Becoming The Ambidextrous Organization

Friedrichshafen, June 14, 2010
Paper »Change Management«
Becoming the ambidextrous organization

Design Thinking as a Methodology
for nurturing Innovation Culture?
Jan Schmiedgen Matriculation Number 9200251 (2nd Semester)
Saved at: Speedtröte:Users:schmiedgenj:Desktop:change management - RANK.doc

Table of Contents
1! Introduction ....................................................................... 3!
2! A short Review on Change, Culture and Innovation ............ 6!
3! Method .............................................................................. 9!
4! Findings ............................................................................10!
5! Conclusion ........................................................................16!
6! References .........................................................................19!
7! Appendix ..........................................................................23!
Declaration of Authorship
I certify that the work presented here is, to the best of my knowledge and belief,
original and the result of my own investigations, except as acknowledged, and has
not been submitted, either in part or whole, at this or any other University.
Jan Schmiedgen, June 14, 2010
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1 Introduction
„We can't solve problems by using the same
kind of thinking we used when we created them.“
Albert Einstein
The corporate world nowadays is facing many challenges. Many of those minor
or major developments and megatrends1 are well known to all of us, some less.
Nevertheless we are all – consciously or unconsciously – aware of the fact that
there are many irreversible transitions on their way, that will influence our envi-
ronment and therefore the way we do business. As markets change and old power
relations shift, huge value migration processes (Slywotzky, 1996) will challenge
the current status-quo of many organizations.
That is why an ongoing discussion within scholars and practitioners tries to find
out ways how to overcome those demanding issues. One very strained term
within that lively dispute is »innovation«. But all to often one has to be under the
impression, that it is demanded over and over, but no one really knows how to
develop an universal, holistic and practical approach that can really make it hap-
pen – especially in existing inertial organizations. Although the body of research is
very voluminous, critics state that the current management and change manage-
ment literature offers rather mechanical methodologies and tools showing what to
do (in terms of theory-driven suggestions like »freeze / unfreeze« or the like) with-
out explaining how to do it and what should exactly be done (Brown, 2009; Martin,
2009b; Nicolai, 2010; Riel, 2009; Sniukas, 2007). That’s why a vast amount of
practitioners2, more and more scholars3 and even governmental organizations4 are
beginning to either make known, or explore a methodology that – as they think –
could bridge the gap between rather mechanical tools and methods and the reali-
zation of successful change towards innovation. This methodology is called design
thinking.
1
To just instance some changes, that sooner or later will call for disruptive changes one could mention demographic change,
healthsystem issues, technological convergence, knowledge bases economies and the reinforced emergence of business ecosystems
as well as new pattern of consumption in our western hemispheres. But also – or even more important – the exponential gro-
wing indivdualization needs in developed but also developing countries, globalisation with its multifariously effects on cultural
diversity, new mobility and most important the global climate change are comprehensable examples.
2
e.g. Bruce Nussbaum (Businessweek), A. G. Lafley (CEO Procter&Gamble), Daniel Pink (Author), Tim Brown (IDEO),
David Kelley (IDEO) etc.
3
e.g. Henry Mintzberg, Roger Martin, Karl Weick, Fred Collopy, Gary Hamel, Lucy Kimbell etc.
4
e.g. the Design Council in the UK or Design som utvecklingskraft (Design as development force) in Sweden etc.
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EXCURSUS »DESIGN THINKING«
The scientific exploration of design thinking outside of the design community is still in its beginning.
Therefore the discourse currently lacks one agreed upon definition, although the discussion roots
can be often found in Heribert Simons book »The Science of the Artificial«1. Dunne & Martin (2006)
described design thinking as the way designers think, regarding their mental processes and the
typical nature of design work: project-based work flows around »wicked« problems.
The term wicked problem was first coined by Rittel & Webber (1973) and describes those tasks, that
are difficult or seemingly impossible to solve, because their nature typically is messy, contradictory,
aggressive and confounding2. They „are ill-defined and unique in their causes, character, and solu-
tion“ (Chuchman in Riel, 2009, p. 94) and involve many factors, stakeholders and decision makers
with often conflicting values. Moreover a resolution of one aspect is likely to reveal or create other
problems, due to complex interdependencies. Therefore approaching wicked problems requires to
understand the nature of the problem itself, first. That’s why designers have not only developed
special methods to address problems, but also a certain »questioning attitude« that permanently
reframes their tasks at hand, what evidentially enables them to innovate very efficient and effective
(Boland Jr. & Collopy, 2004; Brown, 2008, 2009; Dunne & Martin, 2006; Liedtka, 2004; Martin,
2009b; Oster, 2008; Shove, Watons, Ingram, & Hand, 2007).
Practitioners like Tim Brown (CEO if IDEO, one of the worlds leading innovation consultancies) there-
fore describe design thinking as “a discipline that uses the designer’s sensibility and methods to
match people’s needs with what is technologically feasible and what a viable business strategy can
convert into customer value and market opportunity” (Brown, 2008, p. 86). For the scientific purpose
of this paper I prefer the current definition of Roger Martin (Dean of the Rotman School of Manage-
ment, Toronto), that integrates designerly thinking modes in the definition: „Integrative thinking is
the metaskill of being able to face two (or more) opposing ideas or models and instead of choosing
one versus the other, to generate a creative resolution of the tension in the form of a better model,
which contains elements of each model but is superior to each (or all). Design thinking is the appli-
cation of integrative thinking to the task of resolving the conflict between reliability and validity,
between exploitation and exploration, and between analytical thinking and intuitive thinking. Both
ways require a balance of mastery and originality” (Martin, 2009b, p. 62).
Typical design thinking (learning) processes – be it for products, services or whole

business systems – pass iteratively through several stages of problem formulation,
observations, problem definition and redefinitions as well as ideation and proto-
typing phases up to the point of implementation. Their description can, and will
not be part of this paper. That’s why in the following I assume the reader to know
the methodology with its characteristic interdependencies.
1
"Engineering, medicine, business, architecture and painting are concerned not with the necessary but with the contingent –
not with how things are but with how they might be – in short, with design. [...] everyone designs who devises courses of action
aimed at changing existing situations into preferred ones. Design, so construed, is the core of all professional training: architec-
ture, business, education, law, and medicine are all centrally concerned with the process of design.” (Simon, 1996, p. 111)
2
„The causes of the problem are not just complex but deeply ambigous; you can’t tell why things are happening the way they
are and what causes them to do so. The problem doesn’t fit neatly into any category you’ve encountered before; it looks and
feels entirely unique, so the problemsolving approaches you’ve used in the past don’t seem to apply. Each attempt at devising a
solution changes the understanding of the problem; merely attempting to come to a solution changes the problem and how you
think about it.“ (Riel, 2009, p. 23)
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Personally, I stumbled upon design thinking some years ago, as I asked myself
some very basic questions that turned out to be very complicated as they include
so many facets: What problems do organizations have today? Why do some inno-
vate and some not? What are success factors? What hinders them? And, is there a
theory, or better a practical methodology, to ensure continuous innovation out-
comes?
Research Question
I soon realized that the majority of the existing literature focused on optimizing
the status-quo and few on envisioning, exploring and implementing possible fu-
tures in a feasible way. As this is a – maybe the – most important task in change
management I decided to dedicate the purpose of this paper to the exploration of:
In how far can design thinking be an adequate means to nurture an innovation culture and
overcome obstacles that typically hinder such an attempt?
I imposed myself some limitations right from the beginning: Design thinking is a
very open approach. As it touches and connects so many different research areas1
it is nearly impossible to demarcate any research boundaries or to stick to certain
theoretical frameworks in such a short paper. Therefore I will neither strictly de-
fine all of the multifaceted terms like culture, organization or innovation, nor will
I attempt to integrate the following into existing frameworks.
Nevertheless I did an extensive literature review on »innovation culture«, innovation

and change, the characteristics of change as well as on thinking modes and creativity, in
order to connect the streams of design thinking research to current (change) man-
agement knowledge, as described in chapter 2 » A short Review on Change, Cul-
ture and Innovation«. Additionally I conducted two expert interviews (chapter 3)
that I aligned with the current state of research.
1
For instance knowledge management, strategic planning, human relations, organisation design, and many other areas. In a
way design thinking therefore bears resemblance to change management, that „is such a multifaceted phenomenon that every
attempt is necessarily limited, but by piecing together partial views, a broader understanding may emerge.“ (Poole, 2004, p. 4)
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2 A short Review on Change,

Culture and Innovation
When talking about innovation, change and culture in relationship to commercial
success one has to bear in mind that in the end we talk about speed and time-to-
market. Companies need to be attentive to recognize weak signals and must find
ways to absorb and adept fast to new environmental conditions. This is only pos-
sible by »moving knowledge about new externalities« faster as the competition
across the knowledge funnel1 (Martin, 2009b). This however can be quite difficult,
as it requires two different activities: „moving across the knowledge stages [...] from
mystery to heuristic to algorithm, and operating within each knowledge stage by hon-
ing and refining an existing heuristic or algorithm“ (Martin, 2009b, p. 18). The
one activity is concerned with the invention of business, the other with the ad-
ministration – or in other words: The one with exploration of new possibilities,
the other with the exploitation of proven knowledge (cf. Sutton, 2004, p. 268).
Innovation requires both, although the right balance may vary across industries.
The problem however is, that running these two modes simultaneously, requires
the utilisation of completely different thinking and reasoning modes: Exploration
embraces divergent or integrative thinking (Brown, 2009; Flynn & Chatman,
2004; Martin, 2009a, 2009b) that uses inductive, deductive and abductive logic2.
Exploitation however is often connected with linear thinking, where the preferred
modes of reasoning are induction and deduction (Martin, 2009b, 2009c;
Moldoveanu, 2009; Sutton, 2004). If the latter becomes more dominant in an or-
ganization it leads to a – what Martin (2009b) and Sutton (2004) call – »bias to-
wards reliability3«.
This is quiet dangerous, as reliability-oriented organizations can reproduce their

success algorithms only when environmental factors stay stable (»c!ter"s paribus
1
According to Martin the antecedent condition for innovation is to balance intiuitive and analytical epistemologies when
generating insights during the three stages of a knowledge funnel. The first stage – called mystery – is characterized by explora-
tion. This could for example be an question or pheonomenon that cannot sufficiently be explained with current knowledge – in
a way the starting point of a wicked problem. The learning and hypothesis-construction process of the mystery stage leads to „a
rule of thumb that helps narrow the field of inquiry and work the mystery down to manageable size“ (Martin, 2009b, p. 8).
Once this heuristic is put into operation and its regularities can be discovered it converts into the systematized last stage, an
algorithm, that can be run and replicated over and over again.
2
The often forgotten and uncared-for »third mode of reasoning« called abduction (named by Charles Sanders Peirce) is a kind
of inference characterized by probability – or in other words, the »logic of what might be«. Inductive thinking, however is
proving through observation that something actually works (reasons from the specific to the general), deduction on the other
hand, means proving through reasoning from principles that something must be (reasons from the general to the specific).
3
There often seems to be a trade-off between reliability and validity in today’s business context. Most corporations favor reliabi-
lity in their structures and processes as it is the result of a process, that produces a consistent and predictable result over and
over. In order to enhance reliability they often have to reduce the number of variables considered and make use of bias-free
measurements (here management and controlling methods). A designer in the early stages of his work process in turn favors
validity, the extent to which a measure accurately reflects the concept that it is intended to measure. In order to increase the
validity of any process he has to consider a wide array of relevant variables (e.g. as done in the observation phase of the design
thinking process).
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assumption«). As this is not the case in uncontrolled systems (like the current bu-
siness environment), those organizations urgently need to incorporate more
validity-orientation into their culture, as it is a prerequisite of moving new knowl-
edge across the knowledge funnel: „The validity seeker, unlike the reliability
seeker, treats past predictive success as hypotheses to be carefully tested before
using them to generate predictions that are expected to be valid. Hence, the real
empirist is »a first-rate noticer« of precisely the anomalies that would cause him or
her to throw out the »all things are equal« assumption“ (Moldoveanu, 2009, p.
56).
EXCURSUS »RELIABILITY VS. VALIDITY«
Sticking closely to proven and »true« analytical thinking (focusing on running the algorithm) enables
firms to build size and scale (one of the simple-minded management imperatives of the last decade).
Such an endeavor needs consistent, predictable outcomes that can reproduced over and over. Man-
agement methods and processes that favor reliability therefore need to narrow their scope to what
can be measured in replicable and quantitative ways. The side-effect of such an attempt to model
reality is that factors like subjectivity, judgment or other »biases« need to be eliminated.
Validity-oriented firms however have the problem that they „cannot and will not systematize what
they do“ (Martin, 2009b, p. 6) as their foremost goal is to produce outcomes that meet a desired
objective, and develop solutions that over time prove to be correct. With only quantitative measures
this is difficult to achieve, as they would strip away the, for them very important, nuances and con-
texts.
Obviously both approaches should be found balanced in organizations, but unfortunately the current
prevailing management paradigms favor reliability over validity and all too often try to predict rules
derived from past experiences. As an validity-seeker can’t „prove the value of [his] ideas by invoking
the size of [his] regressions R2“ (Martin, 2009b, p. 49) many companies have developed an unbal-
anced mastery towards »bulletproof« scientific decision making by creating tools and methods, that
continuously refine their current algorithm: „Improved technology and statistical-control tools have
given rise to new management approaches […]. Today's business leaders are adopting algorithmic
decision-making techniques and using highly sophisticated software to run their organizations.
Scientific management is moving from a skill that creates competitive advantage to an ante that
gives companies the right to play the game” (McKinsey, 2006). Sutton described this risky phe-
nomenon of uncertainty elimination as »mere exposure effect« to reliability: „The more often people
are exposed to something, the more positive they feel about it; rare and unfamiliar things provoke
negative evaluations“ (2004, p. 268). Or freely adapted from Churchill: »First they shaped their tools,
then their tools shaped them«. Martin explains this bias with the persistence of the past (apparent
reliability through the use of inductive and deductive evidence from past experiences), pressure of
time (reliable systems generate tremendous time savings), and curiously the attempt to eliminate
bias (eliminate subjective judgment) (Martin, 2009c, p. 44 ff.). He further argues that counterpro-
ductive pressures from capital markets often force companies to short-sighted reliability biases
(Martin, 2009c, p. 50 f.) – namely the exploitation and maintenance of their current status-quo at
least as long as the future will no longer resemble the past.
This fundamental problem of balance between reliability and validity, between

exploitation and exploration, between linear and integrative thinking has been
illuminated by various researchers and from many different perspectives. Tripsas
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& Gavetti (2000) for instance drew their attention to the influence of existing ca-
pabilities (algorithms) in the search for new technology innovations. In accor-
dance with the above mentioned »mere exposure effect« they discovered that in-
novation search processes often are determined by previous knowledge. That
means, managers all too often model problems according to former experiences,
what leads to an inability to respond to changes in the external environment as it
produces a certain fixation in capability development (refinement of current heu-
ristics/algorithms) and therefore organizational inertia1. This organizational (or
cultural) inertia is often to be said, to prevent radical and, if ever, favor mere in-
cremental change2. That’s why many scholars demand not only a certain adapt-
ability to environmental transformations, but also a more proactive, re-orienting
change behavior of organizations that builds on anticipation (Hayes, 2006, p. 15
ff.; Nadler, Shaw, Walton, & Associates, 1995): „If managers need to understand
and coordinate variability, complexity, and effectiveness, then they need to create
designs that mix together perceptual and conceptual modes of action or move
back and forth between these modes or rely on multiple compoundings of abstrac-
tion“ (Weick, 2004, p. 47).
In order to achieve that Tushman & O'Reilly (2004) propose organizations to be-
come ambidextrous – executing today’s strategies (heuristics and algorithms) and
creating new capabilities for tomorrows demand (mystery exploration). This no-
tion is in conformance with many other scholars (Leifer, 2001; Markides, 2001;
Martin, 2009b; Stamm, 2003a; Weick & Quinn, 1999; Weick, 2004) and targets
the “balance [of] sufficient predictability and stability to support growth with suf-
ficient creation of knowledge to stimulate growth” (Martin, 2009b, p. 118). Only
these »baked-in paradox« organizations will be able to „balance the freewheeling
innovation and buttoned-down operational discipline, [the] validity and reliability
[tension], and [the] honing and refining versus jumping to the next stage of the
knowledge funnel“ (Martin, 2009b, p. 122).
Remain the questions in how far design thinking, as a methodology and attitude,
can contribute to a balancing culture that is capable to manage such a tension,
what exactly needs to change, and what makes the approach so unique…
That’s what I wanted to find out in my interviews.
1
This phenomenon is closely connected with different epistemologies between diverse practices (e.g. engineers, designers and
managers) and has been widely discussed (Boland Jr. & Collopy, 2004; Dunne & Martin, 2006; Lester & Piore, 2004).
2
I will not expose in detail here, what different types of change in the literature exist. When I refer to incremental vs. radical
change in the following I’ll equate it with contionous vs. episodic, continous vs. discontinous, and competence-enhancing vs.
competence-destroying change (cf. Poole, 2004, p. 5). I am aware of minor arising inaccuracies and the nuances that underlie
those theories, but need to take into account the scope of this paper.
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3 Method
I conducted two expert interviews. As I had to bear in mind that research on de-
sign thinking is still very young, I knew I had to balance practical and theoretical
point of views for my screening phase. I finally convinced two contrasting person-
alities, for an one hour Skype session each. The practical perspective was brought
in by Christian Schneider1 (Industrial Designer), who was a Managing Director at
IDEO. My Interviewee from academia was Dr. Claudia Nicolai (Dipl. Oec.),
General Program Manager und Lecturer at the Hasso-Plattner-Institut – School of
Design Thinking in Potsdam, that is doing extensive research on the topic.
Even though I had already developed some hypotheses based on my literature

research, my aim was not to just let them affirm them. Rather I wanted the inter-
view to be open as possible to give space for the unexpected (Flick, von Kardoff,
& Steinke, 2007, pp. 263 f., 353 ff.; Gläser & Laudel, 2009a). Therefore I chose an
semi-structured, half-open interview form. The Skype sessions were computer
recorded and completed by interview notes taken during the interview as well as
from memory (Bogner, 2009; Gläser & Laudel, 2009b). I later analyzed and clus-
tered emerging topics. Although I had already developed some categories to pre-
pare my coding process in advance I fortunately determined, that themes I ig-
nored before, like »leadership« or »pitfalls and overestimation of design thinking«,
obviously seem to play an important role for my research question as well. These
hints turned out to be very helpful during the interpretation phase. Finally the
topics that emerged in both interviews were innovation obstacles of big corporations,
concrete proposals what needs to change, leadership and top-management commitment,
critique on current change management and innovation methods, explanations why design
thinking could overcome above mentioned critique points, what it predestines for that and
what would be possible pitfalls that would even prevent design thinking making a differ-
ence. The most important quotes have been transcribed and can be found line-
numbered in the appendix on page 23. All following interview citations refer to
these lines.
1
Christian Schneider was choosen as an interview partner, as he was a former Director of IDEO Milan, Project Manager at
the Studio De Lucchi and co-founder of the air-transportation company EWA in RD Congo. He has guided multidisciplinary
and multinational teams for the development of products, services and brand strategies of several fortune 100 companies as well
as start-ups. Clients include Deutsche Bank, Deutsche Telekom, ETF (European Technology Fund), EBS (Electronic Banking
Systems), Ferrari, FraunhoferInstitut, Merloni and Siemens. He has lived and worked in various countries in Europe, Africa
and North America and taught at several Universities such as the Polytechnic University Milan, Carleton in Ottawa and
Stanford.
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4 Findings
As expected, both interviewees confirmed the usual innovation obstacles big1 cor-
porations are facing: The main design thinking inherent activity for example is
radical internal and external collaboration, beginning in the earliest stages of every
product, service or business development. But even this fundamental exercise is
practiced insufficiently in most organizations, although its relevance has been
described multifariously (Chesbrough, Vanhaverbeke, & J. West, 2006;
Handfield, Ragatz, Petersen, & Monczka, 1999). Combined with an also attested
structural and cultural inertia many of the initial assumptions from chapter 2, like
thinking in silos and functional departments, fixation in capability development
and therefore a lack of interdisciplinarity, got reinforced (Nicolai, 2010, 1-13;
Schneider, 2010, 14-59). Mr. Schneider criticized in particular the wrong applica-
tion of otherwise powerful tools like business ethnography or misconceived mar-
ket and trend research as mere »vicarious agents« for reliability-oriented deci-
sions2. This follows the initial argumentation of Martin (2009b), stating that they
are rather used in the predominant logic of measuring and prognosticating instead
of challenging current heuristics and algorithms. In his argumentation the pre-
ferred, but misdirected steering of funds to scopes of application that – in the hope
of risk reduction – can be measured, bears a paradox – especially in an economic
downturn, where anticyclical behavior could be the key to survive or get strength-
ened: „Design thinking is an economic tool to envision possibilities, [...] relatively
cost inexpensive. [...] By applying [it] you have a very cost effective tool to foresee
possibilities for economic growth. [...] It would be worthwhile to research how
much is spent on field research, or operative marketing and how much does it cost
if you employ a team to envision possibilities for your organization. I'm sure this
is in no relation“ (Schneider, 2010, lines 36-45). Thus, the predominant thinking
with its reliability bias is regarded responsible for structural and process-related
problems from both interviewees. This hinders cross-fertilization and the use of
even existing diversity in the organization and leads to – in designers eyes – weird
decisions (cf. Sutton, 2004), like attaching the responsibility of innovation to dedi-
1
Both interviewees pointed out the fact that there has to be drawn a clear distinction between rather smaller and bigger organi-
zations. While in smaller companies the likelihood is greater that people engage in »strategic conversations« in and outside their
firms boundaries, in bigger corporations this often isn’t the case anymore.
2
„Even though we talked a lot about innovation in recent years I don't think that there was much innovation going on. We
were expanding our markets, we were selling our products to new and different markets, approached different markets. We
tried to adept our products to different markets... So ethnographic research was about understanding whether those people like
pink or blue. Bullshit! ... Instead of learning from those cultures and learning from those local realities, to really find innovati-
on opportunities we just adapted our products. In the same time innovation was about making them cheaper and cheaper. This
happened at the one side by improving the technology, the assembly, the production, the distribution... That happened on the
other side by having cheap labor costs. I ask you. Where is innovation?“ (Schneider, 2010, lines 15-25)
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cated managers1: „What all those companies did, back in the ninetieths, is that
they have innovation managers or even innovation executives, and those were
very, very sad persons. Sometimes we asked: And what do you think? They didn't
even dare to speak up! They go a bit happier once they created the position of the
CIO because at least they now sat on the round table and got a big salary. The
next step now is to create [innovation] teams [in an design thinking sense] within
your company. [...] This will already be a big step ahead“ (Schneider, 2010). The
same was observed by Mrs. Nicolai: „Larger corporations have established trend
research departments – attached to the headquarter – but they have no impact [...].
They are good in figuring out patterns that might be in the future [but] they are
not really customer centric. [They have] no experience of addressing the problems
for the corporation and the interplay of different people and different contexts“
(Nicolai, 2010, lines 9-13). Regarding this, Martin stated „the farther the area is
from the customer, the greater is the reliability bias“ (2009b, p. 139) – a point of
view, shared by many other authors (Flynn & Chatman, 2004; Handfield et al.,
1999; Lester & Piore, 2004; Tushman & O'Reilly, 2004).
In the search for a resolution to these obstacles Tushman & O'Reilly (2004) pro-
posed three main areas that need to be changed in order to become an ambidex-
trous organization: Organizational culture, architecture/structure and processes. In gen-
eral, they accord with Martins2 notions as well as with the statements of my inter-
viewees. Altogether their demands sum up to what today already is practiced in
design thinking organizations.
Let’s begin with the structure. Both, Schneider and Nicolai agree on diverse and
project-based teams as the source of innovation. Once a project is finished the
team disbands and reforms in a different configuration suited to the next task at
hand. That means an ambidextrous organization has to deploy a structure that
enables individuals to organize themselves by projects, rather than by permanent
structures. Herefore it has to provide time, space3, relatively little money
(Schneider, 2010) and must establish an project-based activity system than runs
parallely to the more fixed configuration that is running the current business algo-
1
This is an interesting example of the typical working style in traditional management as described thoroughly in Dunne &
Martin (2006) that tries to attach responsibilites to certain individuals, although the setup of their inner-organizational boun-
daries is unlikely allowing them to influence any decision in their »area of authority«: „Individuals are typically much more
adept at describing ‘my responsibilities’ than they are at describing ‘our responsibilities’“ (Oster, 2008, p. 110). In design
thinking the interplay of many decision makers is solved by assigning projects to teams that heavily collaborate with the help of
many tools and methods that overcome the typical problems arising in teamwork (POV development, visualization, prototy-
ping, etc.).
2
„To create an environment that balances reliability and validity, that both drives across the stages of the knowledge funnel
and hones and refines within stages, a business needs to think differently about three elements of its organization: its structures,
its processes, and its cultural norms.“ (Martin, 2009b, p. 118)
3
The supply with, and the configuration of space, is probably one of the most important and most frequent discussed issues
within the design thinking community. As a detailed discussion of this important dimension would go far beyond the scope of
this paper it shall hereby just be mentioned as as very critical component.
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rithm (Martin, 2009b). This is consistent with Tushman & O'Reilly's demand for
autonomous groups and an organizational structure, that remains small with flat
hierarchies: „Size is used to leverage economies of scale and scope, not to become
a checker and controller that slows the organization down. The focus is on keep-
ing decisions as close to the customer or the technology as possible” (Tushman &
O'Reilly, 2004, p. 288). This customer or human-centeredness is another charac-
teristic of design thinking as it serves as the one and only corridor for all decision-
making1. This in return encourages other innovation prerequisites that are widely
accepted: e.g. a culture of informed risk taking and autonomy, keen on experi-
menting employees that feel a sense of ownership and are responsible for their
own results (Martin, 2009b; Nicolai, 2010; Schneider, 2010; Tushman, 2004) and
a tolerance for certain types of failure. Furthermore such an high-participative
approach has several positive side-effects that solve typical organizational prob-
lems, like »organizational silence« (Morrison & Milliken, 2000) or infrequent »mi-
nority dissent2« (De Dreu & M. A. West, 2001), since the users and their reactions
will become the neutral decision instance3. As a result the withhold of opinions
and concerns could disappear and upward information flows more freely.
In connection with the above mentioned demands Schneider frequently empha-

sized the support for experimentation (Schneider, 2010, lines 39, 266) in such an
organizational structure, what leads us to the process perspective. The nature of a
design thinking process is, what Weick (1989) would describe a »struggle with
sensemaking4«. It is a hypothesis-driven theorization process that embraces com-
prehension fostering imperatives like »fail often an early«, »show don’t tell«, »fo-
cus on human values«, »create clarity from complexity«, »be biased towards ac-
tion«, »collaborate across boundaries«, »be mindful of process« and »get experi-
mental and experiential« (Hasso Plattner Institute of Design Stanford, 2009). Such
a mindset requires the reorganization of central corporate processes that today
1
This decentralization of decision-making is the glue, that holds such an contradictorily and ambigous working environment
together: „There is a delicate balance among size, autonomy, teamwork, and speed which these ambidextrous organizations are
able to engineer. An important part of the solution is massive decentralization of decision making, but with consistency attai-
ned through individual accountability, information sharing, and strong financial control” (Tushman & O'Reilly, 2004, p.
288). The direct user/customer feedbacks also serve as decision benchmarks that help prevent the often feared group cohesion,
although design thinking per se prevents that, as it embraces divergent thinking as a norm (Flynn & Chatman, 2004, p. 237).
2
The notion of preventing minority dissent is also consistent with Sutton, who says that „If it's creativity you want, you should
encourage people to ignore and defy superiors and peers – and while you're at it, get them to fight among themselves“ (Sutton,
2004, p. 271).
3
Obviously there are other major instances that guide decision making as well – like the corporate vision (Collins & Porras,
2004) as one compass, or the project vision and goals. Unfortunately their interactions and interconnectednesses cannot be
discussed here as this would go beyond the scope of this paper.
4
„Theorizing consists of disciplined imagination that unfolds in a manner analogous to artificial selection. It comes from the
consistent application of selection criteria to "trial and error" thinking and the "imagination" in theorizing comes from delibe-
rate diversity introduced into the problem statements, thought trials, and selection criteria that comprise that thinking.“
(Weick, 1989, p. 516)
- 12 -
often are dramatically tilted toward just running existing heuristics or algorithms1.
Martin, namely mentions two all-but-invisible process forces, able to promote or
stifle innovation culture: financial planning and reward systems (Martin, 2009b, p.
123 ff.). Regarding the financial perspective, he criticizes the often discussed (short-
termed) strive for consistent outcomes that board and stock analysts demand, and
reminds the reader that financial planning – especially, if fed with past data – can’t
hardly foresee what is needed for pushing knowledge through the funnel. Conven-
tional reliability oriented budgeting approaches must give way to a planning that
consists of setting goals and organization dependent, reasonable spending limits only
(2009b, p. 124). Closely connected, and also mentioned by my interviewees, are
the reward systems. Here he argues that „most executives prefer the known to the
unknown. It is much easier, safer, and rewarding to run a billion-dollar business
than it is to invent one“ (Martin, 2009b, p. 125). Therefore he can’t explain him-
self, why a misconception could have developed, that favors running heuristics
and algorithms as main source for monetary rewards and status. In his view this is
a major problem, as this is unlikely to attract people with the abilities to explore
new business possibilities by moving knowledge through the knowledge funnel2.
This complies with the notions of many other researchers (cf. Flynn & Chatman,
2004, p. 238 f.; Tushman & O'Reilly, 2004, p. 288) arguing that not just success
but also failure should be rewarded while reserving punishment only for inaction:
„Enhancing innovation also has to do with how performance is rewarded. This,
too, entails a dramatic departure from the management practices ingrained in
most companies. Rather than rewarding success and punishing failure, companies
should reward both. Again, I must distinguish between what is right for routine
work and what is right for creative work“ (Sutton, 2004, p. 272). Empowered em-
ployees, enabled to act as intrapreneurs, therefore are the most likely source to
make innovation happen.
1
A phenomenon also one of my interviewees commented: „In the end [corporations], that are very based on measuring eve-
rything, very respective, also controlling the output [will prevent ] divergent thinking [because] you cant really come up with
comparable measures.“ (Nicolai, 2010, lines 238-241)
2
The differences regarding source of status, style of work, flow of work life, reward systems, mode of thinking and the dominant
attitude between »typical managers« and »designers« are thourougly described in Boland Jr. & Collopy (2004) and Dunne &
Martin (2006).
- 13 -
Additionally Schneider and Nicolai permanently emphasized another important

aspect of an innovation culture, that we should pay close attention to. Schneider
named it »diversity«1, other authors describe it in terms of a »boundary manage-
ment« by using a rich variety of internal and external sources, coupling with the
project team, and driving the innovation process:
„If you want to practice design thinking you need a flat hierarchy, you need free
space, and also you have to make use of diversity... but also from different peo-
ple... you can learn an awful lot outside the company. You can learn an awful lot
if you observe people in real life scenarios! When I did Deutsche Telekom we
were observing poor turkish people, we were observing social cases, handicapped
people etc. And this is were we learned [...] Those people do not work in a com-
pany. It is very important that we go out and explore the world. The visions do
not emerge behind the desk“ (Schneider, 2010, lines 80-87).
These design thinking inherent co-creation and observation processes (with pref-
erably »extreme users«) are further key aspects that can evidently2 lead to innova-
tion (Chesbrough et al., 2006; Chesbrough, 2006; Hippel, 2006; Piller, Schubert,
Koch, & Möslein, 2005; Prahalad & Ramaswamy, 2003; Reichwald & Piller,
2009; Stamm, 2003b). The herewith induced self-reflection, in- and outside the
organization (Nicolai, 2010, line 109), makes design thinking a self-observation
and learning process (Beckman & Barry, 2007) that could create the often-quoted
»organizational questioning attitude« for innovation (Baecker, 1994; Brown, 2009;
Hamel, 1998a, 1998b; Kim & Mauborgne, 2005; Markides, 2001; Martin, 2009b;
Riel, 2009; Schneider, 2010). An attitude that challenges existing mental models
and basic assumptions, that resolves seemingly insuperable constraints
(Vandenbosch & Gallagher, 2004), and envisions possible futures. On that score
designerly divergent thinking could – once introduced and established in the orga-
nizational (sub)culture – per se, serve as the driving force for organizational change.
This however leads us to the third and last area that needs to change according to
Tushman & O'Reilly and Martin: cultural norms. As above findings have shown
the ambidextrous organization needs to embrace both, convergent and divergent
thinking. This is also the pragmatic view of both interviewees. „I don’t think you
have to change the corporation completely, but you have to make sure that you
establish a new kind of subculture – this subculture is a value for the corporation
as a whole. It is not about changing everything so I wouldn’t say that design
1
Not to be confused with »diversity management« that often is understood as a rather inward looking concept.
2
Procter&Gambles famous »Connect + Develop« approach that uses open innovation as an major source for future competitiv-
ness, for instance emerged out of another program, called »Design Works«. Design Works has been developed among others
with IDEO in order to introduce an design thinking attitude into the corporation. Once P&G adepted principles of such an
approach to innovation (that now some call hybrid thinking), they realized, that they had to broaden their obseration and
collaboration basis. Today P&G’s goal is to generate half of it’s product innovation with outside help. (Riel, 2009)
- 14 -
thinking can be applied to every problem a corporation has“ (Nicolai, 2010, lines
62-66). Schneider argued „[If] a big company has the budget – again as I sad rela-
tively small – and gives the space to explore innovation opportunities [...] this is
much more feasible than to say, now we introduce an »innovation culture« in our
company.“ (Schneider, 2010, lines 76-79). It also coincides with Tushman &
O'Reilly who discovered ambidextrous organizations having established cultures
that are simultaneously »tight and loose1«. Regarding the »tight-aspect« they argue
that such an culture should rely on strong norms, that emphasize the already
above mentioned design thinking attributes, like openness, autonomy, initiative,
risk taking, etc. With »loose« they mean „the manner in which these common
values are expressed, [varying] according to the type of innovation required“
(Tushman & O'Reilly, 2004, p. 288). Martin looks at it from a more meta-level
and states that „balancing reliability and validity demands a new thinking about
constraints“ (2009b, p. 127) which must lead to norms that treats constraints
rather as a pointer to the locus of needed innovation, than as to the immovable
enemy2.
In order to achieve that, both authors and also my interviewees agree on the ut-
termost importance of leadership – in the sense of top-management commitment3
(Nicolai, 2010, lines 111-115; Schneider, 2010, lines 129-139; Tushman &
O'Reilly, 2004, p. 288) – to introduce such an approach to innovation, although
Mrs. Nicolai and Mr. Schneider prodded me to the fact, that once it’s established,
a very different, engaging and collaborative kind of leadership will have to
emerge, that so far isn’t researched enough4.
1
“Tight in that the corporate culture in each is broadly shared and emphasizes norms critical for innovation such as openness,
autonomy, initiative, and risk taking. The culture is loose in that the manner in which these common values are expressed
varies according to the type of innovation required.” (Tushman & O'Reilly, 2004, p. 288)
2
A more detailed discussion on the different handling of constraints between reliability and validity-oriented businesses can be
found in Dunne & Martin, (2006); Martin, (2004, 2009a, 2009b) and Vandenbosch & Gallagher, (2004).
3
Martin for instance emphasizes the importance of leadership by refering to his experiences with the introduction of design
thinking at Procter&Gamble: „Culturally it’s imperative that people know it is safe and rewarding to bring forward an abduc-
tive argument.[...] CEO’s must consciosly take on the role of validity’s guardian to counter the internal and external pressures
toward reliability“ (Martin, 2009b, p. 138). That this isn’t the fact today was confirmed by Mr. Schneider who complained:
„We need the leadership and it is very hard to get. Because then people are afraid. [...] You [as a design thinker] don't fit into
the scheme. But that's exactly what you need as an [innovation] leader. It is still seen as something strange, that certain com-
panies can do. Thats why I hear all the time: Well, Fortune 100 companies can do it because they have the resources... and so
on and so forth“ (Schneider, 2010, lines 129-134).
4
As roles often are relayed and teams members come and go during a typical design thinking process, it does not fit into exi-
sting explanation approaches: „ I would say if you're in design thinking you got different roles. Leadership in it’s normal sense,
but also in being able being a networker, but also being a resource investigator – so leadership got different roles in terms of
internal and well as external activities – in and outside the corporation. [...] We know about different teaming, we know also
about bringing together different team roles within a project – also in design thinking procjects – but we haven't found so far
that profound knowledge what kind of people, what kind of leadership do we need in the different steps. This is up to future
research. This is something that hasn't been tackled so far“ (Nicolai, 2010, lines 104-120).
Or as Mr. Schneider expresses: „Leadership in design thinking is not as what you would expect with the german term leaders-
hip because leadership here is much more about engaging. What you really do is engage. So we do not lead. We are showing
directions. We lead by motivation, we lead by breaking down barriers, by opening up opportunities. By engaging people. By
exploring their own potential. By making them run. That's what I mean by making people fly! There you have to have the
skills, the personality and the responsibility also“ (Schneider, 2010, 122-128; cf. Jung, Chow, & Wu, 2003).
- 15 -
Now, having shortly examined the contribution of design thinking towards an

ambidextrous organization, respectively their common overlappings regarding
structure, processes and cultural norms, it is very interesting to again discover
obvious similarities to the theory of organizational learning. According to Nonaka
& Takeuchi (1995) the enabling conditions for organizational learning are inten-
tion (vision and objectives), fluctuation and creative chaos (often referred to as
»intentionally generated crisis«), redundancy (in terms of blurred boundaries and
learning by intrusion of »other« concepts via knowledge networks with the outside
world), and a requisite variety (diversity). They are accompanied by an organiza-
tion design that enables a »layering structure« with a business layer for normal rou-
tines (algorithms), a project team layer were the conversations happen (mysteries,
heuristics), and a knowledge base layer (heuristics, algorithms) were both are shared.
They argue, that the organizational success depends on how seamlessly individu-
als can move in and out these layers. On the one hand, these mentioned enabling
conditions describe nothing else than the already inherent nature of a design
thinking process. On the other hand, the layering structure aligns with Tushman
O’Reilly’s and Martin’s notions of ambidexterity and the balance between exploi-
tation and exploration.
5 Conclusion
Although design thinking seems to have found a practical way, how to bring to-
gether the requirements needed to nurture innovation, some questions remain.
Even though the methodology may be already suited to dock on reliability-
oriented organizations, my interviewees and I asked ourselves: Are they, yet? How
must an change process look like, that introduces design thinking as means to
nurture innovation culture into an reliability-oriented organization? Martin and
Riel gave first clues by describing the transition of P&G (Riel, 2009). Nevertheless
research needs to be conducted, also in terms of how to overcome to be expected
obstacles1 towards such an hybrid organization. Design thinkers will not – or sel-
domly – have empirical data to support their course. Those to be convinced orga-
nizations have.
So how to overcome the ease of defending reliability vs. validity? Indisputable the
CEO needs to take on the role of validity’s guardian (Martin, 2009b, p. 138), as
already described. Nonetheless a clash, for instance, of working styles is to be ex-
pected: „If you want to introduce an innovation culture like that, you have to be
1
A closer look leads fast to the discussion of more abstract levels of research, like e.g. management education with its preponde-
rance of training in analytical thinking (Martin, 2009b, p. 129) or the reliability orientation of key stakeholders, like stock
market analysts or the board of directors with their preference for measurable reliability (»what matters is, what can be measu-
red«-attitude).
- 16 -
aware of the difficulties, obstacles and challenges. For instance we have a funny
way of taking on responsibility. I always say that I make team members or MBA
students fly and then I shoot them... Which means how do you come back on
earth, how do you come back to reality? If you have a real innovation it has no
precedent it has no previous case, so it's something that is crazy if you want. You
have to get back then and you to try to find out how are the possibilities of im-
plementation, how is the feasibility of this innovation idea. Therefore we can take
on those risks on a certain extent but then we have to become realistic again. That
is a funny experiment and most companies are not used to that“ (Schneider, 2010,
lines 257-267). In its extreme cases this can lead to inner-organizational resistance
and a questioning of the misunderstood concept. That means the needed leader-
ship towards an, as well as the leadership within an existing design thinking organi-
zation is up to urgent future research (Nicolai, 2010, line 104 ff.).
However, once such a transition succeeded, and the in chapter 4 mentioned areas
structure, processes and cultural norms are aligned towards more tolerance regarding
validity-oriented thinking, abductive reasoning and experimentation, an organiza-
tion should have all the attributes it needs, to become ambidextrous. Design think-
ing itself already fulfills the general conditions needed to make innovation hap-
pen. It embraces convergent and divergent thinking, it historically originates to
resolve wicked problems (often encapsulated as the conflict between reliability
and validity in the form of constraints), and it therefore has the capability to com-
bine the often conflicting triangle of viability (business focus), feasibility (techno-
logical focus), and desirability (design based on human values and user needs fo-
cus) (Brown, 2009). Schneider summarized that as follows: „I don't know any
other methodology which is so finely balanced between creative, innovative think-
ing and real life focus. And I think this is what makes design thinking really
unique.“ (Schneider, 2010, lines 274-277).
To put it even more clearer, this unique combination of realistic self-observations

with the anticipation and envisioning of possible futures could provide the ground
for continuous change in an organization. In particular, as the methodology itself
can be regarded as an permanent learning process that nurtures an ongoing strate-
gic conversation1 (Heijden, 1999), were strategy flows top-down and bottom-up,
preventing organizational inertia, as stipulated by Tushman & O’Reilly: „Finally,
technologies, products, markets, and even senior managers are retained by the
market, not by a remote, inwardly focused central staff many hierarchical levels
removed from real customer“ (2004, p. 289).
1
Van Heijden described »learning loops« in his book »Scenarios – The Art of Strategic Conversation« as strategy development
processes that integrate experience, sense-making, and action into one holistic phenomenon.
- 17 -
Summed up, like change management design thinking connects many research
areas, from strategic planning, innovation management, human relations to orga-
nizational development and many more. But its ability to knot very diverse topics
(Nicolai, 2010, lines 168-173) in a practical way, that makes conscious what prob-
lems really need to be addressed in an organization, fills a gap that hasn’t been
tackled so far in change management (Nicolai, 2010, lines 154-167). So for in-
stance Mrs. Nicolai formulated: „It’s really about the content that has been miss-
ing, also in the discussions about organizational culture… Which is more or less
about how can we change a corporation based on what you've got so far? … It’s
about working together! Maybe it’s about something that has the ability to link
very diverse topics within management, within human relations, within organiza-
tional development etc.“ (Nicolai, 2010, lines 168-173).
Poole pragmatically summarized it: „By now it is common sense that people,
space and time – [are] the »least common denominators« of change and innova-
tion theory” (2004, p. 16). As design thinking in the end connects all these dimen-
sions (Nicolai, 2010, line 220 f.) in an »ambidextrous way«, it could have the po-
tential to help organizations constantly renewing themselves by motivating rea-
sons for innovation (Schneider, 2010, p. 223 f.).
- 18 -
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7 Appendix
The Expert Interviews
1 IDEAL-TYPICAL INNOVATION OBSTACLES OF BIG CORPORATIONS?
2 NICOLAI
3 „We are still wondering to see how difficult it is sometimes for the corporation to
4 come up with a team which has people from different departments. We often fig-
5 ure out that they haven't been in contact before.“ #00:17:22.8# (Nicolai, 2010)
6 „[Some inexperienced firms are] not big enough, that they already have developed
7 routines but they know this will come to an end when they grow.“ #00:06:01.2#
8 (Nicolai, 2010)
9 „Larger corporations have established trend research departments – attached to

10 the headquarter – but they have no impact [...]. They are good in figuring out pat-
11 terns that might be in the future [but] they are not really customer centric. [They
12 have] no experience of addressing the problems for the corporation and the inter-
13 play of different people and different contexts.“ #00:07:51.4# (Nicolai, 2010)
14 SCHNEIDER
15 „Even though we talked a lot about innovation in recent years I don't think that
16 there was much innovation going on. We were expanding our markets, we were
17 selling our products to new and different markets, approached different markets.
18 We tried to adept our products to different markets... So ethnographic research
19 was about understanding whether those people like pink or blue. Bullshit! ... In-
20 stead of learning from those cultures and learning from those local realities, to
21 really find innovation opportunities we just adapted our products. In the same
22 time innovation was about making them cheaper and cheaper. This happened at
23 the one side by improving the technology, the assembly, the production, the dis-
24 tribution... That happened on the other side by having cheap labor costs. I ask
25 you. Where is innovation?“ #00:28:49.7# (Schneider, 2010)
26 „Where is innovation? It's continuously repeating something, and then you're a bit
27 better than the other. Why are you better? Maybe because you produced cheaply,
28 because the shape of your product is a bit nicer, or, or, or... We still think about
29 innovation as something somebody does – like a crazy guy that had a great idea –
30 and that then gets copied by somebody else. But this approach can also happen in
31 very small steps, but improve things in a very significant way.“ #00:48:43.6#
32 (Schneider, 2010)
33 „We are in an economical downturn, so the budgets of research and development

34 are decreasing. That is a paradox because in theory, if you are in an economic
35 downturn, you should find ways to enable an economic upturn again and to do
36 this, you either expand the market or you innovate. Design thinking is an eco-
37 nomic tool to envision possibilities, because if you think about it, it is relatively
38 cost inexpensive. If you build prototypes and models, if you build scenarios you
39 don't have an implementation train in a factory already. You just have an experi-
40 ment and then you try to understand and think of opportunities to foresee how
41 this experiment could turn out in real life. By applying design thinking you have a
42 very cost effective tool to foresee possibilities for economic growth. [...] It would
43 be worthwhile to research how much is spent on field research, or operative
44 marketing and how much does it cost if you employ a team to envision
45 possibilities for your organization. I'm sure this is in no relation.“ #00:07:11.2#
47 „Experiment does not mean that we do something crazy. It just means, it is not
48 finished yet. It is not a final solution, something that has to change your entire
49 company. But that we envision possibilities for you to grow. Possibilities to inno-
50 vate.“ #00:07:32.1# (Schneider, 2010)
51 „What all those companies did, back in the ninetieths, is that they have innova-
52 tion managers or even innovation executives and those were very, very sad per-
53 sons. Sometimes we asked: And what do you think? They didn't even dare to
54 speak up! They go a bit happier once they created the position of the CIO because
55 at least they now sat on the round table and got a big salary. The next step now is
56 to create [innovation] teams [in an design thinking sense] within your company.
57 [...] This will already be a big step ahead.“ #00:24:14.8# (Schneider, 2010)
58 „If it's not possible to make use of all the resources, the human potential that you
59 have, and letting it cross-fertilize to make something happen which was unex-
60 pected, why do you have them at all?“ #00:46:25.9# (Schneider, 2010)
61 WHAT NEEDS TO CHANGE IN CORPORATIONS TO NURTURE INNOVATION?
62 NICOLAI
63 „I dont think you have to change the corporation completely, but you have to
64 make sure that you establish a new kind of subculture – this subculture is a value
65 for the corporation as a whole. It is not about changing everything so I wouldn’t
66 say that design thinking can be applied to every problem a corporation has.“
67 #00:14:17.2# (Nicolai, 2010)
68 „I also think although opening up, to open such a new out of the box thinking –
69 you also have to think about how to incorporate that – not only as a think tank,
- 24 -
70 but also how to influence business within your corporation.“ #00:12:50.9#

71 (Nicolai, 2010)
72 „So you also have to work on a structure where these think tanks are working
73 together with mangers in line.“ #00:13:06.4# (Nicolai, 2010)
74 SCHNEIDER
75 „Usually individual smaller companies innovative and then get bought by big
76 companies. And I tell you, that scenario can also happen in a big company, which
77 means that a big company has the budget – again as I sad relatively small – and
78 gives the space to explore innovation opportunities. From my consulting experi-
79 ence this is much more feasible than to say, now we introduce an »innovation
80 culture« in our company.“ #00:16:26.4# (Schneider, 2010)
81 „If you want to practice design thinking you need a flat hierarchy, you need free
82 space, and also you have to make use of diversity... but also from different peo-
83 ple... you can learn an awful lot outside the company. You can learn an awful lot
84 if you observe people in real life scenarios! When I did Deutsche Telekom we
85 were observing poor turkish people, we were observing social cases, handicapped
86 people etc. And this is were we learned [...] Those people do not work in a com-
87 pany. It is very important that we go out and explore the world. The visions do
88 not emerge behind the desk.“ #00:22:22.4# (Schneider, 2010)
89 „The next step now is to create [innovation] teams [in an design thinking sense]
90 within your company. [...] This will already be a big step ahead.“ #00:24:14.8#
92 „It needs very skilled leadership. But more than the leadership it needs the time,
93 money and space to be practiced. Again, this space, money and time is relatively
94 low compared to all the other tools we had in the past like quality function de-
95 ployment etc. So one have to has to bear this in mind, that the investment is rela-
96 tively low.“ #00:35:11.3# (Schneider, 2010)
97 „We need the leadership and it is very hard to get. Because then people are afraid.
98 [...] You [as a design thinker] don't fit into the scheme. But that's exactly what you
99 need as an [innovation] leader. It is still seen as something strange, that certain
100 companies can do. Thats why I hear all the time: Well, Fortune 100 companies
101 can do it because they have the resources... and so on and so forth.“ #00:37:05.3#
103
- 25 -
103 LEADERSHIP AND DESIGN THINKING
104 NICOLAI
105 „We know about different teaming, we know also about bringing together differ-
106 ent team roles within a project – also in design thinking procjects – but we haven't
107 found so far that profound knowledge what kind of people, what kind of leader-
108 ship do we need in the different steps. This is up to future research. This is some-
109 thing that hasn't been tackled so far.“ #00:27:03.4# (Nicolai, 2010)
110 „Design thinking really needs at the very beginning to be self-reflective, to observe
111 the corporation - ??? has been so far - and also to be open to new approaches in
112 terms of thinking about the question, the problem. Nevertheless I think [remark of
113 the autor: top-management] leadership is important. If the corporation would like
114 to become more design thinking-oriented you need the commitment of the top-
115 management and the CEO as well. Every project needs leadership to an certain
116 extent and thats the thing with design thinking. There must be somebody who is
117 not only responsible for the project. I would say if you're in design thinking you
118 got different roles. Leadership in it’s normal sense, but also in being able being a
119 networker, but also being a resource investigator – so leadership got different roles
120 in terms of internal and well as external activities – in and outside the corpora-
121 tion.“ #00:25:49.2# (Nicolai, 2010)
122 SCHNEIDER
123 „Leadership in design thinking is not as what you would expect with the german
124 term leadership because leadership here is much more about engaging. What you
125 really do is engage. So we do not lead. We are showing directions. We lead by
126 motivation, we lead by breaking down barriers, by opening up opportunities. By
127 engaging people. By exploring their own potential. By making them run. That's
128 what I mean by making people fly! There you have to have the skills, the personal-
129 ity and the responsibility also.“ #00:39:19.4# (Schneider, 2010)
130 „We need the leadership and it is very hard to get. Because then people are afraid.
131 [...] You [as a design thinker] don't fit into the scheme. But that's exactly what you
132 need as an [innovation] leader. It is still seen as something strange, that certain
133 companies can do. Thats why I hear all the time: Well, Fortune 100 companies
134 can do it because they have the resources... and so on and so forth.“ #00:37:05.3#
136 „It needs very skilled leadership. But more than the leadership it needs the time,
137 money and space to be practiced. Again, this space, money and time is relatively
138 low compared to all the other tools we had in the past like quality function de-
- 26 -
139 ployment etc. So one have to has to bear this in mind, that the investment is rela-
140 tively low.“ #00:35:11.3# (Schneider, 2010)
141 CRITIQUE ON CHANGE MANAGEMENT AND THE RELEVANCE OF

142 DESIGN THINKING FOR INNOVATION AND CHANGE
143 NICOLAI
144 „Try to come up with something that also guides the future of the corporation. In
145 last years change management has become popular, and the learning organization
146 as well, but both approaches or both streams of research haven’t been really focus-
147 ing what kind of change do we need. What kind of learning is neccessary. I think
148 this is the gap that at at the moment design thinking really fills.“ #00:21:53.8#
149 (Nicolai, 2010)
150 „What is still missing in the whole literature on change management is ..., well, in
151 change management ... there are no really good models out there. In particular if
152 you look at the bigger names – I look for example at Kotter. This is about staging
153 change but it doesn’t really have a body of knowledge in there I think.“
154 #00:31:24.0# #00:31:28.9# (Nicolai, 2010)
155 „The change literature too often is not helpful and design thinking in terms of –
156 OK what kind of problems are we addressing? – fills the gap which still is lacking
157 in change management. So it is about the content, it is about making the organiza-
158 tion fit for tomorrow in terms of being more responsive, being more able to not
159 only to react but also to be proactive in terms of coming also up with different
160 models of how to organize your organization. Having network structures, think-
161 ing beyond departments which is so far behind many organizations.... And also
162 building on what we call intuition! The knowledge would also more or less incor-
163 porate on what we found so far, what we call implicit knowledge. This is something
164 that also with design thinking comes more into play. Explicit knowledge is about
165 how to do things, organization routines. Implicit knowledge is about pattern rec-
166 ognition – it’s about connecting the dots, connecting observations – which is in
167 terms of the knowledge a very valuable insight.“ #00:33:41.1# #00:33:52.8#
168 (Nicolai, 2010)
169 „It’s really about the content that has been missing, also in the discussions about
170 organizational culture which is more or less about how can we change a corpora-
171 tion based on what you've got so far. It’s about working together. Maybe its about
172 something that has the ability to link very diverse topics within management,
173 within human relations, within organizational development etc.“ #00:22:49.5#
174 (Nicolai, 2010)
- 27 -
175 SCHNEIDER
176 „What all those companies did, back in the ninetieths, is that they have innova-
177 tion managers or even innovation executives and those were very, very sad per-
178 sons. Sometimes we asked: And what do you think? They didn't even dare to
179 speak up! They go a bit happier once they created the position of the CIO because
180 at least they now sat on the round table and got a big salary. The next step now is
181 to create [innovation] teams [in an design thinking sense] within your company.
182 [...] This will already be a big step ahead.“ #00:24:14.8# (Schneider, 2010)
183 TIMEFRAME NEEDED TO INCORPORATE A DESIGN THINKING

184 ATTITUDE INTO AN ORGANIZATION
185 NICOLAI
186 „More in the long run. Its not about we have done that one project. ... You need
187 at least two years, then you get the impact in the organization.“ #00:23:59.0#
188 (Nicolai, 2010)
189 WHY IS DESIGN THINKING BECOMING SO POPULAR?
190 NICOLAI
191 „Couple of reasons. Fashion and trends in the end. It’s about having the next big
192 thing. If you look in particular what we find in the history of business administra-
193 tion there have been always these kinds of areas that popped up, like busines pro-
194 cess reengineereirng, then the focus on stakeholders etc. I think it was time for a
195 new topic. If you look back.... It often is easier to look back and recognise a pat-
196 tern... There has been a lot work done already ten years ago by quiet influtential
197 mangers and researches which have already adressed the problem of understand-
198 ing the market and the markets of tommorow in terms of not being market-driven
199 but trying to drive the market and your competitors. On the other hand there was
200 the design community to become more visible in terms of well-known players and
201 they also started to do this. And then the development of the economy where you
202 got all those things you couldn’t really explain why things became popular, like
203 brand hacking etc. [Those were] lots of phenomena which couldn’t be explaind
204 with the models known so far.“ #00:21:12.0# (Nicolai, 2010)
205 SCHNEIDER
206 "Design thinking was born in period of time, where we had technological innova-
207 tions and we thought about how can we apply these technologies. And to find
208 ways that make sense and that have a place in the world, we used the methodol-
209 ogy to implement the technology in a human-centered way. That was the birth of
210 this methodology. This is how it evolved." #00:04:04.8# (Schneider, 2010)
- 28 -
211 "[It helps to discover] what subconsciously somebody is concerned about. I think
212 this is a methodology thats helps you to understand that and to drive your strate-
213 gies in a direction that will make sure that your product or service is successful in
214 the end." #00:02:59.9# (Schneider, 2010)
215 WHAT IS DESIGN THINKING FOR YOU?
216 NICOLAI
217 „For me it is more about an attitude in the sense of »geisteshaltung« It’s about a
218 different way of solving problems, also applying a different way of asking ques-
219 tions regarding your problems. This knowledge is not new to the world it’s about
220 combination of different steps but also combination of approaches which are dif-
221 ferent in terms of where you're going to work – its about space and people and the
222 project management itself.“ #00:16:59.2# (Nicolai, 2010)
223 SCHNEIDER
224 "[The] application of design thinking is reality-driven innovation... With it’s help
225 it is very much funded what the reasons for innovation must be. Design thinking
226 is a tool to motivate reasons for innovation. I think it is a tool for understanding
227 the collective unconscious." #00:01:46.4# (Schneider, 2010)
228 „This deep qualitative understandiung can help to find reasons for innovation.“
229 #00:04:49.1# (Schneider, 2010)
230 WHY COULD DESIGN THINKING FAIL?
231 NICOLAI
232 „It hasn’t been as long as needed on the agenda of the top-management, normally
233 you get the topmanagement, the CEO and the board – who are in moment very
234 commmited to open up, and create space in the organisation that opens divergent
235 thinking – but at the end it's also about being commitied in terms of letting it run –
236 lets say – longer than four years. This is a major thing that came up in our
237 experience – although you got commitment first, they dont stick to that idea, do
238 not really believe in that in the long run.“ #00:12:00.1# (Nicolai, 2010)
239 „In the end [corporations], that are very based on measuring everything, very re-
240 spective, also controlling the output [will prevent ] divergent thinking [because]
241 you cant really come up with comparable measures.“ #00:12:21.6# (Nicolai,
242 2010)
243 „I also think although opening up, to open such a new out of the box thinking –
244 you also have to think about how to incorporate that – not only as a think tank,
- 29 -
245 but also how to influence business within your corporation.“ #00:12:50.9#
246 (Nicolai, 2010)
247 „So you also have to work on a structure where these think tanks are working
248 together with mangers in line.“ #00:13:06.4# (Nicolai, 2010)
249 SCHNEIDER
250 „In my experience it constantly happens that a company says now we do a work-
251 shop, now we do a seminar and we are all cool and we are all doing freaky stuff
252 and freak out in our brain storming and we have great ideas and then... nothing
253 happens! And that is the worst thing you can do. Because if your collaborators
254 invest their energy – and they are not used to that, they are used to stick to the
255 rules and they all in the sudden have to be creative and have great ideas – thats
256 already a hard process. But if then nothing follows up, then that's a killer.“
257 #00:11:52.8# (Schneider, 2010)
258 „If you want to introduce an innovation culture like that, you have to be aware of
259 the difficulties, obstacles and challenges. For instance we have a funny way of
260 taking on responsibility. I always say that I make team members or MBA students
261 fly and then I shoot them... Which means how do you come back on earth, how
262 do you come back to reality? If you have a real innovation it has no precedent it
263 has no previous case, so it's something that is crazy if you want. You have to get
264 back then and you to try to find out how are the possibilities of implementation,
265 how is the feasibility of this innovation idea. Therefore we can take on those risks
266 on a certain extent but then we have to become realistic again. Thats is a funny
267 experiment and most companies are not used to that.“ #00:13:42.8# (Schneider,
268 2010)
269 WHAT ARE THE CONTRIBUTIONS OF DESIGN THINKING TO INNOVATION?
270 SCHNEIDER
271 „This methodology is a very good tool to keep risks low and also to keep costs
272 low. You cannot produce a product, then sell it, and then find out if it works. That
273 is why you have to trial and error, prototype, this is why you need qualitative re-
274 search.“ #00:29:53.8# (Schneider, 2010)
275 „It takes time to establish itself to filter into companies and to find its tradition. I
276 don't know any other methodology which is so finely balanced between creative,
277 innovative thinking and real life focus. And I think this is what makes design
278 thinking really unique.“ #00:41:57.1# (Schneider, 2010)
- 30 -
279 „Otherwise we continue to repeat and to improve and to make slight modifica-
280 tions, make things a little bit better, [...] think about the car. Box on four wheels. It
281 still is a box on four wheels.“ #00:47:13.6# (Schneider, 2010)
282 ARE THERE LIMITATIONS OF DESIGN THINKING?
283 SCHNEIDER
284 „It is hard to say what are the limitations of design thinking because it is just a
285 way to improve. The limitations are really if you expect that people who were
286 never told to think out of the box [immediately embrace it], that you have to be
287 aware of the hierarchical structures, ...of the company, ...you have to deal with
288 that in a diplomatic way. You [also] have to be aware of the feasibility, of the pos-
289 sibility of the outcomes. Great ideas that cannot be produced are worth nothing.“
290 #00:33:46.4# (Schneider, 2010)
291 „What I think is strange, and risky, and bizarre is to say, now there's is a method-
292 ology that is called design thinking and we change our corporate culture by intro-
293 ducing this philosophy. I think this is a bit over the top.“ #00:43:45.4#
- 31 -

Becoming The Ambidextrous Organization - Design Thinking As A Methodology For Nurturing Innovation Culture?

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Friedrichshafen, June 14, 2010

Paper »Change Management«

Jan Schmiedgen Matriculation Number 9200251 (2nd Semester)

Saved at: Speedtröte:Users:schmiedgenj:Desktop:change management - RANK.doc

Jan Schmiedgen, June 14, 2010

EXCURSUS »DESIGN THINKING«

Typical design thinking (learning) processes – be it for products, services or whole

Nevertheless I did an extensive literature review on »innovation culture«, innovation

2 A short Review on Change,

This is quiet dangerous, as reliability-oriented organizations can reproduce their

EXCURSUS »RELIABILITY VS. VALIDITY«

This fundamental problem of balance between reliability and validity, between

That’s what I wanted to find out in my interviews.

Even though I had already developed some hypotheses based on my literature

In connection with the above mentioned demands Schneider frequently empha-

Additionally Schneider and Nicolai permanently emphasized another important

Now, having shortly examined the contribution of design thinking towards an

To put it even more clearer, this unique combination of realistic self-observations

Beckman, S. L., & Barry, M. (2007). Innovation as a Learning Process: Embed-

Bogner, A. (Ed.). (2009). Experteninterviews: Theorie, Methode, Anwendungsfelder (3rd

Brown, T. (2009). Change by Design: How Design Thinking Transforms Organizations

Hasso Plattner Institute of Design Stanford. (2009). D.School Bootcamp - Bootleg

Heijden, K. V. D. (1999). Scenarios: the art of strategic conversation (Reprint.). Chich-

Hippel, E. V. (2006). Democratizing Innovation (New ed.). The Mit Press.

Liedtka, J. (2004). Strategy as Design. Rotman Management, Business Design(2004).

Markides, C. (2001). Strategy as Balance: From "Either-Or" to "And". Business

Martin, R. (2004). The Design of Business. Rotman Management, Business De-

Martin, R. L. (2009c). The Reliability Bias - Why Advancing Knowledge is so

Moldoveanu, M. (2009). Reliability versus Validity: A Note on Prediciton. In R.

Morrison, E. W., & Milliken, F. J. (2000). Organizational Silence: A Barrier To

Oster, G. W. (2008). Derailing Design Thinking. International Journal of Leadership

Poole, M. S. (2004). Central Issues in the Study of Change and Innovation. In M.

Schneider, C. (2010, June 8). Personal Interview with the Autor.

Stamm, B. V. (2003a). How to infuse Innovation? In Managing Innovation, Design

Stamm, B. V. (2003b). Collaborating for Innovation. In Managing Innovation, De-

Sutton, R. I. (2004). The Weird Rules of Creativity. In M. Tushman & P. Ander-

Tushman, M. (2004). Managing Strategic Innovation and Change: A Collection of Read-

Vandenbosch, B., & Gallagher, K. (2004). The Role of Constraints. In Managing

Weick, K. E. (1989). Theory Construction as Disciplined Imagination. Academy of

Weick, K. E. (2004). Rethinking Organizational Design. In Managing as Designing

1 IDEAL-TYPICAL INNOVATION OBSTACLES OF BIG CORPORATIONS?

9 „Larger corporations have established trend research departments – attached to

33 „We are in an economical downturn, so the budgets of research and development

61 WHAT NEEDS TO CHANGE IN CORPORATIONS TO NURTURE INNOVATION?

70 but also how to influence business within your corporation.“ #00:12:50.9#

103 LEADERSHIP AND DESIGN THINKING

141 CRITIQUE ON CHANGE MANAGEMENT AND THE RELEVANCE OF

183 TIMEFRAME NEEDED TO INCORPORATE A DESIGN THINKING

189 WHY IS DESIGN THINKING BECOMING SO POPULAR?

215 WHAT IS DESIGN THINKING FOR YOU?

230 WHY COULD DESIGN THINKING FAIL?

269 WHAT ARE THE CONTRIBUTIONS OF DESIGN THINKING TO INNOVATION?

282 ARE THERE LIMITATIONS OF DESIGN THINKING?

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