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Why Design Thinking Now?

The Emergence of Design Thinking

Design thinking, a philosophy that has existed for decades, is gaining significant traction now for several key reasons. These reasons reflect major shifts in business, technology, and consumer behavior.

1. Products and Services are Blurring into Experiences

Traditionally, companies focused on creating great products or providing great services. However, this distinction is no longer relevant, as both have merged to create a holistic experience for the customer. The winning products aren't necessarily those with the most features or lowest price, but those that deliver a superior experience across the entire customer journey.

  • Hospitalization Example: A patient's experience is a series of "moments of truth," but the one that leaves the lasting impression is often the checkout process, due to the recency effect. Companies need to focus on managing the entire experience, not just individual stages.
  • FMCG Example: In fast-moving consumer goods, there are four "moments of truth" that shape the customer's experience:
    • On the shelf: The placement and visibility of the product.
    • Buying: The in-store experience, like waiting in long queues.
    • Opening: The packaging experience, exemplified by the intuitive and thoughtful design of Apple's packaging.
    • Disposal: The ease or hassle of disposing of the product, such as batteries.
  • Automobile Example: Maruti Suzuki's dominance in India isn't because its cars are necessarily the best, but because it has ensured a great experience for the customer throughout the entire value chain, from buying to disposal.

2. Customers are More Knowledgeable and Restless

Today's customers are no longer passive recipients of information. They have access to vast amounts of information and are highly suspicious of what companies want them to believe.

  • The "Wisdom of the Crowd": Customers rely on reviews and public opinions to make purchasing decisions, which they consider more unbiased than company claims. This diffuses knowledge and opinions, reducing the power asymmetry between buyers and sellers. For example, Amazon customers trust reviews, and a company cannot simply delete negative feedback.
  • Co-creation and Collaboration: Customers have become restless and want immediate solutions. This has shifted the traditional "division of labor," where the company solves a known problem. Now, companies must co-discover problems and co-create solutions with customers. This is enabled by technologies that allow for rapid iteration and a constant feedback loop.

3. Widespread Experimentation Tools

Access to tools for creativity and experimentation has become democratized, enabling anyone to create high-quality content or products from anywhere.

  • Democratized Technology: Powerful computational tools like ChatGPT, which were once exclusive to large corporations, are now widely available. This allows individuals to challenge established players and find new, unintended uses for technology, a concept known as exaptation. For instance, Instagram, originally for sharing photos, is now a powerful branding tool.
  • The Rise of "Connect and Develop": With the easy availability of tools and an open-source ecosystem, companies can shift from an internal "R&D" (research and development) model to a "C&D" (connect and develop) model, leveraging freelancers and the broader community. This necessitates an open mindset, which design thinking provides.

4. Digitization of Engagements

The large-scale digitization of human interactions has made convenience a primary driver of adoption, even in a country with a high illiteracy rate.

  • Simplicity at the Front-End: Design thinking is the "panacea" for the transition from the analog to the digital world. The key is to simplify the user interface while hiding the underlying complexity.
  • Indian Examples:
    • DigiYatra: Facial recognition technology streamlines airport check-in, making the process seamless and intuitive for the user.
    • FASTag: A passive, temper-proof sticker on a car's windshield simplifies toll payments for everyone, from a truck driver to a Mercedes Benz owner.
    • UPI: The QR code, a simple print on paper, has revolutionized digital payments in India, removing the need for physical cash and human intervention.
  • Analogy: A wristwatch's face is simple and intuitive, with just two or three hands, but its back reveals a complex mechanism. Design thinking similarly masks complexity to provide a simple, user-friendly experience.

5. Problems are Multifaceted

Today's problems, often called "wicked problems," are complex and have multiple moving parts. These problems require a systems thinking approach, which looks at the system as a whole rather than optimizing individual components.

  • Local vs. System Optimization: The Silk Board flyover in Bangalore is a classic example of local optimization. It solves a specific traffic bottleneck but doesn't improve the overall system throughput because the traffic just gets clogged elsewhere.
  • Division of Labor: The principle of division of labor can lead to a "division of attention," where individuals are masters of one small part of a process but lose sight of the entire system. The auto industry, with its assembly line, is a case in point; while individual parts are made perfectly, recalls still happen because no one person understands the car as a whole.
  • Slowing Down: To tackle these complex problems, design thinking advocates for slowing down to think deeply, rather than reacting quickly. This allows for a holistic view of the problem instead of just a single piece.

6. Clash of Business Models

Competition is no longer just about superior products or services; it's about a superior business model. A product can be inferior, but a better business model can make it win in the marketplace. A business model comprises how value is created, delivered, and appropriated.

  • Netflix vs. Blockbuster: Netflix started by mailing DVDs and then pivoted its business model twice: first to streaming and then to producing original content. This ability to pivot their business model, using data analytics to understand consumer habits, allowed them to defeat Blockbuster and grow to a market capitalization greater than Disney.
  • Tesla vs. Traditional Cars: Tesla's success isn't because it invented the electric car, but because its business model offered free lifetime charging and battery swapping, addressing the customer's "range anxiety".
  • Uber/Ola and Airbnb: These companies succeeded by having superior business models that challenged the notion of ownership. They didn't need to own vehicles or rooms; they just needed to connect the right people with the available inventory.

7. B2C Transformation

The distinction between B2B (business-to-business) and B2C (business-to-consumer) has become irrelevant, as all companies are now fundamentally B2H (business-to-human).

  • The Volvo Example: Volvo's success in the B2B market (selling to governments) depends on its B2C thinking. The company considers the end user's experience—the bus passenger—by focusing on comfort, safety features, and ride quality.
  • Indian Market Reality: Companies like Ford failed in India because they were so product-focused that they expected consumers to change their habits to suit the product (e.g., placing the indicator on the left side of the steering column). In contrast, Kia Motors succeeded by adapting its product to the consumer's desire for features like sunroofs, even though it may have contradicted a previous safety stance. The customer now has choices and expects companies to anticipate their needs.

8. Market Surprises

Markets are unpredictable and can present unexpected shocks that can disrupt even dominant companies.

  • Gillette and Beards: The rise in popularity of beards and bald heads, championed by public figures, posed a significant threat to Gillette's long-standing monopoly in the shaving market.
  • The Rise of Home-Based Businesses: The widespread availability of logistics and payment tools has enabled home-based entrepreneurs to compete with large corporations.
  • Activa and Scooters: Bajaj abandoned scooters in the early 2000s, believing they had no future, only to be challenged by the massive success of Activa, which sold over two crore vehicles. This shows how markets can shift unexpectedly.
  • Adapting to Shocks: A company's response to these shocks—either dismissing them as a temporary "blip" or embracing them to learn and pivot—determines its survival. Design thinking provides the provisional mindset and empathy needed to adapt to these changes.

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