What is Your Competitive Advantage Strategy?

We brought in design thinking coach Mansi Kakkar from The Social Innovation Collective to a recent Envestnet | Yodlee Incubator class to walk us through the process of design thinking. Here is what she had to say. ____________________________________________________________ Most entrepreneurs are passionate about solving problems. When we see problems in the world, our natural response is to try to come up with solutions to fix them. And we usually feel a strong sense of urgency about the problems we’re trying to solve. Design thinking is an actionable tool that leverages problem-solving. One thing I’ve learned is that there are no experts in design thinking because every time you apply it, you learn something new. At its core, design thinking requires you to learn by doing… and doing is a way you can gain deep insights from your customers. Design thinking can be a powerful competitive advantage for entrepreneurs. Here we will explain the process of design thinking so you can start doing it yourself.

Design Thinking for Creative Problem-Solving

Design thinking is a creative problem-solving solution that puts the customer at the center of your work. It’s a human-centered approach that focuses on showing, not telling. The minute you feel the need to explain what you’re doing to other people you need to rethink your strategy. Your customer should intuitively understand your product; you shouldn’t have to explain it to them. Since we learn by doing, design thinking focuses on experimentation and prototyping. There is a lot of power in these loops of iteration. Here are the five steps of design thinking:

  • Empathize: Start by learning more about your audience and their problems.
  • Define: Sharpen and refine your key questions for your customer.
  • Ideate: Brainstorm and create solutions to the problem.
  • Prototype: Build a representation of one or more ideas through drawings or wireframes.
  • Test: Test your prototypes and gain user feedback.

You may have noticed that the steps to design thinking are similar to the Lean Startup methodology. There are many similarities between the two methods. Design thinking is analytical but still imaginative and creative. Within each step, there are hundreds of tools you can use to learn more about your customer.

Design Challenge

The best way to learn about design thinking is by participating in a design challenge. This involves designing something useful for your customer and making adjustments as you go. But the catch is, you have a limited amount of time to create it. The goal isn’t depth but rather to discover the breadth of design thinking. You’re trying to put yourself in the shoes of your customer and see things from their perspective. By gaining empathy for them, you can design something they’ll find meaningful. Here are the steps that are involved in a sample design challenge:

  • Interview your customer: Find out more about the customer’s problem and what is important to them.
  • Dig deeper into their problems: To reach the core of their problem, you’re going to have to dig a little deeper. This is where a tool called “the 5 whys” can help. It basically involves asking “why” over and over again until you get to the heart of where they’re coming from. 
  • Capture your findings: You need to document your findings as you go. This can include what they are trying to accomplish and things the customer wants or needs.

This can also include insights that extend beyond mere design functionality. All of these findings are important because they will help you find the right solution.

  • Define a problem statement for your customer: At this point, you’ll define a statement for your customer which outlines their problem and the solution needed.

Based on your findings, you may decide to deviate from your original design at this point. And this is good because the goal is to create something that matters to your customer.

  • Build your solution prototype: Now it’s time to build a prototype of your solution. But keep in mind, your prototype should be scrappy. It should tangibly represent your idea and it should be something your customer can interact with.
  • Share your solution and receive feedback: At this point, you share your solution with the customer and receive feedback. Don’t give your customer a lot of details about the prototype but instead, let them ask you questions about it. They should be initiating the questions, not the other way around.

Strategy for Competitive Advantage

Design thinking is especially beneficial for entrepreneurs because it’s a powerful strategy for competitive advantage. Here are three reasons why:

  • It helps you mine needs: Human beings aren’t very rational and we don’t always understand our own needs. We’re emotional and it’s hard to get to know a person’s needs, wants, and desires by talking to them.

In general, if I have to ask you want you want, I’m not going to find out the answer. Design thinking is a better way to identify and meet someone’s needs.

  • It helps you fail fast and fail forward: Creating a business model and strategizing has traditionally been how an entrepreneur starts their business. The theory is, you’ll figure out what you need to do from there.

Starting off with a business model is a good foundation, but design thinking helps you be cost-efficient because you can start learning quickly. You learn and immediately implement what you learned. This is especially important in the technology sector where you have to be agile and adapt quickly.

  • Problems are opportunities: Problems aren’t really problems, they are opportunities. With any challenge you can find, you can implement design thinking and come up with a solution.

And most importantly, design thinking isn’t just a powerful strategy -- it’s also actionable. It’s not just some high-level, fluffy strategy; it helps you discover ideas and generate outcomes.

Resources to Help You Get Started

If you’re like most people, you probably still have one lingering question: how do you get started? Here are some resources: www.designkit.org   www.ideou.com/pages/design-thinking-resources Roger Martin, The Design of Business Tom & David Kelley, Creative Confidence Tom Kelly, The Art of Innovation Tim Brown, Change by Design If you would like to learn more about the Envestnet | Yodlee Incubator, visit our website here. If you’re an entrepreneur with an idea to leverage financial transaction data, applications for our next cohort will be opening soon. Sign-up to get notified when applications open here.