Drawing on design mindsets to boost innovation

Imagination, concept visualization, empathy and human understanding key components
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 10/23/2012

Business design:

Heather Fraser, executive director of Rotman DesignWorks, and Elizabeth Frank, vice-president of marketing for ice cream at Nestlé Canada, spoke at a recent Strategic Capability Network event about combining business practices with design methods and mindsets to jump-start innovation.

Want different results? Do something different (Organizational Effectiveness)

Leading the charge (Leadership in Action)

Innovation doesn’t come by chance, requires strategy (Strategic Capability)

In 2008, Nestlé Canada’s confectionery business faced a tremendous challenge. Not only was the business slowly declining but the corporate focus was shifting significantly, said Elizabeth Frank, vice-president of marketing for ice cream.

“How do you reconcile selling chocolate bars in a company whose corporate mandate is ‘round’ health and wellness?” she said. “There was a conflict between this kind of overarching, global, corporate ambition and the realities of a diverse portfolio.”

To address these issues, Toronto-based Nestlé set up a two-day off-site workshop. A select team of employees brainstormed how to reframe the long-term strategy in a way that was aligned with the corporate mandate, differentiate the company from the competition and ignite growth for the business, said Frank, speaking at a Strategic Capability Network (SCNetwork) event in September in Toronto.

“We spent $17 on markers, sticky notes, masking tape, fairy costumes and we had a dream to reinvent the future and we got working — we had a lot of fun,” she said.

The process used to tackle the business challenge was shaped by the concept of “business design,” which is the integration of the best of business practices with the best of design mindsets and methods, said Heather Fraser, co-founder and executive director of Rotman DesignWorks at the University of Toronto, also speaking at the SCNetwork event.

Organizations have traditionally been built to be stable and profitable, and there is a focus on reliability, process perfection and being as efficient as possible, she said.

“That very rational, analytical approach to making the most of ‘what is’ is important but it also, more often than not, eventually leads to incremental results.”

Mindsets and methods in the design world — such as architecture and industrial design — are more about “what could be,” said Fraser. It’s about looking at new possibilities, using imagination, harnessing the talents of teams, understanding the human factor and prototyping.

“These are all ideas that are taught and practised in the design world but are not commonly part of business practices. But if you integrate the best of business and the best of design into a way of working together, you can actually get breakthroughs,” she said.

The first step in embarking on the business design process is selecting the team. It’s important to have a diverse team with representatives from all disciplines in the business, said Frank. The Nestlé team included junior employees all the way up to senior executives in marketing, finance, supply chain, consumer insight, product development, corporate health and wellness, and agency partners.

“When you bring together people with different perspectives… you can truly see great leaders emerging,” said Frank. “It might be at the assistant brand manager level or it might be your most senior finance person who discovers he has this wonderful creative flair — but that’s where the magic happens.”

Once the team is assembled, it should work through the three gears of business design to tackle the challenge at hand, said Fraser.

The first component is empathy and deep human understanding. This refers to understanding the “people factor beyond the numbers,” so not just looking at customers in terms of market segments and statistics, she said.

“Think of them as a whole person — really understand how they see the world and what matters to them,” said Fraser. “When you understand people on a deeper level, there’s a wealth of opportunity to serve that customer, and that’s essential.”

The second component is concept visualization. This refers to thinking about ways to meet an unmet need, create a unique experience and make customers’ lives better, she said.

“It’s not just describing it but building it and being able to see it and talk as a team about how you can make the experience richer, more robust and more cohesive.”

The third component is strategic business design. This refers to the strategy behind the concept and how it links back to the business. Strategy and action plans are critically important in innovation to turn the vision into reality, said Fraser.

Employers should spend time analyzing what they do really well, where to focus their energy and how to differentiate from the competition.

“Too often, big ideas just fizzle out because nobody knew what to do with them and that’s a shame because, frankly, if you don’t think that through, all that creativity was just a big waste and that’s where people get cynical about innovation,” she said.

The business design process proved to be very successful for Nestlé Canada, which has about 3,600 employees across the country. The business grew from about $190 million in 2008 to about $215 million in 2011, said Frank.

It created new products, including 100-calorie single chocolate bars for its Smarties, Aero, Kit Kat and Coffee Crisp products — which brought in $14 million in their first year. Nestlé also reduced the number of ingredients in its existing chocolate bars and launched a line of dark chocolate products.

The new items were more in line with the new corporate mission and responded to the evolving needs of the consumer, said Frank.

And when Canadian executives were at the company headquarters in Switzerland to present the plan, the top executives were so impressed that the plan ended up informing the global confectionary strategy — which was quite a coup for Canada, she said.

The business design method offers clear business value that leads to more relevant solutions, a better customer experience, increased competitiveness and new growth, said Fraser.

But it also has tremendous value from a talent standpoint.

“When you realize your business is all about working with people and understanding their deeper needs and motivations, you are more motivated, there’s more meaning and purpose in your job and you find there’s a jump in intrinsic motivation, which is a wonderful thing,” she said.

Business design is also very collaborative and interdisciplinary so when people are working together, the walls come down, they feel more connected to one another and there is an increase in productivity, said Fraser.

“The team that I worked with on this, whenever we end up interacting, whether formally or informally, there’s this spark of magic there because of this process that we went through,” said Frank.

“There’s this shared understanding of the magic that happens when you get a diverse group of people together with a common objective.”

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SCNetwork’s panel of thought leaders brings decades of experience from the senior ranks of Canada’s business community. Their commentary puts HR management issues into context and looks at the practical implications of proposals and policies.

Want different results? Do something different (Organizational Effectiveness)

By Lydia Roy

Albert Einstein said the definition of insanity is “doing the same thing over and over, and expecting different results.”

When it comes to business, how do we step outside of our normal habits, processes and ways of doing things to create a better experience and manage big ideas?

This was explored by Heather Fraser, executive director of Rotman DesignWorks at the University of Toronto, and Elizabeth Frank, her corporate client from Nestlé Canada, at a recent Strategic Capability Network event.

The tools used at design school include intuition, imagination, empathy, originality and iterative prototypes. The question they aim to answer is “What could be?”

In contrast, common business tools include analysis, facts, objectivity, reliability and process.

If business and design are integrated, what could be? We talk about innovation in theory, but few talk about practical ways of encouraging innovation — which seems difficult to pin down.

I was struck by the principles of design. At Nestlé, a group made up of employees and senior executives with diverse points of view was selected to engage in the process.

The goal was clearly defined. A two-day off-site meeting was planned. Its purpose? To create alignment, differentiation and growth. The process? Exploration, visualization, creating prototypes and feedback. The results? Nestlé achieved a new direction and vision. There was a new integration of teams and tangible, measurable increases in performance and business results.

I was glad to hear the following question come up: “How do you sell the design concept and the need for innovation?” Innovation, after all, is usually one of the top five business drivers at most organizations.

First and foremost, it’s important to know the organization. When there is a crisis, when the context is shifting or there is a need for building agility, this may be a good opportunity to sell the design concept as a strategy.

The best organizations are thoughtful about who to involve. Simple guidelines such as including senior executives, consumers, brand experts and even naysayers are important to align purpose and diversity of perspective.

Connecting design principles with business also allows for a whole new level of dialogue that lets us tap into our inner wisdom. By doing so, you bring to life the full capacity of the organization, and part of the process is learning a new skill set that is necessary in leading innovation. One of the most powerful results of the process is that intrinsic motivation goes up.

The message is clear: Enhancing productivity is deeply connected to tapping into our intuition, imagination and creativity. Translating big ideas into strategy can be done by learning something from outside the business — in this case, design school. So, if you want something different, consider doing something different.

Lydia Roy is a commentator for SCNetwork on organizational effectiveness and founder and president of Star Coaching in Toronto. She can be reached at lroy@on.aibn.com or (416) 233-4189. Visit www.lydiaroy.com for more information.

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Leading the charge (Leadership in Action)

By Trish Maguire

We often hear leaders asking for more innovation, creativity and new possibilities. And they have an opportunity to initiate and support a collective approach, and uncover greater insights about problems and challenges, according to Heather Fraser, executive director of Rotman DesignWorks at the University of Toronto.

It was a reality check to hear how, in one example given at the recent Strategic Capability Network event, the leadership team — in reviewing the results of a new initiative — divulged “This is scary for us.”

Is this a systemic challenge employees and leaders find themselves running into frequently? Are the real issues behind the reported shortage of innovation, creative insights and groundbreaking ideas in fact old cultures, mindsets, organizational structures and limited thinking?

If leaders exercise such dispiriting practices that counterbalance the notion of innovation and dedicated actions, how can groundbreaking initiatives ever be fully realized?

If leaders truly want sustainable competitive advantage, then the critical strategy, arguably, should be embracing open mindsets and practising alternative thinking.

The Sioux people have a saying you may find thought-provoking: “Do not only point out the way but lead the way.”

As an HR leader, is there value in your leadership team taking the time to reflect on how they would measure their intellectual resourcefulness? How does your senior leadership team gauge and distinguish between exceptional and sustainable initiatives versus mediocre and conventional ones?

How effective are they with the practical skill and aptitude of ensuring the implementation and execution of innovative ideas? How would your leadership team describe their capacity to influence others about the value of innovative ideas?

Last, but not least, how does your leadership team value their future-based wisdom capability?

A key question for you may be: “Are your leadership development strategies taking aim at the right competencies or are they missing the target?”

Trish Maguire is a commentator for SCNetwork on leadership in action and founding principal of Synergyx Solutions in Nobleton, Ont., focused on high-potential leadership development coaching. She has held senior leadership roles in HR and organizational development in education, manufacturing and entrepreneurial organizations and can be reached at synergyx@sympatico.ca .  

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Innovation doesn’t come by chance, requires strategy (Strategic Capability)

By Karen Gorsline

The idea of introducing a design mindset to a business traditionally driven by analytical practices is intriguing, with applications far beyond strategy formulation. A design mindset, accompanied by basic tools and protocols, can stimulate employers to go beyond analysis — “what is” — into design — “what could be.”

Applying a design mindset to situations and problems can create a strategic capability related to innovation across business activities with differing goals and time horizons, including:

Continuous improvement: This is often affiliated with incremental change and gradually improves productivity, efficiency, quality and costs.

If the inputs to the continuous improvement process are only analytical, the improvements may be incremental. But if imagination and the questions, “How can we do it better?” and “What could be?” are inserted into the process, the outcomes may be more dramatic, representing true innovation rather than an incremental tweaking of process.

Reframing and repositioning: This involves redefining how a product can be used, who might use it and what benefits are highlighted. It involves thinking differently about the current offering or situation — something that has traditionally been the domain of the marketing department.

Stimulating a design mindset at an organization across various disciplines could mean engineers, accountants and others are better able to understand how to support reframing and repositioning originating outside their areas. They could also use design thinking in their own departments to re-imagine and reinvent how their area functions and contributes.

Strategy: While this is often affiliated with major change, many strategies are incremental, may be bogged down in analysis paralysis and fail to do more than sit in a binder. Applying business design approaches and design thinking to strategy opens up a consideration of possibilities that are more likely to result in innovative strategies with more clarity and focus on choices.

High involvement promotes better solutions, more understanding and focus on the direction of benefits and requirements, and commitment to activation of the strategies. Strategy activation can then be supported by continuous improvement and reframing and repositioning, as it unfolds.

Innovation doesn’t come by chance. It’s an outcome of how business is conducted throughout an organization. It requires analytics and insights, planning and imagination, strategies and commitment to the overall customer experience.

The concepts embodied in business design add energy and imagination to how business is conducted and can be applied in ways that are understood and accessible throughout an organization.

Karen Gorsline is SCNetwork’s lead commentator on strategic capability and leads HR Initiatives focused on facilitation and tailored HR initiatives. Toronto-based, she has taught HR planning, held senior roles in strategy and policy, managed a large decentralized HR function and directed a small business. She can be reached at gorslin@pathcom.com .

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