César Marrón
Director General
Cardinal Health
/
Expert Contributor

Design Thinking Can Keep Your Value Proposition Competitive

By César Marrón | Thu, 09/09/2021 - 13:07

For businesses to succeed, leaders must be adaptable and well equipped to manage change on an ongoing basis, especially if you are looking to improve your portfolio, customer services, and communication with your customers and workforce. The design thinking methodology is not only helpful but necessary for any business that is looking to remain competitive.

Design thinking is a non-linear, iterative process that teams use to understand users, challenge assumptions, redefine problems and create innovative solutions to prototype and test. Involving five phases — empathize, define, ideate, prototype and test — it is most useful to tackle problems that are ill-defined or unknown. Aspects of design thinking have been used by organizations to better empathize and understand customers.

The methodology is a proven and repeatable problem-solving protocol that any business or profession can employ to achieve big results. Design thinking combines creative and critical thinking that allows information and ideas to be organized, decisions to be made, situations to be improved, and knowledge to be gained.

Understanding your customer is critical but it’s only a piece of the puzzle when it comes to propelling your business forward. By fully embracing the design thinking methodology across your business, you are setting yourself up for successful visioning, compelling value propositions, enhancing workplace culture, and reframing challenges, all of which are essential to improving and re-creating business models. In the end, it all comes down to having the adaptability to understand your changing markets and developing a winning mindset.

Let’s go over some of these factors:

Strategy

Strategic thinking in design is key to accomplishing a solid design strategy. When we think strategically, we focus more on problem-solving and working with both the customer and the team to solve that problem. It’s a “connecting the dots” approach to implementing a design strategy, developing clearer strategies, promoting proactive behavior and developing a stronger bond with employees who feel more involved and empowered.

To develop an effective strategy for your business, you must first have a clear picture of the overall business and customers. Identifying your customer base supports market segmentation and shows you whether or when to pivot – all important when creating a successful strategy.

After you’ve used design thinking to develop a killer strategy, you need to execute it. To effectively roll out a business strategy across an organization, all employees need to buy in and participate.

Vision

Without a clear vision, a business is going to struggle. Some business landscapes are changing and having a well-known brand in a regulated industry is no longer enough. Emerging tech, endless choices for customers, and the gig-economy are challenging businesses to assess their current vision and business model.

To create a vision that’s both powerful and relevant in today’s market, businesses must look toward the future and reframe the problems they are solving for their end client. The empathize phase of design thinking will shed light on what you can do better and what more you could deliver to provide additional value to your customers. By combining this information with insights gleaned from future-mapping with your teams, you will be well-positioned to build a strong vision.

Value Proposition

A compelling value proposition is a must. Design thinking provides businesses with an opportunity to evaluate what they think their value proposition is and understand what their customers think their value proposition is. This information will help to understand your true value proposition and what your aspirational value proposition could be.

The main characteristic of this strategy process that differentiates it from established strategic activities is its clear customer (user/consumer/people) point of view in defining the way forward. This strategic framework informs value proposition processes on an offering and portfolio management level. The process complements established strategy processes.

Furthermore, the design thinking process will help identify opportunities to better deliver on your value proposition, highlight what your customers believe your value proposition is in a more impactful way or even redefine your value proposition altogether.

Target Market/Market Segmentation

For organizations, design thinking can help in identifying target markets as well as understanding whether and when to pivot.

Many organizations either see their clients as one large group or understand the types of clients they have at a high level. Design thinking is about getting in the minds of each of the market segments and truly understanding how they might behave. This allows businesses to create not just products and services that cater to each type of clientele but also makes them able to target each type of client.

Defining Solutions/Product and Service Creation

Understanding your customers and providing solutions to their challenges (with different solutions or a different business model) is easier to do, especially in a systematic way.

Design thinking involves customers throughout the development process when creating products and services; providing you with built-in customers once the solutions are rolled out. This process will ensure you know the exact features and functionalities your customer wants, meaning you won’t waste resources on developing things you think are cool but that your customers don’t want or are unwilling to pay for.

Culture

Design thinking is participatory by nature, creates a culture of collaboration and embraces progressive iteration. These things alone support a healthy workplace culture. Once a business embraces design thinking, and as people start applying design thinking methodology to projects, it shifts the way they think and relate to one another.

Design thinking becomes especially impactful when it’s applied internally – turning the employee experience into a “customer experience.” By integrating design thinking into the overall strategy of a business, an environment of innovation, learning and human centeredness is created.

Reframing

Reframing in business is critical to the evolution and growth of your business over time. Businesses that are able to reframe will continue to grow as technologies, society and demands change over time. 

Reframing means looking at the challenge in a different way or looking at delivering solutions in a different way. Design thinking will identify where to consider reframing – at the end of the day companies make money by solving their end client’s problems better than anyone else. To continue to generate revenue and thrive, you need to be able to either solve more of your clients’ problems or do it in a way that is better than your competitors.

Identifying When to Pivot

Not all ideas or implementations will succeed in the market. What strong businesses and great business leaders are good at is determining if and when to pivot. Design thinking helps you recognize when it is time to pivot. This is because:

  • you are already working with your customers to understand if the problems you’re solving are their real problems;
  • whether they’re willing to pay to have these problems solved at the price you want to charge; and,
  • if they are going elsewhere for these solutions now (and why).

Leaders must do competitive analysis and market testing of products and services before developing them. Also, they must adapt to market changes through innovation and listening to their customers to find insight. This means you will know earlier whether your solutions are worth developing further or if you need to pivot.

As you think about your business to enhance vision, value propositions, workplace culture or to reframe challenges and business models, design thinking is a great tool for both changing your mindset and getting clarity on all of these, whether you are a B2C, B2B or a nonprofit organization.

Photo by:   César Marrón