Design Decisions

I started looking into some work by James March and the his thoughts on the decision making process. He suggests there are two basic models for making decisions.

1. We weigh up the alternatives and calculate consequences then pick the one that yields the most value. This is the standard model in economics for decision making, that assumes we are rational and make choices based on the logical outcome that benefits the individual.


2. Is decision making based on identity considerations, Who am I? What situation is this? and what do people like me do in this type of situation? This type of decision making is much more based on principles to the individual.

These two decision making alternatives were interesting summaries of decision making. It definitely supports the work I have been reading about brand thinking and consumer behavior. That people naturally making decisions partly based on logical choices, but likewise are driven by internal drives and emotions as well as self identity.

As I dived deeper into the work on decision making, there were various discussions around the decision making process and methodology, which is basically outlined as :

1. Discover the problem
2. Define the problem
3. Define the Objectives
4. Think of Alternatives
5. Work out consequences
6. Make Trade Offs

Of course suddenly it made sense to me that this of course is reflective of the design thinking process, which in itself requires many decision making choices. So it makes sense that these two areas of methodology should have overlap and similarities. The early phases of discovery, rolling into definition followed by building alternatives or prototypes, ending with analysis and making the final result. Of course as such many of the design thinking tools can be used, to help in the decision making process, such as brainstorming, the 5 whys and user research.

In decision making important things to consider are, how we frame the problem. The framing of problems and finding the right questions are going to yield different results, so getting it right early on is going to save much time and effort later. Donald Schon, has written about this issue in his book "The Reflective Practitioner". Wording can go along way to changing peoples thoughts and ideas.

Decisions are not always rational and it should never be discounted that we are emotional creatures and that may affect the decisions we make. Our ability to keep our attention on a task, remember information and clearly think about problems can also have impact on our decision making.

I am not the only one to have noticed this similarity and Dan Saffer, put together a nice slide presentation here on decision making and design.

Summarizing some of the decision theories he outlines in his presentation.

Utility Theory - Each decision has a cost or consequence, as well as a benefit. We weight the benefits against the consequences to arrive at the best choice. Sometimes though the comparisons are not objectively the same. Sometimes the decisions are subjective and then it becomes an individual choice that has other influences, that maybe less rational.

Descriptive Theory - This is about how we actually go about making decisions. It suggests we are driven by forces that try to avoid regret, like loss aversion. We rationalize our decisions to ourselves so that we do not feel regret later. One of the interesting phrases that is used is the term "satisficing" the combination of satisfying and suffice. The idea is to reach a level of just good enough, that makes it easier to make decisions, rather than striving for perfection. Considering the huge amount of data and information we have to process in modern times this is good way to optimize decision making. In his book "The Paradox of Choice" Barry Schwartz mention this problem with consumer choices being to many, "satisficing" is a potential way to avoid becoming frozen in decision making for a consumer.

Decisions surround us everyday, we have to make easy ones, and sometimes very hard ones. Along with this we sometimes have a great deal of time to make those choices and other times it has to be in a blink of an eye. What I like is that designers and design thinking methodology offers one possible way to systematically make the decision making process work in business and new product development teams. Not by guessing but by consideration, learning, building then evaluating. What is clear is that it is not always possible to know which is the right path, but having some form of process can help start the journey.

Questions for Innovation

Sarah Krasley along with Bill O'Connor recent put forward 6 questions that can lead to innovation at an article found here.

These six innovation questions are:

• What could I look at in a new way? (Steve Jobs looked at the computer in a new way, leading to the Mac and the personal computer revolution.)
• What could I use in a new way? (Paleolithic humans turned fire from a scourge into a means of cooking, heat, light, and protection.)
• What could I recontextualize in space or time? (The Sumerians moved language from spoken to written form, expanding its power and reach.)
• What could I connect in a new way? (Thomas Edison connected the light bulb to the electrical grid, leading to electrified cities.)
• What could I change, in terms of design or performance? (Nearly 3 million years ago, the world’s first “innovator” transformed a simple rock into a stone hand-axe.)
• What could I create that is truly new? (In 1776, American colonists created the first “intentional” nation, based on specific abstract principles.)

Kodak's Dilemma

I can remember the first time I got my grubby little hands on a Kodak camera as a child taking snapshots of my parents and cows whilst on holiday. It was a a strange delight to get the pictures back from the chemist (pharmacist), and look at the results, of course a lot of them were incorrectly exposed and blurry but some were pure gold and the stuff of great memories. I thank Kodak for some of those great moments captured, whether with their cameras or their film rolls, they played a huge part in capturing my memories for scrap books and photo albums. The Kodak brand took years to build and was one of the most respected in the realm of photography, they had huge brand value and by all respects should have continued to be a great brand. Sadly their journey is coming to an end and now their brand will be in the scrap heap with other unexpected giants they made similar mistakes when it comes to disruptive technology.


Of course, the World changed with the invention of digital cameras and image processing, and this is where the mighty Kodak failed, they took their eye off the landscape of photography and ultimately failed to react quickly enough to gain ground. Now this is very interesting considering that Kodak actually invented the first digital cameras back in 1975, sadly for them they focused on high end users and sold their technology for use in other peoples hardware. It took Sony to turn the digital camera into a viable consumer product. So what is obvious is that Kodak, suffered from what Clayton Christensen would refer to in his book as the innovators dilemma. As he suggests these huge multi-billion companies are mostly interesting in keeping their current customers happy and they innovate to improve their existing products for those specific customers. Certainly Kodak was not short on innovative talent they hold hundreds of patents estimated at $2.6 billion, but they were not necessarily being innovative in the right areas. A company like Kodak is not going to be willing to invest in an untried technology in a new market, until they start seeing a worthwhile investment of restructuring and planning new strategies. This of course is the dilemma, to innovate and start planning future revenues but not investing so heavily that the existing revenue generation and customers are not neglected. The disruptive technology came from below and shifted the landscape, eventually over taking existing film based technology.

So the question is how could they have done it differently, how might Kodak have dealt with the new trend in photography and ultimately could design thinking have helped in this process? Could Kodak have been saved, could they have moved their brand into the 21st century?

So let's see what went wrong first. CEO, George Fischer, had been working on the digital strategy for Kodak, but the first mistake was underestimating the growth of this category. The assumption was only power users would be interested in the disruptive technology, why jeopardize their existing core business, that was their second mistake. Thirdly they let other brands start to dominate the market presence, because they saw no direct threat to their core business model. Then we look at their expertise and engineers and see that Kodak were absolutely experts in film and processing and even had developed digital technology, but had failed repeatedly to invest in this team and product arm. This of course created instability within Kodak between teams at rivalry with each other, the old school versus the new up and comer. This does not create a good environment for innovation, and then budgets get called into question. Should the core team get the funding or the new teams? The company sold off it's huge health imaging business for over $2.3 billion, and missed out on the baby boomer retirement crowd. Again they were resistant to updating and growing their company in digital. Then came the camera phone, and now digital was everywhere, Kodak was far from ready for this shift. They really didn't see companies like Fuji as important to follow and keep a close eye on, and as such they were surprised as Fuji, dominated the Japanese market then increased share in the US. Fuji film had great distribution models and continued to grow in the digital space. Consumers had changed and were more willing to accept imports from Japan that were well made and manufactured as well as cheap. Of course, it all ended with price battles that ultimately lead to Kodak's demise as the overheads and investments ate away at their bottom lines. Kodak, was too proud of their brand and failed to see the real state of their market and consumers, everything had altered and Kodak didn't.

If we think about the work of Clayton Christensen, he would of course have predicted all of this and said that this was obvious considering all the warning signs, it is almost a classic model of what he refers to in his book. The basic business model would have needed to change to allow more innovation. I can see how a spin off business for Kodak could have been laying the foundation of the next generation of consumer products and services for Kodak. It is in this smaller disruptive team that could innovation could have begun to thrive. Independently funded from the main business they could have worked smarted and more focused on the problems at hand, and grown their own distribution channels and consumer demographics. The main core business would have continued and this smaller team could have been a chance to test the waters of the new space and begin to lay down a new foundation for the core business for Kodak.

Within this team, I could imagine design thinking could have really helped expand and grow the core competencies and technologies. The iterative approach to design with user input early in the discovery process, would have maybe uncovered some interesting insights to digital photography uses. Even though early digital technology wouldn't have produced the quality output you see today they Kodak could have seen the interest that people had once the Mega-Pixel tipping point occurred and reacted to it. Building out prototypes and making small bets would have helped tailor those offerings and maybe establish some new unseen markets ahead of the competition. With less pressure to perform financially, initially this disruptive team could have organically morphed without affecting the main clients and business. Then when the time was right Kodak would have not only established the new technology infrastructures but have a good distribution channel and mark presence, maybe even some new brands to play with under the umbrella of Kodak's reputation. The competition would have been less of a shock and the rapid prototyping team could would have been better suited to the growing changing market and demands.

This is all subjective of course, but I feel design adds huge value to large businesses offering a way to innovate and keep ahead of the competition and most importantly allows the core business to stay on track, while making smaller investments in unknown technologies.

As a final note. Vince Barabba, former Kodak executive, in his new book "Decision Loom" puts forward 4 interrelated capabilities that he feels are important to enable effective enterprise. It's a shame that Kodak didn't take live by these ideas, it may have helped in saving them from the mess they are in now.

1.  Having an enterprise mindset that is open to change. Unless those at the top are sufficiently open and willing to consider all options, the decision-making process soon gets distorted. Unlike its founder, George Eastman, who twice adopted disruptive photographic technology, Kodak’s management in the 80’s and 90’s were unwilling to consider digital as a replacement for film. This limited them to a fundamentally flawed path.

2. Thinking and acting holistically. Separating out and then optimizing different functions usually reduces the effectiveness of the whole. In Kodak’s case, management did a reasonable job of understanding how the parts of the enterprise (including its photo finishing partners) interacted within the framework of the existing technology. There was, however, little appreciation for the effort being conducted in the Kodak Research Labs with digital technology.

3. Being able to adapt the business design to changing conditions.Barabba offers three different business designs along a mechanistic to organismic continuum—make-and-sell, sense-and-respond and anticipate-and-lead. The right design depends on the predictability of the market. Kodak’s unwillingness to change its large and highly efficient ability to make-and-sell film in the face of developing digital technologies lost it the chance to adopt an anticipate-and-lead design that could have secured the it a leading position in digital image processing.

4. Making decisions interactively using a variety of methods. This refers to the ability to incorporate a range of sophisticated decision supporttools when tackling complex business problems. Kodak had a very effect decision support process in place but failed to use that information effectively.

Little bets

Just finished reading Little Bets, by author Peter Sims. A very nice book about the process of innovating through making small investments in time and effort towards large goals. The book is an easy read and I found it quite inspiring with it's examples from companies like Google and Pixar. I liked some of the nuggets of information about entrepreneurial thinking and how these personality types think and take risk. I also liked the stories of how Pixar took risks early on and didn't even start out as a film production company but actually produced hardware. The animated shorts were originally used to sell the hardware and software they produced. If it wasn't for little bets and the ambitions of the Pixar team to keep pushing for full length animated films then who knows what might never have been. Of course equally Steve Jobs' investment in Pixar was a little bet by him in the domain of 3D graphics, and that certainly turned out well. The rest of course is history.

There are some nice references to the work by Carol Dweck on growth mindset versus fixed minds, that was encouraging and insightful about how your mind affects how you perform, I have written a brief post on this already here that I recommend checking out. What is clear from the book is that making little investments towards anything is going to eventually with enough time and focus in the right direction yield results. I think the book is nicely written and makes you want to find ways to apply it to your daily life. I have always liked the quote from Louis Pasteur, that opportunity favors the prepared mind, well this adds an little twist to that concept that good ideas favor little bets.

7 Sins of Innovation

Ryan Jacoby, head of IDEO NY is quoted in an article found here on 7 deadly sins he sees that affect innovation.

They are summarized as:

1: Thinking the answer is in here, rather than out there.

2: Talking about it rather than building it.

3: Executing when we should be exploring.

4: Being smart, afraid to be wrong.

5: Being impatient for the wrong things.

6: Confusing cross-functionality with diverse viewpoints.

7: Believing process will save you.

This list is definitely very pertinent to the creative design thinking process, it promotes prototyping, and building as well as risk and taking, without fear of failure. It also raises the issues with unrealistic expectations from management on innovative new products and encourages diversity in teams that are there to innovate. I like this list and it touches nicely on the major aspects of good design thinking methodologies and implementations.

Also in his talk at NYU Poly Ryan refers to a prototype as being a single question embodied. He then goes on to describes a pilot (study) as a collection of many prototypes embodied all at once, like asking many questions at the same time. What is important to innovation is to ask questions constantly in production, then trying and tweaking those results. Ryan thinks it is important to always be in Beta, constantly exploring new ideas and keeping what works. Of course this is hard to adopt because people are afraid to fail, and can be difficult to prove somethings effectiveness, does the idea scale and how much does it cost. These concerns make innovating difficult in a corporate setting. Ryan quotes that Innovation is fundamentally a human endeavor. Avoid the sins and innovation should get easier and more productive.

Design Thinking

Design thinking is an alternative way of thinking about problem solving and idea generation. It could well be one of the most important new ways of structuring new business teams and creating environments for future workers that has been put forward in recent years. The concept is not really anything new, and certainly many historical figures like Edison, Leonardo Da Vinci, and Tesla, would be in my mind classed as design thinkers. Really the newest step forward is the more formal acceptance of the process of design thinking as promoted by companies such as IDEO that produces reproducible successful results. Most people in the realm of invention and idea creation really have been practicing design thinking for centuries.

Design thinking is a really a process in approaching a problem. The basic four steps of design thinking are: 

Define the problem

Create and consider possibilities

Refine and dissect results

Repeat(optional)

Execute most successful outcome

Within each of these steps are tools and methods that help get the most out of the process. 

Defining the problem, involves a discovery phase with analysis of the problem space. At this point in the process it is critical to immerse oneself in the problem, existing solutions (if any), and the all the available resources and literature. It may also require observation of people and processes already in place. Only after a full discovery would it be worth moving onto a creation phase. At this point in the process it is worth considering tools like brainstorming on smaller parts of the problem, grouping and ideating ideas together to be evaluated as worth pursuing. Which leads nicely into to a complimentary part of the phase of creating prototypes of various levels of fidelity. To test out concepts and encourage team engagement at the early production stage. This is when things begin to really stand out as feasible and worthwhile solutions or not. Then, comes the refine and dissection of those ideas that seem most worthy. Further prototyping, and maybe some usability tests can help refine the results. repeating earlier stages may also prove advantageous. After things seem to funneling into a particular result it then becomes time to execute the most successful outcome into the final product or service.

That in a nutshell is design thinking. Again nothing completely new but really people's acceptance and corporate push for innovation has brought these now more well defined steps into new consideration. They are effective and powerful ways to generate ideas and produce prototypes that lead to more successful end products and services, when done correctly.

Other breakdowns of the steps include.

Discover, Analysis, Ideation, Prototype and Evaluate.

Define, Research, Ideate, Prototype, Choose, Implement, Learn.

In each instance you can see the common form of four basic steps.

I have some further reading here for design thinking.

You can read some more of my thoughts on prototyping here.

And some ideas on idea generation here.