Design thinking is a framework that combines critical thinking, cross functional collaboration, empathy, iteration, and curiosity to deliver innovative solutions. Many companies are leveraging design thinking principles to grow their businesses.
Here are some of our favorite examples.
In 2009, Airbnb’s revenue income was limping. At one point the company was earning a mere $200 a week. What happened? How did Airbnb go from anemic to titanic?
The Airbnb team realized that rental listings had poor quality pictures. So, several of the team members flew out to New York and took their own high quality pictures which they then placed on their website. The result? A 100% increase in revenue ($400). Instead of focusing on scalability, the team turned inward and asked ‘what does the customer need?’ By applying a design thinking methodology to their business, Airbnb had turned a corner.
Their New York experience became a miniature experiment from which the team learnt some big lessons, one of which was that empathy could be just as important as code for a business’ success
2) Ericsson’s Innova
The Swedish telecom giant has leveraged design thinking principles to build its own innovation center called Innova. Innova is similar to a startup incubator but only runs within the company. Internal ideas run through funding rounds (similar to VC financing).
Innova emphasizes the importance of rapid prototyping to get an MVP (minimum viable product) in front of the stakeholders. Furthermore, Innova creates cross functional teams in order to connect the teams with company partners and customers.
Since its creation over five years ago, 4000 ideas have been submitted to Innova, with 450 getting first round funding, 45 receiving second round funding, and 5 ideas having become products.
Burberry, located in London, is a global luxury fashion producing clothing, fashion accessories, fragrances, cosmetics, and sunglasses. In 2006, the global fashion, accessory, and fragrance company’s sales were tepid as Burberry was growing at a mere 2% per year.
In order to grow revenue, the new CEO Angela Arhendts understood that the company need to connect with a digital demographic that reaches for their phone in moments of want or need. Design thinking hammers home the importance of designing with the end user in mind. Empathy can unlock new potential for a company.
Angela and her team decided to innovate around Burberry’s core heritage while reaching out to “the luxury customers of the future: millennials.” The company crafted a marketing strategy that connected with the values of a younger customer base, that was “cool and innovative,” and would convince younger people to become loyal customers.
Burberry created a personalized marketing campaign that connected with a younger demographic. For example, the company invested in building their social media presence, with their Facebook page gaining more than 1 million followers by 2011, the largest at that time for a luxury brand.
By the end of 2012, revenues had risen to $3 billion, and Burberry had transformed itself into one of the most digitally innovative brands. The insights gained from developing empathy with a business’ end user can lift the organization. Though Burberry does not use the phrase “design thinking,” their human centered approach draws from its most important processes and principles.
Mint.com, a web-based personal financial management website, allows users to see where their money is, where it moving, and to view each separate account from their phone, computer or tablet. Bank accounts, investments, and credit cards can easily be synchronized on Mint, which then categorizes the expenses to help the user visualize their spending.
Drawing on a human-centered insight, the team noticed that financial software was time-consuming and cumbersome. The team designed an easy to use software that implemented a mobile platform and aggregated data.
Part of Mint.com’s success is that the creators employed empathy to design a website that enables to easily track how they are spending money. Even though the company does not specifically refer to design thinking in its creative process, their human-centered design demonstrates they built a product that illustrates a core principle of design thinking: truly understanding the position and mindset of the user.
Mint.com quickly became a success. Within 2 years the company had 1.5 million customers and was purchased by Intuit for $170 million.
Let’s have a conversation about how design thinking principles are transforming the way organizations connect with their customer.