The Design of Business

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The Design of Business: Why Design Thinking is the Next Competitive Advantage
Roger Martin
First published December 3, 2010

A wishful prayer from a pragmatist

The Design of Business: Why Design Thinking is the Next Competitive AdvantageRoger Martin
This is a short book with some big, and very good, ideas. The problem is, it could have still been shorter - you’ll get the concept from the first chapter, and thereafter very little is done with it. This is partly because the idea is self-explanatory, and it’s either something you’ll instinctively take to (if you’re disposed to “design thinking”), or won’t.

The thesis, broadly stated, is this: there are three main “phases” any business proposition:

  • Mystery: when an intuition nags at an inventor: the germ of a problem (and more to the point its solution) suggests itself and there is no orthodox means for solving it — here is the maximum opportunity for those who can (think of a young Ray Kroc thinking “how do I build scale in my hamburger joint?”);
  • Heuristic: when you’ve figured out a potential solution, but you don’t necessarily understand the full implications, possibilities and boundaries of your solution; and
  • Algorithm: where both the problem or opportunity and solution are fully understood, and the solution can be maximally commoditised and automated: the only question is efficiency.

Roger Martin’s presentation is a convincing as far as it goes: I dare say the boundaries between the three phases are porous, and Martin is convincing that there is a reflexive quality to the propositions: the more they are solved, and the more the richness of an offering is stripped to its essential superstructure, the lower the barriers to competition, the slimmer the margins, and the more compelling the need to look for new “mysteries”.

It won’t do, therefore, to settle on your mystery, drive it down the “design funnel” as hard and fast as you can, and relentlessly and mindlessly tweak the algorithm to make it run faster. Your own successful enough, itself will present opportunities for others: witness MacDonald’s versus, say, Subway or Starbucks. MacDonald’s algorithm stripped away “extraneous” considerations like healthiness, “coolness", freshness and so on. So Subway was able to differentiate itself on food quality, and Starbucks on the delightful hipness of actually visiting the store (it seems extraordinary in hindsight, doesn’t it!). MacDonald’s was forced by its competitors back up the funnel to consider other offerings.

The idea is intuitive and makes a lot of sense. Particularly in a large organisations, there is a tendency towards “backward looking” data, regression analyses and the tried and true: “no one ever got fired for buying IBM". But the passage of time illustrates the corollary of that truism as well: no-one revolutionised their business by buying IBM either. Large organisations tend to “reliability” rather than “validity” thinking, and are so keen on moving to algorithm stage that they are inclined to skip the “heuristic” altogether.

And that, says Roger Martin, is what “design thinking” makes possible.

However, for a short book with a big idea, it was hard to keep focussed on it. Something about Martin’s writing style is disengaging. He takes a simple idea and beats it to death with self-serving examples: there are extended case studies of Proctor & Gamble, Target, and Research In Motion, all of which he was closely involved with. RIM in particular seems a fairly poor example: yes, they had a big idea and commoditised it (isn’t that what all successful businesses do?) but their subsequent performance has been underwhelming, as they’ve been unable to withstand the march of the smart phones, and have slowly but surely withered on the vine in the consumer space.

On the other hand, Martin’s take on the underlying philosophy of design and business development is polymath enough to take in pragmatists like Dewey and Charles Sanders Pierce. Being a fan of Richard Rorty and the post-modern philosophers this went down well with me and struck me as a solid basis for the common sense contained in the book: in a contingent, ironic and pragmatic universe, where priorities, economic conditions, consumer preferences and political orthodoxies change like the wind, big, fast, dumb, inflexible machinery seems like a poor suit to be long in.

The relentless preference for algorithms (mechanical, reliable) over heuristics (logical, but requiring interpretation and judgment) seems so blindingly obvious that it’s a wonder so much of corporate enterprise is so blind to it. But being a design thinker is not easy - certainly, translating your unorthodox point of view to an anally retentive business analyst requires powers of persuasion not all of us have ("use lots of analogies!” Roger cheerfully advises) and you wonder whether design thinking - utopian an idea though it might be - is one that will generally get nowhere near the beating heart of your average multi-national.


See also