Key takeaways

  • Concepts such as design thinking, agile development and human centered design have continued to grow and change.
  • Challenges arise when some of these methodologies are streamlined, or too many businesses use the same concepts on the same customers.
  • Business leaders should seek to foster creative friction to innovate, as well as be prepared to enact positive change without instant recognition.

Three years ago, I wrote an article profiling the buzzword-prone concepts of innovation, design thinking and agile development. Likening these trends to people in a bar, I wanted to provide an explanation of their distinct traits when compared to one another.

Since then, the business world has continued to embrace the trends, recognising their importance when leveraging new digital technologies at scale. In fact, to ensure the survival of both new and old businesses alike, these concepts are about as optional as breathing.

Because of such attention, design thinking, agile development and innovation have changed and matured. They’ve also been joined by a fourth member: human centered design. What follows is the story of these four trends and how they’ve continued to develop.

Four trends
walk into a bar…

The bar doors open, and in walk two of the four trends: design thinking and innovation. As the more famous of the two, innovation – also known as disruptive innovation – enters first.

The bartender quickly recognises disruptive innovation from the news, tipped off by the way it scours the building for new inspiration and ideas to rewrite the status quo. Design thinking, meanwhile, sits down and immediately converses with one of the wait staff, intensely interested in their life story and problems.

Not long after, agile development and human centered design enter the bar, and the crew is complete. Leaning in, they swap stories and reflect on the week gone by. As usual, human centered design has some of the best anecdotes, vividly describing recent projects with a keen eye for perspective and experience.

While all individual in nature, these trends can come together and collaborate to solve some of the world’s most pressing problems. Drawing from developed methodologies and skillsets, they orbit in a solar system of collective vision.

A real-world example of their teamwork is the fast-growing fintech sector, where competition is giving way to an entirely new business model: collaboration between corporate banks and startup firms.

How else have businesses embraced these concepts over the last three years?

Disruptive
innovation

“The important thing is this: to be able at any moment to sacrifice what we are for what we could become.” – Charles Du Bos

Innovation has come a long way, particularly when paired with disruption, its sister term. Almost any product or service that moves from a niche foothold to mainstream adoption is labeled disruptive these days, with modern examples including satellite company Oneweb, Elon Musk’s space travel startup SpaceX, digital medicine manufacturer Proteus Health, and the not-for-profits GiveDirectly (mobile payments to the poor) and Project Daniel (3D printed limbs).

These industry-changing companies have not gone unnoticed by other business leaders. In the 2015 PwC Global CEO Survey, 67% of CEOs said they anticipated an increase in innovation capacity in the face of broad disruption, whether that disruption comes from technology, natural disaster, or other wide-scale forces.

In the business landscape, disruptive innovation generally has two focal points. For companies and organisations, the term fixates on customer experience. For governments and regulators, it often means helping to grow the next big disrupting innovation, whether through increased funding or deregulation. Importantly, while both are key expressions of disruptive innovation, neither principally concern the creation of new value.

Innovation
through friction

Alongside the rise of disruptive innovation, the last few years have seen businesses open innovation-focused labs, incubators and accelerators¹. These hubs have one thing in common: their existence signals an admission from the parent company that visionary new value can’t easily grow within the current business structures. Walls are designed to protect, not nurture.

Both inside and outside innovation are necessary for disruptive innovation. Friction between the insulated core and outside-in thinking is what business leaders should aim to foster and capitalise on.

Design
thinking

“We fail more often because we solve the wrong problem than because we get the wrong solution to the right problem.” – Russell Ackoff

The last few years have seen design thinking spread across organisations of all kinds, from education to corporations and governments. Design thinking involves a multi-stepped approach to solving complex problems, with no problem too large or ambitious. Steps usually include research, ideation, prototyping and testing.

As design thinking has matured, a new challenge has emerged. Organisations are increasingly moving to ‘agile sprint’ methodologies, streamlining the process to fit within a shorter single or multi-day timeframe. This decision, while appearing efficient, minimises the chances of other, greater opportunities developing during the process. The challenge deepens when design thinking is being used by a majority of organisations, all of which are serving the same customers. What differentiates them?

Design thinking has captured many parts of the marketplace. However, it will benefit organisations to take time to consider the vision around the problem. It’s worth remembering that the bigger the problem, the larger the potential return.

Agile
development

“When nothing is sure, everything is possible.” – Margaret Drabble

Where design thinking focuses on ideas and problem solving, the agile development mindset focuses on testing and learning. This is a critical innovation feature as the speed of change, combined with the complexity of problems and systems, results in considerable unpredictability.

Agile’s applicability is broad, including organisational culture (values of experimentation), methods of operation (participatory standup meetings or product showcases), and technology delivery. New perspectives mostly seek to embrace agile as part of a company’s modus operandi, rather than a temporary means to an end.

By focusing on testing and learning, at an organisational change level, people are empowered to learn from one another, to co-locate and be purposeful, expertly managing priorities in this brave new world.

Human centered
design

Human centered design has changed the least since it began widespread adoption. Partially aided by the development of data analytics, natural language processing, and sentiment analysis technologies, human centered design is a form of customer centricity that has moved beyond short-term projects and become a distinct part of the organisations themselves.

In addition to these advanced data technologies, more analogue tools such as playbooks and flashcards can assist with adopting a human centered design perspective. A classic example is the ‘write your organisation a love or hate letter’ exercise, or a comparison exercise where the decisions or choices of the team are pitted against the choices of the customer. Whatever themes emerge out of these activities, the aim is to simply identify then fix them.

Be an unsung
pioneer

The way the business world interacts with these four trends will continue to change over time, however a consistent theme runs through them: to truly innovate and build new things, new value, business models and frameworks must continue to emerge from new interpretations of these methodologies, challenging the current rules and assumptions.

Business leaders should keep this in mind when examining which trend could provide lift for their organisation. Like the Wright brothers, inventors of the aeroplane, whose maiden flight wasn’t recognised by the public for several years, leaders should also be prepared to be unsung pioneers for a time – ready to enact valuable change long before anybody notices².

 

Contributor

Kate Bennett Eriksson

Kate is PwC Australia’s head of innovation and disruption.

More About Kate Bennett Eriksson