Either they collect a lot of backward-looking data,

which doesn't tell them what future customers really want.

Or they make risky bets based on instinct instead of evidence.

Design thinking is a strategy-making process that avoids these mistakes

by applying tools from the world of design and shifting the focus to human behavior.

Popularized by David M. Kelley and Tim Brown of IDEO

and Roger Martin of the Rotman School,

design thinking has three major stages.

First, invent a future.

Form a few theories about what customers might want, but don't have by immersing yourself in their lives.

Instead of polling them about specific products or services,

observe and ask questions about their behavior.

Next, test your ideas out.

Use iterative prototyping with good enough products or services,

and conduct a few quick experiments

to see how consumers respond.

Adjust the product, the pricing, or the positioning accordingly.

Finally, bring the new product or service to life.

When you've got a winner, identify the activities, capabilities, and resources your company will need

to actually produce, distribute, and sell it.

For example, when senior managers at Procter & Gamble

wanted to turn around the skin care brand Oil of Olay,

they began by observing shoppers in both mass retail channels and high-end department stores.

They realized that their industry

had been primarily targeting women over 50 who were worried about wrinkles,

while pretty much ignoring those in their 30s and 40s who were concerned about other issues.

This was a huge market to be captured.

So P&G experimented with new formulations that would tackle multiple skin care goals

then tested different prototypes, price points, and store displays.

Finally, the company launched a series of new premium, yet broadly distributed products

that were well-received by a wide range of consumers.

By using imaginative, human-centered problem solving,

, design thinking can help you unlock new markets and identify new strategies.

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