Applying Design Thinking to Digital Transformation Theory and Practical Lessons

In recent years, ‘Design Thinking’ term has attracted a lot of attention from researchers and is being applied by many companies. IBM applies design thinking to train employees (Eickhoff et al., 2018). Many companies listed as Procter & Gamble, Deutsche Bank use design thinking to cope with the rapidly changing business environment, where agile behavior, new technology adaption is necessary to survive (Leavy, 2010; Vetterli et al., 2016).

Exploring the concept of “Design Thinking”

Design thinking contributes to important changes in human-centered problem solving, which seems to be an option worth considering in order to stay relevant and ahead of the competition. For example, Airbnb innovators are constantly searching how to generate reliable and stable new business ideas with the help of Big Data, at this time, Airbnb has access to more information regarding their customers so as to understand their behaviors (Lalicic et al., 2021).

Theory and practice of applying design thinking to digital transformation have been popular in the world in recent years. The applied content of design thinking in digital transformation is synthesized and presented by our author group in this article together with a number of digital transformation-related works that are reviewed with important application topics. The authors conducted an interview with a successful case of applying design thinking to digital transformation, a case involving a leading multinational company in the field of manufacturing paper products with world-famous brand names of sanitary napkins, diapers and toilet paper. This study has applied the basic theoretical framework of digital transformation and design thinking to illustrate and analyze the difficulties and challenges when businesses transform digitally, from this foundation, summarizing some implications and solutions to apply design thinking to digital transformation for businesses.

The application of digitization and digital transformation has brought practical value to marketing tactics that are crystal clear as follows: businesses must create insights for each person and propose value, content and access rights must be tailored to each individual.

For design thinking, a 5-step process with Empathy Phase – Defining the problem – Generating ideas for solutions (ideate) – Visualizing (prototype) – Verifying is summarized and presented by our authors. In which, design thinking contributes to making important changes in the process of solving problems, focusing on people, in which this factor seems to be an option worth considering to maintain relevance and to outperform the competition. Theoretical framework for design thinking to make it collateable and comparable. It adds a functional perspective to the personal view of the various personality traits of a design thinker.

Figure of the process applying design thinking to the digital transformation process. Source: Compiled from Tschimmel (2012)

Case analysis of applying design thinking to digital transformation in enterprises

In terms of methods and case studies, conducted through an in-depth interview tool, the interview was held with Ms. Nguyen T.T.L to document the process of applying design thinking to the digital transformation process in order to develop new products (the main products in the Vietnamese market related to feminine sanitary napkins) under the managing of her R&D Department. Interview questions revolved around topics related to success, difficulties encountered when businesses apply digital transformation, and the process of implementing design thinking into digital transformation.

In Vietnam, X Group focuses on personal care for women and children. X has been applying digitalization in all Departments from Marketing, Sales to Factory and Supply chain. The most focused departments are Marketing, Sales and manufacturing plants. The group’s goal is to apply digitization across all divisions; therefore, the divisions have implemented a system-wide digital transformation program.

The results of the interview data analysis indicate that the digital transformation in Group X has achieved certain successes. Nevertheless, there were also difficulties that X had to face. For successful digital transformation, X has applied a 3-step design thinking process (Understanding – Envision – Prototype), instead of a 5-step process, and considers this as a tool for everyone in the company to analyze, to evaluate and to understand the users’ needs, thereby, creating products that are suitable for market needs.

Obtained Lessons

Lessons learned from the digital transformation at company X show a synchronous deployment strategy for all departments to connect and to be compatible with each other. Strategy comes from the vision and the mission of the business besides the fact that: to achieve this, the business leadership must be the leader in giving implementation programs, plans and policies. Just a few years ago, a business might ask itself whether or not it should go digital; nevertheless, today, this is the wrong question. The right question should be how businesses should digitally transform to optimize their business operations in all aspects. That needs a system of solutions from understanding knowledge to applying it properly, sufficiently and appropriately.

Digital transformation is difficult and can bring risks to businesses if digital transformation practitioners do not understand the basics. Evidence from company X shows that enterprises must implement training activities to update digital knowledge, digital applications and digital transformation for all employees globally. Therefore, the solution to apply digital transformation must start with understanding it. Enterprises should provide basic training courses on digitalization and digital business for their employees. Consulting organizations can be outsourced to make this process more efficient.

Situation X demonstrates the design thinking that has been incorporated into the company’s processes and training for employees globally. From a theoretical perspective, design thinking shows an important role in understanding user behavior and creating products that reduce risks. Because both products and services have to go through design, if designers only create products in accordance with their personal preferences, the products can be very creative and good but they are not suitable for customers’ or users’ needs. Therefore, understanding and applying design thinking stages flexibly (for example, 3 steps instead of 5 steps) is an activity worth considering. Enterprises should learn and incorporate into their business processes design thinking as a solution to understand users and, from this result, products and services that are right for them can be created.

Design thinking helps businesses understand their users through the touchpoints and through the implementation steps. Source: Photo collections

With the user-or-customer-centric philosophy of design thinking, businesses can leverage popular digital tools listed as social networks to gather content generated from themselves relevant to the industry in which the company operates. Through this content analysis process, businesses will derive users’ or customers’ needs and desires and find ways to satisfy them. If conducted well, businesses can see this as their core competitiveness to help them win over their other competitors.

Businesses need to consider a number of factors as follows. As users become more and more powerful, they increasingly control information through digital applications. Giving control to customers can be a double-edged sword for businesses. However, this is an inevitable trend and it is important for businesses to have tools as well as a solid theoretical foundation to both empathize with customers and create solutions that match their needs while engaging them in the co-creation process within a tightly controlled framework. Design thinking is a tool as well as a theoretical framework that is being popularly applied by many researchers and managers today. Design thinking helps businesses understand their users through the touchpoints, and through the implementation steps. In addition, design thinking is a problem-solving tool that can be applied to other stakeholders than just users.

It’s essential to note that design thinking is not a magic stick for every business problem. It, itself, is only a theoretical foundation and a tool to implement an application process, in the above case as digitization application. Successful application requires a combination of other core factors that are not discussed in this article listed as strategic thinking on digitalization, leadership culture in change management, human people foundation in digital transformation.

Enterprises should learn and incorporate into their business processes design thinking as a solution to understand users and, from this result, they can create products and services that are right for them.

Please refer to the full research “Applying Design Thinking to Digital Transformation Theory and Practical Lessons” here

Author group: Dr. Cao Quốc Việt, MSc. Nguyễn Tấn Trung, Administration Faculty, UEH School of Management.

This article is in series of spreading researches and applied knowledge from UEH with “Research Contribution For All – Nghiên Cứu Vì Cộng Đồng” message, UEH would like to invite all dear readers to look forward to Newsletter ECONOMY NO #37 “SHARED RESIDENCE MODEL” IN 4.0 REVOLUTIONARY INDUSTRIALIZATION APPLYING AIRBNB EDUCATIONAL CHANNEL”

News, photos: Author group, UEH Department of Marketing – Communication.