Design Thinking  | 5 MIN. READ

Making the Business Case to Leadership for Design Thinking

ExperiencePoint, May 9, 2019

Making the Business Case to Leadership for Design ThinkingWe know design thinking generates value for the business, and chances are since you are reading this post, you probably think so too. That’s awesome. Welcome to the ever-growing community of professionals who recognize that creativity and innovation starts by putting customers at the center of every decision you make.

The trouble starts when you, or another manager/team leader/training director who is equally sure about the value of design thinking, has to convince the “powers that be” that investing in design thinking training will deliver measurable ROI to the business.

Maybe you’ve seen the power of design thinking in action, in a workshop or at a conference. Maybe you got to experience the thrill of talking to a customer about what they want from the brand, or brainstorming a solution to meet their exact unmet need.

However executives who have never had this epiphany, can view these workshops as not driving the bottom line. They see teams playing games, drawing pictures, or heading out on customer-centric field trips and they grow suspicious of how their time is being spent.

But what these execs really want to hear is how they translate into measurable results.

Fortunately, there is a lot of data that can help you build a business case for design thinking in terms your leaders will understand. So the next time you need to pitch the benefits of investing in design thinking, consider using these data points to make your case.

  1. IT projects (and projects in general) fail at an alarming rate…

  2. Business leaders fear competition…

  3. Executives know they need to be customer-centric…

U.S. companies spend roughly $250 billion on IT application development projects every year. Of these, almost a third will be cancelled before they are completed, and more than half will cost 189% of their original estimates, according to The Standish Group’s 2018 Chaos Report.

Design thinking reduces the risk of failure.

Companies that leverage design thinking across the organization have proven to have lower rates of project failure — along with faster time to market, reduced project costs, and higher rates of returns. One report from IBM found these companies saw an average 301% return on investment on projects developed using a design thinking practice, and as much as $1.1M in increased profits for major project. In other words, if you want to lower your risk of failure and improve the ROI of vital business projects, design thinking can get you there.

Global industries are rapidly evolving, and businesses must adapt or risk falling behind. As a result, competition has become one of the top two issues that most trouble U.S. executives, according to a 2019 survey from The Conference Board. In a related study from PWC, more than half (55%) of CEOs admit that they are not able to innovate effectively, which puts their businesses at risk.

Design thinking can give them the competitive edge they seek.

McKinsey’s Design Index (MDI) found companies with the most mature design practices substantially outperformed their competitors, averaging 10% annual revenue growth, and 21% total returns to shareholders (TRS).

Relatedly, the IBM report found that more than 80% of companies using design thinking felt that the design thinking process helped them gather more diverse ideas and opinions, enable business growth, and prioritize good ideas versus top-down initiatives. Fully 28% of these companies attributed design thinking to increased sales.

Becoming customer-centric is the hot business trend of the day. Almost half (48%) of all business leaders now say that understanding consumer needs is a top priority, according to research from KPMG. These leaders recognize that the only way to stay relevant is to engage with their end users to understand their needs and delight them with new products and services. “In order to deliver consistent, sustainable growth, they need to spend less time listening internally and more time listening to the customer,” Willy Kruh, global chair of consumer & retail for KPMG International wrote in the report.

The problem is that most of them don’t know how to do it. As we’ve said before, capturing NPS scores and conducting customer surveys does not make a business customer-centric. The only way to understand customer needs is to engage with them and listen to their needs.

Design thinking shows them how.

This is where design thinking truly shines. Design thinking methods require teams to abandon preconceived notions about what customers want, and actually spend time observing how they live, the obstacles they face, and what they want their products and services to deliver. This new way of engaging with customers will inspire new ideas, enliven productivity, and drive innovative thinking that results in better business returns.

Improving customer satisfaction is the leading reason companies adopt design thinking, according to IBM’s report. And almost 80% of the companies they surveyed said it helped them understand their customers better.

Remember, executives are like any other customer whose problems you need to solve. When you focus on their needs and what will make them happy (i.e. proof of business results) you can craft a message that will resonate — and that gets everyone what they want.

 

Learn how to enable innovation skill-building at scale here or download our free ebook Kickstart Innovation: A Guide for Organizations.

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