Innovation by Design Thinking:

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Juniper Patterson
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1 Innovation by Design Thinking: Business Model Innovation DENIS DENNEHY DIETER DE SMET

3 Any designers present? Individuals whose personality includes 1. Empathy imagine the world from multiple perspectives those of colleagues, clients, end-users, and customers (current and prospective). 2. Integrative Thinking do not rely only on analytical processes (those that produce either/or choices) 3. Optimism no matter how challenging the constraints of a given problem 4. Experimentalism pose questions and explore constraints in creative ways that proceed in entirely new directions 5. Collaboration design thinker does not simply work alongside other disciplines; many of them have significant experience in more than one. (Brown,2008)

Integrative Thinking do not rely only on analytical processes (those that produce either/or choices) 3.

5 What is Management? equated managing with decision-making and argued that there are three essential aspects of decision-making: intelligence, design and action Herbert Simon (The Sciences of the Artificial)

6 Knowledge Funnel (source: Martin, 2009)

7 Characteristics of Knowledge Exploration and Exploitation Exploration Organisational focus The invention of business Exploitation The administration of business Overriding goal Dynamically moving from the current knowledge stage to the next Systematically honing and refining within the current knowledge stage Driving forces Intuition, feeling, hypothesis about the future, originality Future orientation Long-term Short-term Progress Uneven, scattered, characterised by false starts and significant leaps forward Analysis, reasoning, data from the past, mastery Accomplishment by measured, careful incremental steps Risk and reward Challenge High risk, uncertain but potentially high reward Failure to consolidate and exploit returns Minimal risk, predictable but smaller rewards Exhaustion and obsolescence (source: Brown, 2009)

orientation Long-term Short-term Progress Uneven, scattered, characterised by false starts and significant leaps forward Analysis, reasoning, data from the past, mastery Accomplishment by measured,

8 Reliability & Validity (source: Brown, 2009)

9 What is Design Thinking? a process for developing numerous practical alternate solutions to specific problems or issues fully using the individual and group capabilities and ideas of employees, customers, vendors, and the general public (Oster, 2008)

10 Why Design Thinking? New approach to dealing with complex (wicked) challenges in business business management strategy development sustaining a unique competitive advantage (Clarke and Smith, 2008; Dorst, 2011; Fraser, 2006; Raney and Jacoby, 2010) Can make an influential difference in human-centred activities communication and collaboration business model innovation (Brown, 2008; Fraser, 2006) Assumes the human experience is always messy (Liedtka and Ogilvie, 2011)

sustaining a unique competitive advantage (Clarke and Smith, 2008; Dorst, 2011; Fraser, 2006; Raney and Jacoby, 2010)

Solving Tame & Wicked Problems Well-defined Traditional linear process of problem-solving methods understand the problem which can include data gathering and analysis, then formulate and implement a

11 Solving Tame & Wicked Problems Well-defined Traditional linear process of problem-solving methods understand the problem which can include data gathering and analysis, then formulate and implement a solution (Conklin and Weill,2007) Multiple stakeholders - many decision-makers with conflicting values Dependence on human cognitive abilities (creativity) & social abilities (teamwork) (Hevner et al., 2004)

solution (Conklin and Weill,2007) Multiple stakeholders - many decision-makers with conflicting

12 Big Picture Time A problem cannot be solved by people who are concerned with only one or another of its parts Japanese philosopher Fukuoka

15 Benefits of Visualisation Improves problem solving Balances participation and reduces the dominance of certain participants Facilitates the decision-making process Ideally suited for communication Provides a visual means to assure mutual understanding Creates involvement of participants

Facilitates the decision-making process Ideally suited for

16 Evidence of Benefits Promoted Visibility Provided a Common Platform Promoted Interaction Encouraged a Shared Commitment Promoted Discussion Encouraged Problem-Solving Created a Shared Understanding Better visualisation of roles and responsibilities to be shared with new partners joining the ecosystem Common language and focus good for all stakeholders understanding of the process A vehicle for brainstorming Main one was team-building Everyone had a voice Helped to identify customer value proposition and to focus all stakeholders on issues Identification of gaps and could be used to exclude some stakeholders? Ability to see each partner s contributions and motivations Ability to listen to others, ability to contribute objectively, people's ability to negotiate Good interactions amongst partners Collaboration amongst team was better Good discussion tool and looking at specifics of problem Discussion, clarification, communication The visual ability to be able to work as a team collaborating, challenging each other s skills Able to agree more and very good grounding on the project for all partners

brainstorming Main one was team-building Everyone had a voice Helped to identify customer value proposition and to focus all stakeholders on issues Identification of gaps and could be used to exclude

19 Business Model Canvas What are we talking about?

20 Retail Bank (Innofin 2014) Key Partnerships Key Activities Value Propositions Customer Relationships Customer Segments Investment Partners Branch Operations Personnal Assistance Technology Vendors Call Centre Operations IT Operations Deposit Products (Lower interest rates) Automation (where possible) Retail/ corporate customers (depositors) Regulators Key Resources Physical & IT infrastructure Loan Products (Higher Interest Rates Channels Branches ATMs Retail/ corporate customers (borrowers) Loan Assets Internet & Mobile devices Call centres Cost Structure Revenue Streams Interest expenses Channel costs Interest income Fee income

corporate customers (depositors) Regulators Key Resources Physical & IT infrastructure Loan Products (Higher Interest Rates Channels Branches ATMs Retail/

21 Visa Business Model (Innofin 2014) Key Partnerships Key Activities Value Propositions Customer Relationships Customer Segments Technology alliances Payments network management Transaction processing Payment product card programs & cashless payments Financial Institutions (issuers) Commercial partners Value-added services Convenience Financial Institutions (Acquirers) Key Resources Security Channels Payments product platform Visa brand Rewards associated with card payments Sponsorships (Fifa Worldcup/ Olympics) Cardholders Merchants Improved sales & consumer experience TV advertising Trade Shows Cost Structure Revenue Streams Personnel Litigations Provision Service revenues Data processing services International revenues Brand Promotion Network, EDP & communications

22 Google Business Model Key Partnerships Key Activities Value Propositions Customer Relationships Customer Segments Distribution Partners Original Equipment Manufacturers (OEMs) R & D - New product/service development R &D - Improve existing products /services Manage IT infrastructure Key Resources Web search, Gmail/ Google+/ circles Targeted Advertising using Adsense Targeted Advertising using Adwords Channels Automation Dedicated sales for large corporate accounts Internet users Advertisers & agencies Developers Open Handset Alliance (80+ technology/ mobile companies Data centers Branding OS & Platforms - Android, Chrome OS Global sales and support teams Mobile device users Intellectual Property (IP) Hosted Google Apps - storage, shared calendars, video Enterprise Cost Structure R&D Data Centres Traffic acquisition costs (TAC) Sales & Marketing Revenue Streams Advertising Free Sales to enterprise Staff General And Administrative Expenses

23 Workshop Challenge Design an m-payment business model for a retail bank OR Is there a business model that you want to explore?

24 INNOFIN 2014 INTERACTIVE WORKSHOP Key Partnerships Key Activities Value Propositions Customer Relationships Customer Segments Key Resources Channels Cost Structure Revenue Streams

25 Concluding Thoughts Effective collaboration and innovation can provide significant opportunities for any business Use of visualisation tools can lead to shared understanding shared commitment of all stakeholders. Requires an organisational culture of a positive design attitude

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