Customer centricity and innovation: examples of design thinking
In part 3 of our series, we explore two examples of design thinking from Bosch and Airbnb and show how adaptable and versatile the creative approach can be when it comes to solving various problems faced by companies with different starting points.
What makes design thinking attractive?
Think differently, work differently – attributes that you would usually associate with young and dynamic startups. But that is far from the case! The flexible framework of the creative design thinking approach has long proven to be a successful model for innovation in established companies and corporate groups.
For outsiders, although it may seem strange and even disconcerting when employees of age-old corporations or insurance agencies start playing with Legos or papering walls with colorful sticky notes, design thinking reached the boardrooms of long-standing companies quite a while ago and has since proven its value.
The list of well-known companies proudly reporting on their successes with design thinking includes Bayer, BMW, SAP, Ergo, Continental, Otto, Nord LB, Swisscom, Deutsche Bank, Volkswagen, Deutsche Bahn, Siemens, Pinterest, P&G, and many others.
The reasons behind the widespread acceptance of the design thinking approach lie in the advantages it offers:
- Innovative power: Many companies feel pressured to develop creative and edgy solutions to put customer interests at the heart of product development. This is precisely where design thinking comes in.
- Speed: The approach can be implemented using a broad array of fresh and agile methods in order to outdo young and dynamic startups in terms of innovative potential and speed.
- Flexibility: In contrast to agile methods, design thinking offers a flexible framework that can be complemented with many different methods for various purposes.
Two worlds: Bosch and Airbnb as examples of design thinking
We present two examples of design thinking from companies whose starting points could not have been more different. On the one side we have the long-established giant Bosch, which recognized that user experience should be at the heart of everything it does, and on the other side, we take a look at startup Airbnb, which was on the brink of failure until it realigned its coding and data to be more customer centric.
More examples of design thinking, all the insights and thought-provoking ideas from our design thinking trilogy, as well as interesting additional information can be found in our e-book, which is available to download for free.
Pioneering innovative pressure: design thinking as illustrated by Bosch
When it comes to what prompts large corporations to pursue the approach of design thinking, the following quote from Uwe Raschke, Member of the Board of Management at Bosch, made in 2018, serves as an example:
“Five years ago, we recognized that we needed to put much more emphasis on the user than in the past when developing our innovative products. And so we established an activity referred to as the user experience. And design thinking is a fundamental method in this respect.”
This quote implies the following:
- The supposed “method for user experience”, i.e. design thinking, was likely introduced in the product development process at Bosch out of the sheer necessity to meet user interests to a greater degree than before, so as not to lose customers to the competition.
- The creative approach was not introduced organically from the vested interest of various employees involved in product development and sales, but instead was set up as a separate activity, a dedicated department of sorts.
What makes design thinking so fascinating for Bosch?
- Innovation: The collaboration between employees from as many different areas as possible (for example, an engineer, a marketing employee, a staff member from controlling, a designer, and a psychologist) leads to more innovative solutions than if only employees from the same or similar disciplines work together.
- Cost savings: Prototyping and having customers try out a product that has not been fully developed yet serve the purpose of involving them directly in its further development. That saves time and money in terms of releases and subsequently having to modify unsuitable products.
- New worlds of work: Collaboration and creative work require room concepts and role concepts that are different from those provided in a traditional company setting. To this end, existing hierarchies ultimately also need to be broken down.
These three points correspond exactly with the three equal core principles behind the design thinking approach:
Bosch as an example of design thinking: total enthusiasm
According to Raschke, the results Bosch achieved through design thinking are so impressive that even more cross-functional organizational forms are being created. The strategy has been received positively all around. The Group’s new buildings are being designed in a way that optimally promotes collaboration among flexibly arranged teams.
Essentially, Bosch put the cart before the horse. Introduced more as a traditional department, design thinking quickly proved to be a successful work model, which now not only completely permeates the Group’s work philosophy, but also defines the architecture of its buildings.
Startup, unicorn, global player: how Airbnb has applied design thinking
When Airbnb was founded as a small community marketplace in Silicon Valley in 2008, hardly anyone knew about it. Today, there is probably almost no one in the world who hasn’t heard of the platform, which is shaking up the global hotel industry. Now active in over 220 countries, Airbnb quickly grew into a global player and continues to profit from the sustainability trend as part of the sharing economy. Before COVID-19, Airbnb was valued at 35 to 52 billion dollars on the secondary market, and the company planned to list it on the stock market in 2020.
Why isn’t anyone booking reservations on our site? Customer perspective as the key
In a video from FirstRoundCapital, co-founder Joe Gebbia provides inspiring insights into how he used design thinking to transform Airbnb from a failing startup to a billion-dollar business.
The key to solving the problem of decreasing booking figures was seeing things radically and impartially from a customer perspective. This enabled the three-man founding team to identify what needed to be improved the most on their portal: the photo quality of apartments and accommodations being offered was not good enough for customers to get a real idea of what they were booking. After all, customers want to see what they will be getting for their money.
Consistent growth through consistent use of design thinking
Without first making calculations and drawing up cost/benefit forecasts, the team took it upon itself to visit hosts and take its own high-quality pictures of the apartments. This demanded courage, investments, and a willingness to move away from purely data-based analysis, overcome any social anxiety they had, and develop a true understanding of the target group and its needs.
As soon as the better photos were uploaded, success was quick to follow, and the number of bookings skyrocketed from that point on.
Design thinking is now common practice at Airbnb and finds expression in a range of typical methods:
- Taking a customer perspective: Every new employee first has to complete a trip booked via the portal and report on his or her experiences.
- Adhering to the phases of design thinking: New development processes begin with a creative hypothesis alone; data and feasibility studies do not play any role initially.
- Prototyping and testing: New features are first tested as prototypes in certain areas of the site. They are then optimized based on customer feedback before being expanded across the whole platform.
Guided by radical customer centricity: a design thinking role model for startups
Many startups have found themselves in the same situation as Airbnb at the time it introduced design thinking. They had a good, flawlessly coded product, had calculated and analyzed all performance-relevant parameters and KPIs, but success remained to be seen. Why? Because the product could not fulfill the paramount need of the target group – to select a place to stay based on photos.
The problem therefore simply came down to content. Recognizing this meant stepping out of the shoes of a programmer and developer and radically adopting the customer’s perspective. The result was a success story that set a precedent. The application of many typical steps of the iterative design thinking process is now part of the DNA of most startups without them even realizing it.
Design thinking: free downloadable e-book
Do you want to explore even more examples of design thinking in action, read our entire story trilogy on the topic of “design thinking”, and get exclusive access to further thought-provoking ideas and interesting additional information? Then download our free e-book now!