The ambidextrous Organization - Design Thinking as a Methodology for nurturing Innovation Culture?

Friedrichshafen, June 14, 2010

Paper »Change Management«

Becoming the ambidextrous organization

Design Thinking as a Methodology for nurturing Innovation Culture?

Jan Schmiedgen Matriculation Number 9200251 (2nd Semester)

Saved at: Speedtröte:Users:schmiedgenj:Desktop:change management - RANK.doc


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Table of Contents

1! Introduction ....................................................................... 3!2! A short Review on Change, Culture and Innovation ............ 6!3! Method .............................................................................. 9!4! Findings ............................................................................10!5! Conclusion ........................................................................16!6! References .........................................................................19!7! Appendix ..........................................................................23!

Declaration of Authorship

I certify that the work presented here is, to the best of my knowledge and belief,

original and the result of my own investigations, except as acknowledged, and has

not been submitted, either in part or whole, at this or any other University.

Jan Schmiedgen, June 14, 2010


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1 Introduction

„We can't solve problems by using the same

kind of thinking we used when we created them.“

Albert Einstein

The corporate world nowadays is facing many challenges. Many of those minor

or major developments and megatrends1 are well known to all of us, some less.

Nevertheless we are all – consciously or unconsciously – aware of the fact that

there are many irreversible transitions on their way, that will influence our envi-

ronment and therefore the way we do business. As markets change and old power

relations shift, huge value migration processes (Slywotzky, 1996) will challenge

the current status-quo of many organizations.

That is why an ongoing discussion within scholars and practitioners tries to find

out ways how to overcome those demanding issues. One very strained term

within that lively dispute is »innovation«. But all to often one has to be under the

impression, that it is demanded over and over, but no one really knows how to

develop an universal, holistic and practical approach that can really make it hap-

pen – especially in existing inertial organizations. Although the body of research is

very voluminous, critics state that the current management and change manage-

ment literature offers rather mechanical methodologies and tools showing what to

do (in terms of theory-driven suggestions like »freeze / unfreeze« or the like) with-

out explaining how to do it and what should exactly be done (Brown, 2009; Martin,

2009b; Nicolai, 2010; Riel, 2009; Sniukas, 2007). That’s why a vast amount of

practitioners2, more and more scholars3 and even governmental organizations4 are

beginning to either make known, or explore a methodology that – as they think –

could bridge the gap between rather mechanical tools and methods and the reali-

zation of successful change towards innovation. This methodology is called design

thinking.

1 To just instance some changes, that sooner or later will call for disruptive changes one could mention demographic change, healthsystem issues, technological convergence, knowledge bases economies and the reinforced emergence of business ecosystems as well as new pattern of consumption in our western hemispheres. But also – or even more important – the exponential gro-wing indivdualization needs in developed but also developing countries, globalisation with its multifariously effects on cultural diversity, new mobility and most important the global climate change are comprehensable examples. 2 e.g. Bruce Nussbaum (Businessweek), A. G. Lafley (CEO Procter&Gamble), Daniel Pink (Author), Tim Brown (IDEO), David Kelley (IDEO) etc. 3 e.g. Henry Mintzberg, Roger Martin, Karl Weick, Fred Collopy, Gary Hamel, Lucy Kimbell etc. 4 e.g. the Design Council in the UK or Design som utvecklingskraft (Design as development force) in Sweden etc.


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EXCURSUS »DESIGN THINKING«

The scientific exploration of design thinking outside of the design community is still in its beginning. Therefore the discourse currently lacks one agreed upon definition, although the discussion roots can be often found in Heribert Simons book »The Science of the Artificial«1. Dunne & Martin (2006) described design thinking as the way designers think, regarding their mental processes and the typical nature of design work: project-based work flows around »wicked« problems.

The term wicked problem was first coined by Rittel & Webber (1973) and describes those tasks, that are difficult or seemingly impossible to solve, because their nature typically is messy, contradictory, aggressive and confounding2. They „are ill-defined and unique in their causes, character, and solu-tion“ (Chuchman in Riel, 2009, p. 94) and involve many factors, stakeholders and decision makers with often conflicting values. Moreover a resolution of one aspect is likely to reveal or create other problems, due to complex interdependencies. Therefore approaching wicked problems requires to understand the nature of the problem itself, first. That’s why designers have not only developed special methods to address problems, but also a certain »questioning attitude« that permanently reframes their tasks at hand, what evidentially enables them to innovate very efficient and effective (Boland Jr. & Collopy, 2004; Brown, 2008, 2009; Dunne & Martin, 2006; Liedtka, 2004; Martin, 2009b; Oster, 2008; Shove, Watons, Ingram, & Hand, 2007).

Practitioners like Tim Brown (CEO if IDEO, one of the worlds leading innovation consultancies) there-fore describe design thinking as “a discipline that uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity” (Brown, 2008, p. 86). For the scientific purpose of this paper I prefer the current definition of Roger Martin (Dean of the Rotman School of Manage-ment, Toronto), that integrates designerly thinking modes in the definition: „Integrative thinking is the metaskill of being able to face two (or more) opposing ideas or models and instead of choosing one versus the other, to generate a creative resolution of the tension in the form of a better model, which contains elements of each model but is superior to each (or all). Design thinking is the appli-cation of integrative thinking to the task of resolving the conflict between reliability and validity, between exploitation and exploration, and between analytical thinking and intuitive thinking. Both ways require a balance of mastery and originality” (Martin, 2009b, p. 62).

Typical design thinking (learning) processes – be it for products, services or whole

business systems – pass iteratively through several stages of problem formulation,

observations, problem definition and redefinitions as well as ideation and proto-

typing phases up to the point of implementation. Their description can, and will

not be part of this paper. That’s why in the following I assume the reader to know

the methodology with its characteristic interdependencies.

1 "Engineering, medicine, business, architecture and painting are concerned not with the necessary but with the contingent – not with how things are but with how they might be – in short, with design. [...] everyone designs who devises courses of action aimed at changing existing situations into preferred ones. Design, so construed, is the core of all professional training: architec-ture, business, education, law, and medicine are all centrally concerned with the process of design.” (Simon, 1996, p. 111) 2 „The causes of the problem are not just complex but deeply ambigous; you can’t tell why things are happening the way they are and what causes them to do so. The problem doesn’t fit neatly into any category you’ve encountered before; it looks and feels entirely unique, so the problemsolving approaches you’ve used in the past don’t seem to apply. Each attempt at devising a solution changes the understanding of the problem; merely attempting to come to a solution changes the problem and how you think about it.“ (Riel, 2009, p. 23)


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Personally, I stumbled upon design thinking some years ago, as I asked myself

some very basic questions that turned out to be very complicated as they include

so many facets: What problems do organizations have today? Why do some inno-

vate and some not? What are success factors? What hinders them? And, is there a

theory, or better a practical methodology, to ensure continuous innovation out-

comes?

Research Question

I soon realized that the majority of the existing literature focused on optimizing

the status-quo and few on envisioning, exploring and implementing possible fu-

tures in a feasible way. As this is a – maybe the – most important task in change

management I decided to dedicate the purpose of this paper to the exploration of:

In how far can design thinking be an adequate means to nurture an innovation culture and

overcome obstacles that typically hinder such an attempt?

I imposed myself some limitations right from the beginning: Design thinking is a

very open approach. As it touches and connects so many different research areas1

it is nearly impossible to demarcate any research boundaries or to stick to certain

theoretical frameworks in such a short paper. Therefore I will neither strictly de-

fine all of the multifaceted terms like culture, organization or innovation, nor will

I attempt to integrate the following into existing frameworks.

Nevertheless I did an extensive literature review on »innovation culture«, innovation

and change, the characteristics of change as well as on thinking modes and creativity, in

order to connect the streams of design thinking research to current (change) man-

agement knowledge, as described in chapter 2 » A short Review on Change, Cul-

ture and Innovation«. Additionally I conducted two expert interviews (chapter 3)

that I aligned with the current state of research.

1 For instance knowledge management, strategic planning, human relations, organisation design, and many other areas. In a way design thinking therefore bears resemblance to change management, that „is such a multifaceted phenomenon that every attempt is necessarily limited, but by piecing together partial views, a broader understanding may emerge.“ (Poole, 2004, p. 4)


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2 A short Review on Change, Culture and Innovation When talking about innovation, change and culture in relationship to commercial

success one has to bear in mind that in the end we talk about speed and time-to-

market. Companies need to be attentive to recognize weak signals and must find

ways to absorb and adept fast to new environmental conditions. This is only pos-

sible by »moving knowledge about new externalities« faster as the competition

across the knowledge funnel1 (Martin, 2009b). This however can be quite difficult,

as it requires two different activities: „moving across the knowledge stages [...] from

mystery to heuristic to algorithm, and operating within each knowledge stage by hon-

ing and refining an existing heuristic or algorithm“ (Martin, 2009b, p. 18). The

one activity is concerned with the invention of business, the other with the ad-

ministration – or in other words: The one with exploration of new possibilities,

the other with the exploitation of proven knowledge (cf. Sutton, 2004, p. 268).

Innovation requires both, although the right balance may vary across industries.

The problem however is, that running these two modes simultaneously, requires

the utilisation of completely different thinking and reasoning modes: Exploration

embraces divergent or integrative thinking (Brown, 2009; Flynn & Chatman,

2004; Martin, 2009a, 2009b) that uses inductive, deductive and abductive logic2.

Exploitation however is often connected with linear thinking, where the preferred

modes of reasoning are induction and deduction (Martin, 2009b, 2009c;

Moldoveanu, 2009; Sutton, 2004). If the latter becomes more dominant in an or-

ganization it leads to a – what Martin (2009b) and Sutton (2004) call – »bias to-

wards reliability3«.

This is quiet dangerous, as reliability-oriented organizations can reproduce their

success algorithms only when environmental factors stay stable (»c!ter"s paribus

1 According to Martin the antecedent condition for innovation is to balance intiuitive and analytical epistemologies when generating insights during the three stages of a knowledge funnel. The first stage – called mystery – is characterized by explora-tion. This could for example be an question or pheonomenon that cannot sufficiently be explained with current knowledge – in a way the starting point of a wicked problem. The learning and hypothesis-construction process of the mystery stage leads to „a rule of thumb that helps narrow the field of inquiry and work the mystery down to manageable size“ (Martin, 2009b, p. 8). Once this heuristic is put into operation and its regularities can be discovered it converts into the systematized last stage, an algorithm, that can be run and replicated over and over again. 2 The often forgotten and uncared-for »third mode of reasoning« called abduction (named by Charles Sanders Peirce) is a kind of inference characterized by probability – or in other words, the »logic of what might be«. Inductive thinking, however is proving through observation that something actually works (reasons from the specific to the general), deduction on the other hand, means proving through reasoning from principles that something must be (reasons from the general to the specific). 3 There often seems to be a trade-off between reliability and validity in today’s business context. Most corporations favor reliabi-lity in their structures and processes as it is the result of a process, that produces a consistent and predictable result over and over. In order to enhance reliability they often have to reduce the number of variables considered and make use of bias-free measurements (here management and controlling methods). A designer in the early stages of his work process in turn favors validity, the extent to which a measure accurately reflects the concept that it is intended to measure. In order to increase the validity of any process he has to consider a wide array of relevant variables (e.g. as done in the observation phase of the design thinking process).


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assumption«). As this is not the case in uncontrolled systems (like the current bu-

siness environment), those organizations urgently need to incorporate more

validity-orientation into their culture, as it is a prerequisite of moving new knowl-

edge across the knowledge funnel: „The validity seeker, unlike the reliability

seeker, treats past predictive success as hypotheses to be carefully tested before

using them to generate predictions that are expected to be valid. Hence, the real

empirist is »a first-rate noticer« of precisely the anomalies that would cause him or

her to throw out the »all things are equal« assumption“ (Moldoveanu, 2009, p.

56).

EXCURSUS »RELIABILITY VS. VALIDITY«

Sticking closely to proven and »true« analytical thinking (focusing on running the algorithm) enables firms to build size and scale (one of the simple-minded management imperatives of the last decade). Such an endeavor needs consistent, predictable outcomes that can reproduced over and over. Man-agement methods and processes that favor reliability therefore need to narrow their scope to what can be measured in replicable and quantitative ways. The side-effect of such an attempt to model reality is that factors like subjectivity, judgment or other »biases« need to be eliminated.

Validity-oriented firms however have the problem that they „cannot and will not systematize what they do“ (Martin, 2009b, p. 6) as their foremost goal is to produce outcomes that meet a desired objective, and develop solutions that over time prove to be correct. With only quantitative measures this is difficult to achieve, as they would strip away the, for them very important, nuances and con-texts.

Obviously both approaches should be found balanced in organizations, but unfortunately the current prevailing management paradigms favor reliability over validity and all too often try to predict rules derived from past experiences. As an validity-seeker can’t „prove the value of [his] ideas by invoking the size of [his] regressions R2“ (Martin, 2009b, p. 49) many companies have developed an unbal-anced mastery towards »bulletproof« scientific decision making by creating tools and methods, that continuously refine their current algorithm: „Improved technology and statistical-control tools have given rise to new management approaches […]. Today's business leaders are adopting algorithmic decision-making techniques and using highly sophisticated software to run their organizations. Scientific management is moving from a skill that creates competitive advantage to an ante that gives companies the right to play the game” (McKinsey, 2006). Sutton described this risky phe-nomenon of uncertainty elimination as »mere exposure effect« to reliability: „The more often people are exposed to something, the more positive they feel about it; rare and unfamiliar things provoke negative evaluations“ (2004, p. 268). Or freely adapted from Churchill: »First they shaped their tools, then their tools shaped them«. Martin explains this bias with the persistence of the past (apparent reliability through the use of inductive and deductive evidence from past experiences), pressure of time (reliable systems generate tremendous time savings), and curiously the attempt to eliminate bias (eliminate subjective judgment) (Martin, 2009c, p. 44 ff.). He further argues that counterpro-ductive pressures from capital markets often force companies to short-sighted reliability biases (Martin, 2009c, p. 50 f.) – namely the exploitation and maintenance of their current status-quo at least as long as the future will no longer resemble the past.

This fundamental problem of balance between reliability and validity, between

exploitation and exploration, between linear and integrative thinking has been

illuminated by various researchers and from many different perspectives. Tripsas


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& Gavetti (2000) for instance drew their attention to the influence of existing ca-

pabilities (algorithms) in the search for new technology innovations. In accor-

dance with the above mentioned »mere exposure effect« they discovered that in-

novation search processes often are determined by previous knowledge. That

means, managers all too often model problems according to former experiences,

what leads to an inability to respond to changes in the external environment as it

produces a certain fixation in capability development (refinement of current heu-

ristics/algorithms) and therefore organizational inertia1. This organizational (or

cultural) inertia is often to be said, to prevent radical and, if ever, favor mere in-

cremental change2. That’s why many scholars demand not only a certain adapt-

ability to environmental transformations, but also a more proactive, re-orienting

change behavior of organizations that builds on anticipation (Hayes, 2006, p. 15

ff.; Nadler, Shaw, Walton, & Associates, 1995): „If managers need to understand

and coordinate variability, complexity, and effectiveness, then they need to create

designs that mix together perceptual and conceptual modes of action or move

back and forth between these modes or rely on multiple compoundings of abstrac-

tion“ (Weick, 2004, p. 47).

In order to achieve that Tushman & O'Reilly (2004) propose organizations to be-

come ambidextrous – executing today’s strategies (heuristics and algorithms) and

creating new capabilities for tomorrows demand (mystery exploration). This no-

tion is in conformance with many other scholars (Leifer, 2001; Markides, 2001;

Martin, 2009b; Stamm, 2003a; Weick & Quinn, 1999; Weick, 2004) and targets

the “balance [of] sufficient predictability and stability to support growth with suf-

ficient creation of knowledge to stimulate growth” (Martin, 2009b, p. 118). Only

these »baked-in paradox« organizations will be able to „balance the freewheeling

innovation and buttoned-down operational discipline, [the] validity and reliability

[tension], and [the] honing and refining versus jumping to the next stage of the

knowledge funnel“ (Martin, 2009b, p. 122).

Remain the questions in how far design thinking, as a methodology and attitude,

can contribute to a balancing culture that is capable to manage such a tension,

what exactly needs to change, and what makes the approach so unique…

That’s what I wanted to find out in my interviews.

1 This phenomenon is closely connected with different epistemologies between diverse practices (e.g. engineers, designers and managers) and has been widely discussed (Boland Jr. & Collopy, 2004; Dunne & Martin, 2006; Lester & Piore, 2004). 2 I will not expose in detail here, what different types of change in the literature exist. When I refer to incremental vs. radical change in the following I’ll equate it with contionous vs. episodic, continous vs. discontinous, and competence-enhancing vs. competence-destroying change (cf. Poole, 2004, p. 5). I am aware of minor arising inaccuracies and the nuances that underlie those theories, but need to take into account the scope of this paper.


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3 Method I conducted two expert interviews. As I had to bear in mind that research on de-

sign thinking is still very young, I knew I had to balance practical and theoretical

point of views for my screening phase. I finally convinced two contrasting person-

alities, for an one hour Skype session each. The practical perspective was brought

in by Christian Schneider1 (Industrial Designer), who was a Managing Director at

IDEO. My Interviewee from academia was Dr. Claudia Nicolai (Dipl. Oec.),

General Program Manager und Lecturer at the Hasso-Plattner-Institut – School of

Design Thinking in Potsdam, that is doing extensive research on the topic.

Even though I had already developed some hypotheses based on my literature

research, my aim was not to just let them affirm them. Rather I wanted the inter-

view to be open as possible to give space for the unexpected (Flick, von Kardoff,

& Steinke, 2007, pp. 263 f., 353 ff.; Gläser & Laudel, 2009a). Therefore I chose an

semi-structured, half-open interview form. The Skype sessions were computer

recorded and completed by interview notes taken during the interview as well as

from memory (Bogner, 2009; Gläser & Laudel, 2009b). I later analyzed and clus-

tered emerging topics. Although I had already developed some categories to pre-

pare my coding process in advance I fortunately determined, that themes I ig-

nored before, like »leadership« or »pitfalls and overestimation of design thinking«,

obviously seem to play an important role for my research question as well. These

hints turned out to be very helpful during the interpretation phase. Finally the

topics that emerged in both interviews were innovation obstacles of big corporations,

concrete proposals what needs to change, leadership and top-management commitment,

critique on current change management and innovation methods, explanations why design

thinking could overcome above mentioned critique points, what it predestines for that and

what would be possible pitfalls that would even prevent design thinking making a differ-

ence. The most important quotes have been transcribed and can be found line-

numbered in the appendix on page 23. All following interview citations refer to

these lines.

1 Christian Schneider was choosen as an interview partner, as he was a former Director of IDEO Milan, Project Manager at the Studio De Lucchi and co-founder of the air-transportation company EWA in RD Congo. He has guided multidisciplinary and multinational teams for the development of products, services and brand strategies of several fortune 100 companies as well as start-ups. Clients include Deutsche Bank, Deutsche Telekom, ETF (European Technology Fund), EBS (Electronic Banking Systems), Ferrari, FraunhoferInstitut, Merloni and Siemens. He has lived and worked in various countries in Europe, Africa and North America and taught at several Universities such as the Polytechnic University Milan, Carleton in Ottawa and Stanford.


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4 Findings As expected, both interviewees confirmed the usual innovation obstacles big1 cor-

porations are facing: The main design thinking inherent activity for example is

radical internal and external collaboration, beginning in the earliest stages of every

product, service or business development. But even this fundamental exercise is

practiced insufficiently in most organizations, although its relevance has been

described multifariously (Chesbrough, Vanhaverbeke, & J. West, 2006;

Handfield, Ragatz, Petersen, & Monczka, 1999). Combined with an also attested

structural and cultural inertia many of the initial assumptions from chapter 2, like

thinking in silos and functional departments, fixation in capability development

and therefore a lack of interdisciplinarity, got reinforced (Nicolai, 2010, 1-13;

Schneider, 2010, 14-59). Mr. Schneider criticized in particular the wrong applica-

tion of otherwise powerful tools like business ethnography or misconceived mar-

ket and trend research as mere »vicarious agents« for reliability-oriented deci-

sions2. This follows the initial argumentation of Martin (2009b), stating that they

are rather used in the predominant logic of measuring and prognosticating instead

of challenging current heuristics and algorithms. In his argumentation the pre-

ferred, but misdirected steering of funds to scopes of application that – in the hope

of risk reduction – can be measured, bears a paradox – especially in an economic

downturn, where anticyclical behavior could be the key to survive or get strength-

ened: „Design thinking is an economic tool to envision possibilities, [...] relatively

cost inexpensive. [...] By applying [it] you have a very cost effective tool to foresee

possibilities for economic growth. [...] It would be worthwhile to research how

much is spent on field research, or operative marketing and how much does it cost

if you employ a team to envision possibilities for your organization. I'm sure this

is in no relation“ (Schneider, 2010, lines 36-45). Thus, the predominant thinking

with its reliability bias is regarded responsible for structural and process-related

problems from both interviewees. This hinders cross-fertilization and the use of

even existing diversity in the organization and leads to – in designers eyes – weird

decisions (cf. Sutton, 2004), like attaching the responsibility of innovation to dedi-

1 Both interviewees pointed out the fact that there has to be drawn a clear distinction between rather smaller and bigger organi-zations. While in smaller companies the likelihood is greater that people engage in »strategic conversations« in and outside their firms boundaries, in bigger corporations this often isn’t the case anymore. 2 „Even though we talked a lot about innovation in recent years I don't think that there was much innovation going on. We were expanding our markets, we were selling our products to new and different markets, approached different markets. We tried to adept our products to different markets... So ethnographic research was about understanding whether those people like pink or blue. Bullshit! ... Instead of learning from those cultures and learning from those local realities, to really find innovati-on opportunities we just adapted our products. In the same time innovation was about making them cheaper and cheaper. This happened at the one side by improving the technology, the assembly, the production, the distribution... That happened on the other side by having cheap labor costs. I ask you. Where is innovation?“ (Schneider, 2010, lines 15-25)


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cated managers1: „What all those companies did, back in the ninetieths, is that

they have innovation managers or even innovation executives, and those were

very, very sad persons. Sometimes we asked: And what do you think? They didn't

even dare to speak up! They go a bit happier once they created the position of the

CIO because at least they now sat on the round table and got a big salary. The

next step now is to create [innovation] teams [in an design thinking sense] within

your company. [...] This will already be a big step ahead“ (Schneider, 2010). The

same was observed by Mrs. Nicolai: „Larger corporations have established trend

research departments – attached to the headquarter – but they have no impact [...].

They are good in figuring out patterns that might be in the future [but] they are

not really customer centric. [They have] no experience of addressing the problems

for the corporation and the interplay of different people and different contexts“

(Nicolai, 2010, lines 9-13). Regarding this, Martin stated „the farther the area is

from the customer, the greater is the reliability bias“ (2009b, p. 139) – a point of

view, shared by many other authors (Flynn & Chatman, 2004; Handfield et al.,

1999; Lester & Piore, 2004; Tushman & O'Reilly, 2004).

In the search for a resolution to these obstacles Tushman & O'Reilly (2004) pro-

posed three main areas that need to be changed in order to become an ambidex-

trous organization: Organizational culture, architecture/structure and processes. In gen-

eral, they accord with Martins2 notions as well as with the statements of my inter-

viewees. Altogether their demands sum up to what today already is practiced in

design thinking organizations.

Let’s begin with the structure. Both, Schneider and Nicolai agree on diverse and

project-based teams as the source of innovation. Once a project is finished the

team disbands and reforms in a different configuration suited to the next task at

hand. That means an ambidextrous organization has to deploy a structure that

enables individuals to organize themselves by projects, rather than by permanent

structures. Herefore it has to provide time, space3, relatively little money

(Schneider, 2010) and must establish an project-based activity system than runs

parallely to the more fixed configuration that is running the current business algo-

1 This is an interesting example of the typical working style in traditional management as described thoroughly in Dunne & Martin (2006) that tries to attach responsibilites to certain individuals, although the setup of their inner-organizational boun-daries is unlikely allowing them to influence any decision in their »area of authority«: „Individuals are typically much more adept at describing ‘my responsibilities’ than they are at describing ‘our responsibilities’“ (Oster, 2008, p. 110). In design thinking the interplay of many decision makers is solved by assigning projects to teams that heavily collaborate with the help of many tools and methods that overcome the typical problems arising in teamwork (POV development, visualization, prototy-ping, etc.). 2 „To create an environment that balances reliability and validity, that both drives across the stages of the knowledge funnel and hones and refines within stages, a business needs to think differently about three elements of its organization: its structures, its processes, and its cultural norms.“ (Martin, 2009b, p. 118) 3 The supply with, and the configuration of space, is probably one of the most important and most frequent discussed issues within the design thinking community. As a detailed discussion of this important dimension would go far beyond the scope of this paper it shall hereby just be mentioned as as very critical component.


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rithm (Martin, 2009b). This is consistent with Tushman & O'Reilly's demand for

autonomous groups and an organizational structure, that remains small with flat

hierarchies: „Size is used to leverage economies of scale and scope, not to become

a checker and controller that slows the organization down. The focus is on keep-

ing decisions as close to the customer or the technology as possible” (Tushman &

O'Reilly, 2004, p. 288). This customer or human-centeredness is another charac-

teristic of design thinking as it serves as the one and only corridor for all decision-

making1. This in return encourages other innovation prerequisites that are widely

accepted: e.g. a culture of informed risk taking and autonomy, keen on experi-

menting employees that feel a sense of ownership and are responsible for their

own results (Martin, 2009b; Nicolai, 2010; Schneider, 2010; Tushman, 2004) and

a tolerance for certain types of failure. Furthermore such an high-participative

approach has several positive side-effects that solve typical organizational prob-

lems, like »organizational silence« (Morrison & Milliken, 2000) or infrequent »mi-

nority dissent2« (De Dreu & M. A. West, 2001), since the users and their reactions

will become the neutral decision instance3. As a result the withhold of opinions

and concerns could disappear and upward information flows more freely.

In connection with the above mentioned demands Schneider frequently empha-

sized the support for experimentation (Schneider, 2010, lines 39, 266) in such an

organizational structure, what leads us to the process perspective. The nature of a

design thinking process is, what Weick (1989) would describe a »struggle with

sensemaking4«. It is a hypothesis-driven theorization process that embraces com-

prehension fostering imperatives like »fail often an early«, »show don’t tell«, »fo-

cus on human values«, »create clarity from complexity«, »be biased towards ac-

tion«, »collaborate across boundaries«, »be mindful of process« and »get experi-

mental and experiential« (Hasso Plattner Institute of Design Stanford, 2009). Such

a mindset requires the reorganization of central corporate processes that today

1 This decentralization of decision-making is the glue, that holds such an contradictorily and ambigous working environment together: „There is a delicate balance among size, autonomy, teamwork, and speed which these ambidextrous organizations are able to engineer. An important part of the solution is massive decentralization of decision making, but with consistency attai-ned through individual accountability, information sharing, and strong financial control” (Tushman & O'Reilly, 2004, p. 288). The direct user/customer feedbacks also serve as decision benchmarks that help prevent the often feared group cohesion, although design thinking per se prevents that, as it embraces divergent thinking as a norm (Flynn & Chatman, 2004, p. 237).

2 The notion of preventing minority dissent is also consistent with Sutton, who says that „If it's creativity you want, you should encourage people to ignore and defy superiors and peers – and while you're at it, get them to fight among themselves“ (Sutton, 2004, p. 271). 3 Obviously there are other major instances that guide decision making as well – like the corporate vision (Collins & Porras, 2004) as one compass, or the project vision and goals. Unfortunately their interactions and interconnectednesses cannot be discussed here as this would go beyond the scope of this paper. 4 „Theorizing consists of disciplined imagination that unfolds in a manner analogous to artificial selection. It comes from the consistent application of selection criteria to "trial and error" thinking and the "imagination" in theorizing comes from delibe-rate diversity introduced into the problem statements, thought trials, and selection criteria that comprise that thinking.“ (Weick, 1989, p. 516)


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often are dramatically tilted toward just running existing heuristics or algorithms1.

Martin, namely mentions two all-but-invisible process forces, able to promote or

stifle innovation culture: financial planning and reward systems (Martin, 2009b, p.

123 ff.). Regarding the financial perspective, he criticizes the often discussed (short-

termed) strive for consistent outcomes that board and stock analysts demand, and

reminds the reader that financial planning – especially, if fed with past data – can’t

hardly foresee what is needed for pushing knowledge through the funnel. Conven-

tional reliability oriented budgeting approaches must give way to a planning that

consists of setting goals and organization dependent, reasonable spending limits only

(2009b, p. 124). Closely connected, and also mentioned by my interviewees, are

the reward systems. Here he argues that „most executives prefer the known to the

unknown. It is much easier, safer, and rewarding to run a billion-dollar business

than it is to invent one“ (Martin, 2009b, p. 125). Therefore he can’t explain him-

self, why a misconception could have developed, that favors running heuristics

and algorithms as main source for monetary rewards and status. In his view this is

a major problem, as this is unlikely to attract people with the abilities to explore

new business possibilities by moving knowledge through the knowledge funnel2.

This complies with the notions of many other researchers (cf. Flynn & Chatman,

2004, p. 238 f.; Tushman & O'Reilly, 2004, p. 288) arguing that not just success

but also failure should be rewarded while reserving punishment only for inaction:

„Enhancing innovation also has to do with how performance is rewarded. This,

too, entails a dramatic departure from the management practices ingrained in

most companies. Rather than rewarding success and punishing failure, companies

should reward both. Again, I must distinguish between what is right for routine

work and what is right for creative work“ (Sutton, 2004, p. 272). Empowered em-

ployees, enabled to act as intrapreneurs, therefore are the most likely source to

make innovation happen.

1A phenomenon also one of my interviewees commented: „In the end [corporations], that are very based on measuring eve-rything, very respective, also controlling the output [will prevent ] divergent thinking [because] you cant really come up with comparable measures.“ (Nicolai, 2010, lines 238-241) 2 The differences regarding source of status, style of work, flow of work life, reward systems, mode of thinking and the dominant attitude between »typical managers« and »designers« are thourougly described in Boland Jr. & Collopy (2004) and Dunne & Martin (2006).


- 14 -

Additionally Schneider and Nicolai permanently emphasized another important

aspect of an innovation culture, that we should pay close attention to. Schneider

named it »diversity«1, other authors describe it in terms of a »boundary manage-

ment« by using a rich variety of internal and external sources, coupling with the

project team, and driving the innovation process:

„If you want to practice design thinking you need a flat hierarchy, you need free

space, and also you have to make use of diversity... but also from different peo-

ple... you can learn an awful lot outside the company. You can learn an awful lot

if you observe people in real life scenarios! When I did Deutsche Telekom we

were observing poor turkish people, we were observing social cases, handicapped

people etc. And this is were we learned [...] Those people do not work in a com-

pany. It is very important that we go out and explore the world. The visions do

not emerge behind the desk“ (Schneider, 2010, lines 80-87).

These design thinking inherent co-creation and observation processes (with pref-

erably »extreme users«) are further key aspects that can evidently2 lead to innova-

tion (Chesbrough et al., 2006; Chesbrough, 2006; Hippel, 2006; Piller, Schubert,

Koch, & Möslein, 2005; Prahalad & Ramaswamy, 2003; Reichwald & Piller,

2009; Stamm, 2003b). The herewith induced self-reflection, in- and outside the

organization (Nicolai, 2010, line 109), makes design thinking a self-observation

and learning process (Beckman & Barry, 2007) that could create the often-quoted

»organizational questioning attitude« for innovation (Baecker, 1994; Brown, 2009;

Hamel, 1998a, 1998b; Kim & Mauborgne, 2005; Markides, 2001; Martin, 2009b;

Riel, 2009; Schneider, 2010). An attitude that challenges existing mental models

and basic assumptions, that resolves seemingly insuperable constraints

(Vandenbosch & Gallagher, 2004), and envisions possible futures. On that score

designerly divergent thinking could – once introduced and established in the orga-

nizational (sub)culture – per se, serve as the driving force for organizational change.

This however leads us to the third and last area that needs to change according to

Tushman & O'Reilly and Martin: cultural norms. As above findings have shown

the ambidextrous organization needs to embrace both, convergent and divergent

thinking. This is also the pragmatic view of both interviewees. „I don’t think you

have to change the corporation completely, but you have to make sure that you

establish a new kind of subculture – this subculture is a value for the corporation

as a whole. It is not about changing everything so I wouldn’t say that design

1 Not to be confused with »diversity management« that often is understood as a rather inward looking concept. 2 Procter&Gambles famous »Connect + Develop« approach that uses open innovation as an major source for future competitiv-ness, for instance emerged out of another program, called »Design Works«. Design Works has been developed among others with IDEO in order to introduce an design thinking attitude into the corporation. Once P&G adepted principles of such an approach to innovation (that now some call hybrid thinking), they realized, that they had to broaden their obseration and collaboration basis. Today P&G’s goal is to generate half of it’s product innovation with outside help. (Riel, 2009)


- 15 -

thinking can be applied to every problem a corporation has“ (Nicolai, 2010, lines

62-66). Schneider argued „[If] a big company has the budget – again as I sad rela-

tively small – and gives the space to explore innovation opportunities [...] this is

much more feasible than to say, now we introduce an »innovation culture« in our

company.“ (Schneider, 2010, lines 76-79). It also coincides with Tushman &

O'Reilly who discovered ambidextrous organizations having established cultures

that are simultaneously »tight and loose1«. Regarding the »tight-aspect« they argue

that such an culture should rely on strong norms, that emphasize the already

above mentioned design thinking attributes, like openness, autonomy, initiative,

risk taking, etc. With »loose« they mean „the manner in which these common

values are expressed, [varying] according to the type of innovation required“

(Tushman & O'Reilly, 2004, p. 288). Martin looks at it from a more meta-level

and states that „balancing reliability and validity demands a new thinking about

constraints“ (2009b, p. 127) which must lead to norms that treats constraints

rather as a pointer to the locus of needed innovation, than as to the immovable

enemy2.

In order to achieve that, both authors and also my interviewees agree on the ut-

termost importance of leadership – in the sense of top-management commitment3

(Nicolai, 2010, lines 111-115; Schneider, 2010, lines 129-139; Tushman &

O'Reilly, 2004, p. 288) – to introduce such an approach to innovation, although

Mrs. Nicolai and Mr. Schneider prodded me to the fact, that once it’s established,

a very different, engaging and collaborative kind of leadership will have to

emerge, that so far isn’t researched enough4.

1 “Tight in that the corporate culture in each is broadly shared and emphasizes norms critical for innovation such as openness, autonomy, initiative, and risk taking. The culture is loose in that the manner in which these common values are expressed varies according to the type of innovation required.” (Tushman & O'Reilly, 2004, p. 288) 2 A more detailed discussion on the different handling of constraints between reliability and validity-oriented businesses can be found in Dunne & Martin, (2006); Martin, (2004, 2009a, 2009b) and Vandenbosch & Gallagher, (2004). 3 Martin for instance emphasizes the importance of leadership by refering to his experiences with the introduction of design thinking at Procter&Gamble: „Culturally it’s imperative that people know it is safe and rewarding to bring forward an abduc-tive argument.[...] CEO’s must consciosly take on the role of validity’s guardian to counter the internal and external pressures toward reliability“ (Martin, 2009b, p. 138). That this isn’t the fact today was confirmed by Mr. Schneider who complained: „We need the leadership and it is very hard to get. Because then people are afraid. [...] You [as a design thinker] don't fit into the scheme. But that's exactly what you need as an [innovation] leader. It is still seen as something strange, that certain com-panies can do. Thats why I hear all the time: Well, Fortune 100 companies can do it because they have the resources... and so on and so forth“ (Schneider, 2010, lines 129-134). 4 As roles often are relayed and teams members come and go during a typical design thinking process, it does not fit into exi-sting explanation approaches: „ I would say if you're in design thinking you got different roles. Leadership in it’s normal sense, but also in being able being a networker, but also being a resource investigator – so leadership got different roles in terms of internal and well as external activities – in and outside the corporation. [...] We know about different teaming, we know also about bringing together different team roles within a project – also in design thinking procjects – but we haven't found so far that profound knowledge what kind of people, what kind of leadership do we need in the different steps. This is up to future research. This is something that hasn't been tackled so far“ (Nicolai, 2010, lines 104-120).

Or as Mr. Schneider expresses: „Leadership in design thinking is not as what you would expect with the german term leaders-hip because leadership here is much more about engaging. What you really do is engage. So we do not lead. We are showing directions. We lead by motivation, we lead by breaking down barriers, by opening up opportunities. By engaging people. By exploring their own potential. By making them run. That's what I mean by making people fly! There you have to have the skills, the personality and the responsibility also“ (Schneider, 2010, 122-128; cf. Jung, Chow, & Wu, 2003).


- 16 -

Now, having shortly examined the contribution of design thinking towards an

ambidextrous organization, respectively their common overlappings regarding

structure, processes and cultural norms, it is very interesting to again discover

obvious similarities to the theory of organizational learning. According to Nonaka

& Takeuchi (1995) the enabling conditions for organizational learning are inten-

tion (vision and objectives), fluctuation and creative chaos (often referred to as

»intentionally generated crisis«), redundancy (in terms of blurred boundaries and

learning by intrusion of »other« concepts via knowledge networks with the outside

world), and a requisite variety (diversity). They are accompanied by an organiza-

tion design that enables a »layering structure« with a business layer for normal rou-

tines (algorithms), a project team layer were the conversations happen (mysteries,

heuristics), and a knowledge base layer (heuristics, algorithms) were both are shared.

They argue, that the organizational success depends on how seamlessly individu-

als can move in and out these layers. On the one hand, these mentioned enabling

conditions describe nothing else than the already inherent nature of a design

thinking process. On the other hand, the layering structure aligns with Tushman

O’Reilly’s and Martin’s notions of ambidexterity and the balance between exploi-

tation and exploration.

5 Conclusion Although design thinking seems to have found a practical way, how to bring to-

gether the requirements needed to nurture innovation, some questions remain.

Even though the methodology may be already suited to dock on reliability-

oriented organizations, my interviewees and I asked ourselves: Are they, yet? How

must an change process look like, that introduces design thinking as means to

nurture innovation culture into an reliability-oriented organization? Martin and

Riel gave first clues by describing the transition of P&G (Riel, 2009). Nevertheless

research needs to be conducted, also in terms of how to overcome to be expected

obstacles1 towards such an hybrid organization. Design thinkers will not – or sel-

domly – have empirical data to support their course. Those to be convinced orga-

nizations have.

So how to overcome the ease of defending reliability vs. validity? Indisputable the

CEO needs to take on the role of validity’s guardian (Martin, 2009b, p. 138), as

already described. Nonetheless a clash, for instance, of working styles is to be ex-

pected: „If you want to introduce an innovation culture like that, you have to be

1 A closer look leads fast to the discussion of more abstract levels of research, like e.g. management education with its preponde-rance of training in analytical thinking (Martin, 2009b, p. 129) or the reliability orientation of key stakeholders, like stock market analysts or the board of directors with their preference for measurable reliability (»what matters is, what can be measu-red«-attitude).


- 17 -

aware of the difficulties, obstacles and challenges. For instance we have a funny

way of taking on responsibility. I always say that I make team members or MBA

students fly and then I shoot them... Which means how do you come back on

earth, how do you come back to reality? If you have a real innovation it has no

precedent it has no previous case, so it's something that is crazy if you want. You

have to get back then and you to try to find out how are the possibilities of im-

plementation, how is the feasibility of this innovation idea. Therefore we can take

on those risks on a certain extent but then we have to become realistic again. That

is a funny experiment and most companies are not used to that“ (Schneider, 2010,

lines 257-267). In its extreme cases this can lead to inner-organizational resistance

and a questioning of the misunderstood concept. That means the needed leader-

ship towards an, as well as the leadership within an existing design thinking organi-

zation is up to urgent future research (Nicolai, 2010, line 104 ff.).

However, once such a transition succeeded, and the in chapter 4 mentioned areas

structure, processes and cultural norms are aligned towards more tolerance regarding

validity-oriented thinking, abductive reasoning and experimentation, an organiza-

tion should have all the attributes it needs, to become ambidextrous. Design think-

ing itself already fulfills the general conditions needed to make innovation hap-

pen. It embraces convergent and divergent thinking, it historically originates to

resolve wicked problems (often encapsulated as the conflict between reliability

and validity in the form of constraints), and it therefore has the capability to com-

bine the often conflicting triangle of viability (business focus), feasibility (techno-

logical focus), and desirability (design based on human values and user needs fo-

cus) (Brown, 2009). Schneider summarized that as follows: „I don't know any

other methodology which is so finely balanced between creative, innovative think-

ing and real life focus. And I think this is what makes design thinking really

unique.“ (Schneider, 2010, lines 274-277).

To put it even more clearer, this unique combination of realistic self-observations

with the anticipation and envisioning of possible futures could provide the ground

for continuous change in an organization. In particular, as the methodology itself

can be regarded as an permanent learning process that nurtures an ongoing strate-

gic conversation1 (Heijden, 1999), were strategy flows top-down and bottom-up,

preventing organizational inertia, as stipulated by Tushman & O’Reilly: „Finally,

technologies, products, markets, and even senior managers are retained by the

market, not by a remote, inwardly focused central staff many hierarchical levels

removed from real customer“ (2004, p. 289).

1 Van Heijden described »learning loops« in his book »Scenarios – The Art of Strategic Conversation« as strategy development processes that integrate experience, sense-making, and action into one holistic phenomenon.


- 18 -

Summed up, like change management design thinking connects many research

areas, from strategic planning, innovation management, human relations to orga-

nizational development and many more. But its ability to knot very diverse topics

(Nicolai, 2010, lines 168-173) in a practical way, that makes conscious what prob-

lems really need to be addressed in an organization, fills a gap that hasn’t been

tackled so far in change management (Nicolai, 2010, lines 154-167). So for in-

stance Mrs. Nicolai formulated: „It’s really about the content that has been miss-

ing, also in the discussions about organizational culture… Which is more or less

about how can we change a corporation based on what you've got so far? … It’s

about working together! Maybe it’s about something that has the ability to link

very diverse topics within management, within human relations, within organiza-

tional development etc.“ (Nicolai, 2010, lines 168-173).

Poole pragmatically summarized it: „By now it is common sense that people,

space and time – [are] the »least common denominators« of change and innova-

tion theory” (2004, p. 16). As design thinking in the end connects all these dimen-

sions (Nicolai, 2010, line 220 f.) in an »ambidextrous way«, it could have the po-

tential to help organizations constantly renewing themselves by motivating rea-

sons for innovation (Schneider, 2010, p. 223 f.).


- 19 -

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7 Appendix

The Expert Interviews

IDEAL-TYPICAL INNOVATION OBSTACLES OF BIG CORPORATIONS? 1

NICOLAI 2

„We are still wondering to see how difficult it is sometimes for the corporation to 3

come up with a team which has people from different departments. We often fig-4

ure out that they haven't been in contact before.“ #00:17:22.8# (Nicolai, 2010) 5

„[Some inexperienced firms are] not big enough, that they already have developed 6

routines but they know this will come to an end when they grow.“ #00:06:01.2# 7

(Nicolai, 2010) 8

„Larger corporations have established trend research departments – attached to 9

the headquarter – but they have no impact [...]. They are good in figuring out pat-10

terns that might be in the future [but] they are not really customer centric. [They 11

have] no experience of addressing the problems for the corporation and the inter-12

play of different people and different contexts.“ #00:07:51.4# (Nicolai, 2010) 13

SCHNEIDER 14

„Even though we talked a lot about innovation in recent years I don't think that 15

there was much innovation going on. We were expanding our markets, we were 16

selling our products to new and different markets, approached different markets. 17

We tried to adept our products to different markets... So ethnographic research 18

was about understanding whether those people like pink or blue. Bullshit! ... In-19

stead of learning from those cultures and learning from those local realities, to 20

really find innovation opportunities we just adapted our products. In the same 21

time innovation was about making them cheaper and cheaper. This happened at 22

the one side by improving the technology, the assembly, the production, the dis-23

tribution... That happened on the other side by having cheap labor costs. I ask 24

you. Where is innovation?“ #00:28:49.7# (Schneider, 2010) 25

„Where is innovation? It's continuously repeating something, and then you're a bit 26

better than the other. Why are you better? Maybe because you produced cheaply, 27

because the shape of your product is a bit nicer, or, or, or... We still think about 28

innovation as something somebody does – like a crazy guy that had a great idea – 29

and that then gets copied by somebody else. But this approach can also happen in 30

very small steps, but improve things in a very significant way.“ #00:48:43.6# 31

(Schneider, 2010) 32


- 24 -

„We are in an economical downturn, so the budgets of research and development 33

are decreasing. That is a paradox because in theory, if you are in an economic 34

downturn, you should find ways to enable an economic upturn again and to do 35

this, you either expand the market or you innovate. Design thinking is an eco-36

nomic tool to envision possibilities, because if you think about it, it is relatively 37

cost inexpensive. If you build prototypes and models, if you build scenarios you 38

don't have an implementation train in a factory already. You just have an experi-39

ment and then you try to understand and think of opportunities to foresee how 40

this experiment could turn out in real life. By applying design thinking you have a 41

very cost effective tool to foresee possibilities for economic growth. [...] It would 42

be worthwhile to research how much is spent on field research, or operative 43

marketing and how much does it cost if you employ a team to envision 44

possibilities for your organization. I'm sure this is in no relation.“ #00:07:11.2# 45


„Experiment does not mean that we do something crazy. It just means, it is not 47

finished yet. It is not a final solution, something that has to change your entire 48

company. But that we envision possibilities for you to grow. Possibilities to inno-49

vate.“ #00:07:32.1# (Schneider, 2010) 50

„What all those companies did, back in the ninetieths, is that they have innova-51

tion managers or even innovation executives and those were very, very sad per-52

sons. Sometimes we asked: And what do you think? They didn't even dare to 53

speak up! They go a bit happier once they created the position of the CIO because 54

at least they now sat on the round table and got a big salary. The next step now is 55

to create [innovation] teams [in an design thinking sense] within your company. 56

[...] This will already be a big step ahead.“ #00:24:14.8# (Schneider, 2010) 57

„If it's not possible to make use of all the resources, the human potential that you 58

have, and letting it cross-fertilize to make something happen which was unex-59

pected, why do you have them at all?“ #00:46:25.9# (Schneider, 2010) 60

WHAT NEEDS TO CHANGE IN CORPORATIONS TO NURTURE INNOVATION? 61

NICOLAI 62

„I dont think you have to change the corporation completely, but you have to 63

make sure that you establish a new kind of subculture – this subculture is a value 64

for the corporation as a whole. It is not about changing everything so I wouldn’t 65

say that design thinking can be applied to every problem a corporation has.“ 66

#00:14:17.2# (Nicolai, 2010) 67

„I also think although opening up, to open such a new out of the box thinking –68

you also have to think about how to incorporate that – not only as a think tank, 69


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but also how to influence business within your corporation.“ #00:12:50.9# 70

(Nicolai, 2010) 71

„So you also have to work on a structure where these think tanks are working 72

together with mangers in line.“ #00:13:06.4# (Nicolai, 2010) 73

SCHNEIDER 74

„Usually individual smaller companies innovative and then get bought by big 75

companies. And I tell you, that scenario can also happen in a big company, which 76

means that a big company has the budget – again as I sad relatively small – and 77

gives the space to explore innovation opportunities. From my consulting experi-78

ence this is much more feasible than to say, now we introduce an »innovation 79

culture« in our company.“ #00:16:26.4# (Schneider, 2010) 80

„If you want to practice design thinking you need a flat hierarchy, you need free 81

space, and also you have to make use of diversity... but also from different peo-82

ple... you can learn an awful lot outside the company. You can learn an awful lot 83

if you observe people in real life scenarios! When I did Deutsche Telekom we 84

were observing poor turkish people, we were observing social cases, handicapped 85

people etc. And this is were we learned [...] Those people do not work in a com-86

pany. It is very important that we go out and explore the world. The visions do 87

not emerge behind the desk.“ #00:22:22.4# (Schneider, 2010) 88

„The next step now is to create [innovation] teams [in an design thinking sense] 89

within your company. [...] This will already be a big step ahead.“ #00:24:14.8# 90


„It needs very skilled leadership. But more than the leadership it needs the time, 92

money and space to be practiced. Again, this space, money and time is relatively 93

low compared to all the other tools we had in the past like quality function de-94

ployment etc. So one have to has to bear this in mind, that the investment is rela-95

tively low.“ #00:35:11.3# (Schneider, 2010) 96

„We need the leadership and it is very hard to get. Because then people are afraid. 97

[...] You [as a design thinker] don't fit into the scheme. But that's exactly what you 98

need as an [innovation] leader. It is still seen as something strange, that certain 99

companies can do. Thats why I hear all the time: Well, Fortune 100 companies 100

can do it because they have the resources... and so on and so forth.“ #00:37:05.3# 101


103


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LEADERSHIP AND DESIGN THINKING 103

NICOLAI 104

„We know about different teaming, we know also about bringing together differ-105

ent team roles within a project – also in design thinking procjects – but we haven't 106

found so far that profound knowledge what kind of people, what kind of leader-107

ship do we need in the different steps. This is up to future research. This is some-108

thing that hasn't been tackled so far.“ #00:27:03.4# (Nicolai, 2010) 109

„Design thinking really needs at the very beginning to be self-reflective, to observe 110

the corporation - ??? has been so far - and also to be open to new approaches in 111

terms of thinking about the question, the problem. Nevertheless I think [remark of 112

the autor: top-management] leadership is important. If the corporation would like 113

to become more design thinking-oriented you need the commitment of the top-114

management and the CEO as well. Every project needs leadership to an certain 115

extent and thats the thing with design thinking. There must be somebody who is 116

not only responsible for the project. I would say if you're in design thinking you 117

got different roles. Leadership in it’s normal sense, but also in being able being a 118

networker, but also being a resource investigator – so leadership got different roles 119

in terms of internal and well as external activities – in and outside the corpora-120

tion.“ #00:25:49.2# (Nicolai, 2010) 121

SCHNEIDER 122

„Leadership in design thinking is not as what you would expect with the german 123

term leadership because leadership here is much more about engaging. What you 124

really do is engage. So we do not lead. We are showing directions. We lead by 125

motivation, we lead by breaking down barriers, by opening up opportunities. By 126

engaging people. By exploring their own potential. By making them run. That's 127

what I mean by making people fly! There you have to have the skills, the personal-128

ity and the responsibility also.“ #00:39:19.4# (Schneider, 2010) 129

„We need the leadership and it is very hard to get. Because then people are afraid. 130

[...] You [as a design thinker] don't fit into the scheme. But that's exactly what you 131

need as an [innovation] leader. It is still seen as something strange, that certain 132

companies can do. Thats why I hear all the time: Well, Fortune 100 companies 133

can do it because they have the resources... and so on and so forth.“ #00:37:05.3# 134


„It needs very skilled leadership. But more than the leadership it needs the time, 136

money and space to be practiced. Again, this space, money and time is relatively 137

low compared to all the other tools we had in the past like quality function de-138


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ployment etc. So one have to has to bear this in mind, that the investment is rela-139

tively low.“ #00:35:11.3# (Schneider, 2010) 140

CRITIQUE ON CHANGE MANAGEMENT AND THE RELEVANCE OF 141 DESIGN THINKING FOR INNOVATION AND CHANGE 142

NICOLAI 143

„Try to come up with something that also guides the future of the corporation. In 144

last years change management has become popular, and the learning organization 145

as well, but both approaches or both streams of research haven’t been really focus-146

ing what kind of change do we need. What kind of learning is neccessary. I think 147

this is the gap that at at the moment design thinking really fills.“ #00:21:53.8# 148

(Nicolai, 2010) 149

„What is still missing in the whole literature on change management is ..., well, in 150

change management ... there are no really good models out there. In particular if 151

you look at the bigger names – I look for example at Kotter. This is about staging 152

change but it doesn’t really have a body of knowledge in there I think.“ 153

#00:31:24.0# #00:31:28.9# (Nicolai, 2010) 154

„The change literature too often is not helpful and design thinking in terms of – 155

OK what kind of problems are we addressing? – fills the gap which still is lacking 156

in change management. So it is about the content, it is about making the organiza-157

tion fit for tomorrow in terms of being more responsive, being more able to not 158

only to react but also to be proactive in terms of coming also up with different 159

models of how to organize your organization. Having network structures, think-160

ing beyond departments which is so far behind many organizations.... And also 161

building on what we call intuition! The knowledge would also more or less incor-162

porate on what we found so far, what we call implicit knowledge. This is something 163

that also with design thinking comes more into play. Explicit knowledge is about 164

how to do things, organization routines. Implicit knowledge is about pattern rec-165

ognition – it’s about connecting the dots, connecting observations – which is in 166

terms of the knowledge a very valuable insight.“ #00:33:41.1# #00:33:52.8# 167

(Nicolai, 2010) 168

„It’s really about the content that has been missing, also in the discussions about 169

organizational culture which is more or less about how can we change a corpora-170

tion based on what you've got so far. It’s about working together. Maybe its about 171

something that has the ability to link very diverse topics within management, 172

within human relations, within organizational development etc.“ #00:22:49.5# 173

(Nicolai, 2010) 174


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SCHNEIDER 175

„What all those companies did, back in the ninetieths, is that they have innova-176

tion managers or even innovation executives and those were very, very sad per-177

sons. Sometimes we asked: And what do you think? They didn't even dare to 178

speak up! They go a bit happier once they created the position of the CIO because 179

at least they now sat on the round table and got a big salary. The next step now is 180

to create [innovation] teams [in an design thinking sense] within your company. 181

[...] This will already be a big step ahead.“ #00:24:14.8# (Schneider, 2010) 182

TIMEFRAME NEEDED TO INCORPORATE A DESIGN THINKING 183 ATTITUDE INTO AN ORGANIZATION 184

NICOLAI 185

„More in the long run. Its not about we have done that one project. ... You need 186

at least two years, then you get the impact in the organization.“ #00:23:59.0# 187

(Nicolai, 2010) 188

WHY IS DESIGN THINKING BECOMING SO POPULAR? 189

NICOLAI 190

„Couple of reasons. Fashion and trends in the end. It’s about having the next big 191

thing. If you look in particular what we find in the history of business administra-192

tion there have been always these kinds of areas that popped up, like busines pro-193

cess reengineereirng, then the focus on stakeholders etc. I think it was time for a 194

new topic. If you look back.... It often is easier to look back and recognise a pat-195

tern... There has been a lot work done already ten years ago by quiet influtential 196

mangers and researches which have already adressed the problem of understand-197

ing the market and the markets of tommorow in terms of not being market-driven 198

but trying to drive the market and your competitors. On the other hand there was 199

the design community to become more visible in terms of well-known players and 200

they also started to do this. And then the development of the economy where you 201

got all those things you couldn’t really explain why things became popular, like 202

brand hacking etc. [Those were] lots of phenomena which couldn’t be explaind 203

with the models known so far.“ #00:21:12.0# (Nicolai, 2010) 204

SCHNEIDER 205

"Design thinking was born in period of time, where we had technological innova-206

tions and we thought about how can we apply these technologies. And to find 207

ways that make sense and that have a place in the world, we used the methodol-208

ogy to implement the technology in a human-centered way. That was the birth of 209

this methodology. This is how it evolved." #00:04:04.8# (Schneider, 2010) 210


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"[It helps to discover] what subconsciously somebody is concerned about. I think 211

this is a methodology thats helps you to understand that and to drive your strate-212

gies in a direction that will make sure that your product or service is successful in 213

the end." #00:02:59.9# (Schneider, 2010) 214

WHAT IS DESIGN THINKING FOR YOU? 215

NICOLAI 216

„For me it is more about an attitude in the sense of »geisteshaltung« It’s about a 217

different way of solving problems, also applying a different way of asking ques-218

tions regarding your problems. This knowledge is not new to the world it’s about 219

combination of different steps but also combination of approaches which are dif-220

ferent in terms of where you're going to work – its about space and people and the 221

project management itself.“ #00:16:59.2# (Nicolai, 2010) 222

SCHNEIDER 223

"[The] application of design thinking is reality-driven innovation... With it’s help 224

it is very much funded what the reasons for innovation must be. Design thinking 225

is a tool to motivate reasons for innovation. I think it is a tool for understanding 226

the collective unconscious." #00:01:46.4# (Schneider, 2010) 227

„This deep qualitative understandiung can help to find reasons for innovation.“ 228

#00:04:49.1# (Schneider, 2010) 229

WHY COULD DESIGN THINKING FAIL? 230

NICOLAI 231

„It hasn’t been as long as needed on the agenda of the top-management, normally 232

you get the topmanagement, the CEO and the board – who are in moment very 233

commmited to open up, and create space in the organisation that opens divergent 234

thinking – but at the end it's also about being commitied in terms of letting it run – 235

lets say – longer than four years. This is a major thing that came up in our 236

experience – although you got commitment first, they dont stick to that idea, do 237

not really believe in that in the long run.“ #00:12:00.1# (Nicolai, 2010) 238

„In the end [corporations], that are very based on measuring everything, very re-239

spective, also controlling the output [will prevent ] divergent thinking [because] 240

you cant really come up with comparable measures.“ #00:12:21.6# (Nicolai, 241

2010) 242

„I also think although opening up, to open such a new out of the box thinking –243

you also have to think about how to incorporate that – not only as a think tank, 244


- 30 -

but also how to influence business within your corporation.“ #00:12:50.9# 245

(Nicolai, 2010) 246

„So you also have to work on a structure where these think tanks are working 247

together with mangers in line.“ #00:13:06.4# (Nicolai, 2010) 248

SCHNEIDER 249

„In my experience it constantly happens that a company says now we do a work-250

shop, now we do a seminar and we are all cool and we are all doing freaky stuff 251

and freak out in our brain storming and we have great ideas and then... nothing 252

happens! And that is the worst thing you can do. Because if your collaborators 253

invest their energy – and they are not used to that, they are used to stick to the 254

rules and they all in the sudden have to be creative and have great ideas – thats 255

already a hard process. But if then nothing follows up, then that's a killer.“ 256

#00:11:52.8# (Schneider, 2010) 257

„If you want to introduce an innovation culture like that, you have to be aware of 258

the difficulties, obstacles and challenges. For instance we have a funny way of 259

taking on responsibility. I always say that I make team members or MBA students 260

fly and then I shoot them... Which means how do you come back on earth, how 261

do you come back to reality? If you have a real innovation it has no precedent it 262

has no previous case, so it's something that is crazy if you want. You have to get 263

back then and you to try to find out how are the possibilities of implementation, 264

how is the feasibility of this innovation idea. Therefore we can take on those risks 265

on a certain extent but then we have to become realistic again. Thats is a funny 266

experiment and most companies are not used to that.“ #00:13:42.8# (Schneider, 267

2010) 268

WHAT ARE THE CONTRIBUTIONS OF DESIGN THINKING TO INNOVATION? 269

SCHNEIDER 270

„This methodology is a very good tool to keep risks low and also to keep costs 271

low. You cannot produce a product, then sell it, and then find out if it works. That 272

is why you have to trial and error, prototype, this is why you need qualitative re-273

search.“ #00:29:53.8# (Schneider, 2010) 274

„It takes time to establish itself to filter into companies and to find its tradition. I 275

don't know any other methodology which is so finely balanced between creative, 276

innovative thinking and real life focus. And I think this is what makes design 277

thinking really unique.“ #00:41:57.1# (Schneider, 2010) 278


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„Otherwise we continue to repeat and to improve and to make slight modifica-279

tions, make things a little bit better, [...] think about the car. Box on four wheels. It 280

still is a box on four wheels.“ #00:47:13.6# (Schneider, 2010) 281

ARE THERE LIMITATIONS OF DESIGN THINKING? 282

SCHNEIDER 283

„It is hard to say what are the limitations of design thinking because it is just a 284

way to improve. The limitations are really if you expect that people who were 285

never told to think out of the box [immediately embrace it], that you have to be 286

aware of the hierarchical structures, ...of the company, ...you have to deal with 287

that in a diplomatic way. You [also] have to be aware of the feasibility, of the pos-288

sibility of the outcomes. Great ideas that cannot be produced are worth nothing.“ 289

#00:33:46.4# (Schneider, 2010) 290

„What I think is strange, and risky, and bizarre is to say, now there's is a method-291

ology that is called design thinking and we change our corporate culture by intro-292

ducing this philosophy. I think this is a bit over the top.“ #00:43:45.4# 293


The ambidextrous Organization - Design Thinking as a Methodology for nurturing Innovation Culture?

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