What was missing before and during the 2007-08 global financial meltdown, and during the Covid-19 pandemic?
Or during the Spanish Flu? Or in Nazi Germany? Something that perhaps could have prevented the resulting tragedies?
In 2002, somewhere on the outskirts of Mangalore, I was part of the way through third-year engineering. One day, we had classes in an adjoining campus building, one we thought was exclusively for junior college which was also on campus.
After class on the first floor, a few of us close buddies were talking about random topic by a large open window. It was the first time we were in that building which seemed empty on that day. One of my buddies, this giant we call ‘Bear’, was suspiciously quiet through the conversation between the rest of us. Known for the occasional prank, it was almost as though he was concocting something sinister while the rest of us spoke. Then, and without warning, he picked me up, and held me outside the large window. It was a sunny afternoon, and I could feel myself slowly slipping out of the Bear’s hands. As I said, ‘WTF’ and asked him to pull me back in, he very calmly goes, ‘nothing’ll happen, man’. Horrified, my head was doing a ‘time-to-eventuality’ countdown, as I struggled without much success to get a grip on his arm. Finally, after the prank probably got boring, he got me back in. And while I was still breathing a sigh of relief, he seemed really calm, almost like he was confident of his estimates on the safety margin he had for that prank. And yet, I knew that I had little grip, and that I was mere seconds away from slipping to the tipping point from where there was nothing Bear could have done to stop the fall.
(Mis)calculations, and (over)confidence is a cocktail we humans seem addicted to. And sometimes we get the proportions right, and sometimes, terribly wrong. And the worst times are where we are overly confident of the proportions despite glaring evidence to the contrary.
This excerpt from the book ‘The Signal and the Noise’ by Nate Silver mentions one such instance. The global financial meltdown of 2007-08, triggered by the collapse of suspicious mortgage-backed securities (MBS) and collateralized debt obligations (CDO). [Excerpt at the bottom of the post]
As per this excerpt, apart from overlooking the obvious risks of these precariously balanced investment instruments, even as late as 2005, S&P conducted a simulation to assess housing prices. It found a potential 20% drop over the next 2 years. But S&P perhaps was content in knowing that their simulation successfully captured the risk. And that was it.
Cut to more recent times. There are far lower chances of a developed or developing nation getting into a full-scale war, than there is of a virus outbreak.
And yet, most countries across the world, many of whom probably have dozens upon dozens of battle possibilities and multiple theatre scenarios, most were caught with their pants around their ankles when Covid-19 hit. From delaying shutting down international borders, to shutting state-borders and trying to contain the spread.
Covid-19 was of course, a virus more dangerous than most the world has seen in recent times. But yet, the countries that did manage to contain it in the months that followed, were not the most confident or the ones most capable or equipped in containing it. It was almost in all cases, those countries whose leaders accepted (either publicly or in private), that they were dealing with something beyond their abilities and experience; so they followed a more basic, first principles approach to tackle the challenge. And emerged largely successful.
As is common knowledge now, there are known knowns, known unknowns, and unknown unknowns (Donald Rumsfeld). The quicker we accept the situation when something is outside the realm of our understanding, and resist the urge to apply our standard actions and reactions to it, the faster we can begin to deal with it.
The problem is, these instances keep repeating and will continue to repeat. In our personal lives, and also in more far-reaching world events. We are wired in such a manner, that each time a crisis is approaching or presents itself, we tend to react in the same manner. By wasting time in applying what we know, without attempting to first understand.
Answer: Humility
Jacinda Ardern, Prime Minister of New Zealand, and the face of humble leadership the world yearns for.
This post about my 9-step version of the design thinking process has been long overdue. It is already explained in my book, ‘Design the Future’, but I also wanted to share it here for those interested.
The five-step Stanford design thinking process is arguably the most popular process out there. I have however, come across numerous different processes or versions. Ranging from the 15-step Darden process that I was taught, to oversimplifications and misleading three-step processes I have come across.
In my interactions with managers, business leaders and even students, I found that while many were familiar with the Stanford or some other design thinking process, they did not quite understand it well enough. For instance, ‘empathy’ came across to them as something that is ‘just done’. Similar to how many people assume hearing is the same as listening. And seeing empathy as a step in the process gave many the impression that like a switch, it had to be turned on and then off, as one moved to the next step.
So, in an effort to simplify the design thinking process so more people may use it, I created my own version of the design thinking process based on my understanding of design thinking and experiences practicing it. I took the Stanford model, and hopefully improved it.
You need to remember that any design thinking process is a broad guideline. It is not like a military obstacle course that one must complete in a defined sequence. You might find yourself looping through a few steps multiple times. Or in some cases, depending on what the information or insight presents, you might find yourself back at the beginning; starting again with renewed understanding of the challenge.
Sherlock Holmes, in the series ‘Elementary,’ once tells Watson, “The danger with rule books, Watson, is that they offer the illusion that leading a moral life is a simple undertaking, that the world exists in black and white. Welcome to the grays.”
At least when it comes to areas such as creativity and drawing inspiration, remember there can never be stringent rules or guidelines.
My 9-step version of the design thinking process:
My 9 Step version of the Design Thinking Process
Of the nine steps in the process, the first three are more underlying criteria than steps. Criteria that are critical to improving the chances of success on a project. Those three criteria are Humility, Empathy, and Intention. While these might seem obvious to the point of sounding stupid, they are often the most ignored aspects to a design-led process. More on that as we understand each step better.
After that come the more common steps of most design thinking processes.
They are: Define – Empathize with Intent – Redefine – Ideate – Prototype – Test
Let’s look at the nine steps more closely:
Humility – The quality of having a modest or low view of one’s importance. Its relevance springs from the simple signal versus noise perspective. Our objectives as design thinkers is to maximize our understanding of user experiences and needs. Of those we want to innovate for, or whose problems or challenges we want to solve. That is the signal that is of utmost importance to us for innovating for them. Our views, opinions, and biases are the noise.
The moment you can bring yourself down to the level of a beginner or a learner, you put yourself in the backseat, and that’s when the end user or final beneficiary of your innovation will come into the limelight of your focus. Remember to start with humility.
Empathy – The ability to understand and share the feelings of another. Putting yourself in a live user-setting and observing and/ or interacting with users to get a better sense of what a problem or future opportunity might mean to them, how they deal with it, and so on. In conjunction with humility, it offers a good environment to capture user information.
Unlike what some methods might state, empathy (and humility as well as
the next step, intention) are not steps in themselves. They should not be
traits that you turn on and off depending on which stage of the design thinking
process you are. It is also why, along with the intent, I have placed them at
the base of the six-step process, to signify how the three traits always need
to be ‘ON.’
Without being in a constant state of empathy, no real innovation is possible. And that will be the difference between a real design thinker or team creating an exceptional change, and people simply practicing it as a flavour of the times.
Intention – An intention is the larger thought and nudge to action for a change, that brings you to employ the design thinking process. You might wonder what the difference is, between humility, empathy, and intent.
As a business leader, humility will always help you spot customer or employee or other stakeholder needs and concerns. Empathy will let you better understand those needs and concerns. To get to the root causes of it. You might still choose not to do anything about it, because you don’t have the intention to. Contrarily, if you have the intention, but lack humility and empathy, it would mean that your objective or goal is not the right one.
Equipped with humility and empathy, but in the absence of any intent, a
business leader will always spot improvement areas in his or her business. All
they need then is to choose their intention – i.e., determine the direction of
their effort, and get working on it.
Define – Here, we put the problem statement or
opportunity statement in words. It is a starting point of sorts, to the primary
design thinking process. Before interacting with user groups, this is a step
where we broadly express what we think the problem or opportunity area might be.
It could be how a client has described a problem, or, if we are helping a
friend or industry colleague, it could be their description of the issue.
One key thing to remember with defining a problem or opportunity is to
make it sound positive, irrespective of how grave or pointless the situation
might seem. A lot of companies are prone to defining/ framing what hurts first.
Their definition ends up being a problem statement which sounds grim. The
disadvantage of doing this is that when you invite people to think of ideas,
even as part of a brainstorming exercise, a grim-sounding problem statement
stifles the thinking, and will hugely limit the number and quality of views
that you receive.
On the contrary, if you turn your problem statement into an opportunity
statement, people ideating will be in a positive mindset, and be more attuned
to think of creative ideas. Try to notice the difference of mindsets the
following two statements evoke. Read them more than once if necessary:
A Problem Statement: “How can we drastically reduce our after-sales
service related expenses?”
An Opportunity Statement: “How can we redefine our service arm to be more relevant to customer needs, while not proving expensive for us?”
As Abraham Maslow once said, “if all you have is a hammer, everything looks like a nail.” Defining a challenge too negatively and very precisely might give you solutions that just create more problems of their own.
Empathize with intent – This is the fun phase, where you spend time
observing actual users in their natural surroundings. See how they consume a
product or service. How they interact. And you must do this in the subtlest way
possible, even when you are interviewing or interacting with them. Especially
if the process is delicate or embarrassing for the end-user, or if the user is
introverted or are in some way intimidated by you and your team’s presence.
One important thing to remember in this phase is to be subjective with the empathy, but objective with what they share with you. If you have a subjective mindset when trying to find learnings, you might tend to get lost in a problem. And depending on the type of assignment, it might leave you either in disbelief, or maybe even depressed or an emotional wreck, depending on the kind of problem you are working to solve, as users expose you to severe difficulties or bitter experiences.
Instead, empathize with users as they walk you through their journey, experiences, feelings, and thoughts. But look at it from behind a glass wall when taking notes or drawing inspiration or conclusions from it. That way, your focus is not diverted by problems but instead stays focused on noting down those problems and possible thoughts, reasons, etc., that might spring to mind. The focus will help you then work towards getting rid of the problem, as opposed to being overwhelmed by it.
Redefine – After gathering user insights, we revisit our original definition with what we have learned. After enough information has been collected in the earlier stage, the team debriefs. The information is shared amongst team members without contaminating it with their inferences. That way, each member gets a clear sense of how things presently are.
Often, when tasked with solving a problem for someone, even when we have little or no information to go with, we are eager to get started with identifying potential solutions right-away. You might have seen this tendency in yourself and others (I tend to, from time to time), where someone mentions a problem, and without stopping to understand more, you start rattling possible causes or solutions.
That happens when we go with our definition of someone else’s problem. Which is why, after an initial definition, once we get a better understanding of it from actual people facing the problem (in the ’empathize with intent’ stage), we redefine the challenge more accurately, based on what we have learnt.
Ideate – This is the stage where designers would take the information they have gathered and use it as inputs that they put through a choice of design thinking tools. Tools including the brainstorming or versions of it, to contra-logic, worst-idea, brain-writing, trigger questions, changing perspectives, etc., and then use anchors, forced combinations and connections to come up with numerous ideas. The more ideas, the better, and the crazier the ideas; even better!
Prototype – Prototyping an innovative solution is akin to shaping a solution using two pairs of hands – your design team’s, and your users’. In the previous stage, you would have identified some potential ideas and possible directions regarding a solution. This is where you need end users to help you figure out what works for them, and what does not.
The objective of this stage is to be able to move rapidly towards a final solution, with minimum investment (as far as possible) on experiments towards refining potential solutions. The moment each prototype becomes too expensive and complicated, there is a tendency to either convince yourself and your team that it is a great solution (because of the effort that went into it. It is a cognitive bias called the IKEA effect).
Another possibility is that if you encounter a roadblock at this stage, your team or the top management might get easily demotivated and consider it a colossal failure, solely because your team spent a fortune building a prototype that user groups did not like or approve of.
Instead, make the most basic and low-cost but effective prototypes possible. Use anything from sheets of paper for story-boarding, to card paper or cardboard, Styrofoam and other craft supplies to work toward a final solution. Your objective with each prototype, is to test no more than one factor or variable you need clarity on. Test too many criteria, and the learning becomes unclear.
At workshops I conduct, I sometimes take my old letterheads for participants to use for discussions, sketching, or to make things out of.
It is only when everyone finds using anything lying around them as potential material for prototypes, is when prototyping will become far more prevalent. The same goes for ideating. If the materials you use are too fancy, you or your team might use it as an excuse to delay prototyping, or even ideating.
Which is also why, while a lot of design thinking workshops use post-its and put up pictures of it, few participants continue to use post-its to implement some of the tools they learnt. Because buying post-its is expensive and sometimes inconvenient. If you can’t make do with stuff already at your desk or around, the action gets delayed till you buy those supplies. Take this from someone who uses toothpaste or soap to write on the bathroom wall so that a potential idea does not disappear with the flowing water.
Test – Once you’ve completed the prototyping phase, you
move on to testing. The significant difference between the two is that while
prototyping was far greyer and also, the prototypes were far less expensive but
required a slight stretch of the imagination by the user, the testing phase is
that much more advanced, as it is that very close to the final product or
service.
And unlike checking one feature at a time in the prototyping phase, here
you are testing the product or service in its entirety, towards ironing out any
features or poor service extensions that exist, by letting your users directly
interact with the solution.
The first rule to keep in mind in the testing phase too is that your
product or service is not final or finalized yet! There would still be some
assumptions that your team would need to test. For instance, it is one thing to
prototype with sketches or storyboards or even pretend mobile interfaces. Quite
another to have end users interact with your store layout or theme park or
mobile application.
Which is why we have the testing phase, where your team would help build
almost-final solutions to test them in the hands of a closed group of
stakeholders. It is great to have a select list of people who will evaluate your
creation. That increases the focus and feedback capturing. And what you will be
testing, are any assumptions that were earlier not tested, or that sprung up
along the way with the increase in clarity.
It isn’t possible to overstate the amount of valuable, even critical
insights that can be gained in the testing phase.
Testing is followed by eventually launching the product, service or
change – once all assumptions and user hesitations have been factored in.
After you’ve gained more realistic insights from real users who
interacted with your prototypes and brought you very close to a final solution
that you by way of prototypes and then running exercises with them in the
testing phase, you are finally onto an almost ready and well-refined answer.
Ideally, even after launch, the journey should be looked at like it is the making of a TV series. You’ve launched season 1 or 2, and it is doing well. But you need to check-in now and then as to how viewers are reacting and engaging with it. The bigger question in your mind always is, is there enough traction to demand a season 3, and if yes, would there be any significant changes needed (replacing actors, etc.) or is the show no longer relevant to its audiences. In which case, you then need to figure out what next. That way you are not going in blind with season 3, to later find out it lost its audience midway through the previous season itself.
One should remember that there is no perfect product, service, experience or solution to user needs or problems. And there are no runaway results promised by design thinking, the way some firms guarantee the ability to create viral videos. But yes, you always have a far greater chance of arriving at a product or service that people want or need by using design thinking, than by merely guessing or troubleshooting your way through.
How open or rigid, would you say your views and beliefs are?
Here’s an excerpt from Benjamin Franklin’s autobiography, in which he mentions the following interaction with someone:
I was acquainted with one of its founders, Michael Welfare, soon after it appear’d. He complain’d to me that they were grievously calumniated by the zealots of other persuasions, and charg’d with abominable principles and practices, to which they were utter strangers. I told him this had always been the case with new sects, and that, to put a stop to such abuse, I imagin’d it might be well to publish the articles of their belief, and the rules of their discipline. He said that it had been propos’d among them, but not agreed to, for this reason: “When we were first drawn together as a society,” says he, “it had pleased God to enlighten our minds so far as to see that some doctrines, which we once esteemed truths, were errors; and that others, which we had esteemed errors, were real truths. From time to time He has been pleased to afford us farther light, and our principles have been improving, and our errors diminishing. Now we are not sure that we are arrived at the end of this progression, and at the perfection of spiritual or theological knowledge; and we fear that, if we should once print our confession of faith, we should feel ourselves as if bound and confin’d by it, and perhaps be unwilling to receive farther improvement, and our successors still more so, as conceiving what we their elders and founders had done, to be something sacred, never to be departed from.”
………………………..
Notice the humility and level of awareness in that man’s views?
Let’s put that into present day business or religious or even political context. Would you say we’ve come a long way, or gone a long way backwards?
Improving on our habits or skills alone doesn’t change the world. It’s our views that need to be open to questioning, to reasoning, and to correction where necessary. Only then can we actually attempt to effect any improvement.
How often do you question your views and beliefs?
__________
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Way to go, Alok! The Venture Capital Differentiators
A few years ago, I came across this interview with Alok Mittal on the internet. Alok is the Managing Director at Canaan Partners, one of the leading VCs in the technology and healthcare businesses, the world over. And in that interview, Alok was talking about their investment in techTribe a few years earlier. techTribe, by the way, happens to have a job referral service offering, similar to the incentive based job referral business model of the company I wrote about earlier.
Alok had publicly agreed that the incentive driving referrals was not going as expected. And that they have been planning to sell the company as the business model didn’t seem to work. I did feel a sense of pride and satisfaction that my gut feel and reasoning was in a way being backed by someone, who is to me, something of an authority in the field.
Then, something struck me. Here was a world where everything that everyone spoke about publicly was, like the Americans popularized, “good”. And amongst them was someone as knowledgeable, intelligent, and capable as Alok Mittal. It took someone humble, grounded, and true to his work, to openly talk about his mistakes. Literally in Rudyard Kipling’s words, he could ‘meet Triumph and Disaster, and treat those two imposters just the same‘.
Hats off to your humility and honesty towards your work, Alok.!
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