What Is Design Thinking? Definition, Phases and Examples

Updated February 3, 2023

Design thinking is the process of analyzing the problems with a product or service and developing creative solutions for them. This strategy enables a business to improve its products and services and enhance operational efficiency. Additionally, design thinking can provide opportunities for innovation and collaboration among employees.

In this article, we define design thinking, explain its five phases, provide examples and highlight the importance of this methodology.

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What is design thinking?

Design thinking refers to the process of using creative skills to solve problems. It involves approaching a problem systematically and thoughtfully to correct it and develop lasting, positive change. This strategy typically relates to client-focused project activities. Design thinking allows businesses to progress through projects, develop and perfect products and services, optimize workflow processes and fulfill customer needs.

When companies implement design thinking to create or enhance a product, service or process, they prioritize user satisfaction. They also consider the technological and economic feasibility of a project. In this methodology, team members conduct constant experimentation and improvement. Through multiple iterations of a project, businesses can continue to meet audience expectations. 

Related: 6 Main Types of Critical Thinking Skills (With Examples)

5 phases of design thinking

As a systematic plan, there are several key phases of design thinking. These phases guide a creator through product or service development and consumer interaction. While these five stages encompass the essentials of design thinking, different business industries can use different or additional processes to apply this approach:

1. Defining the problems and identifying consumer needs

In this phase of design thinking, business teams identify and define the problems consumers might be having with products or services. They think about how consumers could benefit from current and new features. Considering the consumer perspective can allow businesses to gain a deeper understanding of their target audiences. It also fosters empathy and leads to sustainable solutions.

Related: How To Develop Creative-Thinking Skills in 5 Steps

2. Understanding and empathizing

Empathy is the idea of appreciating the experience of another. Design thinking creates a foundation of understanding and empathy by encouraging companies to empathize with their customers. When a business can focus on solving customer issues and bettering user experience, it can attract new clients, support customer loyalty and achieve success. Empathizing with consumers may mean offering affordable prices, providing consumer credit or implementing other customer-focused initiatives.

Related: FAQ: What Is Empathy in Leadership? (With Benefits)

3. Ideating solutions

Companies that implement design thinking can also spend considerable time in the ideation phase. In this phase, team members apply creative problem-solving and critical thinking to find ingenious solutions to problems. Teams collaborate and share ideas that could potentially solve issues regarding the production or use of a product or service.

Related: 7 Creativity and Innovation Examples

4. Developing solutions

After building a significant amount of ideas, team members can start planning an official implementation of these ideas. This involves managing projects from initiation to completion. Teams establish decisions regarding resources, budget, timeline and task distribution to prepare for starting a project. They can then advance to further stages of design thinking without worrying as much about logistical issues.

Related: How To Create Your Own Problem-Solving Process

5. Testing solutions

As businesses develop ideas and solutions to consumer problems, rigorous testing is required. Team members test ideas in a thorough, iterative manner to ensure success. They may conduct experiments and trials, develop prototypes and complete other activities to find out which solutions may be viable for the business. Their goal the entire time is to make the lives of customers better by improving specific products or services.

The testing stage of design thinking can also mean going back to the beginning of a process and starting again to apply new-found strategies that fix design flaws or reduce inefficiencies. One of the foundational principles of design thinking is the readiness to start over or make radical shifts to meet contemporary consumer needs. Those who apply this strategy remain dedicated to learning and improving.

Related: What Are Problem-Solving Skills? Definitions and Examples

Examples of design thinking

Design thinking can be an involved process, but many business leaders find it worthwhile, as it can lead to great advancements in an industry. Using design thinking principles can be beneficial in breaking down a problem so that those involved can consider different perspectives. Here are some examples of the use of this framework:

Example 1

A phone service provider might identify a problem regarding the lack of long-distance call coverage in their services. By reviewing customer reviews, gauging customer satisfaction and conducting other research, the service provider determines that the lack of long-distance service is the main problem consumers have with the company’s services. 

The phone service provider can implement design thinking to create solutions that satisfy consumers and save the company money. In this case, a creative solution might be to include long-distance services with specific phone plans to fulfill customer needs while saving on operational costs. The phone service team might then launch a new phone plan to test this solution.

Related: A Complete Guide to Customer Service Reviews: 11 Types To Help Your Business

Example 2

A software company looking for solutions to improve an app may use design thinking to determine how consumers use their products. They can assess metrics to see what features customers use most. They can also conduct interviews or peruse customer suggestions to find out what customers may want. Gathering this information can help the company implement new and improved design strategies at the onset of product development processes. This can result in the company creating a product that fulfills customer needs.

Related: 17 Customer Retention Metrics (Plus How To Calculate Them)

Example 3

A restaurant may study the strategies of other popular restaurants in the area to learn why customers are frequenting those spots. They can then test new strategies, like an online ordering system, to confirm how this may enhance customer satisfaction. They may also form creative improvements to the cooking and serving process to optimize a customer’s experience at the restaurant.

Related: How To Write a Competitive Analysis For Your Brand (With Tips)

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Why is design thinking important?

The purpose of design thinking is to analyze and evaluate how consumers interact with goods and services. Additionally, design thinking can play a part in how businesses seek to understand how the consumer-product interaction operates. Design thinking also serves to challenge traditional methods of problem-solving during the ideation, design, development and production of goods and services. This application of critical thinking and creative problem-solving can focus on solutions that may not always be apparent when implementing strategies for improving products and services and business processes.

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