Design thinking has become such a hot topic amongst L&D and innovation teams at large companies that one would think executives see it as their silver bullet solution to their innovation woes (that, or it’s a way for them to be seen to be investing in innovation and providing a creative outlet for their millennial staffers).

Whatever the case, over 80% of new product launches at large companies fail and it’s because, as Michael Dell famously put it, “ideas are a commodity, execution of them is not”.

The same holds true in the startup world where 95% of startups fail, usually due to market failure stemming from botched execution.

While design thinking is indeed an incredibly powerful ideation and prototyping tool that I use with my team and with clients, it is but one of many pieces to the corporate innovation puzzle.

It alone won’t deliver any value beyond temporarily galvanizing employees and delivering some chemical reactions.

The Stars must Align

To get corporate, or any innovation right for that matter, the stars must align, and that includes:

• Structure: The processes and policies, systems, resources and values of a large organisation must support behaviours critical to innovation such as moving quickly, experimenting, being free to fail and long-term thinking.
• Business model: It’s the difference between mere invention and innovation - a business model that makes money. Pricing models, revenue models, cost structures, distribution channels, target customer segments, marketing channels and so on must come together like a well oiled machine for a business to be successful.

Buyer behaviour can be influenced not only by function and price, but by factors such as switching costs, seller brand and reputation, budget, timing, internal politics, form, customer support, compatibility, social proof, security and privacy and existing relationships. You could have the ‘best idea’ in the world but if just one facet of your business model is not quite right then it might very well be the difference between success and failure. This is where approaches such as Steve Blank’s Customer Discovery method and the Lean Startup come into play. But in order to practice such approaches, the environment must support it, as we’ll learn later.

• Psychology: When brainstorming, are we in a state of clarity? Are we under time-boxed pressure? Do we ‘work alone together’ and combat the influence of loud, outspoken employees who dominate sessions? Do introverted employees speak up? Are we free to provide constructive criticism without fear of recourse? Are people comfortable sharing their ideas or have we built a culture of fear where we’re expected to be ‘right’ all of the time and if we have any doubts or fears of looking stupid we bite our lips?

You can plug design thinking into any organisational context but what becomes very apparent is that in order for innovation to flourish at a large company and for ideas to go from zero to one, the underlying environment must be supportive.

GE & the Lean Startup

A perfect example of this is General Electric.

The company hired Eric Ries, author of the lean startup philosophy, to train 5,000 middle managers in how to practice lean startup.

However, once the middle managers returned to their domiciled business units, do you think they could apply the lean startup? Of course not, because the business units had been set up to deliver, not to discover.

They had a perfectionist six sigma culture, an attitude of being the ‘smartest people’ in the room and that the customer didn’t know what’s best for them. The new product investment (NPI) process required the completion of massive business cases that asked questions such as market size and projected ROI - something you can’t reliably predict when it comes to disruptive innovation and you’re operating under conditions of extreme uncertainty.

It wasn’t until the organisation changed the environment by introducing a new belief system and processes that support acting on these beliefs, that the company’s industrial division decreased time to market validation for new ideas by up to 80%.

Learning: Get the environment and culture right first.

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