Understanding the Need for a New Approach to Strategy Development

Abstract

The business environment is changing more rapidly than in the past. Understanding and addressing customer needs is key for being competitive. Disruption is becoming the new normal. Traditional strategy development processes are analytical, linear, problem focused, and backward-looking. They fail to cope with these new dynamics. A paradigm shift is required to address strategy successfully. Design thinking has emerged as a promising approach coping with the increased uncertainty and allows focusing on the strategic aspects that matter most. Design thinking is an abductive approach to solving wicked problems, combining the advantages of design and thinking. Design thinking for strategy supports designing the strategy of a firm around customers and their jobs-to-be-done. Design thinking for strategy relies on the business model canvas as a common language, combined with game theory to embed the resulting strategy outcome into the real world. In addition, design thinking for strategy uses resources (time and money) wisely and focuses on results rather than effort. This ensures that the outcome is a strategy that exhibits four key traits required for success: desirability, feasibility, viability, and uniqueness.