Digitization

How to get your innovation process on track

Patrick Jörg03/16/2020

Innovations are the power unit of digital transformation. But do you know how to drive innovative processes in your company to make better use of the opportunities offered by digitalization? We will introduce you to an efficient method in this article: Design Thinking.

Digital change affects almost every company: from the small carpentry shop through giant multinational corporations. Ignore it, and you could jeopardize the whole future of your company. Responsible decision-makers are therefore rising to the challenge and driving innovation forward. But what’s the best way to do this? After all, innovation does not happen by chance or overnight—it takes clear strategies and methods to develop ideas, test them and implement them. Design Thinking is a tried and tested process that global corporations such as Nike, Airbnb and Apple also rely on.

What is Design Thinking?

Design Thinking has its origins in the design industry, but it is also highly relevant to other industries. It puts the customer and their viewpoint(s) right at the forefront. It is not about simply solving a particular problem, but rather about understanding it from the user’s perspective and making it tangible. The Design Thinking process consists of several individual steps that can be assigned to two areas, known as problem space and solution space.

Problem Space: Understand—Observe—Define your Point of View

Empathy is the magic word in the problem space. Put yourself in your customers’ shoes for this. Accurate observations and interactions such as interviews give the best insight to best understand the user’s perspective. The knowledge gained from this then flows into new problems or questions. Seeing it through the user’s eyes often leads to a completely new task definition.

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Solution Space: Finding ideas—Developing prototypes—Testing

Brainstorming techniques are used in the solution space to generate the right ideas. New ideas can be experienced with minimal effort, using running prototypes. The prototypes then need to be tested by selected users. The results help to select and further refine the right concepts. This step is repeated until the results meet the objectives.

The benefits of the Design Thinking Method

Good ideas are not always easy to put into practice in companies: the cost issue, the development time which is often difficult to estimate, not knowing whether customers will accept them and, as a result, uncertain sales forecasts are frequent barriers. It is in precisely these kinds of situations that companies benefit from the advantages the Design Thinking method offers. Here are three examples:

1. Avoid risks

The prototypes mean that potential risks can be assessed at an early stage of the project with relatively little effort. Companies can thus take countermeasures in plenty of time and learn from their own experience. A prototype isn’t particularly expensive and prevents risky ideas from being pursued and money burned right up to final rollout. This is particularly important because the innovation process often does not even get started because of tight budgets and the fear of an idea failing.

2. Ensure Market Acceptance

Because the customer is top of mind from the very beginning, you gain valuable knowledge and insight about their expectations and needs. If these findings are paired with the company’s own projections, then ideas and products can be created safe in the knowledge that the added value for the customer is completely in line with actual market demand.

3. Overcome challenges

Design Thinking breaks down complex projects into specific, bite-sized problems. These are then solved using prototypes. In this way, even major challenges can be overcome step by step. Clearly defined processes also shorten innovation paths, making them efficient and calculable.

Design Thinking in practice

Just theoretical? No way! The example of Hilti, a manufacturer specializing in construction tools, demonstrates just how well Design Thinking works in practice. The company realized during the course of an innovation process that: customers do not want drills, all they want is the holes. Ever since then, Hilti not only sells tools and equipment outright, but also offers them by subscription. They guarantee that customers will always get precisely the tool they need, and only pay for what they actually use.

This innovation was preceded by completely transforming the business model and the value chain through sales. Today, the new subscription model already accounts for as much as 50 percent of sales in some markets. This was a major step for Hilti that led to sustained success, and gave them clear competitive advantage over the competition.

Develop new ideas

Are you ready to rethink your business model and kick off your digital transformation with a lot of new ideas? COSMO CONSULT will be happy to support you in your IT projects. Give us a call or write us an email.

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Author:
Patrick Jörg
Digital Business Consultant | COSMO CONSULT