[MUSIC] Now that you've been introduced to design thinking, we'd like to dive a bit deeper and explore how to use it in innovative finance. Make sure that you have read the vroom case study from IDEO before proceeding. Design thinking began as a new idea in academia nearly 50 years ago. Morphing over the decades to become a hot topic in the world of industrial design. From there, it invaded the mainstream business world, and is now beginning to be used in the development sphere. Several of the key concepts of design thinking include encouraging experimentation and wide ranging ideation. The notion of failing fast, user-led processes of creation, and a strong sense of cultivating innovation throughout any process. Design thinking offers a structured framework for understanding and pursuing innovation in ways that contribute to organic growth, and add real value to your customers. And creativity is central to the design process. The design thinking cycle involves observation to discover unmet needs within the context and constraints of a particular situation. Framing the opportunity and scope of innovation, and generating creative ideas, testing and refining solutions. Design thinking minimizes the uncertainty and risk of innovation by engaging with customers or users through a series of prototypes to learn, test, and refine concept. So, how do you use design thinking in due diligence? When you're trying to take an innovative finance approach, you need to challenge the assumptions around your issue area. Especially the assumption that money is the problem or reason why objectives are not being achieved. This is why due diligence of your focus area is so critical, as it allows you to uncover the social, economic, corporate, environmental, cultural, and political forces that are maintaining the status quo. The design thinking approach is a powerful tool to use during the due diligence process. The first two stages, Empathise and Define, are particularly useful in mapping your problem and solution landscape and identifying the levers for change. Empathise and Define are the first stages of the design thinking process. This is the work that you do to understand people within the context of your design challenge. It is the process of zooming in from a statistic about a certain group of the population to understanding them. What do they spend their time doing, and why? What are their physical and emotional needs? How do they think about the world, and what is meaningful to them? The Define mode of the design process is all about bringing clarity and focus to the design space. It is your chance and responsibility as a design thinker to define the challenge you are taking on based on what you have learned about your user and about the context. These two steps can be particularly useful when you’re trying to understand the problem landscape and how existing solutions work. To illustrate how to empathize, and how that can lead to defining the problem better, we will draw from the vroom Case Study from one of the leading design thinking organizations globally, Ideo.org. There are two ways to empathise with ones end-users. The first technique is engaging. Sometimes we call this technique interviewing, but it should really feel more like a conversation. Prepare some questions you'd like to ask, but expect to let the conversation deviate from them. Keep the conversation only loosely bounded. Elicit stories from the people you talk to and always ask Why to uncover deeper meaning. Engagement can come through both short, interscept encounters and longer, scheduled conversations. In the case study, the Ideo team undertook a highly immersive approach. Visiting low income communities in California, New York, and Pennsylvania to conduct interviews with parents. and to observe existing programs aimed at improving child development outcomes. By engaging with parents, they learned that many of them had very tough upbringings, and did not feel fully equipped to engage with their children because their own parents didn't engage with them. This is a critical part of understanding the problem which could have been easily missed. Suppose the team only read reports on resources such as books and toys that parents in low income communities have to enable them to engage with their children. If the research indicated a lack of such resources, the designers might have concluded that this is the underlying reason for the problem. This would undermine the fact that perhaps, even if the parents had these resources, they would not know how to use them to engage with their children, or be comfortable doing it. Another technique for empathising is through observing users and their behavior in the context of their lives. As much as possible, do observations in relevant contexts in addition to interviews. Some of the most powerful realizations come from noticing a disconnect between what someone says and what they do. Others come from a work around that someone has created, which may be very surprising to you as the designer. But she may not even think to mention it in conversation. In the case study, one of the most successful programs the Ideo team witnessed during their research, was one in which the nurses went into peoples homes for several hours every week, simply to play with the children in front of the parents. By modeling play, they were able to affect behavior change and shift the parent-child dynamic. This is a key insight that starts to uncover what already works. This case study highlights the fact that there is no better way to understand the people you're designing for than by immersing yourself in their lives and communities. This does not mean that other data sources beyond the experiences of the users is irrelevant. In this project, the design team also interviewed child development experts and pediatricians to understand if their professional experience and previous research reinforced the findings from the field. The result of the combination of these approaches in the due diligence process is that you emerge with a rich and robust understanding of the issue area. You not only have the data, but have the underlying stories which relate that data to the human experience.
