Six Advantages of Incorporating Design Thinking in Your Business | What is the importance of design thinking in business?

This blog by Human Design and Innovation Consulting explains design thinking, its four principles and five phases in detail. Questions answered include: What is the importance of design thinking in your business? What is its impact on your branding and market positioning?

What can you as a business or corporate leader do to ensure 10X growth, increased revenue, and profitability in your organization? What can assure that employees remain motivated by, and committed to, the success of your organization? What can enhance customer experience and retention? Is there anything that can establish a culture of innovation and digital transformation to bring the best products and services in your niche market?

Will you agree if I tell you that all the scenarios discussed above can be made possible by introducing just one change in the way your organization thinks, plans, and executes? Yes, design thinking is in. According to Harvard Business Review, the social technology called “design thinking” has the potential to do for innovation now, what TQM (Total Quality Management) did for manufacturing in the 1980s.

According to a 2021 article in Forbes magazine, the future of business rests with customer-centric leaders. If the pandemic taught us anything, it is the importance of customer-centricity in business. This means putting your clients at the core of your business. This focus on customer centricity has brought monumental success in world-class companies like Apple, McDonald’s, Adidas, and Ikea. The same focus in a mid-sized or start-up organization too can transform it into a market leader in its segment.

Customer centricity is the core of design thinking. Design thinking is the latest among business methodologies like Six Sigma, Lean Start-up, and Agile. Let us understand what design thinking is.

What is design thinking?

The dictionary defines design as “purpose or planning that exists behind an action, fact or object”. At the very basic level, design thinking is a solution-focused problem-solving approach. Designers traditionally use this by generating a large number of solutions and eliminating those which did not work. Design thinking provides innovative solutions to complex problems (or “wicked problems”, as they are often called) and redefines customer experience by bringing change in the way an organization thinks and plans.  

Do you know who the first person was to mention design as a science or way of thinking? He was Nobel-Prize-winning computer scientist Herbert A. Simon, who wrote about it in his 1969 book Sciences of the Artificial.

According to Tim Brown of IDEO, “Design Thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Design thinking is based on human-centered design and innovation that emphasizes empathy so that its problem solving is based on the needs of the customer or end-user. It is a creative problem-solving toolkit that prioritizes customers’ needs and aspirations above everything else.

Let us understand the four principles and the five phases of design thinking.

The four principles on which design thinking is based

Hasso Plattner, Christoph Meinel, and Larry Leifer, in their book Design Thinking—Understand–Improve–Apply, identified four rules of design thinking. These are often regarded as the four principles on which design thinking is based. Here are these four principles:

  • The Human Rule

It says that “design is social in nature”. Problems must be solved in a way that satisfies human needs. Problem-solving must acknowledge the human element in all technologies.

  • The Ambiguity Rule

It states that “ambiguity is inevitable”. Since the presence of ambiguity is acknowledged, the problem-solvers are allowed to experiment at the limits of their knowledge, the limits of their ability to control events, and the freedom to see things in a different light.

  • The Redesign Rule

This rule says that “all design is redesign”. This rule acknowledges the existence of designs in the past. It promotes understanding of how human needs were met in earlier times, allowing technology and social circumstances to evolve constantly.

  • The Tangibility Rule

It says that “making ideas tangible facilitates communication”. It encourages creativity and a designer’s way to make tangible ideas that are abstract and problems that are complex, facilitating problem-solvers to create working prototypes of their solutions.

The five phases that comprise design thinking

Herbert A. Simon in his famous book mentioned above included 7 phases comprising a design thinking process. Modern versions of the design thinking process, mostly used in businesses, education, and computer science, include anywhere from 5 to 6 steps. The 5 most commonly used stages include Empathize, Define, Ideate, Prototype, and Test. The sixth, Implement, is often included as a final step, once the final product is completed. Let us know about them in detail.

  • Empathize

At this stage, the problem-solvers try to walk in the shoes of their customers or users, while trying to understand the problem deeply. The Empathize stage brings in the human-centered element to the design thinking process by focussing on research in finding “gaps in the market” through tasks like comparative study, market research, local visits, and interviews. There may be no straightforward product solutions to a given issue, so the Empathize stage requires the team to identify the need and address it. A case in point may be the issues customers (especially the children) were facing while using the traditional Heinz Tomato Ketchup bottle, made of glass.

  • Define

At this stage, the information collected from the previous stage is used to define the problem, its challenges, its needs and wants in human-centric terms. The definitions need to be broad enough for a flexible and creative approach but narrow enough to help the team to move on to the next stage. A case in point may be defining the problem of wastage in the form of unused ketchup sticking at the bottom of a Heinz Tomato Ketchup glass bottle and of accidental injuries to small children and grown-ups if they accidentally drop the glass bottles on the floor.

  • Ideate

Once the problem-solving team is equipped with the definitions of the exact problems their customers are facing, they can begin generating ideas to solve the defined problem. The Ideate phase encourages free-thinking and unconventional approaches. So, the team brainstorms through several rounds of meetings. The problem, now in the form of a well-defined set of statements and diagrams, can be discussed with teams outside the core problem-solving team. People from outside can offer valuable ideas by looking at the problem from different angles. For example, in the case of the Heinz Tomato Ketchup glass bottles, the problem-solving team can give the task of ideating solutions to different groups. The core team then lists down every solution coming their way, regardless of how good or bad it is.

  • Prototype

At the beginning of this phase, the best ideas and solutions from the previous phase are picked up and used to come up with a tangible result in the form of a prototype, producing several basic iterations of their problem-solving product. The Prototype phase focuses on experimenting to create multiple approaches to solving the problem. For example, a new design of the Heinz Tomato Ketchup can be created, using different shapes and materials.

  • Test

This is usually the final stage of design thinking where the prototypes thus created are tried and tested on a control audience. Here, the problem-solvers can combine the best solutions from the prototype phase into one complete product. The final product involves the most user-testing. We all know the final product in the case of the Heinz Tomato Ketchup, which is an inverted bottle made of plastic. It has not only solved the problem of accidental injuries by replacing the packaging material of glass with plastic but also addressed the wastage of unused ketchup sticking to the unreachable corners at the bottom of the old glass bottle.


It is often considered the sixth stage, where the final product is actually put to use in solving the problems of the target audience. The Implement stage is when the new bottle design of the Heinz Tomato Ketchup became available on the shelves of grocery shops, departmental stores, and online markets for the actual consumers.

The design thinking phases, although arranged in a sequence, may not be linear. Iteration is a crucial component of design thinking. The Test phase or the Implement phase may not be a strict ending point, as new problems might surface in the final product. The new problem may require all the five phases, or a few phases mentioned above to fine-tune the product to create the best possible solution.

What is the importance of design thinking?

Below, I am discussing the six advantages of incorporating design thinking in your business. Given that design thinking rekindles creativity, narrows down focus areas, and communicates goals with clarity, its importance in business is immense.

  • Clarity

Design thinking helps businesses to bring clarity in their business understanding by helping leaders to identify, understand and address the problems that affect their businesses and customers. Since design thinking values solutions over processes and innovation over traditions, it can help you find the right problems that need to be solved for the customers.

  • Future readiness

With clarity comes a clear vision about the possible problems and their possible solutions. In this age of technology-powered disruptions, it is all the more important to create a roadmap and chart the direction for the future using the power of design thinking in decision making.

  • Competitive advantage

Since design thinking encourages customization of products and services for your customers, it stands to benefit your organization by giving it a competitive advantage through the creation of bespoke, best-in-class products and services that are more practical, user-friendly, and immersive. The deep understanding of customers and the practice of putting the needs of your customers first to solve their problems through empathy and iterations help you to build not only the best products and services but also the most engaging and delightful experiences for your end-users.

  • Team collaboration and innovation

Nothing infuses team-based collaboration as much as design thinking does by focussing on brainstorming, interactions, thinking out of the box, and letting everyone contribute for a common cause. It enforces team-based collaboration that puts the user at the center. Business leaders like CEOs, CMOs, CFOs, CHROs, Chief Strategy Officers, and L&D Heads can get people aligned with common goals to collectively come up with better products and services.

  • Better sales interactions

Sales interactions with customers are often a decisive way for a product’s success. Better sales interactions ensure positive word of mouth and better customer engagement. Sales interactions are expedited in design thinking because the prospective customers are kept constantly in touch with the product development process. Moreover, the customers get to know how your organization is keen on solving their issues.

  • Effective product launches

Design thinking helps in better product launches by reducing the last-minute surprises and risks. Since the customer feedback and iterations were already factored in during the development phase itself, the launched products and services perform well from the very beginning.

Design thinking vs other approaches

The solution-based, human-centered, and qualitative-insight approach of design thinking is in sharp contrast with the problem-based approaches such as Six Sigma, Lean Start-up, and Agile.

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While all the other approaches have relevance in different set-ups, design thinking seems particularly more pragmatic. From the diagram above, you can see that though design thinking emphasizes the importance of understanding human challenges and needs through deep empathy and qualitative insight, it is not too rigid in its processes and leaves enough room for human creativity to stay alive. The other methodologies have a high process and quantitative-data focus.

Design thinking focuses on personalization. Companies like Spotify, Amazon, and Netflix are known for their emphasis on hyper-personalization for their customers. Design thinking is the future.

This concludes my article on the six advantages of design thinking. If you have any queries or suggestions, do share your thoughts in the form of comments.


About the author – A Haryanvi by origin, an entrepreneur at heart and a consultant by choice, that’s how Ajay likes to introduce himself! Ajay is the Founding Partner at Humane Design and Innovation Consulting (HDI). Before starting HDI, Ajay founded the Design Thinking and Innovation practice at KPMG India. His 16+ years of professional career spans across various roles in product and service design, conducting strategy workshops, storytelling and enabling an innovation culture. He has coached 50+ organizations and 2000+ professionals in institutionalizing design and innovation practices. He loves to blog and speak on topics related to Design Thinking, Innovation, Creativity, Storytelling, Customer Experience and Entrepreneurship. Ajay is passionate about learning, writing poems and visualizing future trends!


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