The End of Design Thinking and Proactive DX

In November 2023, the Tokyo office of the globally renowned design consulting firm IDEO closed its doors. IDEO's departure, having contributed significantly to the spread of design thinking, has sparked considerable debate within Japan's design industry, particularly regarding the future of consulting services centered around design thinking.

This series focuses on delivering essential knowledge about DX and digital products. In this fifth installment, we explore "Proactive DX" from the current state of design thinking.

*For more on GNUS Inc., see here
 

Design Thinking and the Current State in Japan

Design thinking has gained significant attention in recent years as a methodology that applies the designer's thought process to solving business challenges.
Processes like "discovering the core problem" based on user perspective and empathy, "generating ideas from diverse viewpoints," and "validating through prototyping" are expected to solve business challenges, foster new innovation, and enhance customer experience.

Amidst this, following the closure of IDEO's Tokyo office, opinions surfaced within the industry questioning whether "the value of design thinking itself has become stale in Japan."

However, I don't believe the value of design thinking itself has become obsolete. While it may have become somewhat commonplace compared to its earlier days when it garnered excessive attention as a novelty or new approach, I firmly believe there are still numerous situations and possibilities within the Japanese business world where design thinking remains essential.

The "Challenges" Faced by Design Consulting Businesses

So, if the value of design thinking hasn't become stale, what does the closure of IDEO's Tokyo office signify?

While the design thinking approach is gradually permeating Japan today, I believe the situation is such that companies find it difficult to continue committing judgment and budget to "design consulting businesses" like IDEO's that utilize design thinking. Given this, I consider "difficulties in the design consulting business" to be the correct interpretation, rather than "the end of design thinking."

I believe there are two main reasons behind the difficulties facing the design consulting business.

First, the outcomes of design consulting are "not necessarily quantifiable." Client companies receiving support often find it difficult to clearly grasp the cost-effectiveness in the short term, leading to hesitation in making decisions about continued investment. I believe this difficulty stems from the fact that achieving fundamental benefits inherently requires evaluation from a long-term perspective.

Second, extracting results from design thinking requires more than just changing how specific projects are conducted. It necessitates altering company-wide approval workflows and the speed of business decision-making. This means "changing the existing internal review, approval processes, and timelines." Beyond supporting the client's business, it also requires gaining internal understanding and cooperation for revising the client organization's structure and authority.

GNUS Inc.'s Challenge in Supporting "Proactive DX"

In fact, the challenges facing the design consulting business apply equally to the "offensive DX" we support, centered on developing digital products.

"Proactive DX" means leveraging digital technology to create new business models and services, thereby building competitive advantage. Compared to "defensive DX," where cost reductions and efficiency gains can be quantified, "proactive DX" is harder to measure for cost-effectiveness. Furthermore, the probability of new digital products or services succeeding as businesses is not particularly high. Consequently, we perceive this as an area where securing ongoing investment decisions within client companies is challenging.

What's crucial for "Offensive DX" isn't one-off ideas, but a sustained commitment to solving corporate challenges and fostering a new culture within organizational transformation. Investment here cannot be judged in the short term.

As a digital product specialist company, we at GNUS Inc. believe that to establish services truly essential for Japan's business transformation, it is necessary not only to create short-term case studies but also to build a track record of long-term corporate growth, and to continue sincerely explaining this value to client companies.

GNUS Inc.: Established within the Dentsu Group in 2019 as a partner for business growth and transformation through digital products. We support clients from planning and PoC through development, operation, and growth of digital products—key to DX for new and existing businesses—by assembling optimal teams from our network of over 600 members globally and applying agile project management. https://www.gnus-inc.com/

Kunihiko Bunbun / Representative Director and CEO, GNUS Inc.
After joining Dentsu Inc., he was assigned to the Sales Division, where he worked on marketing strategies for foreign consumer goods manufacturers and IT companies. In 2009, as part of Dentsu Inc.'s new business division, he launched the digital magazine sales app Magastore and served as its Product Manager. From 2011, he worked in Dentsu Inc.'s newly established New Business Development & Consulting division, driving digital transformation and new business consulting for the media, finance, automotive, and sports business industries. From 2017, seconded to Dentsu Holdings USA in New York, primarily responsible for digital marketing consulting and new business planning for major Japanese manufacturers, driving the development of software services utilizing AI. Returned to Japan in 2019, founded GNUS Inc., and assumed the position of CEO.