How to Turnaround a Business through Design Thinking?

In my last blog I illustrated the 4^th principle of Design Thinking (Observe the whole and not the parts) through a technical problem. In this post I am going to illustrate the same principle but through a case study from the business world, which I personally dealt with. However, the other principles of Design Thinking would be implicitly demonstrated too through this story.

 

Whether a company would live long or die prematurely would depend greatly on the ability of the managers to solve business problems – not through help of models but by using the principles of Design Thinking.

 

Why is that?  Unlike mathematics problems, business problems are such where everybody wants an answer but is not clear as to what the answer might be or how to reach the solution.  

 

For example, if someone asks us to find out the square root of 31. 5 we know for sure that by applying a given method or model we would find out the desired solution quickly. This is what most of us try doing when we are confronted with business problems. We desperately search for a method to find the answer. But unfortunately, this style of finding a solution to a business problem simply does not work.

 

Then what can managers do?

 

Most business managers try solving their business problems thru gut feelings, experience, common sense or plain logic or they try applying solutions that have worked earlier. They may also try applying solutions or methods they have only heard from others or read in some book or journal. They try to implement some system to bring about some order into the chaos that already exists.

 

Alternatively, they continue to do what they have been doing with perhaps additional emphasis on ‘harder work’, ‘better work’ or ‘smarter work’ or ‘closer and more stringent supervision’ or thru coaxing, manipulating, reward or punishment. But by its very nature, business problems are always tricky and are not so amiable to such treatments. As a result business problems remain unresolved and companies fail to gain dramatic  improvement in performance  – essential to realize their well thought out competitive strategies.

 

Even tried and tested techniques like brainstorming, field force analysis, failure mode effect criticality analysis have limited value in solving business problems. These may generally fix something that is broken or improve it marginally. Using such methods is a way of simply trying to solve the problem by specifically trying to look at some issues or parts of their system.

 

But dramatic improvements never happen. Why is it so?

 

This is because we sometimes misunderstand the term business problem solving. We may think that we have solved a problem only to find that it is either a partial solution or we have landed up with a bigger problem or we have created many new problems. In short, we did not get the benefits that we initially thought we would.

 

The objective of business problem solving therefore is to solve a problem permanently, gain dramatically without creating any adverse side effects and help people do their job better. Apparently it is a tall order. But it need not be so as the story would demonstrate.

 

The trick is to observe the system in totality and find out the present imperfections within the system, which interact to create the problem. Once such imperfections are found we then creatively find ways and means to eliminate such imperfections for good to restore or bring about the needed balance in the system and boost business results by leaps and bounds. This method of solving business problems comes under the broad umbrella of Design Thinking. Specifically, I call it the ‘Theory of Imperfections’.

The application of Design Thinking principles is varied. It can not only be used to solve tricky business problems but also be used to transform organizations under any business conditions, improve any individual processes for performance, quality improvement, product development, knowledge development, etc.

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The Story or the Case Study

 

0^th Principle of Design Thinking – The Context

 

A company ABC (name withheld for confidentiality) operates in India to produce plastic molded parts. The monthly turnover of the company is say X units (in money terms). The company is 12 years old. The technology has been imported from Germany. The market is stable. But there has been a slow build up of order backlog and the backlog at the present rate of production would take around 11 months of sustained production to complete execution of the orders.

 

This generates a business problem. The marketing department is unable or unwilling to book any more orders since they would not be able to keep delivery commitments and the company would incur late delivery charges. At the same time since orders can’t be executed in time the company suffers from severe cash flow problems.  60% of the raw material is either imported or has to be purchased against advance payment. Moreover, raw materials make up for 60% of the product cost. Machine availability varied between 80 to 90%. Management has not been able to pay dividends to its shareholders for the last 4 years. At present, it does not have much liquidity to buy any additional machine. The banks have refused to lend money. If this state continues the board has even contemplated to close down the factory and sell off the company or its assets. The 63-year-old Chairman of the board is a very experienced and knowledgeable hands-on technocrat in the country with a MBA degree from the best business school in India.

 

1^st Principle of Design Thinking -- What are the Assumptions? Challenge them!

 

a)       If the production process can be speeded up the orders can be executed in time and that would improve the cash flow of the company.

b)       The management is unable to increase the price of the product owing to competitive pressures.

c)       The labour union does not have any incentives for higher production.  The union is not pro-management but might not offer too much resistance to improve productivity if proper incentives are paid.

d)       If the management fails to step up production then the loss and subsequent closure of the factory is imminent.

 

2^nd Principle of Design Thinking – The Constraints

 

a)       No liquidity

b)       No money to buy new technology

c)       Bankers refuse loans

d)       Machine availability is low

e)       Competitive Pressures are high

f)         Talented fresh blood refused to join the company.

 

How the company wanted to solve the problem?

 

Management thought a lot on traditional lines and decided to initiate many actions to improve the situation. The actions along with the results are listed below.

 

a)  Introduce productivity tools to eliminate manual operations. This was carried out in a systematic manner. However the turnover of X units of money per month remained the same. Delivery backlog remained at the previous level of 11 months.

 

b)  Get higher productivity die for faster processing. The die was designed, manufactured and fitted. The speed of processing improved by 20 to 30%. However, no significant improvement in productivity took place. Monthly turnover remained at around X units with estimated backlog at 11 months.

 

c)  Get an industrial engineering study done – time and motion study. This was done No improvement in productivity or reduction in backlog showed up.

 

d) Offer financial incentives to the workers for higher productivity. This was instituted with no visible improvement in productivity or order backlog.

 

e)  Introduce system approach -- TPM – the Japanese way. It was thought that this takes time to implement to get appreciable results (minimum 3 years). Hence the idea was dropped.

 

f)  Buy additional machinery. This was not done for want of funds.

 

g) Reduce manpower Could be done marginally since the company was already operating with the bare minimum manpower. No improvement seen or felt.

 

h) Reduce cost. Some improvements could be done on raw material. The effect was marginal and not lasting since price of raw material went up offsetting the advantage.

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So we see that traditional thinking did not help the company achieve its business objectives and improve its bottom or the top line. More than two years of valuable time were wasted experimenting with proven ideas.

 

I hope that the Paradoxes (3^rd Principle of Design Thinking) clearly stand out for everyone to see. 

 

Now let us see what happens when we apply the 4^th Principle of Design Thinking – Observe the System as a whole & not in parts -- to this tricky problem.

 

But how does one see the whole in Operation Management. There are many ways but one of the easy ways is to see the 3 fundamental things, which are the following:

 

a) The flow of materials – how the materials move from one place to another – how smooth it is.

b) The flow of information – what type of information flows across the organization and how, what is the speed of the movement, how many routes does it take, what is the quality of information, etc…

c) The flow of energy and signals – How much energy is added at different work stations, what is the transformation at each station, how much is wasted and how is it wasted, etc…

 

Basically, I looked at the different types of ‘flows’ and their interactions that were taking place all over the organisation to keep the operation alive and productive. 

 

On doing this, I quickly discovered that the ‘imperfections’ lay in the information and material flow.

 

As for the information flow a strange thing was happening. All bits of information in the plant were sort of looping around a *centre* repeatedly before these achieved their intended purpose. This was causing delay at every stage of the internal decision making process and with time, these delays were stacking up one upon other to form ever increasing delay loops all across the operation. This was getting reflected in the productivity, poor availability of the machines and order backlog.

 

The material flow problem looked something like this. Large quantities of materials were stacked across different work stations. This was because they wanted to process as many orders as possible in parallel mode. That is simultaneously process two or more orders. Common wisdom would say that it would speed up the production process – just like modern computers do – parallel processing. But instead of speeding up the process it was delaying the process since every time a new order has to be processed the machines are to be set differently, different dies were to be used. And all these operations, seemingly small, were cumulatively consuming a large amount of time. 

 

5^th Principle of Design Thinking – Making intelligent choices

 

To fulfill this Principle is relatively easy once we successfully negotiate the 4^th Principle.  The choices that lay before me were clear. I now had to redesign the system to eliminate the system imperfections as much as possible. Accordingly, the information flow was redesigned and the production scheduling was also redesigned. It was redesigned in such a manner that it was easy to do (6^th Principle of Design Thinking -- Algorithm) and day to day decision making at different stages of the operation would be extremely easy (7^th Principle of Design Thinking – binary code).

 

Results of the application of Design thinking to solve this tricky problem:

 

1. Monthly turnover increased from X units (of money) to 2X units in just one month.

2. By the end of the seventh month from implementation the turnover increased to 3X units per month

3. The order backlog of 11 months was wiped off within the first 4 months of the change.

4. Cash flow problem vanished.

5. The company made a profit for the first time in the last 4 years and could pay dividends.

6. The company could lessen the manpower and still work more effectively.

7. The sales people picked up their bags again and started connecting customers with the new found confidence for fresh order.

 

How did this all happen?

 

The only miracle that was needed was to look inwards and understand the System as a whole as opposed to seeing the problems in parts and blaming this or that. And that is done by successfully applying the 8 basic principles of Design Thinking.

 

But this is not the end of the story. The system would again change with time and a new set of problems would appear. When that happens we would again have to look at the system with fresh eyes and not assiduously stick to something that worked well for us. The *brilliant* solutions of today would be outdated tomorrow.

 

Acknowledgement

I gratefully acknowledge with thanks the permission given by Mr. Madan Mohanka, Chairman, Tega Industries Limited to publish the story of one of his subsidiary plants where the Principles of Design Thinking were applied to solve the tricky problem to turnaround the organisation. You may reach him, if you like, at

madan.mohanka@tegaindustries.com

 

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Illustration of the 4th Design Thinking principle -- Zoom Out for better view.

In my last post I described the basic principles of Design Thinking.

In this post I would like to illustrate the 4th Principle, which is a bit difficult to master: -- Observe the Whole: Think about the Whole (Thinking by observing and zooming out -- physically and psychologically).

This to my mind is the most important step in problem solving through Design Thinking and might challenge even the most skillful of Design Thinkers. Observing the whole would essentially mean to have a system view of a problem in totality. Why is that? This is because different parts of the system interact to produce the problem and until and unless we somehow manage to find the underlying relationships between different parts of the system 'wicked problems' would remain wicked and unsolvable. 

How do we do that? It is easier said than done. But let me illustrate the principle through an example to show what is involved at this step.

A Wicked Problem: The Story of the instrumentation failures

In a certain petrochemical plant in the Middle East I was once invited to solve one of the most nagging problem of the plant. In a year more than 1200 instrument diaphragms failed during operation leading to frequent stoppages of the plant which affected the operation of the process plant severely. One can appreciate the losses involved when a process plant stops even for a short duration. However the problem remained unsolved for 4 years before I visited them. 

What was happening?

These instruments were pneumatic that means air was needed to operate them. The diaphragms of these instruments were made of rubber. And these cracked on one side (the side receiving the air) in a random fashion. Naturally, people thought that the failure has something to do with the quality of the rubber. And they naturally blamed the manufacturer. Therefore, they concentrated on improving the quality of the rubber. They discussed with the suppliers and then they made many changes. The idea was to provide the best possible rubber so that the failure could be arrested. But it did not work. The number of failures stood at 1200 a year. Notice that the focus was on the part of the system (the rubber diaphragm) rather than on the whole system. 

What happened next?

Trying to see the whole system at work by 'Zooming out from the part'.

Step 1: Step back a little..

By stepping back we would like to see the system. As soon as we step back a little we see that all these pneumatic instruments were connected to air driers. An air drier dries up the air that is coming for a compressor so that the moisture in the air does not travel to the instruments and damage them. This incidentally was a very well designed and also very costly air drier. We checked the performance of the air drier and found that everything is in order -- the drier is operating as it should. Nothing wrong. So, step back further...

Step 2: Step back further

As we step back further we then notice that these instruments and the air drier are connected to a very heavy duty Rolls Royce turbine compressor -- again a fine and costly piece of equipment. This turbine compressor had a very funny problem, which I would discuss in another post. But for now all that I observe is that this compressor is sucking air through a suction pipe that is turned towards the ground (the compressor was placed at a level) and the opening of the suction pipe was about 5 feet off the ground level. So what? It does not tell me anything. Hence step further back...

Step 3: Step further back

Now I start noticing different things. Beyond the boundary of the plant on the southern side I find a sponge iron plant running. I always hate to go inside a sponge iron plant -- it is extremely dirty and polluting. So, as usual, this plant too was spewing dirty red NOx laden smoke out of its chimneys. Then I look towards the western side I see the vanishing outlines of the clear blue sea. And I also feel the heat of the Middle East sun. Story goes, that in summer the temperature actually soars beyond 51 degrees Centigrade but the official figure never goes above 49 degrees C since once it crosses that limit a holiday has to be declared. Unfortunate employees -- they miss out earning for free on forced holidays. Time to put things together.

Step 4: Putting things together.

Having come this far  out (physically and psychologically) from the humble rubber diaphragm I almost forgot about the poor creature. Now I have more or less seen the system. What does it comprise of? 1. Rubber Diaphragms 2. The instruments 3. The Air driers 4. The Turbine Compressor sucking air practically from the ground up 5. The polluting sponge iron plant 6. The beautiful sea 7. The extremely hot sun.

So how do I make sense of all these put together and how do they all relate to the problem at hand? Let us see whether we get any clue by putting all elements of the system together. Let us start by putting elements 5, 6, & 7 together. What happens?

Step 5: Putting points 5 + 6 + 7 together

When NOx + Strong sunlight comes together it produces ozone -- a molecule of which has 3 oxygen atoms compared to the normal oxygen molecule which has 2 atoms. Hence Ozone is heavier than normal air. Note that the sea also produces ozone. So when we combine 5, 6 & 7 together we have a lot of ozone in the atmosphere. And wind in these latitudes flows from the south. So what? Hence let us add elements (1, 2, 3 & 4) to the elements (5, 6 & 7) and see what happens -- that is all the elements put together.

Step 6: Putting 1, 2, 3, 4, 5, 6 & 7 together -- everything put together.

We understand that ozone is heavier than normal air because of its molecular weight (having 3 oxygen atoms instead of 2). Hence ozone would always cling to the ground and studies indicate that the ozone layer normally exists up to 4 feet above the ground. Ah! Ah! So the compressor suction pipe which is around 5 feet above the ground is sucking in a lot of ozone into the system and an air drier (element 3 in the system) does not separate ozone -- it only takes out the moisture from the air. So what now comes to the instrument (element 2 in the system) and the rubber diaphrams (element 1 in the system) is air highly laden with ozone. We also know that ozone and rubber (of any kind) are strange bed fellows -- like putting a snake and a mongoose together. The ozone in turn cracks up the rubber (called 'crazy cracks' something like the uncertain steps a drunkard would take from the pub to his home). You can now understand as to why we found the damage only on one side of the diaphragms (the air side). Once the cracks develop to a certain extent the instruments fail randomly. Now we get the answer, when we considered the total system as a whole.

The beauty is that all parts of the system are interconnected and interdependent to produce the 'wicked problem'.

Step 7: What is the solution?

You have by now guessed the solution. Turn up the suction pipe so that instead of sucking in a lot of ozone from the ground it sucks in normal air (desert air in this case). A simple but elegant solution that does not need a lot of effort and resources nor continuous effort to maintain. 

The client did exactly that and what was the result?

Six years have now passed -- not a single failure of the troublesome diaphragm. From 1200 failures a year to Zero failure a year. The case is solved once and for all.

Hope I have been able to illustrate the 4th principle of Design Thinking -- Zoom out (physically and psychologically) to view the whole system rather than focus on parts of the system.

The beautiful picture (thanks to Trichur) would help one to visualize the beauty of the Zooming Out principle.

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General Principles of Design Thinking

In response to my previous post there were a few requests to list down the general principles of Design Thinking as applicable for organizations and individuals.

I shall attempt to do so and then illustrate the application of these principles through later posts. The order of writing down the principles one after the other has a logic, which I have found convenient to apply when solving problems. It is always possible to have minor variations in the order but this is the general and natural progression of the principles, when applied to solving live cases (any real case for that matter -- organizational, product, processes, services, knowledge, quality, marketing, self development.....).

0th (Zeroth) Principle: Similar symptoms: Different Problems

All problems are contextual and therefore unique.

It means that even if the symptoms of two similar looking problems might appear to be the same the underlying reasons might be completely different thereby leading to different solutions. For example, we might have a headache for various reasons like -- fever, exhaustion, digestion problems or from cold. While the symptoms appear similar the underlying reasons might be different in each case and therefore the treatment of the problem would differ according to the context and so would be the solutions. Therefore, all problems are to be looked at within a given context. As soon as the context changes so does the problem.

1st Principle: Challenge the assumptions: Start with a Zen mind

Quite often we think that we know the solution to a problem and go ahead in implementing the solution without having a second thought. In most cases it turns out that the solution was wrong and the nagging problem persists or repeats itself. This is a social waste of human capital and the society at large suffers. Why does this happen too often? This is because our individual perceptions are stored in our mind as experience, which we think of as very real and true. Why does this happen? When faced with a problem the mind plays the trick by bringing out the stored perceptions which we wrongly describe as experience or knowledge. It is nothing but a perception stored in the mind at some other point of time. It is at times useful like running away from fire or a tiger but not very useful to solve nagging problems. Hence the necessary step is to challenge such perceptions (or assumptions) and start looking at a problem with a Zen mind (or a beginner's mind). It does not matter how much experience one has -- new links are to be formed to understand a problem deeply. And this can only happen if we start looking at things with a Zen mind.

2nd Principle:Work within Constraints: Go out of the box

It is bit paradoxical: Greater the constraints: better are the solutions. It means the beauty or elegance of a 'solution set' increases non-linearly with the amount of constraints. This is a mental discipline any Design Thinker must have. If necessary it might be a good idea to self impose as many constraints as possible. I think that the best innovations happen under an atmosphere of constraints. It necessarily means that with more constraints a problem solver is forced to think harder but 'out of the box'. It is sort of funny, that the outlines of this box are made up of all the 'knowledge' the problem solver had gained through solving previous problems. S(he) has to break out of this box to find new (that is dissolve his/her previous knowledge) to find elegant solutions to the problem, which would further enrich him/her with new knowledge and concepts. Hence a problem is not only defined by its operating context but also by the constraints imposed on the problem solver.

3rd Principle: Create the Paradox tree: Plant the Mystery

Coming through from the Zeroth Principle to the 2nd Principle we are now in a position to create a Paradox Tree -- that is creating a set of interrelated paradoxes (you can find an example in my blog: (http://dibyendu.posterous.com/improving-social-well-being-and-competitive-e). Once done we now completely define the mystery of the problem to be solved.

4th Principle: Observe the Whole: Think about the whole (Thinking by observing & Zooming Out).

I feel this is the most difficult and critical part of the whole thing (Thinking by observing & zooming out) that might put to shame even the best Design Thinkers in the world. It is in this part that a problem solver gets the real idea of the inherent imperfections in the system that are preventing the system from performing at a desired level and in the desired manner. Not surprisingly therefore, this part is called the heuristic part. Because no one exactly knows how the Design Thinker gets the idea of the inherent 'system imperfections'. But we need not unnecessarily lose hope once we understand that any system is a web of interrelationship between the different parts of the system and one has to carefully understand the essential relationships operating at various levels and at different strengths and probabilities. Soon we get to see the imperfections -- 'weaknesses' of the system where it needs to be corrected. System Thinking (from whole to the parts not parts to the whole) and a foundation of Chaos help one to successfully negotiate this vital step in the entire process. There are also some shortcut heuristic methods that help at times. But the best can be only achieved through System Thinking; its principles, relationships and the laws of how these relationships would change or transform over time. However, the validity of the imperfections are to be tested. The test is very simple enough. If the set of imperfections when connected properly helps us to answer the set of paradoxes or the paradox tree that we built through the application of 3rd Principle then the discovered set of system imperfections is correct and we may proceed further.

5th Principle: Create & Choose responses that eliminate, avoid, or inhibit the set of imperfections.

The idea is to generate multiple responses to the discovered 'imperfections' and then choose the most appropriate ones that eliminate the imperfections or avoid them or inhibit them from playing in the system. This is 'hand-on Design Thinking. A variety of methods can be used here -- Visual thinking, Verbal thinking, Thinking by drawing & painting, Thinking by doing, Thinking by playing around, Intuitive thinking, Brain storming (various), Body storming, Dialogues, Slow Thinking, Imagining, Inversions, Bio-mimicry, Thinking through Story telling, Prototyping, Videos etc.. .. Once the ideas are in place, it then becomes a matter of choice as to what we choose for the final application. The set of solutions must pass the test of being appropriate, cost effective, viability (can be done with the least possible effort, time and resources to turn the ideas into reality). This is solely done through Analytical Thinking. As in the 4th principle here too it is a combination of both right and left brain thinking. 

6th Principle: Do and Check

Here the emphasis is on implementation of the selected ideas either as prototypes (if too risky) or direct implementation (trails). The basic idea is to monitor the performance of the design thinking. If it turns out to be OK then the ideas are accepted firmly. If not, then one has to go back and either revise the solutions or find new ones.

7th Principle; Convert into Algorithms & Binary Codes

That is: make it simple for everyone and keep it simple for everyone so that the newly designed or re-designed systems work smoothly as desired without the functionality being impaired in any way and people find it easier to operate. Saying differently it translates to the mantra: MISS (Make it Super Simple) KISS (Keep it Super Simple). Then only it has a chance of being accepted by the general public for its use and benefit.

The beauty however is, as I have seen, that once done correctly, it gives organizations benefit for years to come. It needs no frequent 'tweaking around'.

These are the 8 basic principles that are always applicable and are necessary for individuals and organizations to either learn or implement so as to survive and be successful in turbulent chaotic times.

But that is only a small part of the bigger story that unfolds. It improves the society in more ways than one. And to my mind that is the true purpose of Design Thinking and its applications that might be applied to any field of human endeavor. Isn't that wonderful. But to achieve that we must have new thinking within existing organizations and people armed with new thinking skills to help that transformation happen as and when needed.

 

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Getting to The Untapped Knowledge in Organizations | 15inno

The problem is, the knowledge management databases usually become so large and unwieldy that they are unusable.  I can attest from experience that these systems often end up becoming digital piles of untapped information.  Finding what you want can be like finding a needle in a haystack.  Or, more accurately, it is like finding a specific needle in a stack of needles.

What’s the solution?

You might call it, “reverse knowledge management.”

Instead of posting knowledge which sits passively in a database waiting for someone to find it, you post your question to your “community” so that it can be answered at the time of need.  Of course, asking the world for an answer to your question is not new.  Yahoo/Google Answers did this a few years back.

via 15inno.com

Knowledge moves: Not in books.

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Improving Social Well Being & Competitive Edge through Design Thinking.

Design Thinking is a way of solving problems -- from simple to very wicked problems. Not the usual way we take to solve problems, which is mostly analytical. It uses the techniques and methods used by good Designers and artists. Therefore, it uses skills and faculties of the human brain like like Visual Thinking, Thinking by doing, Imagination, Intuitive Thinking and also Analytical thinking. That means that the approach attempts to utilize the whole of the brain rather than a part of it. Usually we use the left side of the brain (the analytical side) for normal day to day activities. Though useful to help us carry out our daily activities with ease it does not help us come up with very bright ideas. So, the basic skill that is needed is to see and treat a system as a whole and then come to its parts if necessary. By doing so, it attempts to see the relationships and the effect of such relationship between different portions of the system. Never the other way round. Why is that? Because by improving a part of the system the system does not improve.

However, seeing systems in this manner is a difficult task. Because it involves the whole brain -- both the right and the left. In general, most people tend to use the left part of the brain more than the right part. And as it is true for any part of the human body -- a part that is not used for a long period of time atrophies or loses its use. Our long years of education system reinforces this behavior since it relies on the accuracy and repeatability of the left brain. Hence over time the left becomes much more powerful than the right. Though it is difficult to believe, the right has tremendous power to change our destinies but is kept safely locked.

This is not to say that we don't use our right brain at all. Everyone has a certain amount of right-brain intuitive thinking? In fact there is a normal distribution curve that would say 10% have a lot of right-brain activity, 10% have very little right-brain activity, with the remainder somewhere in-between. To balance both parts of the brain would be the natural objective of anyone striving for growth, development and success. Herein lies the challenge, which can possibly be squarely met by adopting the principles and philosophies of Design Thinking, which to me,as a way of defining, is to bring about the balance of the left and right brains.

However, by using a team based approach that includes an experienced and naturally gifted designer the overall impact can be better. Adding imagination, creativity, inspiration from other industries, promoting innovation, and supplying a design process (implicit and explicit) alongside the internal knowledge of a client team will bring additional dividends that cannot be gained with a DIY approach, however much participants are encouraged to think "outside the box" for themselves...

Let me illustrate the philosophy and the principles of Design Thinking and its effect on an organization and society through a real life example.

A certain well known company (MNC) makes a variety of shampoo product. What they realized was the majority of the poor population in India can't afford to pay for the relatively costly shampoo bottles (large sizes). To them it makes business sense to manufacture and sell shampoo in bottles. It brings down the cost of manufacturing and logistic and thereby improves the bottom line. The company challenged this assumption (the 1st Principle of Design Thinking) and thought about how they can reach the rural poor with their product. They went for making small packets (sachets) containing 8 ml of the product and sold them dirt cheap at Re 1/- a packet. Soon they were earning more profits and capturing more market space with this new thought.

The problem however, was that demand started to grow almost exponentially. The company did not have the required infrastructure to meet the growing demand. They however thought about the constraints (2nd Principle of Design Thinking) and decided that they possibly can meet the growing demand if only their individual machines can deliver 80 sachets per minute rather than 60 sachets a minute. They tried it out and soon found that it became impossible to operate the machine. The machine vibrated too much from a level of 25 microns it went way above 160 microns. Such harmful vibration was damaging other machine parts and the downtime of the machines increased leading to lower productivity. 

In addition to this specific problem they discovered that they had other problems too, which were:

a) Variation in product quantity. Each sachet must contain 8 ml. However, for some unknown reason the quantity varied from 6 to 8 ml. The customers might feel cheated for having less quantity for what they pay.
b) Product wastage -- 5% of the product was being wasted in the machine
c) The sachets burst at the seams -- leading to product loss, product complaints and product recalls from their wholesalers
d) Worker's union refused to increase the productivity since they were not promised any extra benefit for doing so. They demanded a raise in their productivity linked bonus. However, they would not mind if the company purchased new machines that were designed for 80 sachets per minute.
e) The company did not like to invest in new machinery since the machinery had to be imported and the cost of import did not justify the investment.

This now brings up a number of paradoxes (a set of Paradoxes): (The 3rd Principle of Design Thinking)

1. Running the machine at higher speed: Lower vibration
2. Buying new machines: Without increasing infrastructure
3. Buying sophisticated machines: Lower costs
4. Increase production: Lower the rate of wastage
5. Increase production: Without paying extra as production bonus to workers
6. Increase speed of production; Better heat sealing of the sachets.

The paradoxes create the mystery that is now to be solved through Design Thinking

To do so, we now need an algorithm (4th Principle of Design Thinking) to solve the mystery.

How are we to do this. We need to Observe the whole system rather than concentrate on parts of the system or concentrate on each individual paradox. It makes sense when we try to look at the whole system by putting all the paradoxes together. It then makes meaning. (5th Principle of Design Thinking). The objective of the observation method is to find the inherent 'IMPERFECTIONS' of the system that produces the set of paradoxes.

The next step is to come up with suitable response against the 'IMPERFECTIONS' discovered through the 5th Principle. The response must be such that all the paradoxes are handled in one go. Leaving out one of them does not provide the answer. (6th Principle of Design Thinking).

Having found suitable responses the next step is to convert the responses to digital codes (binary codes) so that the responses can be implemented, everyone can understand them and anyone can then operate the new system. (7Th Principle of Design Thinking). At this stage involving people becomes necessary.

In this case the results of such Design Thinking turned out to be as follows:

1. The new machine could turn out 80 sachets per minute against 60 sachets that were produced earlier
2. In spite of the machine's higher speed the vibration level was almost imperceptible -- down to 6 microns (even the operator could not feel it)
3. Wastage came down from 8% to 0%.
4. Variation of quantity in each sachet was 0%. Every sachet contained the desired 8 ml of product.
5. Bursting of the sachets at the seams reduced to zero. No product complaints and recalls.
6. The new systems were created in house at 1/8th the cost of the original imported machine.
7. No new infrastructure created. Older systems replaced at fractional cost.
8. Improved productivity without paying additional production linked incentives.

Notice that the response solved all the problems in one go. The whole system improved in one shot. It was not an incremental affair or a matter of continuous improvement or continual improvement. Everything happened in one go.

This is the power of Design Thinking and its principles. It improves the social well being, reduces environmental problems, improves social wealth by improving productivity and builds new competitive edge for an organisation that can't be copied by competitors.

You may like to watch a short (30 sec) video of the main issues here:

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Shukla Bose: Teaching one child at a time | Video on TED.com

Shukla Bose: Teaching one child at a time | Video on TED.com

Design Thinking, User Experience and Sustainability all rolled into one.

A fine example.

Kevin Bales: How to combat modern slavery | Video on TED.com

Kevin Bales: How to combat modern slavery | Video on TED.com