Outside, it’s a crisp and bright spring day in New York. Despite the glorious weather, the bar inside SoHo House is crowded and buzzing with lively conversations–even in the middle of a sunny afternoon. I’m sitting in a cozy booth with Vijay Vaitheeswaran, senior correspondent and China Business Editor of The Economist. He’s enjoying a cappuccino and discussing his new book, Need, Speed, and Greed: How the New Rules of Innovation Can Transform Businesses, Propel Nations to Greatness, and Tame the World’s Most Wicked Problems.
It’s been gaining praise from critics; Kirkus Reviews, for instance, calls it “The perfect primer for the postindustrial age.” While most reviewers are likely to focus on the finance and geopolitical aspects of the book, I’m particularly interested in Vaitheeswaran’s take on design’s role in the innovation process, as he mentions the power of design in his book. While it’s not central to his core research and arguments, he certainly makes a case for so-called “design thinking” as a way to approach pressing corporate (and global) challenges. In Need, Speed, and Greed, Vaitheeswaran covers a large spectrum of issues, including social networking, environmental sensitivity, the fall of outdated industries, and shifts in the world’s economic power balance, to name a few.
Here’s our (lightly) condensed and edited conversation on where design fits in.
SmartPlanet: Why do you believe that “design thinking” is a key business strategy that smart companies should consider?
Vijay Vaitheeswaran: Design thinking’s contribution is that it brings a multidisciplinary approach, a type of systems thinking, to management as well as to non profits. The previous wave of management thinking, going back to statistical control and Six Sigma, was very valuable. It was about precision and repetition, about constant, repeatable results. These methods reflect the first level of achievable innovation. But they are more suited to a manufacturing age.
Today, in the ideas economy, we know that we achieve 80% of success by using our brains–with new IT [information technology], and in services. And in our economic environment today, we need leaders who know how to deal with constraints, too. Yes, companies still need to know the management basics and how to make widgets the same every time. But systems thinkers are needed today. And we need creativity. Design thinking is wonderful for helping with these types of thought processes.
SP: I often hear innovation experts worry that design solutions aren’t really scalable, and may not be appropriate for really big challenges–say, if you’re looking at developing products that will truly affect climate change, for instance.
When we deal with the world’s most difficult challenges, we need lots of tools in the toolkit. We have technology, and that is great. We have a certain, proven way of managing, thanks to the MBA revolution. But then we can get caught up in analysis paralysis. Everyone’s reading the same HBR case studies. And we’re repeating what we did in the past. To move forward, we need systems thinking. And we also need people who are willing to challenge what we’re doing.
We’re in a disruptive age. If we want to solve big, wicked problems, we need to be disruptive. We can’t fix climate change with our existing system. We need to break it. You can also make a parallel with the healthcare system. Design thinking forces people to think in the round, think holistically.
SP: What about the current backlash against design thinking?
Every wave has its backlash, just as every wave can be oversold. I don’t want to fall guilty of overselling. But I would like to help audiences who are not yet familiar with design thinking become aware of its potential. MBAs and technology-based fixes aren’t always enough to solve big challenges. Yes, you can say solar is a promising technology that will play a role in addressing our energy problems, but it won’t fix anything unless companies figure out details such as how people can easily install panels, or even how they can afford them. This is where design thinking is needed. Now, you don’t have to do formal design thinking to come up with good ideas, but the process of holistic thinking that designers can offer is helpful.
SP: Can you push the idea further, and offer a scenario where design thinking could solve a specific energy-related issue?
There are a lot of interesting things you can do when you think holistically. For example, think about the design of buildings. We are becoming more aware that when more thought goes into designing buildings, there are fewer “sick” buildings. When you design efficient and smart lighting, heating, and cooling systems into a building, not as afterthought, you see the positive results. There are lots of studies out there that prove happier people live and work in these buildings.
We know this, but why don’t more people design in this way? That’s where incentives–where economics– come in. Architects have incentives to build a big, sexy building with a glassy exterior to win awards. Developers want big clients, such as law firms, to buy multiple floors in these buildings. But then the person who has to work there is unhappy. There is no way for the individual to adjust the lighting, or the heat, or the cooling.
So the only way to tackle such different views and design efficiently is to lock a number of different people in a room and talk about what are essentially the microeconomics, the various incentives, that need to be addressed to fix stuff. Design thinking requires putting different people in a room and solving problems in the round. That is why it’s helpful.
SP: In the book you write about “wiki worlds” and the beauty of crowd-sourcing. Do you believe that design–and innovation–can only get better if it is open?
There is a double-edged sword here. Fundamentally and unequivocally, open innovation is wonderful. But what companies don’t realize is that it isn’t easy. It has its perils, and the concept has been oversold. We’ve seen user feedback and crowdsourcing lead to great designs for mountain bikes and LEGOs. It’s a good time to get ideas from customers. But sometimes you get the mediocrity of crowds, not just the wisdom.
What companies need to realize is that they can’t just sack their marketing department and outsource their roles to users. And they need to be smart enough in-house to discern when power users are overtaking commenters– when a small percent of users who are cranky or have an agenda step in. They might not be reflective of their customers.
So it might take more effort to manage crowdsourcing than it was to have traditional marketing meetings in a closed room. But it’s worth the risk and effort. If you don’t engage in it or manage it, your competitor will. And it means spending resources and time to get it right.
SP: Who gets it right?
Amazon, with its user feedback. And there’s IBM–a great example. They use Linux, which saves hundreds of millions of dollars a year. They host innovation jams. What’s interesting is that IBM has more patents than many other companies, though. Their secret is that they are open when it suits them, closed when it doesn’t. In software, they do not have a proprietary lead, so they’re open. With supercomputer Watson’s hardware, they’re not giving any design details away. Companies need to find right balance for their organizations. You can’t just toss open innovation or crowdsourcing out there.
SP: For professional designers, where do the biggest business opportunities lie in the near future?
Some of the biggest opportunities are in the sphere of Big Data. This area is also fraught with peril. But mining Big Data will build great industries for future. What kinds of produts will be created with Big Data? How will we control privacy as the era of Big Data develops? How will we understand our collective selves? Where do individuals begin and end? A design-led model of innovation can help shape answers to these questions.
Designers have a role in innovation’s future, because when design is done well, it puts the individual at the center. Traditional management consulting puts processes and company strategies first. Design thinking is a useful compliment to management thinking, especially design’s anthropological nuances. Designers believe companies should not just rely on focus groups and what the C-suite thinks. At a time when democratic innovation is rising, design thinking can be an important tool to help people at top, the sales and managers and CEOs, to consider the individual, the user.