In the rapid-change business environment, innovation has become the holy grail in terms of competitive advantage. Defined by Merriam-Webster as “a new idea, method, or device,” innovation tends to inform all parts of the successful operation, from obvious areas like product development to unexpected areas like financial reporting. Because the sources of global business advantage have evolved from operational efficiencies, where now most businesses are able to achieve competitive parity through access to the same technologies and processes, to differentiation, where every opportunity to stand out from the competition can result in increased market share and profits, innovation is even more essential.
Innovation is nothing new, of course, but because other sources of advantage have been exhausted, as Tim Brown notes, business “leaders now look to innovation as a principal source of differentiation and competitive advantage” (2). In the search for innovation, several approaches for developing new ideas, methods, or devices have shown promise, and design futures, as a fusion of design thinking and strategic foresight, is one that organizations should consider incorporating into their innovation processes because it addresses a longer view, pluralizes the future, and engages multiple stakeholders in creating innovation.
Typically, corporate strategic planning processes look at more immediate horizons, usually less than three years. While, as Bradford notes, there should be a relationship between the planning horizon and “the future environment in which the organization will be operating,” the majority of organizations align strategic planning horizons with budgetary cycles, i.e. one year. There is no doubt tremendous value to reviewing and adjusting strategy on an annual basis, but one year is too short a view to address large-scale changes in the macro environment that present significant disruptive threats to product lines, regional markets, and overall competitive positioning. Because strategic foresight emphasizes longer horizons, as well as a broader view of the macro environment, it provides a much-needed complement to traditional strategic planning.
However, while strategic foresight in the most common form of scenario planning may provide useful views of the futures in which the business may operate, it may not necessarily activate the kind of intellection and creativity that will embed a view of the company into the future and thus help drive innovation. Because design futures can bring together design processes, particularly design thinking methods, with strategic foresight, and can bring to life scenarios in tangible ways, corporations should not only employ strategic foresight in the strategic planning cycle but also include exercises in design futures, particularly with product and marketing teams.
Additionally, because strategic foresight “pluralizes the future,” or seeing the future not as one fixed outcome, but rather multiple possibilities, it can provide tremendous value by stimulating conditional and “what-if” thinking in the strategic planning process (van Alstyne 70). With design futures, this pluralization of the future allows for the development of multiple tangible scenarios that can bring to life different product options, as well as different strategic responses to possible changes in the environment, whether those changes are competitive or social, economic, political or otherwise.
To even further imagine, for instance, opportunities for value chain innovation based on multiple contingencies in availability of resources, or environmental regulations, may lead to approaches that could provide differentiation. What if we source our raw materials differently? What if our products use different materials? What are the range of options if certain laws are passed or consumer values change? Such questions can drive innovative thinking, but when the organization can imagine answers to these questions in tangible prototypes, the design futures exercise can gain weight and organizational traction in ways a text-based futures exercise might not be able to do.
Finally, if executed properly, design futures exercises can bring multiple organizational stakeholders together to collaborate on innovation in a very hands-on fashion. One of the challenges with innovation as practiced in many organizations is that innovation is considered the exclusive work of product developers or engineers; everyone else is excluded from the exercise of and responsibility for innovation. Such attitudes do not create the culture of innovation that mark the most successful companies. If instead people from marketing, product, finance, sales, and operations can collaborate on prototyping multiple future scenarios in a robust way, in a way that illustrates possible futures that can be experienced, as good design futures scenarios should do, it not only infuses a broader stake in innovation, it paves the way for the broad organizational cooperation that will make new initiatives more successful.
In conclusion, in order to better differentiate and innovate, organizations need to look at longer horizons and the broader environment. Strategic foresight provides the tools to do so, but in order to really engage an organization in innovation and differentiation, design futures provides probably the most useful set of tools because design futures is tangible, plural and can engage multiple stakeholders in hands-on collaboration.
As an interesting, if imperfect, example of a business-oriented design futures exercise, consider this exercise by Pamela Duque for Zara.
Bradford, Robert W. “Strategic Planning Horizon: How Far Out Should You Plan.” Center for Simplified Strategic Planning. http://www.cssp.com/strategicplanning/blog/strategic-planning-horizon-how-far-out-should-you-plan/
Brown, Tim. “Design Thinking.” Harvard Business Review. June 2008.
Merriam-Webster. “Definition of innovation.” Merriam-Webster Online. https://www.merriam-webster.com/dictionary/innovation
Van Alstyne, Greg. “How We Learned to Pluralize the Future.” Creating Desired Futures: How Design Thinking Innovates Business. Basel, 2009, pp. 69-72.