Design Thinking turned Airbnb into a billion-dollar business.

The story dates back to 2007 when one of the co-founders had problems paying his share of the rent. There was a design conference and the hotels surrounding the area could not host all of the attendees.

Bryan Chesky and Joe Gebbia had the idea to rent out a spare room in their apartment and called it Airbed and Breakfast (they only had an air mattress and no spare bed).

That incident launched a series of long events that transformed Airbnb and made it the success it is today.

Design Thinking came to be when the three co-founders came close to calling it quits. They had just gotten accepted to Y Combinator, a startup accelerator, and had Paul Graham as their mentor. The latter suggested they meet face-to-face with their users and interview them.

What Paul Graham suggested was the first of fives phases of Design Thinking. From that point onward, Airbnb picked up steam.

So, what is Design Thinking? What is it composed of? Does it have any limits?

Design Thinking is a philosophy plus a set of tools to help solve problems creatively. It's a human-centric process, meaning it focuses on solving problems from a human standpoint. You're figuring out who you're designing for and what their needs are.

What is Design Thinking?

If you’re a designer, product manager, someone who is responsible for branding or anyone directly involved in the innovation process, I’m assuming you already know what Design Thinking is: A mindset to innovative and create a solution to a problem, that for some reason requires a ton of post-its.

Stages of Design Thinking

To delve deeper into Design Thinking, we must discuss its process and key components. The process is comprised of five phases — empathize, define, ideate, prototype, and test. According to this school of thought, each step is crucial and should occur linearly (which is one of the critique points, but more on that later).

So, here's an explanation of the Design Thinking phases:

1. Empathize: We, humans, are emotional creatures. Despite what we might think about our purchasing decisions, most of them have feelings in the driver's seat. It's why we when having the choice, go for brands that we like, trust, and identify with.

Empathy is a powerful tool for connecting with consumers on an emotional level. It helps companies understand the needs of their customers so they can provide better products/services. This step usually happens through incentivized surveys or user interviews to gather as much information as possible.

2. Define: Next, define the problem(s). After empathizing and learning about the struggles of the consumer, it's time to characterize and explain their challenges to start generating ideas about how they can be fixed. In short, you take everything you learned from the Empathize phase and try to generate insights.

3. Ideate: This step is straightforward. You stated the problem as concisely as possible. Now, it's time to brainstorm solutions. Post-its are heavily involved in this phase.

4. Prototype: You've come up with multiple solutions, and homed in on a specific one. But it's still an abstract idea. It's time to create a prototype. This first iteration has to be good enough to be tested.

5. Test: You have reached the end of the Design Thinking process. All you need is a sample of users to test your product and give you feedback on how to fine-tune it.

After that, you restart the process, usually from the Define phase, until you have perfected your product.

The issue with abstract models such as Design Thinking is that they can easily be misunderstood. So, let’s define what Design Thinking is not.

Design Thinking is not a recipe. It’s a list of ingredients with no instructions. Also, Design Thinking is not a linear approach. In other words, the aforementioned phases can be done simultaneously or in different orders.

So, Design Thinking is flexible.

Why is Design Thinking Important?

The importance of Design Thinking stems from our restricted patterns of thinking. We think within the confines of our expertise, lived experiences, and narrow perspectives. We have our assumptions and opinions.

They’re easily accessible and, to their merit, simplify our lives. With their help, we can quickly access the needed knowledge so we can make decisions and exercise our habits.

These thought patterns fire on automatic, which makes it hard for us to “think outside of the box”.

This in turn has a detrimental value when it comes to understanding other people’s needs. It should be remembered that human focus is at the core of Design Thinking.

Here’s a real-life story that ran in the papers with the title The Truck That Couldn’t:

A truck driver got stuck underneath a bridge. He couldn’t back up. Eventually, traffic got blocked and the authorities were called in.

A pool of engineers, paramedics, emergency personnel, and other truck drivers gathered to try to solve the problem. Each individual pitched a solution that fit their expertise. A boy was walking by and saw the hubbub. He approached the experts and took at the current situation. Then, he nonchalantly said, "Why not just let the air out of the tires?". And it worked.

Setbacks With Design Thinking

In a survey conducted by the Design Thinking Association, respondents reported time and integration into the business and its existing processes as the most difficult aspects of the innovative approach.

• Time: When managers and the rest of the hierarchical ladder care more about results, instead of trusting the process and giving it enough time to blossom, it hinders the efforts of the designers. Innovation requires patience.
• Integration into the business and its existing processes: Business processes, by design, are wired to limit and eliminate risk (time- and budget-wise). To avoid this obstacle, the Design Thinking exercise can be implemented before the launch of the project. So, instead of being phase one of the project funnel, it can be a precursor.  
  

How You May Be Doing It Wrong

We’ve established that Design Thinking is a human-centric, innovative process that links people, technology, and business together to solve unprecedented and unexpected problems.

In theory, you may learn about the steps of Design Thinking and believe that you can implement it right away.

Just like with every real-world experience, that’s not how it works.

So, here are some ways you might be doing Design Thinking wrong:

• Using it on Duh challenges: Duh, means obvious, obviously! Obvious challenges are those that can be solved with less brainpower. For example: For kids, getting an MRI can be a scary experience; big machine, bland room, doctors and technicians in lab coats, etc. The obvious challenge here is how to make getting an MRI less scary for kids. One obvious solution is to paint the entire room, the MRI machine included, with kid-friendly graffiti.
• Refusal to reframe the problem: Design Thinking keywords include: human-centric, out-of-the-box ideas, and innovative solutions. None of those can happen with congested thought patterns. Albert Einstein once said, “If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and five minutes thinking about solutions.”. This means the quality of the generated solutions is proportionate to how well we thought about the problem.
• Being human-centric, but not really: This falls under strict deadlines put by managers and leaders. Doing interviews, getting immersed in the users’ lives, and the Empathize journey is long. Insights cannot be generated via phone interviews and ideas that are generated in a two-day workshop.
  

The Takeaway

Design Thinking is a complex and lengthy process. Mastering it requires trial and error. Trial and error are also important parts of the process because they help generate more insights.

As a leader, you have to make the right call whether you can afford to go all the way to allocate the proper time and resources for your Design Thinking process or not.

If you do, know that you’re on the path to creating your competitive advantage in a fast-paced and relentless business landscape.