Why design thinking is the next competitive advantage

Well, thank you. Thank you for the introduction. It is wonderful to be here again at an AIGA
Conference, and I thought this morning I would share with you a few thoughts on how value is
Being created, how competitive advantage is being created increasingly in the modern
Economy, what the challenges are to organizations in creating value in that fashion, and what
I think design thinking can do to help out in that in a very important way. And so if we think
About how value is being created in an increasingly knowledge-oriented economy, it’s in
How we deal with and process and advance knowledge. And it is arguable to me that
Everything in the world crosses the minds, the vision, of society, first as a mystery. So there
Are mysteries of ancient times. There’s mysteries of why if I drop this, it will fall, or mysteries
Of how it is we can create on a two-dimensional piece of paper a three-dimensional image.
Or more recent mysteries how in the coastal or beach culture of California how people
Wanted to eat. Or I would argue current mysteries, like how is it that we can have billions of
People living on this planet in peace without destroying the planet. That’s a current mystery.
And the way that we deal with these mysteries is we think about them for a while, and if we
Think about them for long enough, we come up with a heuristic, which is a way of thinking
About that mystery that helps us understand it better. A heuristic. So why do things fall when
We drop them becomes the heuristic of gravity. There’s a universal force called gravity that
Pushes things down. Being able to represent on a two-dimensional piece of paper a threedimensional
Object – the heuristic of perspective. Or if you’re the McDonald’s brothers in
1955, you come up with the heuristic for dealing with the mystery of how to – for the people in

/> This emerging beach culture in California want to eat the quick service restaurant with a
Limited menu and the ability to get people in and out of the restaurant very quickly.
If we continue to work on understanding that world, we can sometimes turn that heuristic
Into an algorithm. And what is an algorithm as opposed to a heuristic being a way of
Understanding something that gives us a better chance of coming to the answer we want? An
Algorithm is a formula, an exact formula for being able to accomplish what we want. So what
We eventually figured out by understanding and studying gravity and physics is that if I drop
This, it will accelerate at 32 feet per second squared. And one of the nifty payoffs to that is that
In the modern world – what changed about the modern world is post-1980, when we got
Something to the stage of an algorithm, we could code it.
So Honeywell can make your 777 fall from the sky exactly the way it wants, with autopilot
Without any human intervention. Or in terms of representing a three-dimensional object in
Two dimensions, we figured out the vanishing point in due course and now have software for
Doing that. And arguably, the McDonald brothers, who had a very successful heuristic that
Helped them understand how to feed Californians, opened five stores. They were
Mammothly successful five stores, attracted the attention of a milkshake maker salesman
Named Ray Kroc, who bought the chain of five stores and turned that heuristic into an
Algorithm. The 57-step process for cooking a hamburger. The sophisticated algorithms for
Where to locate restaurants.

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