SRM Business School,

Lucknow
DESIGN THINKING
Paper Code – KMBN106
MBA 1st Year (2022-23)

BY
Dr. Shubhendu S. Shukla
Assistant Professor
Department of Business Administration
+91-9793000083
shubhendusshukla@gmail.com

A précised Notes for the students to crack the Semester

examination, as per the latest syllabus of DR. A.P.J. ABDUL
KALAM TECHNICAL UNIVERSITY, LUCKNOW 2021-22

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 DESIGN THINKING
Course Credit: 2 Contact Hours: 20

Course Objectives:

1. How to transform creative thinking into design thinking in every stage of your problem
2. How to apply design thinking to your real life problems / situations in order to evolve an
innovative and workable solutions

Lecture Sessions on Design thinking (16 hours)

Unit 1- Innovation & Creativity: Meaning of Innovation and creativity. Difference between
innovation and creativity, and its role in Industry and organizations, dynamics of creative thinking,
Process of Design Thinking , implementing the process in driving innovation, Case Study

Unit 2- An exercise in design thinking & implementing design thinking through a workshop &
exercise case studies in design thinking, design thinking process. Case Study

Unit 3- Design Thinking in Various Sectors (Health sector, Finance, Education, Infrastructure)
Design thinking case studies in retail, design thinking case studies in banking, design thinking case
studies in management decisions

S. No. Course Outcome Bloom’s Taxonomy

CO1. Gain in depth knowledge about creative thinking
1 Knowledge (K2)
and design thinking in every stage of problem

CO2. Applying design thinking to your real life

Applying (K4)
2 problems / situations in order to evolve an innovative
and workable solutions
CO3. Understand and implement design thinking to
3 your real life problems / situations in order to evolve an Synthesizing
innovative and workable solutions

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 DESIGN THINKING

What You’ll Learn

• How to apply design thinking to your problems in order to generate innovative

and user-centric solutions
• How to make use of practical design thinking methods in every stage of your
problem, with the help of method templates
• How to initiate a new working culture based on a user-centric approach, empathy,
ideation, prototyping, and playful testing
• How to employ ethnographic and analysis methods, such as interviews, focus
groups, and surveys
• How to prototype early and fast, as well as test your prototypes so as to reduce
risks and accelerate organizational learning

1. Introduction

Design Thinking is not an exclusive property of designers—all great innovators in

literature, art, music, science, engineering, and business have practiced it. So, why call it
Design Thinking? The special thing about Design Thinking is that designers’ work
processes can help us systematically extract, teach, learn and apply these human-
centered techniques to solve problems in a creative and innovative way – in our designs,
in our businesses, in our country and even in our lives.

2. What is Design Thinking?

Design Thinking is an iterative (continuous) process in which we seek to understand the

user, challenges, assumptions, and redefine problems in an attempt to identify alternative
strategies and solutions that might not be instantly apparent with our initial level of
understanding. At the same time, Design Thinking provides a solution-based approach to
solving problems. It is a way of thinking and working as well as a collection of hands-on
methods.

Design Thinking revolves around a deep interest in developing an understanding of the

people for whom we’re designing the products or services. It helps us observe and
develop understanding with the target user. Design Thinking helps us in the process of
questioning: questioning the problem, questioning the assumptions, and questioning the
implications. Design Thinking is extremely useful in tackling problems that are ill-defined
or unknown, by re-framing the problem in human-centric ways, creating many ideas
in brainstorming sessions, and adopting a hands-on approach in prototyping and testing.
Design Thinking also involves ongoing experimentation: sketching, prototyping, testing,
and trying out concepts and ideas.

3. Design Thinking’s Phases

There are many variants of the Design Thinking process in use today, and they have from
three to seven phases, stages, or modes. However, all variants of Design Thinking are very
similar. All variants of Design Thinking embody the same principles, which were first

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described by Nobel Prize laureate Herbert Simon in The Sciences of the Artificial in
1969. The five phases of Design Thinking, according to d.school, are as follows:

1. Empathise – with your users

2. Define – your users’ needs, their problem, and your insights
3. Ideate – by challenging assumptions and creating ideas for innovative solutions
4. Prototype – to start creating solutions
5. Test – solutions

It is important to note that the five phases, stages, or modes are not always sequential.
They do not have to follow any specific order and can often occur in parallel and repeat
iteratively.

Source : Interaction Design & Thinking Foundation

4. Innovation, Creativity & Invention

When working with clients, we often get a lot of questions about innovation, and we’ve
seen there’s a lot of confusion on the terminology.

Whether in technology, research, or even humanitarian organizations, the word

“Innovation” is often advertised and associated with growth, potential, and the attitude
to achieve more and do better. It, along with “invention” and “creativity,” is sometimes
used as a buzzword, thrown around a lot but not properly understood.

While creating a company or product, is important to clarify and differentiate these

words from each other in order to focus the organization, get value from research and
development (and returns on money invested in it), and understand how to structure
individual roles within the company.

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 4.1. What are similarity and difference?

• Innovation is the process of turning a new concept into commercial success or

widespread use.
• Invention is the creation of a new idea or concept.
• Creativity is the act of turning new and imaginative ideas into reality.

Creativity, invention, and innovation are all interrelated and necessary for growth to
occur. We can follow any successful company and see an investment of time and effort
into these three concepts. Based on experience and research conducted, some points are
as follows:

4.2. Creativity

Creativity is the act of channeling imagination into something concrete. It is the very first
stage of design, where ideas start to actually take form, and a plan can be developed.

That most human of qualities, creativity evidences itself in our ability to solve challenges
or problems with novel solutions ideas. Shawn Hunter, author of Out Think: How
Innovative Leaders Drive Exceptional Outcomes (Wiley, 2013), defines creativity as "the
capability or act of conceiving something original or unusual."

The key factor is that creativity remains an idea alone, not reality yet. Interestingly,
creativity is very specific to people; animals have no way to communicate ideas, and much
of what they do transfer is assumed by instinct or by example.

Examples of creativity:

in the case of Uber, creativity was necessary in producing the concept of ride sharing and
of making driving jobs accessible to any individual.
another example can be the Google Glass, which although were very creative at the time
(new, different in the market), were not necessarily innovative (monetary return over
investment made by the company).

4.3. Invention

Invention is the physical creation of a new concept or idea. According to Nesta’s

innovation policy toolkit, it is defined as the creation of an idea to do or make something
without verification that it works, or is commercially valuable. Invention cannot occur
without creativity, but just creativity is not enough to properly develop an idea.

Examples of invention:
• product designs, business models, or working prototypes.
• Uber channeled invention in creating a solid and working business model, based
upon the ideas they had formed in the creation stage.

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 4.4. Innovation

Innovation ties everything together in business. According to British

Standards, Innovation is the successful exploitation of new ideas. It involves turning an
invention into a commercial success and encouraging its widespread use. This is the stage
where bold ideas, once properly developed, are brought to the public eye. This is what
Uber has achieved, now that its product is in use all over the world and benefits people
everywhere.

According to Hunter "Innovation is the implementation or creation of something new that

has realized value to others." Innovation is realized most vibrantly in the form of a tool,
physical benefit, or aid that solves a problem or creates an advantage.

Examples of innovation:

• successful products and services like Care of, Amazon Scout, Impossible Food,
Google’s self-driving taxis, …
• successful process innovations like Amazon predictive orders, or additive
manufacturing processes.

Once again, Innovation cannot happen without creativity or invention, and neither
creativity nor invention is useful in business if not properly executed.

5. Importance of innovation and creativity

Innovation is the process of creating and implementing a new idea. It is the process of
taking useful ideas and converting them into useful products; services or processes or
methods of operation. These useful ideas are the result of creativity, which is the
prerequisite for innovation. Creativity in the ability to combine ideas in a unique way or
to make useful association among ideas. Creativity provides new ideas for quality
improvement in organizations and innovation puts these ideas into action.

Change and innovation are closely related, even though they are not the same. Change
often involves new and better ideas. The new idea may be the creation of a new product
or process or it can be an idea about how to change completely the way business is carried
out. Successful organisations understand that both innovation and change are required
to satisfy their most important stake holders.

5.1. Strategic Importance of Innovation

For both established organisations as well as new organisations, innovation and change
become important in a dynamic, changing environment. When a company fails to
innovate and change as needed, its customers, employees and the community at large can
all suffer. The ability to manage innovation and change is an essential part of a manager’s
competencies.

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 5.1.1. Types of Innovation

Three basic types of innovation are:

(i) Technical,
(ii) Process and
(iii) Administrative.

Technical innovation involves creation of new goods and services. Many technical
innovations occur through research and development efforts intended to satisfy
demanding customers who are always seeking, new, better, faster and/or cheaper
products.

Process innovation involves creating a new way of producing, selling or distributing an

existing good or service.

Administrative innovation occurs when creation of a new organisation design better

supports the creation, production and delivery of goods and services.

The various types of innovation often go hand in hand. For example, the rapid
development of business to business e-commerce represents process innovation. But this
new process requires many technical innovations in computer hardware and software.
Also as firms began to use business to business e-commerce, administrative innovation
soon followed. Further, implementation of process innovations necessitated
organisational change. “Doing something new means doing something differently”. Thus,
innovation and organisational change go hand in hand.

5.2. Importance of Creativity

Creativity goes hand in hand with innovation. And there is no innovation without
creativity. While creativity is the ability to produce new and unique ideas, innovation is
the implementation of that creativity i.e. the introduction of a new idea, solution, process,
or product. Creativity is the driving force behind innovation and the incorporation of
looking at things from a different perspective and freedom of restrictions by rules and
written or unwritten norms.

Creativity can help a company to manage tasks, improve staff performance and create
quality products. It is also vital in fostering a likeable and aspirational company image.
With consumers now able to get a snapshot of what company life is like, businesses need
to be able to depict their inner culture in a way that makes it seem appealing.

As new technologies continue to develop and become available, companies have to be

flexible and able to keep up to date. Creativity allows them to easily identify new ways in
which technology can be applied to help their businesses. Likewise, with social media and
other interactive forms of marketing now available, it’s never been more important for
companies to be able to be creative.

Allowing employees to be more creative can inspire them to come up with more
interesting ideas as well as improve their overall output. Many of the world’s leading

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companies have started to adopt unorthodox methods of encouraging maximum
creativity from their employees, such as sleeping pods and flexible working areas.

5.2.1. Why is creativity important in business?

Creativity and innovation within a well-run companies have always been recognized as a
sure path to success. Stimulating creativity and exploring completely new and unknown
before territories lead as result to increasing the productivity of the organisation.
Encouraging the employees to think outside of the box and giving them time and
resources to explore new areas for innovative ideas is the key to cost-effective business
solutions.

Creativity improves the process of solving problems. It doesn't matter if we're talking
about developing a new strategy or an innovative way to stay ahead of the competition.
Creative problem solving gives that competitive edge that any business is striving to
achieve.

Creative ideas and innovative approaches can come from almost anywhere- from your
partners, customers, target groups, employees. They can bring you fresh perspectives and
ideas, to show them that you’re listening and open to their feedback. That's why it is
important an open exchange of ideas to be supported and encouraged by the company.

5.3. Importance of Innovation

Innovation is important because it’s the only way that you can differentiate your products
and services from those of your competitors. For customers and clients to choose your
business, your offer needs to be distinctive and valuable, and the only way to achieve this
is through innovation.

It can be tempting to let your rivals do all the heavy lifting of creativity and innovation,
with all the investment, experimentation and risks that this entails. Then, when they
come up with a dazzling new product or improvement, you can simply copy what they’ve
done at a fraction of the effort. However, there are several pitfalls to this approach.

Most importantly, you’ll always be playing catch-up. However quickly you get your
version to market, your rivals will always have the lead on you and they’ll already be
planning their next move. This means customers will go to your rivals first, who will
maintain a reputation for leading the pack. Your business won’t stand out because there’ll
always be someone else who’s already met the needs and desires of your customers.
You’ll harm your own brand, and could also risk infringing on your competitor’s
intellectual property rights.

However, innovation doesn’t have to be focused on changing a product or service. If you

can find an innovative new process that enables you to create a product more efficiently
without compromising on quality, you’ll be able to stand out from your rivals by
undercutting their prices. Similarly, your innovation could come in the form of a new
distribution system, enabling you to stand out by offering the fastest delivery to
customers.

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 6. Difference Between Creativity and Innovation

There’s a lot of confusion for creativity and innovation. In Creative types of working it is
claimed that creativity and innovation can’t be measured while Performance demands
measurement. In a changing world that changes every second, it’s essential that
companies figure out the difference between creativity and innovation.

6.1. Creativity vs. Innovation

• Creativity is the capability or act of conceiving something original or unusual while

Innovation is the implementation of something new.
• The main difference between creativity and innovation is the focus. Creativity is
about releasing the potential of the mind to visualize new ideas. Those concepts
could manifest themselves in any number of ways, but most often, they become
something we can see, hear, smell, touch, or taste. However, creative ideas can also
be thought experiments within one person’s mind.
• Creativity is subjective, making it hard to measure, as our creative friends assert.
Innovation, on the other hand, is completely measurable. Innovation is about
introducing changes into relatively stable systems. It’s also concerned with the
work required to make an idea feasible.
• By identifying an unrecognized and unmet need, an organization can use
innovation to apply its creative resources to design an appropriate solution and
earn a return on its investment.
• Invention is the creation of something that has never been made before and is
recognized as the product of some unique insight.
• If you have a brainstorm meeting and dream up dozens of new ideas then you have
displayed creativity but there is no innovation until something gets implemented.
• Somebody has to take a risk and deliver something for a creative idea to be turned
into an innovation. An invention might be a product or device or method that has
never existed before.
• Organizations often chase creativity, but what they really need to pursue is
innovation. Theodore Levitt puts it best: “What is often lacking is not creativity in
the idea-creating sense but innovation in the action-producing sense, i.e. putting
ideas to work.”

7. Need for Innovation and Creativity for an Organization

Innovation is a new technique or idea encompassing product/services, processes,

managerial styles, and even organizational structures. It may be technology push or
demand-pull or even a combination of both. Research and development (R&D) activities
of an organization are examples of such innovation. In any organization, the need for
innovation is primarily felt to keep pace with the competition.

It has to be essentially customer focused as this backward linkage facilitates process-

centred innovative changes. Whether it is just-in-time (JIT) inventory control, supply
chain management (SCM), business process outsourcing (BPO), flexible manufacturing
systems (FMS), product/service customization, strategic backward or forward
integration, synergy through merger or acquisition, alliances or collaboration,
organizational re-engineering through TCM or Six Sigma practices, new work culture as

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facilitator of organizational change, or any R&D initiative for value addition, which
broadly encompasses innovation, it all stems from the customers’ explicit or implicit
needs. Mapping customers’ needs and aligning the innovation initiative to customers’
needs, is what we need in this competitive world. Innovation is enabled by proactive
organizational behaviour practices.

It calls for creating a work environment that recognizes creativity, inter-organizational

co-operation (rather than competition and working as cross-functional teams),
productive meetings for innovative results, introduction of formal innovation
programmes, and finally the organization’s receptivity to new ideas and perspectives.
Fostering innovation requires a structured approach. It has to be broadly in the given
context, leadership, values, and culture. Contextual analysis helps in building the required
innovation teams. Leaders facilitate the teams. Values enable adoption of principles,
which foster innovation, and finally the culture provides the playing field.

At this stage, it is pertinent to define creativity because innovation and creativity are often
used interchangeably in the work place. The Webster Dictionary has defined creativity as
‘the ability or power to create, to bring into existence, to invest with a new form, to
produce through imaginative skill, to make or bring into existence something new.
Creativity is, therefore, the core competency.

It is the talent of the employees of an organization. Competitors can replicate the

strategies of an organization but not the creative talents of its employees. To encourage
creativity, an organization first creates the right environment where employees feel safe
even to come up with ‘dumb’ or ‘crazy’ ideas.

Creativity is often punished in organizations, as creative people spend more time in

getting ready for action. They are also more difficult to manage. Organizations, therefore,
often see them as major time and money wasters, and inhibit their creative thoughts.

A review of creativity literature helps us to capture creative patterns in the

following ways:

1. A creative process is a balance of imagination and analysis. It involves idea generation,

analysis and evaluation.
2. Creativity does not stem from subconscious process, as traditionally believed by the
classical school of thoughts. It is a purposeful or directed attempt to generate new ideas
under a controlled situation to help an organization to leapfrog in competition.

Paul E. Plsek (1997) used the term more appropriately as ‘Directed Creativity’. It is a
purposeful generation of creative ideas with seriousness of its implementation, whenever
it matches with organizational requirements. Non-implementation of at least some ideas
(that fit the purpose) will inhibit creativity.

Innovation is the implementation of creative ideas. Therefore, creativity is the sub-set of

innovation. Innovation being a holistic concept, here we prefer to use the term
interchangeably. Competencies, on the other hand, are sets of behaviours, which
encompass skills, knowledge, abilities, and attributes.

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Competencies are measurable and they change over time. Hamel and Prahalad (1990)
attributed business success only on innovative creativity, knowledge resources, and the
expertise, which together create the critical potential of an organization, that is, the core
competencies.

Other proponents of core competencies such as Quinn (1992), Drucker (1992), Porter
(1995), Waterman (1983), Peter (1988), Nonaka and Takeuchi (1955), and Senge (1990),
also showed that developing the core competencies helps an organization to build its
strategic power. The core competencies are difficult to duplicate by the competitors
because of their distinctiveness. Core competencies are, therefore, critical success factors
for any organization.

Although there exists, widespread differences regarding constituents of core

competencies and its relation with knowledge, skill, abilities, and attributes of employees,
there is agreement among the proponents about how these are created by linking the
organization’s goals, structures, and cultures.

Innovation and creativity help to develop the core competencies, supplementing

knowledge and skill base for the employees. In this respect, directed creativity, that is,
purposeful generation of new ideas matching the organizational requirements is more
relevant.

8. 10 Strategies for Increasing your Creativity and Innovation

Now that you understand the various levels of creativity, you can implement some
strategies that will boost your company’s ability to create and innovate.
1. Truly creative people have developed their ability to observe and to use all of their
senses, which can get dull over time. Take time to “sharpen the blade” and take
everything in.
2. Innovation is based on knowledge. Therefore, you need to continually expand
your knowledge base. Read things you don’t normally read.
3. Your perceptions may limit your reasoning. Be careful about how you’re
perceiving things. In other words, defer judgment.
4. Practice guided imagery so you can “see” a concept come to life.
5. Let your ideas “incubate” by taking a break from them. For example, when I’m
working on a big business project, one of the best things I can do to take a break
from it is play my guitar or the flute for a few minutes, or take a ride on my
motorcycle. It shifts my brain into another place and helps me be more innovative
and creative.
6. Experience as much as you can. Exposure puts more ideas into your subconscious.
Actively seek out new experiences to broaden your experience portfolio.
7. Treat patterns as part of the problem. Recognizing a new pattern is very useful,
but be careful not to become part of it.
8. Redefine the problem completely. One of the lines I’ve been sharing for the past
few decades is: “Your problem is not the problem; there is another problem. When
you define the real problem, you can solve it and move on.” After all, if you had
correctly defined the real problem, you would have solved it long ago because all
problems have solutions.
9. Look where others aren’t looking to see what others aren’t seeing.

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 10. Come up with ideas at the beginning of the innovation process … and then stop.
Many times we come up with several ideas and start innovating, and then we come
up with more ideas and never get a single idea done. At some point you have to
turn off the idea generation part of the process and really work on the innovation
and execution part in order to bring a project to life.

9. Stages of Design Thinking

The Hasso Plattner Institute of Design at Stanford (known as the d.school) describes
design thinking as a five-stage process. These stages are not always sequential, and teams
often run them in parallel, out of order and repeat them in an iterative fashion.

Author/Copyright holder: Teo Yu Siang and Interaction Design Foundation. Copyright

terms and licence: CC BY-NC-SA 3.0
9.1. Stage 1: Empathize—Research Your Users' Needs

In first stage of Design Thinking process you should gain an empathetic understanding of
the problem you’re trying to solve, typically through user research. This involves
consulting experts to find out more about the area of concern through observing,
engaging and empathizing with people to understand their experiences and motivations,
as well as immersing yourself in the physical environment so you can gain a deeper
personal understanding of the issues involved. Empathy is crucial to a human-centered
design process such as design thinking because it allows you to set aside your own
assumptions about the world and gain real insight into users and their needs.
9.2. Stage 2: Define—State Your Users' Needs and Problems

During the Define stage, you put together the information you have created and gathered
during the Empathise stage. You then analyze your observations and synthesize them to
define the core problems you and your team have identified. These definitions are
called problem statements. You can create personas to help keep your efforts human-
centered before proceeding to ideation.
The Define stage will help the designers in your team gather great ideas to establish
features, functions, and any other elements that will allow them to solve the problems or,

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at the very least, allow users to resolve issues themselves with the minimum of difficulty.
In the Define stage you will start to progress to the third stage, Ideate.

9.3. Stage 3: Ideate—Challenge Assumptions and Create Ideas

During the third stage of the Design Thinking process, designers are ready to start
generating ideas. You’ve grown to understand your users and their needs in the
Empathise stage, and you’ve analysed and synthesised your observations in the Define
stage, and ended up with a human-centered problem statement. With this solid
background now you and your team members can start to “think outside the box”, look
for alternative ways to view the problem and identify innovative solutions to the problem
statement you’ve created. Brainstorming is particularly useful here. It is important to get
as many ideas or problem solutions as possible at the beginning of the Ideation phase.

9.4. Stage 4: Prototype—Start to Create Solutions

This is an experimental phase. The aim is to identify the best possible solution for each
problem found. Your team should produce some inexpensive, scaled-down versions of
the product (or specific features found within the product) to investigate the ideas you’ve
generated. This could involve simply paper prototyping.
Prototypes may be shared and tested within the team itself, in other departments, or on
a small group of people outside the design team. This is an experimental phase. The
solutions are implemented within the prototypes, and, one by one, they are investigated
and either accepted, improved and re-examined, or rejected on the basis of the users’
experiences. By the end of this stage, the design team will have a better idea of the
constraints inherent to the product and the problems that are present, and have a clearer
view of how real users would behave, think, and feel when interacting with the end
product.
9.5. Stage 5: Test—Try Your Solutions Out
Evaluators rigorously test the prototypes. Although this is the final phase, design thinking
is iterative: Teams often use the results to redefine one or more further problems. So, you
can return to previous stages to make further iterations, alterations and refinements – to
find or rule out alternative solutions.
Overall, you should understand that these stages are different modes which contribute to
the entire design project, rather than sequential steps. Your goal throughout is to gain the
deepest understanding of the users and what their ideal solution/product would be.

10. Implementing the process in driving innovation

Innovation is essential for the growth of any company. But that’s a very generic way of
describing innovation. To successfully implement innovation, you need to know exactly
what makes an innovative organization as well as how it contributes to its growth. Given
the growing interest in innovation, it’s no surprise that organizations are looking for clear
guidelines on how to implement it. Every innovation is unique. Even so, certain strategies
and skills are useful across a range of projects and at all levels of an organization:

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10.1. Spot opportunities for innovation. As innovation expert Greg Satell puts
it, “No matter what form innovation takes—short, agile sprints or long-term,
grand-challenge investments—innovation is fundamentally about solving
problems.” As you think about your organization, what problems need solving?
Where do opportunities lie? Once you land on some promising ideas, continue
to explore them from different angles. By doing so, you may discover even
more exciting possibilities.

10.2. Prioritize opportunities. You don’t have infinite time and resources, so
prioritize potential innovations depending on where you think you’ll get the
most bang for your buck. Narrow in on the two or three ideas you think are
most worth digging into, testing, and refining. Then express them as
hypotheses you can test through targeted experiments.

10.3. Test your potential innovations. Keep your experiments modest in scope,
especially when you’re starting out. You may want to begin with “paper
prototypes,” or simple drawings of the new product or process that your end
users can interact with to see what works and what doesn’t. They are quick
and inexpensive, and they help you figure out where you need to tweak your
concept. With each round of testing, move to progressively more complex
experiments involving more users.

10.4. Build support for your innovations. Don’t be shy. Make sure the time is
right and tell your story to all your stakeholders, including those whose
resource backing you need and those who’ll directly benefit from your
innovation. You’ll want to tailor your approach based on what’s important to
each person and what you need from them.

10.5. Learn from your innovation efforts. You’ve probably heard the mantra “fail
fast, learn fast.” After each innovation, list what you would do again and what
you wouldn’t. And don’t overthink failure; the key is learn from it and apply
those lessons to your next innovation.

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