Design Thinking and the Quest for Reinvention of Strategic Management

Every individual, practicing professional, multi-national Corporation, non-profit organization, educational institution and government establishment ought to be thinking about ‘reinvention.’ In order to transform our economy, organizations, politics and societies reinvention is a necessity not to be taken lightly. Corporate strategies 20 years ago aimed to outsource production – a novel idea then – but today, this strategy results in an inability to innovate and possibly even compete in current markets. Many corporations are encountering difficulties when trying to define their perceived competitive advantage. Channel access and a warehouse of intellectual property and patent documents are no longer enough.

Business leaders and governments are also experiencing a profound crisis of trust and legitimacy triggering a loss of confidence in traditional modes of operation. The new world of reinvented strategic management requires applied design thinking across all management and functional disciplines. The very core of many management theories are being questioned and ‘management’ itself is close to a point of failure. Leaders are looking to find something new to grasp onto in order to make sense of what’s going on and are looking to organize for a future of unprecedented uncertainties. Companies that fail to make the transition will be forced to play catch-up, risk irrelevancy or even extinction.

"Leadership in our networked age relies on the ability to connect/build trust as key competencies."

One of the problems lies in training. Our MBAs are based on theories developed in a post-World War II environment. While adequate when there was very little competition and technology was not a key driver for competitive advantage, these theories are losing their relevancy in today’s landscape. The M-form organization design is functionally oriented, with every manager overseeing a piece of the business, as if optimizing each function results in optimizing the whole. The actual result is quite different. Turf battles; lack of collaboration; and unhealthy internal competition cause an underperformance that actually sub-optimizes the whole.

Design thinking brings a refreshed, revitalized, and rejuvenated approach to management. When the writing is already on the wall, the tendency is to try to cope with the problem by more vigorous action upon one of the formula’s two sides – a decrease in costs, an increase in sales, or both.

The strategic process that occurs when the organization already realizes that it is facing a crisis usually leads to cost-reducing strategic plans – closing plants, reducing manpower or cancelling investments. These are changes in the present organizational cognitive frame that provides the feeling of a remedy but not an actual cure.

The notion of Design Thinking gained traction when Buchanan’s (1992) paper Wicked Problems in Design Thinking shifted design theory away from its legacy in craft, industrial design and production towards a more generalized ‘design thinking’ that could be applied to nearly anything from business to social issues.

Design Thinking Leadership is Distributed

That is, leadership is not solely the purview of the CEO, but can and should permeate all levels of the firm. Leaders can no longer be 100% certain of the future but still need to radiate a sense of confidence in a positive future. This is where the practice of sense making as a new managerial tool can help; sense making is the discovering of new terrain during invention. In the very process of mapping the new terrain, you are creating it and shaping your future.

Design Thinking Leadership is Creating Meanings

Meanings are not born from spreadsheets. Creating meaning is the hardest part of the design process; you’re not going to get it right the first time. But you can iterate, again and again. Strategy needs to be present but you also need to let your gut drive. Design thinking allows you to create strategic options that let you experiment and it is through this process that you may be able to ?nd meanings.

Design Thinking Leadership is Building Trust

The only way to create change is to have high level of trust within key relationships of an organization. Leadership is not an individual sport, and in our networked age the ability to connect and build trusting relationships is a key competency. While leaders try to create trust, optimism, and harmony, what are often created are anger, cynicism, and conflict instead. The core capability of relating centers on the leader’s ability to engage in inquiry, advocacy and connecting.

"Leadership is about making things happen, contingent on a context."

Design Thinking Leadership is Transformative

Leadership is about making things happen, contingent on a context. Leaders may create change by playing a central role in the actual change process, or by creating an environment in which others are empowered to act. It is through practice, reflection, following role models, feedback, and theory that we learn leadership and it should have lasting effects.

Design Thinking Leadership is Visually-Oriented

Strategic planners should use images, metaphors or stories to capture creative imagination and incorporate it into the strategy process. It opens up the future and invites us to look at uncertainties allowing us to be comfortable working with many unknowns. Design thinking expects us to cope with inadequate information in order to create a tangible outcome.