Bringing Design into the Boardroom

One of my favorite things about my role at DirectorPrep is that, when I come across a new idea or an interesting concept in the world of board governance, I get to share it with our Savvy Director readers.

That’s how today’s blog came about. While researching an entirely different topic, I came across a series of articles from the Institute of Directors of New Zealand (IoD NZ) about applying the principles and practices of design thinking in the boardroom.

I found the concepts to be quite compelling. I hope you do too.

What is Design Thinking?

Design thinking is an ideology and a process for solving complex problems in a user-centric way. It focuses on achieving practical results that are technically feasible, economically viable, and meet a real human need.

From its origins as a way of teaching engineers how to approach problems creatively, design thinking evolved into a way of thinking in the fields of science, design, engineering and eventually business. It has gradually come to be seen as an approach to technical and social innovation, and it’s being applied in settings as diverse as healthcare, social sciences, business practices, and daily life.

Design thinking is based on the belief that, to generate innovative solutions, we must adopt a designer’s mindset and a user-centric perspective. With this approach, we can solve not just common everyday problems, but highly complex, “wicked” problems that resist standard methods and approaches - from global issues like climate change and poverty, to business challenges like change management, sustainable growth, and competitiveness.

At the heart of design thinking are the principles of user-centricity, empathy for the target audience, collaboration, diversity of perspectives, judgment-free idea generation, experimentation and iteration, and a bias towards action.

With this focus on creativity, innovation, and out-of-the-box thinking, it’s had a major impact on organizations at the executive and operational levels. But, so far, it seems largely absent from our boardrooms. New Zealand directors Judith Thompson and Pamela Bell would like to change that.

The Design Thinking Process

There are five key steps in the design-thinking process, although they don’t follow a strictly linear process, as new discoveries often require going back to repeat a previous step.

Step 1. Empathize. Paint a clear picture of who the end users are - their challenges, needs, and expectations. This requires building empathy by engaging with and observing the target audience through surveys, interviews, and observation sessions.

Step 2. Define. Define a clear problem statement that sets out the specific challenge to be addressed from the point of view of the user. The problem statement guides the entire design process, providing a fixed goal and helping to keep the user in mind. A good problem statement is human-centered, broad enough for creativity, yet specific enough to provide guidance and direction.

Step 3. Ideate. Come up with as many ideas and potential solutions as possible, using ideation techniques such as bodystorming, reverse thinking, and worst possible idea, to get you thinking outside the box and exploring new angles.

Step 4. Prototype. Turn the best ideas into prototypes or scaled-down versions of the concept to be tested.

Step 5. Test. Test the prototypes to find out what works well and what needs improving by observing users and asking for verbal feedback.

Design Thinking in the Boardroom

Now that we’ve covered a few basics of design thinking, let’s explore how authors Judith Thompson and Pamela Bell suggest applying these concepts to the field of board governance. In a series of articles (listed in the Resources section below) posted on the IoD NZ website, these two directors and design experts argue that design thinking can set a different tone for interaction within the boardroom and between the board and the executive.

“Design thinking can provide a common language that is human-centered and innovation focused. It opens up communication pathways and protocols to translate innovative ideas from operations to governance, helping directors get closer to the real experiences of customers.”

Design Thinking Governance Fundamentals

In the first article, they share some fundamentals about bringing design thinking into a governance setting:

Lead with a human-centered mindset. Design thinking can help re-frame priorities by aligning the conversation with organizational purpose and customer needs, and by challenging directors’ unconscious biases that close off receptivity to new ideas and different perspectives.

Stand in the customer’s shoes. By the time customer insights reach the board, they’ve lost all sense of being about real humans. Directors need ways to get close to customers, to understand their real needs and how they experience the organization’s products and services.

Build the board-CEO relationship. Design thinking helps reframe the board-CEO relationship in ways that help balance opportunity and risk, holding the executive to account but still creating a safe space for experimentation and open dialogue.

Value diversity. If everyone has the same perspective, directors are not going to be able to have the dynamic, divergent conversations that are needed to make good boardroom decisions.

Approach conversations with curiosity. Find dynamic, human-centered ways of providing information and data-sharing, and encourage communication that is experiential, interactive, and enlightening. The goal is board reporting that inspires curiosity, empathy, and creativity.

The authors offer these concrete suggestions:

• After reading the board package, think customer-centrically about the implications of new proposals and exceptional results.
• Observe customers in action, especially when they’re experiencing pain points or dealing with something that’s not working well.
• Think about how to set CEO performance metrics that are purpose-driven and customer-led.
• Look around the boardroom and consider how aligned or divergent directors’ values are.
• Consider how direction might be different if the board’s main concern was for the user experience.
• Ask how the board agenda might include items that foster innovation.

Preparing to Take Design Thinking to Board Meetings

In the second article, the authors delve into ways to help you prepare for board meetings with a design thinking approach.

People first. Directors are used to approaching decisions from the perspective of financial and legal implications, alignment with strategy, and the competitive landscape. While these aspects are critical for the board, remember that the design thinking mindset starts with human empathy before anything else.

Opportunity bias. The board’s focus is naturally on risk identification and mitigation. This bias can lead directors to look more strongly toward negative consequences rather than positive opportunities. A design thinking mindset is biased to optimism in a way that looks expansively at opportunity – not ignoring risks, but before considering them.

Being generative. Re-framing issues by expanding the boundaries of problems and solutions is central to design thinking. A generative mindset looks to a more distant horizon and helps uncover issues and opportunities that the board may need to pay attention to in the future.  

Learning by doing. Often the best learning is not from big research projects and long reports, but the rapid learning cycles developed from iterative, learning-by-doing, and fail-fast approaches.

The authors offer these concrete suggestions:

When reading the board package and considering business cases, satisfy yourself that the case for customers stacks up by asking:

• What customer needs are being served by this?
• What problems are we solving for our users better than anyone else?
• How will this deepen our employee experience and help them do a better job?

Before focusing on the risks of a proposal, ask yourself:

• Is there a bigger opportunity here?
• What else might we be missing?
• Who can we partner or collaborate with to make this happen faster or better?

Build on the ideas in the board package by placing them into a future scenario. Before thinking about whether you agree or disagree, ask yourself:

• How can we make this idea better?
• How can I inspire a future-focused conversation?
• What are we missing that we don’t know about yet?

Challenge yourself about how much you are learning from the decisions you make. Ask yourself:

• Are we learning and moving forward quickly enough?
• Am I acting as an accelerator or a brake on experimentation?
• How can I encourage and influence other directors to adopt a learning mindset?

Using Design Thinking in the Boardroom

Looking for some practical design-thinking techniques to use in the boardroom? That’s where the third article comes in.

The right dashboard. What qualifies as ‘the right dashboard’ depends on what type of business you’re in and where it is in the lifecycle. Established businesses often focus on mainstream financial metrics such as revenue and profitability, but directors of start-ups or fast-moving tech companies need real-time data on forward-looking factors such as customer acquisition, growth rates, marketing lead generation, etc.

Innovation conversations. If the board’s tendency is to question every small mistake, chances are you’ll just force the CEO to become a good news machine and shut down the possibility of a more open conversation. Steer away from focusing on risk and towards understanding what the organization is learning by asking questions like, “Have we been bold enough?” and “Have we taken enough risks?”

“I’ve been thinking…” Use a 10-minute slot at the beginning of a meeting for a board member to express their viewpoint from the perspective of their own subject matter expertise. This can result in ideas and opportunities being raised and discussed with open minds. Rather than confining blue sky thinking to the annual strategy session, it becomes part of every meeting.

The opportunities register. Keep track of the numerous ideas that come out of discussions, and save them for a later, more structured, review. Having regular idea-generating sessions to capture ideas without filter and judgment is a great way for boards to build up a reservoir of creative ideas for future strategy sessions.

Co-creating solutions. Co-design is an opportunity for directors, CEO, employees, and customers to work together creatively on problem solving. Moving away from the presentation and report-receiving format gives directors an opportunity to build empathy with users, interact with the operational team, and learn together as a board.

In Conclusion

Every aspect of the design-thinking approach to governance might not be right for your board. Still, I’m fairly certain there’s a nugget or two for every Savvy Director out there to consider.

I encourage you to explore the original articles from IoD NZ – you’ll find the links in the Resources section below.

Your takeaways:

• Design thinking is an ideology and a process for solving complex problems in a user-centric way.
• With a focus on creativity, innovation, and out-of-the-box thinking, design thinking has had a major influence on organizations at the executive and operational levels.
• There’s now an opportunity for boards that are struggling with traditional governance structures, such as arts and culture organizations, to integrate a design thinking approach into their processes.
• Design thinking fundamentals such as leading with a human-centred mindset, standing in the customer’s shoes, and building performance metrics that support risk-taking can open up communication between the board and the CEO.
• Integrate a design-thinking mindset into your board meeting PREP.

Resources:

• Design Thinking Governance. Judith Thompson, CMinstD, and Pamela Bell, MinstD. Institute of Directors New Zealand. November 2021.
• Preparing for Design Thinking Governance. Judith Thompson, CMinstD, and Pamela Bell, MinstD. Institute of Directors New Zealand. November 2021.
• Using Design Thinking Governance in the Boardroom. Judith Thompson, CMinstD, and Pamela Bell, MinstD. Institute of Directors New Zealand. November 2021.
• What is Design Thinking, and How Do We Apply It? Emily Stevens. Invision. January 2020.
• Why the World Needs More Design Thinking. Will Fanguy. Invision. June 2018.

Thank you.

Scott

Scott Baldwin is a certified corporate director (ICD.D) and co-founder of DirectorPrep.com – an online hub with hundreds of guideline questions and resources to help prepare for your next board meeting.

We Value Your Feedback: Leave your suggestions for future Savvy Director topics.