thelogisticsofmarketdelivery),designingthelaunchofthenewproduct(inordertomaximize marketadoptionanddiffusion),andmarketing(inordertodefinesalesplan)andproduction (inordertoevaluateearlyproductionoutputandplacement)plans,amongothers. Thisphaseallowsforappropriatemarketlaunchandexploitation(Ulrich&Eppinger,2004), alongwithlearningasmuchaspossibleaboutproductionandexploitationbeforegettingtothe market(Pisano,1996). 3.5.LaunchandExploitation Theobjectivesforthelastphaseonthemodelarefocusedongeneratingpaybackandmanaging thelifecycleoftheinnovation.Buildingonpreviousresearchandpracticeaboutthefinancial returnsfrominnovation(Andrew&Sirkin,2006),teamsshouldfocuson(i)planningand executingthelaunchofinnovationssothatitcangenerateenoughinertiatoreachadiffusion tippingpointasfastaspossible,and(ii)generatingsalesinordertosecurefinancialreturn. AccordingtoAndrewandSirkin(2006)therearetwoimportantvariables:(i)thetimetoreach volumeproductionattheminimumscaleneededtodeliverpaybackfortheorganization,and (ii)thepostlaunchinvestmentneededtomaximizepayback.

4. TheProcessofLearningtoInnovate
Theprevioussectionsummarizedageneraldesignthinkingbasedinnovationmethodcreated bystudyingvariousfirms,andrefinedthroughalivinglaboratoryatthebusinessschooland schoolofengineeringatAdolfoIbezUniversity.Idevelopedacoursesyllabusforan InnovationWorkshopinwhichIwantedtotestwhetheronecouldteachgroupsofordinary studentstodevelopextraordinarysolutionsforrealproblems.Mymotivationforcreatingthese coursesstartedasvisitingresearchscientistatMITMediaLab,between2001and2002,whereI 11

foundmostfacultyapplyingconstructionismonthecurriculaofitscourses.Iwasluckytohave metMitchelResnick,SandyPentland,BakhtiarMikhakandbecameawareoftheteachingwork ofNeilGershenfeldonhiscourseHowtoMake(Almost)Anything2.Ihavealsogainedand learnedverymuchfromcontactswithStefanThomke,fromHBS,andhiscoursematerialfor ManagingProductandServiceDevelopment,andStanfordscourseIntroductiontoHuman ComputerInteraction(CS147).Finally,myteachingapproachwasalsoheavilyinfluencedby myparticipationatHarvardBusinessSchoolColloquiumonParticipantCenteredLearning (CPCL),andasmasterandPhDstudentatvariousMITandHarvardcourses. Basedonthesecoursesandresearch(mentionedinSection2),andthemodelillustratedin Figure1,Idevelopedacoursesyllabusthathasbeenimprovedthrough10classestaughtsince 2007,withmorethan500studentsandabout100projectteams.Afterthesuccessandresults fromthiscourse,wedevelopedadesignthinkingbasedMasteronInnovation(MI)program, whichisnowonitssecondgeneration3.InthispaperIwillfocusontheInnovationWorkshop, ratherthantheMI,fortworeasons:(i)theworkshophasmorehistoryandresultsthantheMI, and(ii)hasbeenappliedtotraindevelopmentteamswithinfirmswithgoodresults. Inthefollowingsection,Isummarizethe(i)objectives,(ii)teachingphilosophy,(iii)structure, and(iv)outcomesofthecourse. 4.1. Objectives Thegeneralobjectivesofthecoursearetochangethewaystudentsthinkaboutinnovation, andhowtheyactwhiledevelopinganewproduct,serviceorprocess.Bytheendofthe course,studentsshouldbeabletoidentifynonobviousandlatentneedsfromroughly definedinnovationchallengeandexplicitneeds.Theyshouldgainfirsthandexperienceon designthinkingasmethodforapproachingdevelopmentproblems,andfeelmore comfortablewithhandlingrisk,ambiguity,anduncertainty,aswellasrecognizetheirareas ofignorance.Theyshouldknowhowtolearnthroughfailureandexperimentation,feel comfortablewithit,andappreciatethebenefitsoffrontloadingproblemsolvingaswellas managingbasicmethodsforobservation,interviewing,discovery,experimentation,and prototyping. 4.2. TeachingPhilosophy Inordertoaccomplishtheseobjectives,thecourseisdesignedtobeanexperienceso studentscanlearnbydoingandapplydesignthinkingreasoningtorealproblems. Giventhatidentifyinganworthyinnovationchallengeisnotaneasytask,Istartby contactingcompanies,NGOsandgovernmentorganizationsforproblemsorprojectsthat canbeusedaschallenges.Thestudentsarepresentedwithlooselydefinedchallenges,
2Forthesyllabus,pleaselookforcoursecodeMAS.863atMITOpenCoursewareat

http://ocw.mit.edu/OcwWeb/web/home/home/index.htm
3Forinformationandstructureonthisprogram,pleasesee

http://www.uai.cl/images/stories/Facultades/Negocio/Master/mi/folleto%20mi.pdf 12

presentedbyCEOs,orareamanagerssuchastheChiefTechnologyorMarketingOfficer. Thechallengesareimportantproblemsinwhichfirmsareworkingorthinkingonand,in mostcases,firmsaskstudentstosignNonDisclosureAgreements.Thearrangementsabout intellectualproperty(IP)havebeenvaried.Inthecaseswherethefirmspayorreward students,thesponsorcompanyretainIP,whileinsometheyallowstudentstoowntheIP andhavedecidedtoinvestontheirdevelopments. Inordertomakestudentsfaceanddealwithhighlevelsofambiguityanduncertainty,there isnoplaceforclarificationquestionsfromtheprofessororsponsorfirms.Instead,students areencouragedtolearnwhattheyneedfromfieldwork,andtoreceivefeedbackfrom sponsorfirmsandconsumersfromthevariousconceptsandprototypesdevelopedthrough thecourse,andfromclassdiscussion. Asresultthecoursefocusesonparticipantcenteredlearning.Thisalsoreflectsonthe gradingsystem:(i)50%ofthegradingisassignedbythesponsorcompany,basedonthe qualityofthefinalworkpresentedbythestudents,and(ii)theother50%isassignedbythe professortoeachstudentscontributiontothelearningprocessoftheclass,throughdaily assessmentofhisinclassandonlineparticipation. Finally,Iusedthiscourseasalaboratoryformyresearchoninnovationprocessestoboth developtheory,andletstudentstousetheory(Carlile&Christensen,2005).Therearetwo finaloutcomesforeachteam:(i)afinalprototype,and(ii)aprojectreportthataccountsfor allsteps,ideas,photographs,sourcesofinspiration,fieldworknotes,conceptdesigns,and prototypescreatedthroughtheprocess. 4.3. Structure Thecoursehas5modules,eachwithadifferentobjective.Attheendofeachmodule,each groupisrequiredtopresentanadvancetotheprojectinanyformat(video,memo,prototype, etc.).ThecoursestructureisillustratedbyFigure3. 1. UnderstandingInnovationProcesses:focusesonintroducingstudentstodesignthinking basedinnovation,andmakethemcompareittotraditionalproductdevelopmentand engineeringprojectmanagement.Thisisachievedbycombiningcasebasedandlecture basedclasses.Attheendofthemodule,sponsorfirmspresentthechallengestotheclass. 2. SourcesofInnovation,NeedsandObservation:Thefocusofthismoduleistoprovide studentswiththepossibilitytolearnbyapplyingmethodsofreframing,identificationof sourcesofinnovation,identificationoflatentneedsandfieldwork(observation, interviewing,etc.).Theobjectiveofthismoduletomakestudentslearnanddiscover nonobviousaspectsofthechallengebyapplyingandcontrastingmethods,sotheycan perceivethechallengeanditsneedsfromdifferentperspectivesanddiscoverareasof opportunity.Thelearningobjectivesareachievedthroughacombinationofcasebased classes,teamworkplanningandfieldwork. 3. IdeaandConceptGeneration:Thismodulefocusesongeneratingskillsinbrainstorming andconceptgenerationthroughacombinationofcasebasedclasses,onediscussion basedlectureandteamworkonideaandconceptgeneration.Studentsapplyoneor 13

variousbrainstormingtechniquestocreatepreliminaryideasandconcepts,inorderto buildtheskillsneededforModule4(LearningthroughExperimentationand Prototyping)andmanagePrototypeandTestingCycles(illustratedinFigure2).They alsostartplanningusabilitytests,andhowtoobtainfeedbackfromcustomersandthe sponsorfirm. 4. LearningthroughExperimentationandPrototyping:thismoduleisaimedtocreateskills forlearningbyexperimentationandprototyping.Studentsgetexposedtocasesand methodsaboutprototypingandexperimentation,andtheconsequencesoffailingas soon,asmuchandascheapaspossibleinorderto(i)learnasmuchaspossibleabout whatmightnotwork,and(ii)decreasetheprobabilityoffailinginthemarket(after launchinganewproductorservice). 5. ProcessDesignandImprovement:Thelastmodulefocusesonexaminingtheexecution ofaninnovationprocess,improvingit,andallowingtheorganizationforcontinuous improvementofitsinnovationroutines. Figure3:CourseModules

4.4. Outcomes EveryInnovationWorkshopIhavetaughthashadbetweenoneandfivechallenges.Inevery term,Ihavemadechangesbasedontheresultsoftheprevious,andasresultthecurriculahas evolvedovertheyears.Partofmyresearchfocusesonanalyzingtheoutcomesorthecoursefor furtherimprovement,butIdidnothadtheopportunitytocomparethequalityoftheworkof mystudentswithotherssimilarstudents,solvingthesameproblem,butwithouttheskillsand knowledgegainedattheInnovationWorkshop. Suchopportunityhappenedduring2008,attheDesafoalaInnovacinChile2008(the2008 ChileanInnovationChallenge),thattookplaceduringthesecondhalfof2008.Chiles InnovationForum4organizedastudentcompetitionwhere4organizations(threecompanies
4Seehttp://www.foroinnovacion.cl/fortheInnovationForum

14

andoneministry)presentedonechallengeeach.Studentparticipationreachedabout500 studentsgroupedinto63teamsfrom23universities. Thecompetitionhadthreephases(SeeFigure4).Thefirsttwophasesfocusedonblindreview oftheproposalsbyexecutivesofthecompaniesandtheministry.Fromthe63teamsstartingin PhaseI,35madetoPhaseII,andonly23reachedPhaseIII.PhaseIIIincludedatimed presentationfortheexecutives.Atthebeginningofthecompetition,14ofthe63teamswere formedbystudentswhohavebeentrainedbymeattheInnovationWorkshop(22.2%).By PhaseIII,11outofthe14teamswerestillincompetition(47.8%). Eachorganizationhadtochooseonlyoneteamaswinner.Fromthe23teamsthatreached finales,fourteamswereselected:threemasterlevelteamswithtrainingattheInnovation Workshop,andoneteamofPhDstudentswithoutthetraining.Thefinalstep,however,wasto choosethemostinnovativesolutionamongthese4teams.Thistaskwasgivento8ofthepeople thathavebeenawardedAVONNI,theChilesprestigiousNationalInnovationAward. Afteranalyzingtheprojectsofthefourfinalteams,theAVONNIjudgesdecidedtoawardas MostInnovativeProjectthesolutionofateamcomingfromtheInnovationWorkshop.Noneof thesolutionsweremadepublic,becausebecameintellectualpropertyofthesponsorfirms. Figure4:PhasesandCompetingTeamsatthe2008ChileanInnovationChallenge

Source:theauthorbasedondatafromInnovationForum 15

5. Conclusions
Regardlessofthesector,thesustainabilityofavaluepropositionisamatterofstrategic relevance.Whetheroneconsiderscreationofpublicorprivatevalue,designthinkingbased problemsolvinghasthebenefitofallowingsuperiorperformance.Fromtheperspectiveof innovation,addressingsustainabilityinvaluecreationnecessarilyrequireshandlingthemoving targetproblem.Themovingtargetproblemiscreatedbytheinteractionamongthetime neededtodevelop,implement,launchandexploitasolution,andtheuncertaintyandambiguity inherenttoanyproblem.Teamscangeneratebreakthroughsolutionsbyreducingtimeto market,whilehandlingambiguityanduncertaintyinadequatemanners.Byadequate mannersImeantoamplifyambiguityanduncertainty,inordertoenhancethechaosinherentto aninnovation,butwithinaprocessthatisdesignedtomitigatetheirimpact. Inthispaper,Iarguethatdesignthinkingbasedinnovationcancontributeinimportantwaysto thesustainabilityandsuperiorityofproblemsolving,throughmethodsthatallowteamsto(i) learnaboutthehiddenandlatentaspectsofchallenges,anddiscoverareasofopportunityand anomalies,(ii)becapableofgeneratingthelargestpossiblesetofalternativesforsolutions,(iii) selectand/oridentifysuperiorsolutionsbyiterativecyclesofprototypingandtesting,(iv) identifyassoonandfastaspossiblewhatcangowrong,and(v)learnbeforelaunchhowto rampupthenewservices,productsandprocesses. Researchshowsvariouscompanieshaveachievedthisgoal,andmyparticularresearch presentsanapproachfordoingit.However,themostrelevantaspectpresentedhereisthefact thatteamsandorganizationscanlearnhowtoachievesuperiorperformancethroughdesign thinkingbasedinnovationtraining.Whetherinpublicpolicy,management,designand engineeringschools,orduringincompanyexecutiveeducation,oneneedstofocusoncreating asetofnewcapabilities:(i)learningtocraftaninnovationchallenge,(ii)learningtoidentify sourcesofinnovation,(iii)learningtoperceiverealityindifferentways(bycreatingcreative capacity),(iv)learningtogenerateasmanyideasaspossibleand,byexploration,identifythose thataresuperior(bygeneratingexplorationcapacity),(v)learningtofailassoon,fastand cheapaspossibleinordertosucceed. This,however,requiresamorebasiclearning:learningtounlearnwhatkeepspeopletrapped intotheefficientwayofdoingthings:(i)avoidingmistakes,(ii)beingcostefficient,(iii) implementingthingsatonce,etc.Theresearchonthispaperisunderdevelopment,butalready hasshownsignificantresults,aswiththeexampleofstudentscompetingforsolvingproblems duringthe2008ChileanInnovationChallenge:(i)facedwithsameproblems,groupsofstudents trainedindesignthinkingbasedinnovationachievesuperiorresultsthatgroupsofstudents withoutsuchtraining,and(ii)theskillsandmethodsforachievingsuchperformancecanbe learned.

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