#13 :: Creatively rigorous; rigorously creative?
Design strategy, and how to balance the intuition/analysis gap
Today we’re talking about design strategy and its power to blend analysis and intuition. Commercial creativity. This issue, we take complex research from academia and make it tangible for practice.
Highlights:
There are two polar approaches to innovation which rely on either analysis+data or creativity+intuition. Each alone is flawed
Resting too heavily on data and analysis stifles creativity. But favouring unstructured intuition results in biassed, high risk decision making
Design strategy enables agility in the present, while imagining future scenarios. It balances the analytical and creative orientations
It’s tough to achieve, because it permeates across the fabric of how firms make commercial decisions
Airbnb gets the balance just right. We outline five methods it uses to innovate creatively yet rigorously
01: Both and innovation
Airbnb, Tesla, Apple, Dyson, 3M, LVMH, Hermann Miller, Automattic, Nike, IBM. Some of the world’s most advanced, most innovative, most commercially successful firms. Each has a unique brand, product range, and way of doing business that’s at once technically feasible, commercially viable, and desirable on the market. And all talk proudly about deploying a design strategy (DS) approach. Here we summarise what that means.
These firms are so valuable because they have unique, embedded IP. Used effectively, design strategy differentiates, galvanises engagement, creates sophisticated experiences. It builds innate, unreplicable advantage. It sounds complex: it took me a few years to analyse and compose a 300 page doctorate on the linkages.
DS requires a blend of competencies, culture and capabilities, but the core is simple: it means converging the strengths of both creativity and analysis in a cohesive way to navigate the present, and make decisions for the future.
In practice, what does that look like?
The intersection of business and creativity can be a rough terrain to traverse. So in this issue, we drill down to identify tactics for innovation. We believe theory is always really important for understanding the deeper foundations – the value of doing something – before implementing it. Design strategy took root in business schools in North America, so let’s start there.
Think different (1997)The theory from Harvard: Reward of DS
In the book, Design of Business, published by Harvard Business Press, Roger Martin argues that most businesses are dominated by analysis, logic and data. This is at the expense of creativity, design, intuition. For them, the main goal is a system that enhances reliability and reduces risk. New ideas are evaluated and assessed based on ‘reliable’ insight about the future.
But, leaning too heavily on analysis is a mistake since reliable insights breed predictability, sameness, reductionism. It’s where innovation dies, precisely because the ‘new’ is risky. Plus, we can never predict the future.
It’s a much broader theme. Everywhere we’re skewed in favour of the sciences over the humanities: in education, economics, society, business, law, politics. To think different, as Apple proclaimed in 2007, is an uphill battle.
But contrast that to firms where the pendulum swings in the opposite direction to favour creativity, intuition, playfulness. That brings a different type of pain: Biassed decision making, unsubstantiated conclusions, paralysis resulting from loose definition, brilliant but redundant products (remember Segway?). Their focus is validity: what ‘should’ happen. But this is tricky, because proof of concept takes a long time. So there’s also high cost and high risk associated with developing new programs, products and features this way.
Comparing analysis led vs creative led orientationsCommercialising Think different
The creative/analysis orientations are polar, occurring depending on which mindset dominates (accountants/engineers versus creatives/designers). Martin argues that the sweet spot is a balance between analysis and intuition. Appreciating and taking qualities from both.
But inherent divergence - they have different goals, priorities, approaches, philosophies - can clash and bring a lack of cohesion.
So what do LVMH, Airbnb, Tesla, Apple et al. do differently? Design strategy concerns internal process and visible output. These firms have the knack of seamlessly blending creativity and analysis — from product development to customer engagement.
A step beyond the maligned design thinking methodology (Nick Foster, former Google head of design recently wrote a compelling case), it’s about deep balance: Integrating lots of people’s viewpoints to address complex markets, rapid change, and dynamic consumer and cultural contexts — in a 360 way, and being agile enough to respond nimbly.
So far so intimidatingly great. Let’s take a look at how to do it. Airbnb is a best-in-class exemplar of a design strategy approach, so we’ll look at how they developed their innovation muscle to face down the challenges of Think different.
Design strategy components02: Under the hood: Airbnb’s innovation muscle
Here are design strategy principles that every firm can implement. These five insights on tools and mindset can move businesses towards sustained growth, customer engagement, product differentiation and market leadership. It’s important to say that these principles are in the DNA of Airbnb, from its early start-up phases to the industry-disrupting, global brand we know today — so can be applied regardless of size.
Golden triangle: Desirability, viability, feasibility (IDEO)Hybrid leadership: According to IDEO, the holy grail of a successful product is desirability (wanted/needed), (commercial) viability, and (technical) feasibility. The three Airbnb founders embodied this - designers, a strategist and technologist. Starting out, they recognised that their biggest challenge is driving user conversion at the top of the funnel - from awareness to booking. By integrating their different viewpoints, they manipulated the product to effectively balance each constraint. Today the company is organised to enmesh disciplines and different perspectives, and multi-discipline teams are empowered to improve and innovate around specific metrics.
Learning about the audience: User centricity is integral to design strategy. Airbnb actively orients itself towards its audience through deep learning. At the outset, positive word-of-mouth was the key factor influencing how Airbnb took off. So, the founders made a concerted effort to understand early adopters. They met and spoke with hosts and guests to understand and connect their goals and motivations. Today, the company constantly researches and uses learnings to build new features and campaigns. For example, post-pandemic, it pivoted to focus on long term rentals to accommodate the changing shape of travel, tourism and digital nomadism.
Embracing challenge: The only constant is change. Airbnb has faced and coped with potentially business-breaking challenges, such as increased regulation, overtourism, the pandemic, and copy-cat competition from the big players. Yet the company has been resilient. It grew exponentially in the years to the pandemic, and again increased revenues in the year to 2022 by 40%. A key characteristic is its adaptability and agility to innovate amid changing macro factors. For example, ‘offbeat’ and ‘off the grid’ were added as search categories in response to changing desires post-pandemic.
Test to iterate: Learning is critical at Airbnb. Metrics are important and data science is integrated deeply in those enmeshed product teams. It regularly runs finely-tuned tests that are designed to result in data that is assistive to design and product, rather than stymying it. This then drives product improvements, as well as supporting engagement.
Substantiated decisions: With my students of Creative Direction at Central Saint Martins, we talk about grounding creative decisions in substance. At Airbnb, decision making is strong because it's based on having an informed point of view. Nothing is built in isolation. Product is balanced with nuanced understanding of the market, and new tools are always connected to methods to boost awareness (e.g. brand marketing, sophisticated targeting, engagement campaigns).
Airbnb co-founders03: Think different
“The way we work with design is a huge strategic advantage at Airbnb, it’s so, so powerful”
— Michael Curtis, former VP of Engineering, Airbnb
If it was easy to blend inherently different cultures and ways of thinking, the world would be full of joyful products. But it’s not. It requires a high degree of honing to develop openness, understanding, and an appreciation of the value of creativity and analysis. Doing that while also looking outwardly to learn is exceptional. The beauty of design strategy is this ultimate agility: simultaneously responding to a rapidly changing present, while proactively preparing for an uncertain future. Innovation that stays ahead for years and decades.