“We are stuck. The global competition is fierce. Our product is a commodity. We need to innovative but we can’t seem to do it.”
The senior leadership team at one of the world’s largest steelmakers couldn’t come up with the next blockbuster product to change their fortunes.
“We are highly successful, respected brand with superior profitability and shareholder returns. How can we leverage our success into the future?”
The senior leadership team at one of a venerable US financial service firm wanted to build on their success.
Here were two senior leadership teams with two very different motivations for wanting something new. Both had decided to try using Design Thinking in hopes of identifying innovative new products to drive their success. Neither explicitly expressed the desire to shift their organizational culture. They just wanted the next new “thing”.
We knew that the steelmakers, stuck in the grind of commodity production, were unlikely to conceive of innovative new products unless they believed they could. The Innovation Evolution Map was the first step to getting their creative confidence. An Innovation Evolution Map is a Design Thinking tool for showing how innovations in the company happened and evolved over time. Starting with a wall sized whiteboard and a hand full of markers we had the leaders map the major innovations created by the company since its inception. There were many. They were then charged with describing the enabling conditions that were in place when each of those innovations happened; market forces, leadership styles, company culture, R&D capabilities and financial resources.
Highly successful companies such as the financial services firm can exhibit an overconfidence that keeps their leaders from sensing threats from unconventional market entrants. These potential competitors take advantage of subtle shifts in customer needs and preferences. Sensing this was the case we employed the Role-Play Ideation tool. The leaders were split into small teams each assuming the identity of the executive teams of their conventional competitors and potential emerging competitors. The teams were charged with imagining innovative new products the competitors might introduce that would challenge their own company’s market position.
As I have seen time and time again applying Design Thinking tools have the unintended consequence of unfreezing leadership teams, whether they are stuck or simply complacent. In the search for innovative new products both leadership teams realized their organizations needed dramatic change to attain their goals. By reflecting on the Innovation Evolution Map the steelmakers realized regaining an innovative culture was within their reach by putting certain conditions in place. The financiers were shocked to realize that trust could be built on-line posing an imminent threat to their in-person retail model. Two different motivations to change; one based on optimism and one based on fear.
As W. Werner Burke said “Presenting people with a discrepancy between what is and what is desired will create tension, and the motivation will be in the direction of reducing that tension: that is, to move toward the more desired sate.” By using the Innovation Evolution Map and Role-Play Ideation tools these leaders had a lived experience and felt the tension, for them it was not as an abstract rationale for change.
I believe change is best initiated and accomplished in the context of the work that people do in an organization. Both leadership teams were focused on creating innovative new products, changing the organization was a means to that end not a “corporate-wide strategic initiative” handed down by the CEO.
Design thinking is a team sport, requiring the active engagement of a diverse set of thinking styles. It is firstly, focused on gaining a deep understanding of the humans within a system and secondly, imagining a desired future state, two of the requisite steps to initiating change within organizations. Here we have seen how the Innovation Evolution Map and the Role-play Ideation tools unfroze the senior leadership teams. In my next 'praktikel blog we will explore other Design Thinking tools that can unfreeze larger groups of people within organizations desiring change.
Oh, yes, as a result of being unfrozen the steelmakers changed their R&D resourcing and management approaches that have resulted in the development of successful new materials. The financiers made immediate and significant changes to their strategic planning process, refocused their investments and adjusted their organizational structure. This included establishing a consumer innovation lab to explore the application of new technologies to take advantage of shifting customer needs and preferences.
I am Dan Buchner the Founder and Principal of ‘praktikel working at the intersection of innovation, leadership and learning helping leaders and teams innovate to advance their organizations and communities. Learn more about what I do and how I do it danbuchner.com