The crowd shouts and cheers its suggestions and encouragement as iconic host of Let's Make a Deal, Monty Hall, asks the contestant to pick between doors #1, #2, and #3 for the chance to win a prize. Once the contestant has made a choice (let's say Door #1), Monty ups the suspense by revealing the undesirable contents behind one of the doors not chosen (let's say Door #2) and asks if they would like to change their selection. At first blush it seems like even odds between the two remaining doors, and all the contestant can go on is their gut and the roar of the crowd - but in this case, a little quantitative analysis can go a long way in solving what has been deemed the "Monty Hall Problem."

Lets Make A Deal Weekly Primetime

©1971 ABC Television

Many innovation leaders are put in a similar position as the game show contestant - forced to make decisions in a truncated timeframe, with limited data, and under pressure from stakeholders who often possess nothing more than a strong hunch or personal bias to inform their own position. Given their predicament, it's no surprise that bold bets are questioned, limited, or back-burnered in favor of nearer-term, easier-to-realize opportunities - even if they are smaller and transactional rather than breakthrough and transformative.

In response to this situation, innovation leaders - particularly at consumer products companies - are increasingly turning to design thinking as a strategy to surface, iterate on, and develop products targeting growth markets. For companies that do not have the luxury of a significant central research budget and long development timelines (and even some that do), design thinking offers a rapid, highly user-focused approach to support bolder, longer-term bets.

However, while the design thinking process is an excellent method to identify potential opportunities and the depth of the associated problem, it has a couple of common failure modes:

  • Redundant Efforts: Companies often hire design firms in the wake of a more conventional market study, assuming that the designers will be able to take the initial analysis and translate it seamlessly into a new product. However, a typical market study deliverable focuses on broad segments of interest or existing competitive products, and these results may not always flow cleanly into the design process (which centers more around specific unmet user needs). Unless they're able to coordinate with the analysts evaluating the market landscape, design firms often end up needing to re-do a portion of their predecessors' work to validate market interest in a new solution.
  • Incomplete Business Case: When deployed on its own, design thinking may result in a beautifully crafted product, but insufficient understanding of which version of the solution actually meets revenue and timing targets - causing immense headaches for the business unit and creating potential for internal backlash. Product companies in particular sometimes rush through the design thinking process to get to the testing phase, shortchanging strategic focusing efforts and truncating the activities devoted to market testing and critical analysis. In fact, upfront product investment for fast-moving-consumer-goods (FMCG) companies significantly lags that of the fast-growing tech sector, with Nielsen noting that "FMCG brands should spend more time developing and refining their value proposition."
Nielsen

Source: Setting the Record Straight on Innovation Failure - Nielsen Company, 2018

We've found that when brands race to start prototyping instead of investing in understanding their product's value prop and the dynamics of the market they're trying to enter, the result is often a solution users love, but no one will buy.

Recently, for example, Newry was brought in to identify potential partners to take a new healthcare product to market. The product, developed through a rigorous design thinking process, was thoughtfully engineered and addressed a real end user need. However, some initial analysis indicated that several key issues (including questions around price point, likely purchasers, and channel implications) remained unresolved.

Given the notoriously convoluted value chain dynamics of the medical industry, we realized building insight around these unknowns was a higher priority than finding a partner for commercialization and pivoted to develop a quantitative understanding of the device's value within the context of the entire healthcare ecosystem. The findings from this work helped the client refocus their go-to-market strategy on more realistic targets - a valuable outcome, but one that would have been more useful to understand from the beginning.

Visual 2 Lilypad

Quantifying our client's value prop allowed us to build a much more robust go-to-market plan for their product.

I would contrast this engagement with a project where Newry worked with a client from the beginning to develop their overarching strategic focus - based on both qualitative and quantitative methods - and then worked iteratively with a team of designers to guide the client's innovation efforts.

By adopting a market-insight-driven perspective early on and refreshing quantitative insights regularly throughout the product design and development process, our client avoided a last-minute scramble to define the key value props that the market would support. We also bypassed the redundancy problem often associated with the handoff between the strategic marketing function and the design thinking function by working closely and continuously with our client's design firm partner. The result was the successful introduction of an award-winning, first-of-its-kind product - built on a platform that has continued to create value for the client.

Quantified Design

What no one at Let's Make a Deal seemed to realize at the time was that by analyzing the door "problem," one could construct a strategy that would on average, bring better results. Remember our contestant forced to choose between keeping their selection or switching to the remaining door? Mathematicians have shown that choosing the new door offers better odds of success (2/3 chance) as opposed to keeping along the current path (1/3 chance).

Design thinking is one good way to better understand what might be behind the doors of opportunity. But using it alone, or without a clear connection to other strategic marketing efforts, can create blind spots - and cause significant problems if the value prop is misaligned with market dynamics.

On the other hand, intertwining design thinking with a strategic and quantitative effort will lead to a more powerful understanding of the real size and definition of your opportunity. While this augmented process of "quantified design" may take slightly longer, it provides a nice middle ground between picking direction based solely on gut instinct, and a full-blown central R&D strategy - and increases chances of success by leading to products more aligned with the organization's strategic intent, the end user's desired experience, and a value prop connected to a business case.

So, go on... pick door #3.

Contact Torrey to Learn More
Torrey Babson

Torrey Babson leads Newry’s efforts related to consumer products companies – leveraging understanding of design thinking, market dynamics, and quantitative strategies into a unique perspective on growth opportunities and strategic positioning. Since joining Newry in 2011, he has led numerous projects addressing both B2B and B2C markets, helping companies grow…

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