How to Design for Outcomes

NeoNurture Incubator

It’s always a bit dangerous to be “inspirational.” The problem is that inspiration doesn’t always lead to action – and that’s what we ultimately want.

This is a lesson that Timothy Prestero and his organisation Design that Matters learned painfully.

In 2010, DtM came out with an incubator designed for use in developing countries that won a ton of awards. Their strategy was that they would use the awards and the attention that they generated to inspire manufacturers to make their incubator.  Prestero tells the whole story in this excellent TEDx talk:

I first heard about the DtM incubator in Steven Johnson’s TED talk – still one of my favourites. The problems that they were solving were: many premature babies born in less-developed countries die because they are not kept warm enough over the first few weeks. This problem is relatively easily solved with an incubator. However, throughout much of Africa and Asia, the incubators that are available are older ones donated by Western hospitals.  They require a great deal of care and maintenance, and without a support infrastructure in place to keep them running, they quickly die – and become useless.

DtM’s solution was brilliant – they made an incubator out of car parts. Because they used parts that are widely available, the unit is easily repairable. And it’s cheap and easy to build.

NeoNurture Incubator

The solution is so simple, so elegant, that everyone went nuts for it.

Except for manufacturers.  Despite all the awards, DtM couldn’t find anyone to build their incubator.  So one were ever used.

This is a great example of a common innovation problem: we not only have to solve a customer need, but we also have to do so in a way that makes business sense.  Ideas that do both are what Mark Payne calls two-sided solutions in his book How to Kill a Unicorn.

One of the case studies that he talks about is work that his firm did for a bank that was trying to get existing customers to buy more products from them, rather than spreading their banking across multiple banks.

To be successful, the innovation we’re out to create has to thread its way though two needles at once. It has to transcend consumer resistance with a value proposition that makes consolidating assets under one roof both rationally and emotionally attractive. And it also has to thread a second needle, carving its way through the IT system issues, the siloed P&L structure of the different business units, the executive incentives, and the realities of the bank rep on the floor.

The DtM incubator only got through one needle – the user needs.  It failed to address the business needs – something that they have corrected with their next product.  The Firefly treats infant jaundice, and it is already widely in use.

The difference this time is that instead of designing for inspiration, they designed for outcomes. They didn’t just design for the customer, they also designed for the business. Customer needs and business needs are not mutually exclusive – you can only win if you address both.

Here is how Peter Drucker explains a similar false dichotomy in his classic book Management:

One important advance in the discipline and in the practice of management is that both now embrace entrepreneurship and innovation. A sham fight these days pits “management” against “entrepreneurship” as adversaries, if not as mutually exclusive. That’s like saying that the fingering hand and the bow hand of the violinist are “adversaries” or “mutually exclusive.” Both are always needed and at the same time. And both have to be coordinated and work together. Any existing organization, whether a business, a church, a labor union, or a hospital goes down fast if it does not innovate. Conversely, any new organization, whether a business, a church, a labor union, or a hospital, collapses if it does not manage. Not to innovate is the single largest reason for the decline of existing organizations. Not to know how to manage is the single largest reason for the failure of new ventures.

He’s describing the process you need to come up with two-sided solutions.  You need the great new ideas, but you also need the execution skills to pull off the ideas.

This is why business models have parts that focus on both internal processes, and product-market fit – you need to have both.  Organisations often focus on just one side or the other.  The way to design for outcomes is to address all of the business model canvas, not just one side.

Payne’s book mostly describes working with companies that are using tools like design thinking to support innovation.  The flaw that he identifies is that they start looking at the business side too late in the process.

My experience has been more with organisations that look mostly at internal capabilities, and they start thinking about customer needs too late in the process.

In both situations, the solution is to build a discipline that looks at both sides of the problem right from the start.

Prestero’s solution is to keep the outcomes you’re looking for in the front of your mind all the way through the process.  Your great ideas are useless if you don’t make them real. If we really want to change the world, we have to focus not just on the change we want, but on the often dreary managerial tasks that must be addressed to realise that change.

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

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