I first came across the concept of Design Thinking through a friend who was studying for a Masters degree on the subject. At that time, I knew very little about it but judging by my friend´s past interests, it would have something to do with creativity and innovation. She has a degree in Business, like I do (we actually went to school together) and I couldn’t understand the sudden interest in Design. Back then, I thought a designer’s main purpose in life was to make things prettier, desirable, ergonomic perhaps and user friendly. Little did I know…
The second contact I had with the concept was at a school called Perestroika, in a course about Leadership, Management and Innovation. We were there for an entire Sunday, learning about Design Thinking and applying the ideas to a real problem. The class was enjoyable and impressive. Not only because the methodology was amazing but because the result we achieved and the process through which we achieved it, took everyone by surprise.
I realised then that Design Thinking has nothing to do with making things more desirable. It was actually a problem solving methodology that could deliver the most unexpected solutions to all sorts of issues.
The methodology is different because, for a start, it is totally focused on human beings: their experiences, their difficulties, their desires, their needs and all that concerns the person using the product or service being developed. Empathy is of the essence. Additionally, while it acknowledges the value of rational-linear thinking, it encourages creativity and instincts to come into play. A combination of both approaches (rational and emotional), taking turns throughout the process is what makes it unique.
I became more and more interestedand intrigued by this way of thinking. I read books, listened to podcasts and watched many videos about it. Not being a specialist on the subject myself, this is how I came to understand its framework:
- Human centred: end consumers are the focus and to get to know them better you need to leave your pre-conceived ideas behind and immerse yourself in their world. It’s important to learn how things are done, the difficulties involved, their experience, their desires, their demands;
- Co-creation: once a problem has been identified, a multi-disciplinary team can come up with potential solutions through brain-storming exercises, followed by a rational analysis of the ideas proposed;
- Prototype: this is a very important part of the process because ideas may sound good in theory but in reality may not work due to a number of factors which can only be identified through prototyping;
- Feedback: Getting the end consumer’s input and feedback is important to ensure you understand the needs correctly and that the product/service designed actually meets those needs appropriately.
Excellent, but what does that have to do with Finance, you might be wondering… Everything.
If you think about a conventional organisation, Finance is usually one department, just a part of a whole, correct? Unless we are talking about Financial Institutions (which we are not), Finance is never core business. Finance is a supporting department that exists for two main reasons:
- To look after regulatory demands, from all sorts of interested parties (Tax Authorities, Governmental institutions and Financial regulators), that companies are subject to and must comply with in order to exist;
- To provide the Management team with relevant information about the business´ financial performance, in order to enable them to make decisions.
When providing information to management, who is our end consumer? Management, correct? So, when developing financial reports, financial analysis, financial whatever, shouldn’t we co-create it with them? Shouldn’t we immerse ourselves in their world and walk a mile in their shoes, in order to understand what is actually relevant to them? Shouldn’t we “prototype” and have them use it before we make the report/analysis official and start issuing it on a monthly basis?
When we study Finance, we are presented with all sorts of possible KPIs, reports, analyses, calculations but that is not to say that all of them will apply equally to all organisations. Each company is a different “being” with very specific needs and concerns. So, before developing a monthly report with all those complex calculations and analysis, shouldn’t we spend some time understanding the business with the people who actually run it?
I worked as Finance Controller in a gold mining company for over 3 years and I had the chance to experience that issue first hand. When I took over the controllership department, Finance used to issue a Monthly Report and it was approximately 60 pages, containing all sorts of numbers in the most detailed format possible. I remember a junior analyst working until very late at night to print all the 10 or 20 books that had to go out every month. It was a monstrosity! I spent a couple of days going deep into the analyses and questioning management about those results so I could understand what happened during the month. Nobody really had the answers to my questions because they had no idea what I was talking about. They simply didn’t read the book. It was just too big and too detailed. Top Management didn’t have the time to go through a report like that. Not to mention that the number breakdowns didn’t tell much of a story and it just wasn’t possible to understand what went wrong (or right) in the month based solely in those analyses.
There was a complete disconnect between what Operations really needed and what Finance was providing. It was a total waste of time and effort that wasn’t helping the company in any way. Finance was producing information for itself and it became so focused on the product (the report) that it lost sight of the client (Management). Classic mistake, I guess.
My initial thought was to try to streamline the report and maybe I would get people to read it. After a few months, it hit me. Why on earth was I trying to get people to read something that they should be demanding from me in the first place? Then I realised something was really wrong and “improving” the process wasn’t going to cut it. I had to re-engineer it.
I decided to spend more time at the mines and in the manufacturing facilities, understanding how management actually ran the business on a daily basis. I spent hours talking to site managers, maintenance managers, mine planning professionals, geologists, mine engineers, plant managers and I finally got it. Out of that ocean of information we were providing, there were a hand full of KPI’s that were actually important to them. They showed me why those KPIs were relevant and how they could make decisions based on that information. They also took the time to walk me through how those specific figures would help them identify bottle-necks in production, allowing them to act quickly and fix the problem.
Basically, I allowed myself to be immersed in their universe. I also listened and paid a lot of attention to everything they did and said. After a while, I called my best FP&A analyst, both cost controllers and together we developed a dashboard. What was once a 60-page report was going to become a one-page dashboard. I included only the KPIs Management considered important and laid out the information in the way they preferred to look at it. We also changed the cost breakdown analysis and by presenting the information in a different format, it became much more obvious what was driving cost overrun (or cost savings). Naturally, throughout every step of the way, Management was involved in the “creation process” and helped us test every single prototype.
Soon after, the monthly performance meeting started to be more productive, insightful and informative. All the attendees now actually read the dashboard and could talk to every single figure of that report. Slowly, people became more interested and soon enough the meeting room was full of managers and senior analysts, with a copy of their dashboard at hand, covered in notes! With time, those meetings became more strategic and huge issues were being discussed and important decisions were being made.
The highlight of that process was when I went to one of the mines and saw the dashboard hanging on the wall of the Site General Manager’s office. At last, mission accomplished.
Obviously, our dashboard was not the only factor driving all these changes. Had Top Management (CEO, CFO and COO) not been supportive of us throughout the entire process, none of it would have happened. Because they cared, everybody else in the company cared as well.
We focused 100% on our client, we immersed ourselves in their environment and collected loads of information, understood the needs and demands, co-created a solution, prototyped it, tested it (as many times as necessary) and in the end, we delivered something useful and relevant to the business. And we did all that, simply by changing our mindset and thinking less like accountants and more like designers.
Even in Accounting, you can see the influence of Design Thinking. The other day, I was studying for my CIMA qualification exam and I was reading about the International Accounting Standards Board. Everyone in Finance knows that is the institute who issues the international financial reporting standards (IFRS) we all must comply with. I read about their framework, disclosure and reporting requirements, and in the end, I saw the following sentence: “There may be circumstances when management decides that compliance with a requirement of an IFRS would be misleading. Departure from the IFRS is therefore required to achieve a fair presentation.” My interpretation of these sentences was that, even in a highly regulated environment such as Financial Reporting, if the information you are providing is irrelevant (or even misleading) to the “end-consumer”, you should not apply the accounting standard. The IASB is now spending more and more time with users of financial statements before issuing an standard. Investors, governmental entities, banks, auditors, accountants can all actively participate in the process of creating a stardard. In my opinion, the IASB is showing an incredible understanding of the Design Thinking principles.
Well, in the end, I came to understand that Design Thinking is a mindset and it has everything to do with Finance… and HR, and Logistics, and Procurement, and Marketing, and Operations. It’s applicable everywhere by everyone. You just need to be open to new ideas and ready to burn the old ones.
Written by Luciana Hodgson
Article Taken from https://www.linkedin.com/pulse/how-design-thinking-helped-me-change-my-perception-role-hodgson
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