A Novel Strategy Development Process Based on Design Thinking

Abstract

Most traditional strategy design processes are highly analytical. They are tedious and are built on abstract concepts, like a vision, a mission, and values statements. Typical strategy design theory focuses on the capabilities and resources that define a firm’s competitive positioning. Little is left to creativity, and especially creativity at the customer level. Innovation is often related to technology rather than to how to satisfy customer needs. Traditional strategy development exercises, based on deductive data driven reasoning techniques, often end up in large binders of PowerPoint presentations, and substantial consulting bills. Too much time is spent on analyzing data about markets, their size, and competitors. Too little time is used to understanding customers and their jobs-to-be-done. This does not have to be the case! A novel, three layer, incremental, and iterative process for designing, understanding, and validating sound strategies that addresses these challenges is introduced. The first layer focuses on determining the foundation through an environmental analysis, followed by identifying of the firm’s strategic focus. During the second layer, the business model underlying the strategy is designed and validated. During the third layer, the competitive advantage is determined based on a validated business model, and its sustainability ensured. Finally, the designed strategy is translated into a stakeholder focused communication message.

Design is not just what it looks like and feels like. Design is how it works—Steve Jobs