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observation, imagination, and configuration

 

Observation, imagination, and configuration are the key tools of  business design .

The first of the three is observation—deep, careful, open-minded observation. Since design thinkers are looking for new insights that will enable them to push knowledge forward, they must be able to see things that others don’t (for example, patterns that can help turn a mystery into a heuristic). This requires careful watching and listening in a way that is responsive to the subject, as an ethnographer would. An ethnographer attempting to understand how youngsters in China think about their handheld phones would watch them use their phones before even asking a single question. And when appropriate to ask, the question would likely be of the form: “I saw you punch one button repeatedly; you looked frustrated. Then you flipped the phone closed and opened it again. Why were you doing that? What were you thinking? How did it make you feel?”

That’s a very different approach from asking, “What are the top five things that matter to you about your handheld phone?” Now, any phone manufacturer would love to know which five things matter most to young users. But to ask for a ranked list from phone users would be to ask them to do the designers’ jobs for them. Users can and do conceptualize their feelings about their handhelds, but rarely in the form of a top-five list. That list is for the designer to compile—and only after diving deep into the user experience.

Deep, user-centered understanding, using the techniques of the ethnographer, is an essential tool of the design thinker. Shallow understanding that is oriented to confirming and perpetuating the current model causes knowledge to ossify rather than move forward. As a manager, if you want to understand your customers, think carefully about the kind of data you want and how best to get it. Embrace the idea of spending time with your customers. Imagine you work at one of the big three automakers. How could you better understand what American consumers really want in their cars? You could look at the list of best-selling cars and try to infer what it is about the Honda Civic that is so appealing. Or you could ask a focus group of customers how important things like gas mileage and color selection are to them. Chances are that you would end up exactly where the Big Three are today. Consider, instead, actually spending time with your customers and those of your competitors, going to their houses and garages to listen to them talk about their cars, how they make them feel, what makes them happy, and what frustrates them. From these visits, you would be able to distill deeper insights into the mystery of your changing customers than analytical thinking could ever get you.

The second tool of the design thinker is imagination. At first blush, it may seem that imagination is simply a natural act of the human mind, rather than a tool. It’s true that we all have imagination. Yet for many of us, it is underdeveloped. Design thinkers programmatically hone imagination into a powerful tool, one comprised of an inference and testing loop.

To move from one stage on the knowledge funnel to the next, one has to experience, through observation, data that is neither consistent with nor explained by the current models. When faced with that data, one must make an inference to an explanation. It is a guess that constitutes the best explanation one can devise given the data, which is insufficient to yield a statistically significant finding. That inference-making process is what we call abductive reasoning, Charles Sanders Peirce’s third form of logic.

It is a powerful form of reasoning about the world that, as we have seen, is underutilized and underdeveloped in the business domain in favor of deductive and inductive logic. Businesses don’t reject abductive reasoning merely because they’re hidebound; after all, abduction does have a weakness we’ve already explored, which is that ideas based on abductive reasoning can’t be proved in advance. There is a decent chance they could be just plain wrong. This is why the inference-testing loop is so important. Here, the design thinker tests the breakthrough inference by producing a prototype and observing whether it operates as desired or expected. Typically, even with a talented abductive thinker, the initial prototype falls well short of what’s desired.

Those shortcomings, viewed from the design thinker’s stance, offer the opportunity to infer what would make the prototype better, giving rise to a succession of new tests, new inferences, new prototypes, until we arrive at a winning design—whether that is a design of a product, service, customer experience, or organization. In your role, you can choose to make prototyping and testing part of your lexicon. Just as you explicitly embrace abductive thinking, asking yourself what could be true, you can commit to testing and retesting that inference.

The final tool of the design thinker is configuration—translating the idea into an activity system that will produce the desired business outcome. This is essentially the design of a business that will bring the abductively created insight to fruition. Without that, all the observation and imagination will have no meaningful payoff. The master of configuration is Steve Jobs, who created an activity system for the iPod, including iTunes and Apple stores. The system made iPod a compelling product, exceedingly hard to replicate and highly profitable.

For a manager, the configuration step is to ask how your insight and new solution fit into the larger scheme of the business in which you operate. The activity system you create may relate only to your department or project. But even within that limited sphere, you can build a model to test and verify.

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