Appunti Business Design and Transformation Lab

Notes: Business Design and Transformation Lab

Introduction

Business Design and Transformation Lab - Politecnico di Milano A.Y. 2021/2022 - Notes and Summaries by Prof. Tommaso Buganza and Prof. Cabirio Cautela. MSc in Management Engineering, Politecnico di Milano (A.Y. 2021/2022). All content is related to the notes taken during the course lectures (no copyright was violated).

Index

• Lecture 01: Opening Lecture (3)
• Lecture 02: Reframing at the Core of Design Thinking (6)
• Lecture 03: Design Research (10)
• Lecture 04: How People React to Change (14)
• Lecture 05: Design in Organizations (17)
• Lecture 06: Idea Generation (20)
• Lecture 07: Design Tools to Present an Idea (25)

01. Opening Lecture

The course, led by Prof. Tommaso Buganza and Prof. Cabirio Cautela, along with teaching assistants Alessandro Biffi, Gianluca Carella, and Michele Melazzini, focused on redesigning and transforming businesses through design. By adopting a Project-Based Learning (PBL) approach, it served as a practical platform for students to apply their academic knowledge to real-world projects.

BDTL provided a distinctive learning experience, fostering the development of capabilities and skills necessary for implementing innovation initiatives within organizations and gaining acceptance from its members.

How can companies move people from a vision to an actioned new purposeful organization?

• Understand → Extrapolate the business needs from a specific situation/context and summarize a list of requirements to be matched in order to fulfill them.
• Design → Generate and develop an innovation proposal impacting the business and integrate it with the business and organizational transformations needed to implement the innovation.
• Interact → Drive the teamwork in a professional environment interacting both with teammates and professors, and with professionals in the companies providing the brief.

The course is designed around three main blocks:

• Design approach to innovation → The problem is more important than the solution. Some key-words:
  • Problem setting, Problem finding, Problem Framing, Problem Reframing
  • Divergent and convergent thinking
  • The approach of Product-Service System (PSS) to innovation
  • The concept of design-research
  • The use of tools with a critical view
• Business redesign → Aims at challenging a dominant paradigm. Some key-words:
  • Design in organization
  • Design thinking for creative confidence
  • Challenging a dominant paradigm
  • Organizational purpose
  • Value proposition articulation and business modeling
• Organizational transformation → Challenges the resistance to change (organizational change and bringing people on board for the change project). Some key-words:
  • Human/employee-centered approach
  • Innovation and design for transformation
  • Organizational culture
  • Sense-making and shared directions
  • Engaging and leading change

01.1 Perspectives on transformation

What is transformation?

• The process of changing completely the character or appearance of something in order to improve it (Cambridge dictionary).
• It is a business strategy for change management intended to move the organization from where it currently is to a desired future state. These change initiatives involve efforts focused on employee experience (Redhat).
• Radically improving performances by changing behaviors and capabilities throughout the organization and turning separate initiatives into a balanced and integrated program of change (McKinsey).
• Reimagining and revitalizing how Human Resources enables the organization and empowers its people (Deloitte).

We will take the employees’ perspective to change behaviors and capabilities and, in this process, Design Thinking will provide the visualization tools (knowledge visualization is crucial in design!). Note that the design process doesn’t consider the organizational context: that’s the reason why of this course!

01.2 The BDT process

A business design transformation process is composed by 6 main steps:

• Challenge articulation and context landscaping (to scope the transformation) → Define a design challenge starting from a brief. Activities:
  • Design brief definition
  • Data collection
  • Data analysis
  • Analyze organizational logics, behavior, structure
• Reframe the vision (to design a strategic direction) → Envision valuable directions defining a value proposition. Activities:
  • Define design direction
  • Define organizational purpose & context
  • Value proposition generation
  • Idea generation
• Re-design the business logic (to make the new direction work) → Articulate and propose new business offering ideas and related logics. Activity:
  • Business modelling
• Drive stakeholder commitment (to establish a sense of urgency of transformation) → Map the key stakeholders that can own the transformation within the organization. Activities:
  • Mapping ecosystem organization network
  • Mapping employee experience
• Engaging and enabling employees (to empower employees to act) → Define actions that can empower and engage employees towards the new direction. Activities:
  • Analyze employee motivations
  • Design interventions to engage employees
• Nurturing the transformation (routinizing, to sustain the transformation process) → Shape a long-term process that can nurture the transformation. Activities:
  • Define a future roadmap
  • Define a set of possible long-term actions

01.3 Some theoretical concepts

What is conflict and why do people tend to avoid it? People tend to avoid conflict for several reasons: harm, rejection (“I don’t want to be rejected”), loss of relationship, anger, being seen as selfish, intimacy, saying the wrong thing, failing, getting what you want, hurting someone else… But we know that lack of conflict in teams is a sign of “over conformity” → Over conformity happens, for example, when people have been working together for a lot of years, when the team decides not to address a problem or when there’s no proper environment. Over conformity is an enemy of good and innovative ideas: indeed, the more you challenge an idea, the better it becomes. If we don’t have conflicts, something is wrong.

One of the possible frameworks to help us orientate and act in a conflict is the 5 conflict-handling modes. According to this framework, five modes (or approaches) exist when dealing with a conflict:

• Competing → “My way or no way”, fully assertive. A mode where one party uses their power or authority to win the conflict and achieve their goals. If not properly managed, this mode will harm the relationship.
• Accommodating → “I don’t like it, but have it your way”. A mode where one party chooses to yield to the other party's concerns or interests to maintain harmony.
• Avoiding → “Let’s postpone the discussion, other things are more relevant right now”. A mode where one party chooses not to deal with the conflict and avoid confrontation altogether.
• Collaborating → “Let’s find together a win-win solution”. A mode where both parties work together to find a mutually satisfactory solution to the conflict.
• Compromising → A mode where both parties give up something to reach a middle ground and resolve the conflict. It’s a lose-lose situation and shouldn’t be the first option.

Particularly relevant to mention in this case is the notion of values: values are the things that drive people’s behaviors and are not negotiable. Therefore, the only way to exit a conflict based on values is through a power-based decision.

Other important concepts in this regard are the “Philosophy of Abundance” and the “Theory of Scarcity”. Simply put, on the one hand, the philosophy of abundance says that if one cake is not enough for everyone, another can be made; on the other hand, the theory of scarcity says that one cake must be enough for everyone and people must get the most out of it.

In this technological and rapidly changing environment, having an agile mindset is crucial. This has three main pillars:

• Proactivity → The ability to anticipate issues.
• Adaptability → The ability to collaborate with others, while embracing new tasks and roles.
• Complexity → The ability to face and manage complex challenges.

Other important concepts are the ones related to MBO, extrinsic/intrinsic motivation and the SD Theory (SDT).

MBO means “management by objectives” and it’s a common practice adopted by managers. It leverages on extrinsic motivation, namely, when people do something because of an external reward, e.g., money (extrinsic motivation comes from external factors outside of oneself). MBO was developed by Peter Drucker, one of the most famous experts when it comes to management studies. More in detail, extrinsic motivation is driven by external factors such as rewards, punishments, and social pressure, and it is often associated with achieving external goals and meeting expectations set by others.

Anyway, more recently, experts investigated MBO and discovered that this practice could be detrimental for employees in most situations. According to them, it’s better to refer to the self-determination theory (SDT), which is based on intrinsic motivation, namely, when people do something because they like and enjoy it, for its own sake (intrinsic motivation comes from within oneself). More in detail, intrinsic motivation is influenced by internal factors such as personal values, interests, and passions, and it is often associated with personal satisfaction and a sense of accomplishment.

SDT is based on 3 pillars:

• Autonomy → People need (and often like) to have autonomy (but, before, they need to be aligned on the business objectives!).
• Competence → People need to have the competence to perform a task and feel that they are growing.
• Relatedness → People have to feel that what they are doing has an impact.

02. Reframing at the Core of Design Thinking

02.1 Creative problem solving (CPS)

The Double diamond, or 4D-model, is a way to represent the Creative Problem Solving process. It consists of 2 spaces (Problem space and Solution space) and 4 phases (Discover, Define, Develop and Deliver):

• Discover → Outside-in approach: the designer starts from the user, outside of the organization, like an ethnographer. The aim is to get insights (i.e., from psychology, “looking at traumatic past events from another perspective”) by leveraging on empathy to reach new perspectives on the problem. It’s a divergent activity, which is oriented to grasp new insights by looking at users’ behavior in their daily life.
• Define → Designers leverage on insights to define the frame of the problem: here, they define alternative views of the problem (alternative frames) with the aim of decreasing the possibilities of failure (problem framing).
• Develop → Designers generate novel, wild and radical ideas (at this step, they are still not considering budget and feasibility).
• Deliver → The creation of the prototype and its test: does it work? Does it have any criticality? It should be the real working model, after the development of the idea. This is the moment of testing and prototyping, to understand if the idea is valuable or not.

The Design Thinking approach is iterative, “quick and dirty”. This means that if the output is neither feasible nor promising, designers iterate. On the other hand, if the insights are strong and powerful enough, then the whole process will be natural and easier.

Theoretically speaking, the Design Thinking process is a constant path between abstract conceptualization and concrete experimentation, and between reflection and activation.

02.2 Creative problem solving (CPS): main ingredients

Which are the core principles of CPS and, broadly speaking, of Design Thinking (DT)?

• Abductive Reasoning → It is a type of logical reasoning that involves generating the best possible explanation or hypothesis to explain a set of observations or data. It involves making educated guesses or inferences based on incomplete or uncertain information.
• Divergence and Convergence → Divergence means creating alternative options generated from initial insights, while convergence means converging those options into a specific frame. For example, the “funnel model” is a convergent tool; on the contrary, in DT there is not a funnel: it’s all about creating alternative conditions (insights) and then trying to converge them into frames. In this sense, DT is a continuous mix of diverging and converging actions.
• HCD (Human-Centered Design) → It is a problem-solving approach that focuses on understanding the needs and behaviors of the users to create more effective, efficient, and user-friendly products, services or processes. The goal of HCD is to create solutions that meet user needs, while taking into account the context and environment in which they will be used. We deal with humans when generating innovation, and we always have to take this into account.
• Learning by Doing → It is the process of acquiring knowledge and skills through active involvement in a task. Rather than simply reading or listening to information, learning by doing allows individuals to engage with the material in a more tangible way, which can lead to a deeper understanding of the subject matter. This approach emphasizes the value of practical experience, problem-solving, and critical thinking. It is based on the fact that you learn only if you do something: after the testing phase, you will learn, but if you don’t prototype, you will never learn.
• Optimistic Mentality → It is a mindset that focuses on positive outcomes and possibilities. It involves having confidence in oneself and the future, and the ability to see opportunities and solutions rather than problems and obstacles. Optimistic individuals tend to maintain a hopeful and positive outlook, even in difficult situations. Designers tend to be optimistic professionals by nature. Only if you fail fast, you can succeed sooner. Don’t give up! Consider the feedback from the testing phase and try again.
• Holistic Approach → It is a way of approaching a situation or problem by considering all aspects of it, rather than focusing on individual parts in isolation. This approach recognizes that everything is interconnected, and therefore, requires a comprehensive understanding and solution for the issue at hand. Usually, designers take the overall problem through a humanistic reasoning to understand its sense from the user perspective: they don’t divide the main problem into sub-problems, but look at it as a whole!
• Trial and Error Approach → It involves trying different techniques until the desired outcome is achieved, and learning from the mistakes made along the way. This approach is often used when there is no clear way to solve a problem or when the outcome is uncertain. It’s connected with the “learning by doing” pillar: namely, learning by the errors caused by the ambiguity of the problems.
• Play with Ambiguity → Play with ambiguity is a crucial aspect of intentionally using language, actions, or ideas that can be interpreted in multiple ways. It serves the purpose of challenging the mind, encouraging deeper understanding, and fostering unexpected solutions. This skill becomes particularly important when dealing with "sticky problems," which are difficult to solve or address.
• Visualization → It is the act of translating ideas, concepts, and solutions into visual representations. It uses different visual mediums to assess, cultivate, and convey ideas in a manner that is both comprehensible and captivating. Through visualization, designers and stakeholders can gain a deeper understanding of the elements comprising a design solution and their interrelationships. This facilitates more effective and efficient evaluation and refinement of ideas throughout the entire project. Consequently, designers rely on imagery as a means of communication, using tools such as post-it notes to foster collaborative reflection within their teams.
• Framing and Reframing → Framing is the process of gathering and making sense of data obtained from users' field/context in order to identify patterns and gain a deeper understanding of the problem at hand. It involves defining and presenting the problem to problem solvers, taking into account the context, constraints, and stakeholders' needs. By framing the problem, designers can establish its scope and parameters, as well as gain insights into user needs and motivations. Reframing, on the other hand, entails approaching the problem from a different perspective and shifting the focus of the design challenge. This involves questioning assumptions and exploring alternative solutions that may not be immediately apparent.