Design Thinking + IT Services = Innovation Excellence (White Paper)//Motiv Strategies
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This document discusses how integrating design thinking with IT project development can lead to more successful outcomes. It proposes a 3-D model consisting of three phases: Discovery, Development, and Deployment. In the Discovery phase, both design thinking methods like ethnography and traditional strategic analysis are used to understand user needs. For a project with the Virginia Employment Commission, user archetypes were identified which enriched the request for proposal. The Development phase involves creating prototypes and visual representations of concepts to get user feedback. Iterative testing and refining occurs. Technical requirements are defined later based on the user vision. Once a strong prototype and business case are established, the potential service moves into the Deployment phase where a final
Design Thinking + IT Services = Innovation Excellence (White Paper)//Motiv Strategies
- 1. Design Thinking + IT-Mediated Services = Innovation Excellence By Jeneanne Rae Carl Fudge August 2009
- 2. Design Thinking + IT Mediated Services = IT Excellence __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Design Thinking + IT- million?” Both of these are described in Nelson’s (2007) paper, “IT Project Management: Infamous Failures, Classic Mistakes, and Best Practices.” On Mediated Services = the flipside, firms that get it right re-use developed IT platforms and associated data again and again to Innovation Excellence create new sources of value. They creatively adapt existing functionality to enable new products and services, as described in Kohli and Melville’s (2009) writing on “Learning to Build an IT Innovation IT-mediated services are becoming increasingly Platform.” In the realm of IT at least, the rich do significant in the public and private sectors today. appear to be getting richer. While some examples of high profile successes exist, too many IT projects become high-cost resource Various explanations for the high rate of IT project drains that disappoint both the organizations that failure have been put forward. Technological issues invest in them and their targeted users. A major may be in play, such as difficulty choosing an reason for this is the frequent mismatch of appropriate software development methodology, a expectations between developers and users. belief in technology “silver bullets,” or a management Developers approach these projects as “IT team that is not effectively coordinating internal and deployments,” focusing closely on technical outsourced developers. Other reasons include a lack specifications but not fully taking into account the of complementary capabilities, scope creep, needs of real users, who expect a quality service to insufficient project sponsorship, over promising and be delivered. The entire notion of creating a service under delivering, and poor interface design. for an end-user is often lost on development teams, resulting in the creation of user experiences that are Though these reasons do contribute to suboptimal underwhelming and subsequently fail to capture the results, many IT project failures are ultimately rooted results – financial or otherwise – that were projected. in a mismatch between what is demanded and what is supplied. The value proposition to users is that of a Because of this mismatch of expectations and the service, such as an online benefits management tool opportunity to apply design thinking to bridge the gap, that provides a human resource service to the practice of IT-mediated service development employees, while developers perceive that what is (services mediated by electronic technologies) is ripe being delivered is an IT project, a business for change. We propose a new, integrated automation system, a computer system upgrade, or a perspective rooted in design thinking called the “3-D new database. This difference in perception is a model,” in which all decisions about the development significant hindrance to success and directly inhibits of new IT-mediated services are grounded in the the user’s goal of a delightful and valuable solution, perspectives of real users. Not only will this approach such as Apple’s iTunes music delivery service. help organizations create new and delightful experiences that impact the bottom line, but it can While the technical features of an information system also enhance organizational culture by providing a are undoubtedly important, the overall experience of framework to achieve continuous improvement of the service is paramount. In the era of services, products and services. We describe this new happy users translate to the bottom line as approach and illustrate its effectiveness in a specific organizations gain competitive advantage through case example: the Virginia Employment services that make them more “sticky” or allow them Commission’s unemployment insurance system. to reap cost savings through efficiency gains e.g., by replacing call centers with online, self-service Why IT Projects Fail So Often software. The mismatch between a development IT projects do not have a strong success record approach focused on IT specifications and ever overall and according to the Standish Group (2006), increasing user demand for quality services leads to a only 29% succeed, while 53% are challenged and model that is ripe for an overhaul. An empathic 18% fail. The reality is that they are risky endeavors approach rooted in design thinking is a critical missing due to the human and technological complexities link in the development of IT-mediated services, involved and the significant financial investment which we now describe. necessary. Failures lead to management frustration and financial loss, notably shown by two examples: Integrating Design and Innovation Using the 3-D the FBI’s Trilogy project to upgrade its computer Framework system, a $170 million “train wreck in slow motion,” The solution that we have developed comprises an and Nike’s inventory glitches after an ERP integrative process that blends design thinking with implementation, about which CEO Phil Knight traditional innovation and IT system design activities. famously quipped “This is what I get for our $400 The resulting fusion provides a framework for 1
- 3. Design Thinking + IT Mediated Services = IT Excellence __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ organizations to complement time-tested The Discovery phase continues with field research in development strategies with design thinking and start the form of ethnography, latent needs finding, building an organizational culture of innovation as empathy for the end user and user journey mapping well. The process involves three phases: Discovery, which is conducted by objective personnel trained in Development, and Deployment (see Figure 1). We will design research methods. They function as explorers, illustrate the framework by describing a real client invested in discovering where information project that we worked on with the Virginia breakdowns occur and seeking to understand the Employment Commission (VEC), to develop a new IT user’s context and state of mind. This information mediated service for use in the public sector. often provides clues for potentially impactful innovation opportunities. To find these clues, an ethnographic model of the user’s experience is generated, noting pain points and emotional wants 1. Discovery Phase and needs along the way. This process is referred to The Discovery Phase is a combination of business as user journey mapping (see Figure 2), and is pivotal and design thinking and includes framing the problem in laying the groundwork for creating a customized and researching user needs. It kicks off by stating all service innovation that will delight users and assumptions about the opportunity’s context, user, anticipate and counteract future information and competitor to frame the research needed to prove breakdowns. or disprove the dominant logic of a sector or industry. Figure 1. The 3-D Model illustrates the main steps in IT-Mediated Service Innovation Rather than using deductive logic (reasoning from a to an improved future and seeks to build ideas up, general theory to a specific instance) or inductive unlike critical thinking which breaks them down. There logic (reasoning from a specific instance to a general are no judgments in design thinking, a core value that law or theory), design thinking uses “abductive” eliminates the fear of failure and encourages reasoning, drawing on the logic of possibility and maximum input and participation. Also, the process is exploring alternative world states to reveal the intuitive rather than generative: in brainstorming, for possibilities of what could be. Design thinking is linked 2
- 4. Design Thinking + IT Mediated Services = IT Excellence __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ example, understanding patterns is almost always different alternatives while the big picture focus is the more useful than identifying the best ideas. overall customer experience. In addition to leaning heavily on design thinking As Consultants, we were engaged by the VEC who methods, effective IT-mediated service innovation needed to create a Request for Proposal (RFP) for requires the incorporation of traditional strategy and potential vendors of a complex service delivery marketing analyses, too. A strategic lens ensures that system designed to automate activities such as the work performed moves the organization towards administration of unemployment benefits. The its most important goals, such as improving its user success of the service depended upon accurately experience and driving loyalty. Marketing analysis is specifying the service needs in an RFP, which proved often used as the starting point to seek deeper insight to be a difficult task for the VEC leadership. from certain types of customers, e.g., the most profitable, most diverse geographically or segments Aneesh Chopra, then Secretary of Technology for the that are attached to certain channels. While this State of Virginia (and now serving as the Chief analysis is indeed necessary, it is not sufficient for Technology Officer of the White House Office of effective service innovation: demographic information Science and Technology), described the challenge as is no substitute for the contextual inquiry and one of “maintaining a balance between neutrality emotional needs gathering performed during towards competing vendors and successfully meeting ethnography – the latter directly informs service the needs of the State to acquire a functional yet innovation whereas the former provides boundary flexible system.” While a highly structured and explicit conditions. definition of requirements is common practice, this unfortunately also serves to restrict potentially Once both design thinking and strategic analyses creative responses. For example, if the VEC were to have been integrated, the next stage uses convergent specify what technology should be used to achieve thinking to synthesize the initial findings and move certain functionality, this could inhibit a vendor who towards the design of a new service concept in the may have a better, alternative way of solving the Development stage. This culling reigns in the problem. Another difficulty with the traditional possibilities identified through design thinking and approach is that the user experience is opaque: identifies a clear starting point for service design. The “unfortunately, in most government services, its hard goal of the initial discovery process is to articulate to describe the user’s experience,” said Chopra. what a better service would do and building many Figure 2. A user journey map for an unemployed citizen seeking assistance from the VEC 3
- 5. Design Thinking + IT Mediated Services = IT Excellence __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ To gain more insight into the VEC user experience, reactions can be gauged. Storytelling, vignettes, field observations were conducted to capture insights cartoons, and amateur videos are shown to potential from both staff and users regarding their current users in order to tap into their emotional response, interactions with the VEC system. The design thinking thus harnessing a unique quality of design thinking, approach yielded journey maps of user’s experiences, which is turning complex systems into forms that are noting aspects such as how often users needed to visible, tangible and accessible to users. When interact with the system (and for what reasons), and creating these visual representations, it is important to what roadblocks they encountered. The mapping step involve end users and front line staff in the helped identify when information breakdowns took conceptualization process whenever possible, and place, such as when users were unable to understand keep the stimulus user-centered. what documentation was required to interact with the system, usability issues in managing system access Design thinking is critical during these initial iterations passwords, and frustration over what users identified of a prototype and a couple of traditional mindsets will as “wasteful procedures.” need to be reversed in order for the process to be most effective. First of all, rather than evaluating a The VEC now recognized that understanding user service by its technical performance, it should be needs was key to developing first a successful RFP evaluated by the reaction it elicits from end users and and hopefully productivity reform, too. A key first step front line staff. Secondly, multiple prototypes should was grouping users into four distinct scenarios or be generated and, while project managers may resist “archetypes,” based on their needs, an exercise which this out of concern that the process will be inefficient, had never been performed before. At this point, any incremental time investment is outweighed by the development of the RFP was significantly enriched fact that prototypes reduce uncertainty and risk. based on the methods of design thinking. According Through prototyping, designers can determine to Sam Lapica, Director of Technology at VEC, “We whether users actually want the service, whether the had never created specific scenarios before - that was team can deliver it, and whether cost objectives can a new idea for us. It was more function specs, design be met before the initial pilot is launched. In goals, and aspirations. Once we identified the four prototyping, the goal is not perfection but rather to customer archetypes it became clear to us that we learn about the strengths and weaknesses of the wanted to challenge the vendors to respond to that.” concept and to identify new directions that further iterations might take. The value here rested in having additional criteria by which to evaluate vendor offerings, and assessing the With real user reactions in hand, the user experience extent to which vendors’ proposals met the needs of can then be refined even further. This is also an all four user archetypes. Lapica notes that “this is a opportune point to study the business case and IT very specialized area of software development and specifications of the service and to document the we didn’t want to foreclose possibilities by being too feasibility, costs and projected efficiency gains specific in the RFP. We wanted the vendors to have associated with the service. It is important therefore to some latitude.” Design thinking, in this case, was able deploy metrics and service standards to provide to accommodate both specificity and latitude by quantitative measures (i.e., time to completion, providing a wide range of archetypes to present percent completion, customer satisfaction) of the diverse user needs. According to Lapica, “The productivity enhancements driven by an improved process built on what we had already started and customer experience. The best programs seek to gave us a different perspective and the addition of the improve some important aspect of the business case scenarios was very creative.” such as productivity of the user or the system. And without specified targets, it is difficult to prove that the 2. Development phase implementation of an ideal experience meets its The Development phase begins once a vision for a objectives. Once the concept and the business case better service is in place and initial prototypes can be have been developed, a period of iteration and constructed. A key part of this is the ideation and refinement follows where, once again, it is important visualization process, where quick, visual to involve end users and front line staff whenever representations of services are depicted on paper so possible. that participants can easily understand them and their 4
- 6. Design Thinking + IT Mediated Services = IT Excellence __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Figure 3: Design thinking methods used in the Development phase including ideating (left); visualization (center) and concept development (right) At this point, the focus shifts from quantity to quality 3. Deployment phase concerns. Contrary to traditional approaches which The strength of the final prototype and its business lay out specifications for IT functionality early on in a case determine whether and how big of an investment project, design thinking methods involve crafting the organization should make in the potential service. informed technical requirements later in the process, Just as it would with a physical product such as a once a clear vision for key requirements can be medical device or laptop computer, the design articulated. thinking process ends with a final specification for what should be built. In the product development At the VEC, Sam Lapica described the visualization world, it is well known that organizations are far more phase as “exercises with the project team to arrive at efficient at producing a product efficiently if both the a unified vision for the project,” as these exercises developer and the users agree that the final prototype were used to develop a service prototype for use in represents cost, margin, and timing expectations. This the RFP. Part of the difficulty in developing the RFP is not necessarily common practice in the IT world, lay in the complexity of the service, which was where projects are often funded lavishly before the intended to satisfy a variety of user needs e.g., final outcome is known and are not necessarily business owners researching incentives for opening a subject to user scrutiny during development. new branch in Virginia or individuals navigating the state’s unemployment registration procedures. The In fact, many of the disasters mentioned at the services in question were entirely intangible, requiring beginning of this article occurred because there was conceptual rather than physical prototypes. Using a no final prototype or business case prior to the prototype allowed the Vendors to gain a much clearer beginning of the implementation phase of the work. and more granular understanding of user needs. This area holds one of the strongest opportunities for IT-mediated service design to learn from product During the VEC project, the iteration and refinement development processes. The techniques now used in process culminated in a two-day workshop involving product development in most industries include consultants, the technology team at the VEC, and parallel development, rapid prototyping, and most senior VEC leaders. Consultants presented the user recently, co-creation with users. Finally, incorporating profile archetypes and guided discussion of their an element of storytelling helps sell the concept to findings to determine whether user needs could leadership. All of these methods should be used in IT- realistically be met through the system. This process mediated service innovation to reduce the risk of shifted the focus of the RFP process from identifying failure. desired information technology specifications, to exploring how they would address the problems of a A common practice for many would-be innovators wide range of users. According to Lapica: “It became faced with developing IT-mediated services has been possible to identify not just information technology to go straight from concept generation to a pilot barriers, but business process and policy restraints phase. Often these efforts require significant that were obstructing the process.” Chopra stated that investment and have been known to fail because they the workshop was, “The most impactful moment. We do not meet user needs or their service expectations. listened to the customer experiences and allowed This is most likely due to several reasons, including VEC leadership to listen to the outcomes and see if inadequate understanding of the problem to be they found them realistic or unrealistic. This changed solved, a solution fraught with shortcomings, a system the nature of the discussion away from ‘what IT that is too costly, or all of the above. The protocols requirements do we want from the IT vendor?’ to ‘how outlined during the development phase, especially will we address the needs of user A, B, and C?’” prototyping and iteration, help the development team 5
- 7. Design Thinking + IT Mediated Services = IT Excellence __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ get the technical specifications into the success zone There may also be an unexpected indirect benefit of because of their heavy user focus. Because services deploying the process we describe: a subtle shift in need to be experienced in order for judgments of culture of the organization applying the design quality to be made, there is no better way to mitigate thinking process to IT-mediated service innovation is the risk of possible failure than to deploy prototypes. It very likely, too. At the VEC, Chopra believes that is therefore in the best interest of any organization to design thinking indirectly shifted the overall approach build in the requisite protocols for continuous to business improvement. In discussing his improvement upon launch whether the IT-mediated perspective on business improvement strategies service is internal or external to the provider. using previous approaches, he indicates that: “I would have emphasized Six Sigma, lean, or some other performance improvement process that is a well- Conclusion known manufacturing strategy used for process No one argues that IT projects have a very high improvement. Now I would say design thinking is far failure rate. The question is why, and what can be better suited for a services environment. We hope done about it? We submit that there are two main design thinking might be the platform on which we learning points for organizations as they seek to build a culture of continuous performance develop IT-mediated services that delight users and improvement throughout our organization.” customers. First, IT projects should be reframed as As organizations grapple with the twin challenges of IT-mediated services so that the user experience is ever-demanding users and ever-increasing resource front and center in all aspects of design and scarcity, new approaches will be required. Simply execution. Second, service innovation methods based applying new technologies to new problems using the on design thinking methods should be applied. As same methods is a prescription for mediocrity and emphasized by Tim Brown, CEO of IDEO, in his 2008 preservation of the status quo. We urge organizations HBR article, design thinking is a “discipline that uses to consider design thinking as an innovative new the designer’s sensibility and methods to match approach to designing compelling IT-mediated people’s needs with what is technologically feasible services. and what a viable business strategy can convert into customer value and market opportunity.” In the VEC engagement and others with which we have been involved, we observed that there are both direct and indirect benefits of using a design thinking approach to IT-mediated service innovation. The primary direct benefit is a better service design in terms of effectiveness, usability, and efficiency. The key to achieving better service design is elevating the user needs so they become central to all aspects of the process. At the VEC, the project started off as an exercise in IT specification setting, but after going through the design thinking process, it became more important to examine the IT barriers, process barriers, and policy barriers that are obstructing the process. In the words of Chopra, “What we’ve learned through this process is a far clearer path from IT investment to citizen improvement. In the past, IT investments were largely back office and internal in their focus, citizen benefit often indirect and secondary.” 6
- 8. Design Thinking + IT Mediated Services = IT Excellence __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Top Tips from the Authors for Building Innovative IT Services 1. Hold on to the notion of creating a service for an end user rather than a new systems deployment. Forgetting this often results in user experiences that are underwhelming and fail to capture results. 2. Ground all development decisions in the perspectives of real users, by gaining their insights and letting them co-‐create the new service. 3. Try to match user and developer expectations and remember that the value proposition to users is that of a service and not a set of technical specifications. 4. Market analysis is necessary, but not sufficient for innovation: demographic information is no substitute for the contextual inquiry and emotional needs gathering performed during ethnography. 5. Ensure there is a final business case and prototype in place before implementing the new IT-‐mediated service. This practice reduces uncertainty and therefore, risk. Bibliography Brown, T. Design Thinking. Harvard Business Review (2008). Hartmann, D. Interview: Jim Johnson of the Standish Group. InfoQueue, 2006. Kohli, R., and Melville, N. Learning to Build an IT Innovation Platform. Communications of the ACM, 52, 8 (2009), 122-‐126. Nelson, R.R. IT Project Management: Infamous Failures, Classic Mistakes, and Best Practices. MIS Quarterly Executive, 6, 2 (2007), 67-‐78. Further Reading “IT’s Star Turn” by Jeneanne Rae in BusinessWeek online http://www.businessweek.com/innovate/content/jul2007/id20070718_340679.htm “Seizing the White Space: Innovative Service Concepts in the United States.” Prepared by Peer Insight for Tekes, the Finnish Funding Agency for Tehnology and Innovation http://www.peerinsight.com/docs/tekesreport.pdf 7
- 9. Design Thinking + IT Mediated Services = IT Excellence __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Author Biographies Jeneanne Rae Jeneanne is a nationally recognized thought leader on innovation management and design strategy. Rae was hailed as one of Business Week's "Magnificent Seven Gurus of Innovation" in its cover story on the creative corporation. After receiving an MBA from Harvard Business School, Jeneanne has now spent twenty years mastering the art and science of innovation, including spending seven years on the senior management team of IDEO. A columnist for Business Week online, Jeneanne writes on cutting-edge innovation topics. As an adjunct professor for nine years, she taught new product development and service development at Georgetown University's McDonough School of Business and currently teaches executive education through various top ranked programs. Jeneanne can be contacted at: jrae@motivstrategies.com; 703-778-1051. Carl Fudge Carl is an Innovation Program Leader with Motiv, focused on design capability building and service innovation projects within leading international corporations. With a background in organizational change, Carl is a firm thought leader on subjects including organizational design, leadership and talent management. He holds a Masters degree from Columbia University in Organizational Psychology and a B.S. in Psychology from University College London. Prior to joining Motiv he was a Management Consultant with McKinsey & Co., in Houston, TX. While at McKinsey he worked on topics such as growth strategy, operational efficiency and performance management in the beverage, foodservice, media and energy industries. Carl can be contacted at: cfudge@motivstrategies.com; 703-778-5543. 8