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Designing Decisions
Roger Martin

The dean of the University of Toronto's business school explains why managers need to learn how to think like designers, and why all design is really decision design.

Douglas Look: Can you describe your "ah ha" moment - when you made the connection between the importance of design thinking and its relevance for business? Was it one specific event or did this happen over time? What led to that realization?

Roger Martin: The "ah ha" happened over time and a there were a number of events that contributed to it. I can credit various people. One important contributor was a long term friendship with a pair of designers. The first is Barb Woolley, who was studying design at the Ontario College of Art & Design along with my future wife, Nancy. Barb ended up marrying an illustrator named Bob Hambly who had been to the Philadelphia College of Art. Barb and Bob are our best friends. We would hear stories of what they were doing and I was kind of involved in them getting started in business together, as an informal advisor to their firm from the beginning. And that got me to watch what they were doing and how they were working, what design really was. I think as a business guy I had more of an appreciation for what designers do for their living on a day-to-day basis than the average business guy, because of this informal advisory relationship with two of my best friends.

DL: You didn't have experience with designers beforehand?

RM: No, zero. I just watched them and said, "Wow, that's interesting." I've always been interested in how people think. I would just watch how they thought, and had fun.

DL: What was interesting, or perhaps different from how you thought as a businessperson?

RM: One way is this notion that when somebody gave them constraints, they seemed to think that was cool. Most business people, when given constraints, complain about them - if only we had more time, if only we had more money, if only the distribution channel liked us more, if only, if only. In contrast, if you gave Barb and Bob constraints, they would sort of perk up and say, "Ooh...that's hard" in an excited tone. I would think to myself, because I'm a business guy: "What is with these people?" But then I realized that you can't have a fantastic design if you have no constraints.

DL: Were they oohing and aahhing because they were warming up to the challenge of solving those issues, or was it something else?

RM: It just made the task at hand potentially worthy of greatness. There was this Canadian real estate mogul named Robert Campeau who came down to the United States and bought Federated Stores and Allied stores; two of the most venerated big department store chains in the U.S. He created a huge empire, got overextended, and crashed and burned. And then he needed to sell his fishing lodge up in northern Quebec, in the middle of nowhere in beautiful country. It was the kind of place where and you have to the fly in and fly out, the kind of capability that only insanely rich people have. So the bankruptcy agent involved in selling the place hired Hambly & Woolley to put together a sales brochure.

DL: They were hired to produce the marketing material?

RM: Right, but the company was bankrupt and could hardly afford to spend anything. The dilemma for Barb and Bob was that this property would only appeal to somebody rich, with a certain kind of sensibility. If they produced a cheap brochure to save money, it wouldn't be effective, because the only kind of people who would consider buying a property like this would be put off by a cheap-looking brochure. So they had a dilemma, but instead of saying, "Oh My God, we can't do it, give us triple the production budget", they said, "Oh, this is kind of cool."

After thinking about the challenge for awhile, they realized that this wasn't a broad-based marketing campaign, as there weren't many people interested in a property like this. So they didn't think of the usual four-color press run of 10,000 brochures - instead only 50 or 75 would suffice. And that insight transported them into the handmade category. They came up with the concept of an old photo album that your parents might have had at their cottage, with covers made out of birch bark and laced together with a leather thong. They made high-quality color photocopies of actual photos, and used those old-fashioned black corner pieces to mount them. They even decorated the cover with a real wild bird feather. The thing looked fantastic. They ended up winning all sorts of awards for it, and it came in perfectly on budget. Bob was all excited about how he had found the right feather and all these things.

To me that was the incredible a-ha moment, which is that Bob and Barb wouldn't have enjoyed it half as much if the clients had released the constraints. What made it so cool was the tough constraints and the need for coming up with some kind of creative resolution that was out-of-the box, something completely different that nobody else would have thought of.

DL: So it's a completely different point of view [from business thinking] in terms of the approach to problem solving.

RM: Yes, but even one step before problem solving - the approach to the entire task, which is, "I'm not going to get bummed out by the constraints; I'm going to get invigorated!"

DL: Are you saying that business people don't typically think that way? Like a Donald Trump, who might get his excitement out of someone saying, "You just can't do this?"

RM: I would say that more often the reaction to really tough constraints [among business people] is to complain about them and not enjoy them. But I think you are right that you do have people would get charged up and what you are describing is more of an interpersonal dynamic. A businessperson may have a bunch of people come to him and tell him that he just can't do it. In reaction, he gets into a fighting mood and decides to show them they're all wrong. So for the business person, it is a personal one-upmanship challenge.

DL: But you're saying that for designers, it seems like the challenge is a lot less about ego or proving something to others.

RM: Yes. It's more about, "This is what I live for: this is my job, this is what I do."

DL: How did you then translate these kinds of ideas, about how designers approach problems, to apply to and inform the business world?

RM: Okay, to get there, I should tell you about a couple of other influences. First, there is a guy named Chris Argyris, a famous Harvard Business School professor emeritus, who is the father of the field of organizational learning. One of his most central views based on his research is that all human behavior is designed, that people don't do anything without design behind it. Now, often that design is implicit. It's not necessarily conscious; you couldn't describe it piece by piece. But there was a reason behind it, if you go back and ask them "Why did you do that?" He talked about designed helplessness. When people end up feeling completely helpless in a situation, he'd tell them to look back and see how each step they took was designed to produce an excuse for feeling helpless. So that had a big influence on me, the notion that all action is designed.

Then in 1992 I was consulting on strategy for Herman Miller. A wonderful man named Rob Harvey, executive vice president of design, hired me. I thought, isn't that odd, that the EVP of design hired me to do corporate strategy, instead of the head of strategy or the CEO? What I came to realize was that at Herman Miller, which is a fantastic design company that produced the Aeron Chair and other great products, Rob Harvey thought about strategy as a design challenge, no different than the challenge of creating the Aeron chair or the Eames lounge.

I was thinking about all these things as I was consulting for Procter and Gamble. A.G. Lafley became CEO in 2000 and appointed Claudia Kotchka as the VP of Design. He wanted to turn P&G into one of the world's great innovation and design companies. I became intimately involved with design strategy at P&G.

So with those four things - working with Barb and Bob; working with Chris Argyris, who saw all action as designed; working with Herman Miller, who saw that designing strategy is no different than designing products; and then with P&G, who saw design as integral to competitiveness - I came to view design thinking as not something just for designing products and services, but design thinking as a way of designing any decision.

DL: That is interesting, because that is what it comes down to - even when you are designing products, it comes down to designing a series of decisions.

RM: You also have to design decisions for strategy. For example, the two big questions in business strategy are "where to play" and "how to win". These are fundamentally design questions.

DL: If you take prototypical designers and compare them to prototypical MBAs, you would imagine totally different kinds of people, using different parts of their brains, whose talents lie on different ends of the spectrum. Designers often don't think in business terms, and vice-versa.

RM: I think that's right, and I think education plays a part too.

DL: Last year you said you were working on ways to merge design and business education - could you discuss that a bit?

RM: I came to the conclusion that I've got to figure out how designers are taught to think, with the belief that you could apply that way of thinking to business, productively.

DL: Designers and business people seem to be very different personality types. How do you think you can merge these two very different types of people, different types of thinking? At the IIT Institute of Design, we're trying to do similar things, though perhaps from a different angle.

RM: I think you are right, in the sense that if you arrayed business people and designers across an axis of types of thinking, the distributions of the two groups would be quite far apart. Visualize an x-axis, with absolute focus on reliability on the left and absolute focus on validity on the right. If you drew two bell curves, the center of the business person's curve would probably be on the left, toward the reliability end, and the center of the designer's bell curve would probably be on the right towards validity. That is, the mean for business people would be centered more on reliability and for the designers on validity. You will have some overlap of the two curves: designers who are reliability-oriented and business people who are validity-focused. So we have fruitful group in the middle where, I think, you can take business people and imbue them with design thinking skills, and make them more validity-oriented thinkers.

DL: So where would a person like Steve Jobs be on your curve?

RM: He would be at the extreme right tail of the business curve. What happens with Steve, something which has happened in the past, is that his organizations screw up because of not paying enough attention to reliability.

DL: At the Rotman School, some of the things that you are trying to achieve [by blending design and business education] will be based on how you market your program and how successfully you recruit certain kinds of people.

RM: Yes, absolutely. There will be a selection bias, where people on the left half of the business distribution, with great happiness and delight will choose another program rather than our program.

DL: That would be beneficial for you. As long as people know what they're in for, you are drawing upon people who already have a certain kind of inclination, rather than trying to force-feed a group that doesn't share the same point of view.

RM: That's correct. And that's basically part of our strategy.

DL: There's been so much written about innovation lately - it's really a hot topic in the media. But I've also read that human resources professionals still don't seem to value creativity and innovation skills, that innovation and design thinking are not valued by many businesses. Why are companies holding back, not embracing these new approaches to innovation as part of business strategy?

RM: I think it's more that creativity and innovation in general are more validity-oriented. As most corporations grow, they veer toward being reliability-oriented. So a validity orientation is kind of scary for a firm. I don't think they don't value these skills; it's just that they find them scary. As I wrote in my Business Week Online article, "Designing in Hostile Territory," designers and creativity-oriented people don't understand the degree to which they terrify business organizations, and so they get bad reputations in business organizations.

DL: Are the designers doing this with intent, or is it just the way they are, or the things they suggest, or the things they question? How are they scaring businesses?

RM: I wouldn't hold designers completely to blame. However, I think that getting back to Chris Argyris - that all action is designed - and I think that the way they get back at people who are not creative and who thwart their creativity is that they terrify them.

DL: I see, so in some ways it is their design arrogance.

RM: When someone is reliability-oriented and you say to them, "I don't care if your number-crunching system gives that answer, that's just wrong, wrong, and we're going to do it this way instead!" - as long as you do it that way, you're never going to get anywhere.

DL: And from the other side, the designer type sees the business person just present a solution like it came out of a black box and say, "This is the design, and that's just how it has to be." And business people, marketing people, sales people are always armed with reams of quantitative data to back up their decisions, although if you look closely a lot of that is quite subjective itself. But they do have these numbers, and designers typically don't have that kind of data.

RM: That's exactly right, it's a battle of the quantitative data, that is, measuring the measurable, whether it's useful or not, makes the reliability-oriented person feel secure. But it causes the validity-oriented person to say "Nah... I know that data and it's not that compelling." So you'll hear A.G. Lafley, the brilliant CEO of P&G who is highly balanced between valid and reliability, say, "When I look at our market research, I look at the verbatims [qualitative responses] to see if I can find any anomalies that will tell me something I wouldn't get from the overall quantitative results." Here you notice the verbatims influence the decision making. It's not just about the reliability with no questions. He's not going to ignore that 70% of the people said "this is a great product," but he's also going to take into account the subjective, non-quantitative, interpretation-intensive information in the verbatims.

DL: So it's about the qualitative data side.

RM: Yes, they will mix these two things together and come up with a decision that reflects both. Now the designers, they're inclined to say, unlike Lafley, "Arghh, that quantitative stuff is just crap, it's not relevant. What's relevant is what I think." And the reliability-oriented person just says, "I don't even know how to think about you!"

DL: You said that designers say "What I think" is the essential point. When business people have numbers, it's seen as hard data. But when designers say "I think, I believe, I feel," that's just not an effective way of doing battle with reams of quantitative data.

I understand that the Rotman School has been working with the Institute of Design and Stanford University to develop workshops for companies in new methods of research, analysis, and business planning. How did the first workshop go, and what were the reactions of the participants?

RM: The workshop went very well and people reacted to it very well. That is in part because we approached it as a design challenge. You design an intervention to overcome the problem of validity and reliability, and couch what you're saying in terminologies and thinking that are as reliability-oriented as possible. So that's what it takes to design in a hostile territory. Designers want to have a really hard design challenge, to design the object or a service. But what they should view as the really hard challenge is not designing the object, but designing the intervention that will cause the object to be accepted in the organization.

DL: How to actually get it implemented.

RM: That's the really big design challenge. The other ones are minor by comparison, but designers tend to avert their eyes from the hard challenge and are happy to throw their arms up and say, "I'm working for a Philistine/moron/idiot!"

DL: I think it again goes back to that ego question, who are they designing for? They are designing for themselves. What sort of research that they do? They do research to support their idea, rather t han going out to find the real problems and real needs. If they did better research, they would do a much better job.

RM: You got it.

DL: How did the Rotman School / Institute of Design / Stanford team work together at the workshop?

RM: It worked well. I think actually the reason we like working together is because we are all in the middle [of the reliability-validity curve]. Patrick Whitney and David Kelley are at the left tail of the designer distribution, and I'm at the right tail of the business distribution, and so we find ourselves happily in the middle, with slightly different backgrounds but understanding each other very well. I think it's a marriage made in heaven. And we don't particularly present it as interdisciplinary - it's just Designworks: here's how you think your way through strategy the way a designer would.

DL: What are the skills that are going to be most important in the near future for this kind of thinking?

RM: I think heuristics, and not algorithms. The notion that you can make lots of money by memorizing and deploying an algorithm, I think those days are gone.

DL: What kinds of characteristics are important for the designers and business leaders of the future?

RM: There's comfort in knowing a body of knowledge and having a set of skills and sensitivities that enable you to get to a refined and excellent answer to a complex design problem. But it is not a routine algorithm in which you can do ABCD and out pops the answer.

I think that in terms of the modern business economy, my job is to energize the skills and the sensitivities that will enable people to look at fuzzy, complicated, interconnected and ambiguous situations, and come up with a more fine-grained view that leads to a good solution. And that's an artistic sensibility actually.

DL: Is the need for these kinds of skills something new? Are there market forces that are making it more important to think this way?

RM: I think it's just becoming more obvious because of a couple of things. The relentless march of computerization and Moore's Law has given over to computers all the algorithms; and then there are China and India, where all the algorithmic things that still do require arms and legs are being done at a tenth the cost of North America, Western Europe and Japan. It's become more obvious that you're not going to make a high standard of living by operating algorithms.

DL: Probably there is some role for the ever-expanding network of information afforded by the Internet and information technology in this - building up social networks and the ability to share the information, even to the send your algorithmic work to India or China.

RM: Absolutely. The encircling of the world with fiber-optic cable has certainly helped accelerate this. The other thing that is happening is that industries and the buyers are getting very sophisticated, and everybody wants something more artful than not. Not all of them are going to be able to afford it, and a lot of them may lack the sensitivity to judge the difference. But think about the dominant wine that was consumed in America only 20 years ago. I'm sure by volume it was Gallo Hearty Burgundy, sold in gallon jugs.

DL: And now it's Yellow Tail.

RM: Yes. People have gone up in the sensitivity scale and are making finer and finer distinctions, which are important features of artistry - being able to distinguish between something good and crap. One of the most distinguishing features of an artistic mind is that you cannot convince an artist that something they think is crap is good. They have an inviolate crap/non-crap line.

DL: What's the last point that you want to leave us with?

RM: I think the most interesting frontier in design is the design of decisions. That's what I'm most fascinated by. How do you think about designing our important decisions?

Roger Martin is Dean of the Rotman School of Management at the University of Toronto. He was formerly a Director of Monitor Company, a global strategy consulting firm based in Cambridge, Massachusetts. During his 13 years with Monitor Company, he founded and Chaired Monitor University, the firm's educational arm, served as co-head of the firm for two years, and founded the Canadian office. His research interests lie in the areas of global competitiveness, integrative thinking, business design and corporate citizenship.

Doug Look completes his Master of Design Methods at the IIT Institute of Design in 2006, where he has been concentrating on developing user-centered tools and methods for research and analysis. Before coming to ID, in his role as Senior Product Manager and Design Strategist at Autodesk, Inc., Doug led efforts to develop and bring to market two new Computer Aided Design software applications. As a licensed architect with over 20 years of experience, he has sought ways to implement digital technology solutions to improve work flow processes while respecting traditional methods and practices.

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