The shift toward innovation, culture and design thinking

Reflecting on the business morning of Design Capital, part of the State of Design Festival, three weeks on three key themes continue to recur in my mind.
• Innovation
• Organisational culture
• Design thinking

Roy Green, University of Technology Sydney Business School, commenced the morning stating:

For knowledge and innovation, the global financial crisis changes nothing. The real challenge is to link short term recovery to long term competitive advantage.

Green discussed that even within the crisis, those countries who have invested the most in knowledge still have budget surplus – for example Sweden. This is due to the recognition at a high level that innovation drives productivity growth, competitiveness and social inclusion.

Green presented many figures throughout his session including data on product innovation by companies; organisational collaboration in innovation activities; and research and development budgets – in all three areas Australia is lagging behind much of the developed world. What does this mean? To me, it says Australians, both as individuals and companies, are primarily forward thinkers but not so forward in action.

To overcome this Green concluded that organisations must:
1. Invest more in innovation
2. Invest in capabilities and skills for innovation
3. Invest in the management of innovation.

This is needed as innovation is becoming increasingly ‘organisational’, introducing new business models, technology absorption and systems integration. It is becoming ‘non-linear’ with multiple sources of knowledge and creativity, and increasingly driven by collaboration and networks rather than silos. It seems that currently organisations want to ‘do’ innovation without understanding or investing in the appropriate structures, requirements or development required to ensure long term organisational agility.

Peter Williams, CEO of Deloitte Digital, followed demonstrating the change in business models which results in innovation and rapid responsiveness to market (and ultimately success), made available through the social web.

He demonstrated what is possible if organisations are flexible and agile enough within this environment, however most organisations are still governed by structures that do not enable the flow of creativity or innovation required and do not understand the paradigm shift to a social world and the implications this has for business.

Williams stated ‘Corporate culture is an issue: openness, self organisation, and self governance are alien to this environment’.

Innovation will continue to be contrained in organisations where questions such as these prevail: Who owns it? Who’s in control? What are the deliverables? How much will we make? What will happen if someone says something wrong/ bad?

Williams reiterated Clay Shirky’s ‘Failure for free’ concept discussing the core importance of learning by doing in the current environment. With low costs and speed to market, business cases are not required, just launch.

Williams introduced the notion of social innovation and porous design being critical – how can you get people to innovate for you? He introduced a number of success examples of this:
iPhone: the mass numbers of applications being developed daily by the audience
Threadless: you design the t-shirt, population votes on favourites, whichever is most popular is printed
Innocentive: innovation challenges solved by a global community of experts

In Williams words ‘start somewhere, do, reflect and go again’. Oliver Freeman, host of Design Capital summed up Pete Williams presentation as ‘we need to give ourselves up to the anarchic state. In this environment quantity = quality and the diamonds will filter through’.

Moving toward providing capability and the appropriate structure and environment within an organisation for innovation, Joseph Correnza, Principal from Arup Australia presented partly on their workplace design culture. He discussed ‘innovation is the responsibility of each person in the organisation, not a particular team’. Their design culture involves integrated thinking and a holistic approach which is key to the company’s identity and the basis of their differentiation. Their philosophy and culture is built upon:
• knowledge+experience: including knowledge sharing, participating reviews and critiques, networks and forums, professional and technical training.
• creativity+invention: supports original thought, encourages exploration, search for inspiration, communicating ideas, engage in dialogue and passion, allow incubation and maturation.
• holistic+mulitdimensional: discovering cause and effect, encapsulating multiple perspective, developing an appreciation of drivers, working within a cross disciplinary environment, considering the community and society, composition and harmony

In particular it was emphasised the importance of developing confidence within people to explore their own ideas.

Correnza also discussed design thinking as an influence toward Arup’s culture, as the process which leads to the outcome involving:
• Problem definition and translation
• Option creation and exploration
• Selection and refinement
• Execution and delivery
The design thinking process mirrors closely the concepts within Correnza’s Designers Toolkit presented, being made up of: exploration, testing, optomising, collaborating, delivering and immersing. The language may differ but the principles remain aligned.

Previously Green had discussed design thinking as being key for the workplace of the future, which is agile, engaged and collaborative – and which in turns enables innovation. Williams supported this, presenting the importance of design thinking in business models as it provides the opportunity to identify talent, allows openness in process and participation, and the occasion to introduce porous design and incentives to get involved.

So what do I take away from all of this?
The concepts of innovation, organisational culture and design thinking are somewhat intertwined and interdependent for business agility and success. I want to say this will be important in the future, however the paradigm shift is already occurring, people are increasingly social and collaborative, there is greater expectations on response times and engagement. Organisations need to reevaluate and move from primarily process based, closed heirarchical systems and allow creative thinking and innovation, increase nimbleness and time to market, and change their cultural approach to structures and work practices or find themselves falling off the cliff as the new social paradigm fully takes off. It is apparent to me that collaboration and innovation are high on our priorities list within Australian organisations but in actuality appropriate investment, both monetary and personnel, are not being invested to encourage and support this.

More
Williams summed up his core themes on the Deloitte Digital Blog.
View Neil Shewan from Tank Studio’s response to Design Capital.