Solving Complex Problems (Like Innovation)
Written by Nur Karadeniz - Guest Author
How a new way of thinking from the design world can push your business forward.
Think about your business or the service you provide to your customers. That business or service depends on a whole system of people and technologies to make it work. You can imagine it as a spiderweb. Your service sits in the centre, with suppliers, workers, technology, and customers connected to it through the lines of the web. Different parts of your business that support that service are also on the web, as well as anything else that affects your service, like laws, other businesses, and even current market trends.* Every spiderweb—every system—will look a little different.
For the past four years, I’ve led design-led innovations at two separate innovation centres. We have been entrusted with dozens of large-scale and complex problems to solve, as well as asked to create innovative solutions to open-ended challenges. The first thing we do when we are given a new problem is to map the entire system it touches. Why? You can’t design a car engine without understanding the entire system of the car; the best engine in the world does you no good if you can’t get the power to the wheels. In the same way, if you want to solve problems in our business or find opportunities, it’s helpful to first build an accurate view of the entire picture of the system. Designers know that once we build a picture, we can start designing and changing parts of that picture far more easily.
Every company and every department faces complex problems. Supply chains, procurement, and environmental compliance are three easy examples. However, systems go further than just a few examples. Problems in one department often affect others, as everything is connected. How do you serve your online customers? How does your online experience interact with your in-store experience? How will your new automation interact with your employees? How do you source a more ethical product in response to customer demand? Are there opportunities to partner with others to enhance your service? Even finding opportunities for innovation within your service means understanding the complex world in which you operate. Experience and service maps can help, if these are tools in your arsenal, but they do not show the full system or the back-end reality of your organisation.
Fortunately, there is a thinking system that can help us understand and capitalise on complexity. System Design combines two of the design world’s most powerful methodologies—design thinking and systems thinking—into a framework that harnesses the best of each. We have pioneered the approach at innovation centres, and it’s becoming popular in the design world. Now it’s time to bring System Design to business.
In over a decade of working with systems, the teams I have worked with have not only solved complex and costly business problems but found profit opportunities from understanding systems. We’ve worked on projects as large as a digital passport system for the United Nations intended to serve 1.2 billion people in the world, and as small as designing a company’s single service. The method is equally helpful in both cases. In this article, I’ll share with you what system design is at a high level, and how you can use this method of thinking to solve your own hard problems (and find your own opportunities) in your business.
But first I’ll explain some examples of what system design can do …
What System Design Can Do
The industry is now looking for opportunities to delight customers while becoming ever more efficient and cost-effective. Furthermore, especially in this time of the pandemic, we want to create sustainable and resilient processes. If the services will go down in a crisis, if they do not scale or must be replaced in a few years, industry leaders will not want to invest. Fortunately, designers have started using system design to create systems, services, and solutions to stand the test of time.
There is a service that sells second-hand cars in Germany called Auto1. A customer can look for a second-hand car, call for a test drive, get financing, even get insurance. Companies work together to provide a single point of service on the same platform, and while in a way that isn’t ground-breaking, in a way it is. Customers get more value and convenience, and the companies help each other in a symbiotic way.
A few years ago, I worked on a team creating a data insight service for a utility company. When the customer received the electricity bill, they would get a statement saying, for example, an average person with a similar house is spending 15 percent less in electricity. The comparison comes from real data. The customer would start thinking they should turn off lights more, to keep up with houses similar to theirs. The data insight created a better experience for the customer, but it also led to better customer behaviour in the direction the utility company wanted.
In another project, I worked on a team designing smart services for a telco company. We used advanced analytics and AI to understand the patterns between customers, data, their usage, and the system so that each customer could have a unique experience. However, the system would not have worked without a careful re-design of the business processes supporting it. We created a system map of the back-end processes, how they worked to deliver different services, and how data flowed among them.* The AI would handle low-level customer service tasks, and escalate the customer to employees when needed.
At the end of the project, not only did the company realize additional profits from AI, they also created efficiencies from the business process redesign. They used fewer resources to deliver a better experience for the customer. The work we did improved customer service performance indicators and saved money besides.
So how, exactly, do you use system design?
Building a Map
Whether you’re looking to solve a complex problem or innovate, the first step is always to get a clear picture of where you are. What systems exist in your world? You won’t be able to describe this accurately in words. You’ll need to create a picture. As designers have known for years, the process of representing information on a map will radically improve your ability to think about your problem effectively.
Draw a map of all of the parties, processes, and services that touch on your problem. This process will take time. The map will require extensive research, which usually takes the form of conversations with subject matter experts. The larger and more complex your system is, the more you’ll have to talk to experts on the various parts. (I recommend talking with users, stakeholders, employees, technology experts, and any additional expertise that you might need. For example, if you’re working on a textile supply chain issue, you’ll need to learn about how textiles are made and the environmental impact of the process.) Research and system building, while time-consuming, are critical. You’ll see where your system is strong, and where it’s breaking down. You’ll identify problems, such as policy or user engagement problems, well enough to represent them on the map. Where there are problems, there are opportunities.
Once you have a portion of your map, go through and validate it with the experts. Is the map accurate from a technology perspective? Does it describe your business processes? Does it fully capture the human stories and people’s pain points? Is there anything missing? I recommend talking to clients, suppliers, and even competitors.
You’ll also want to consider where your industry is headed, trends, and regulation. Yes, this will take extra time, which can feel counterintuitive in a business world where people often rush to the first solution that seems reasonable. Taking the time to understand the problem in depth (and representing that understanding in a map) will mean your solutions are longer-lasting and actually have the effects you want. Otherwise, you may be using a Band-Aid on a broken leg, or solving one problem only to cause another.
Create a complete map of everything that affects the problem you’re interested in—and stop. The world is too big for us to map every system forever. If the topic doesn’t reflect on the problem you’re solving, you likely don’t need to explore it in any depth.
Challenges and Root Causes
Once you’ve built a good map, come back to your problem. For each issue on the map, investigate it within the overall system. Spend time to consider the root causes of each issue at the system level. For example, supply chain problems can be caused by a lack of communication with a specific supplier. Or, poor customer service experiences can be caused by a system that doesn’t prioritise calls well or doesn’t share the right information about the customer with the representative. The employees might be doing everything right! The system might cause ongoing issues anyway. Consider both human interactions and non-human interactions.
What does success look like for your larger problem? Try not to be too prescriptive—most complex problems don’t have a single answer. Improving a procurement process, for example, can be done in multiple ways. Perhaps you could use automation, changing business processes, partnering, or creating a data-driven technology platform. Any of these would provide success or a piece of success for your larger problem. (If you need to decrease costs by 10 percent, you can improve five things by 2 percent or one thing by 10 percent. Both would be successful.)
The Systems Design Workshop
Once you have a definition of success, you’ll want to run a system design workshop. You’ll have identified experts on various parts of your problem during your research phase. Invite the most important experts into the same room along with your stakeholders, designers, user representative(s), and anyone responsible for executing solutions. Explain you will be hosting the workshop to discuss your in-depth understanding of the system, and to brainstorm opportunities and innovation potential together with the experts in the field. Getting everyone in a single room with a single understanding of the problem has been shown to lead to breakthroughs and value for everyone touched by the problem.
At the workshop, briefly discuss the problem you will be solving. Then go over the system map. Because organizations are so fragmented, it’s likely that no one in the room will have seen the whole picture. If you invite stakeholders, partners, or clients to attend, they will have a completely different understanding than your internal group as well.
Lead a conversation about potential solutions. In design thinking, we call this ideation. We want to create as many ideas as possible. While we don’t want to interrupt the flow of ideas, the benefit of multiple experts is that one expert can suggest an idea, and another explains that idea is technically impossible on the spot. Having all the experts in the room means all of the ideas can be pre-validated. Only the best ones make it past the group.
The Feasibility Studies
At the end of the workshop, the group will select a handful of ideas to study further. Then, you can run feasibility studies on the ideas after the workshop. Is this idea viable? Can we get sufficient data of the right kind to support it? Is it technically viable? Will the market support the idea, and will there be sufficient profit to make it worthwhile for the company?
Like we used different experts to bring different perspectives to the system map, we want to use different lenses on each finalist concept. Only if the concept makes sense on every level do we want to put it into practice. If we have several good concepts that make it through ideation and feasibility, we’ll prioritize the one that provides the best business value for the situation.
Testing the Idea in the Real World
In the design world, we spend time developing every idea into a well-thought-out product or service. We work hard to make it as perfect as we can, but we still always test the thing in the real world before we put it into production. Sometimes what people (customers, employees, managers) say that they want is not actually what they want, and we’ll need to redesign the product or service. More often, we can learn from the market’s feedback in small scale before we move to large scale.
The design world says we should test several times, iterating and improving a design every time. Every cycle decreases risk—and costs time and money to execute. Designers often want many cycles before they’re comfortable selling the product widely. The Lean movement, in contrast, argues that you should test an imperfect product quickly, iterate it once or twice, and go to market. That strategy is both cheap and fast but can be very risky. As a businessperson, it’s important to ask how much testing you need and want in your situation. Are you willing to spend more to have more testing and less risk? Do you need an answer quickly, even if the answer is low quality and may not fully solve your problem?
I personally would always recommend that you create at least one pilot test for your product or service. Pilots tend to prevent the worst of the mistakes from going into production and show the true interactions of the product or service on the system. If you want to make sure your solution doesn’t have unexpected bad side effects, at least one pilot is critical. However, you may be willing to put an idea through fewer rounds of testing in exchange for more risk and less cost. Only you can know what’s right in your situation.
Do make your decision about testing carefully, with full knowledge of what you are gaining and what you are losing. Don’t skip testing because you think you don’t need it. You’ll need it; the more complex the system you’re working within, the more you need to test!
System Design Thinking Creates Results
Why does the system design methodology work so well? By representing the entire system, we’re able to understand and create entirely new ways of solving problems. System design workshops are also highly engaged. People get excited about creating ideas together. I’ve seen new business processes, new business models, partnership models, and uses for technology come out of workshops, things that would never have been made any other way.
For example, recently in the UK, Barclay’s Bank released a product in partnership with the Costa coffee chain. The refill cups have payment information built in so that when you get coffee, you pay with the cup rather than having to take out your credit card. You would never normally see a bank involved in a coffee product, but the partnership makes sense for them both.
Where to Go From Here
If you want to explore system design further, I’ve given many talks and lectures on the subject, some of which are available on my website. The key idea is that your business—and your service or product—exists as part of a system.
System design is a great tool to achieve more efficiency within complex processes and companies because you bring all the pieces together in a single model. It can also help companies find opportunities to create and pilot new ways of doing business. If you want innovation without as much risk, system design is a great method to achieve that.
Try using system design to solve your next problem or find your next opportunity. You’ll be surprised at what you can achieve.
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*Service design friends have noticed that the system design map is similar to the service design map. It is also different. Service design focuses on services from the customer’s point of view across multiple channels. It is not concerned with how that service is delivered in the background, or how efficiently the business processes involved in that service are delivered. System design does care about the customer, but it remains focused on the overall structure of the system itself and how it interacts with all of the people affected by it, customers, employees, stakeholders, and so forth.
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About Nur Karadeniz
Experience and System Design leader with a mission to help the world create more ethical, sustainable, and useful digital products. She regularly speaks on the future of design, creating services with manners, and the ethical use of technology and AI. Society’s hardest problems can be solved, Nur says, but the solutions must be designed in systems.
Author of Solving Complex Problems: An Introduction to System Design
Twitter: https://twitter.com/nurdeniz
Cover image by Image by schaeffler from Pixabay
