Designers and investing in innovation

Here is an interesting trend: “The design partner–a designer who helps manage and select investments–is becoming a mainstay role at venture capital firms.” A recent article in Fast Company (“Why VC Firms Are Snapping Up Designers“) notes that design is becoming an increasingly important attribute in digital products. So it makes sense to have someone with those skills on the investment team.

But, the article also notes that design is more than skin deep. As Irene Au, former head of Google’s user interaction team, points out, a design oriented approach helps diagnose problems:

“I don’t necessarily expect to be vetting potential investments, but where there’s poor design, that’s usually a reflection of a deeper underlying issue that has to be solved. If a design is cluttered, it probably suggests that to the company, the value proposition isn’t clear to themselves,” she says. “You can start to use a design as a tool to spot where the problems are in a company.”

Design-thinking goes deeper than diagnosing problems in a company. It is a means of generating ideas, as the article notes:

The crew of four design partners at Google Ventures operates differently. The team embeds itself at portfolio companies for five-day “design sprints,” which work sort of like Extreme Home Makeover for startups, in which new ideas go from problem to sketch to prototype to market-tested product within a week.

Finally, the article quotes John Maeda, former head of the Rhode Island School of Design, who uses design as a strategic tool: “My role is to find strategic insights as to where design can have the most business impact. A designer can bring a viewpoint of not just aesthetics, but economics and usage.”

All of this attention to design as a factor in the VC process doesn’t surprise me. A recent paper from the OCED on Measuring Design and its Role in Innovation discusses the importance of design as an integrated element in the innovation process (see earlier posting)

And as a Wall Street Journal story from a year or so ago reported (“Forget B-School, D-School Is Hot“), more and more business schools are incorporating courses on “design thinking.”

Design thinking is a different process that the standard linear model of innovation: ideation, prototyping, consumer testing of final options. As I noted in a posting a number of years ago:

Design thinkers must set out like anthropologists or psychologists, investigating how people experience the world emotionally and cognitively. While designing a new hospital, IDEO staff stretched out on a gurney to see what the emergency room experience felt like. “You see 20 minutes of ceiling tiles,” says [Tim] Brown [CEO of the design firm IDEO], and realize the “most important thing is telling people what’s going on.” In a completely different venue, IDEO visited a NASCAR pit crew to come up with a more effective design for operating theaters.

Wikipedia uses this definition:

Design Thinking is a process for practical, creative resolution of problems or issues that looks for an improved future result. It is the essential ability to combine empathy, creativity and rationality to meet user needs and drive business success. Unlike analytical thinking, design thinking is a creative process based around the “building up” of ideas. There are no judgments early on in design thinking. This eliminates the fear of failure and encourages maximum input and participation in the ideation and prototype phases. Outside the box thinking is encouraged in these earlier processes since this can often lead to creative solutions.

Key to the process is involving the client in the design process – which is made possible by rapid-prototyping. As the Deputy Chief Executive of the UK Design Council (Trust me, I’m a Designer: How Design Research Can Influence Businesses, Governments and Policy Makers?) put it:

More and more business leaders and policy makers also see design as a strategic business process that helps to identify and meet real user needs.

Because of the increasing importance of this new model of innovation, I have long advocated greater attention to promoting design thinking. Specifically I have called for support for creating d.schools similar to what we give (and is proposed) for engineering schools (see earlier posting). In addition, one of the new Institutes in the National Network for Manufacturing Innovation should be devoted to the embedding of design thinking in the product development and production process (see earlier posting).

With VC’s slowly getting the message about the role of design thinking in innovation, maybe policymakers will as well.