Design Thinking, Agile and Lean are ways of innovating that focus on building products and services that create customer value. These management philosophies aim to take the risk out of the development and delivery processes to avoid the waste of making products and services that customers do not want.

The 3 I’s

These three philosophies share some commonalities in their focus on customer value and emphasis on
taking action. They are ways of taking the risk out of processes by incrementally building and testing
solutions to ensure their success before scaling them. However, each practice has a specific focus, combination of tools and intended outcomes that make them unique. It is important to understand your organization’s goals in choosing which methodology to use, and when, to achieve your desired outcome.

Origin and Overview of Design Thinking: Identifying

The term “Design Thinking” originated in the 20th century as a way to apply the industrial-design process
to creative problem-solving by thinking and working like a designer. Design Thinking has an emphasis on empathizing with the humans for whom you’re designing throughout the entire process. It is a particularly good method to use when the problem to solve is complex and there is a lot of ambiguity around the problem and potential solutions. The complexity warrants design thinking’s emphasis on conducting deep user research to understand their perceptions of the problem and testing how they would react to new solutions. Design Thinking also lends itself to products and services for which usability is key to bringing value to the customer.

There are many Design Thinking frameworks with varying process-step breakdowns. However, the popular
frameworks share many common elements, such as:1

  • Empathizing with the users to understand their perspectives on the problem
  • Reframing the problem based on insights from the users’ experiences
  • Ideating using divergent thinking to explore as many creative ideas as possible
  • Prioritizing ideas to prototype using convergent thinking to refine and improve ideas
  • Co-creating low-fidelity prototypes with users to quickly iterate
  • Testing prototypes with users to get feedback to further improve solutions

Origin and Overview of Agile: Iterating

The term “Agile” in this sense comes from the Manifesto for Agile Software Development of 2001, in which a group of software developers gathered in Snow Bird, Utah, to declare a way of developing software that was
an alternative to the status quo, which included lengthy plans and time horizons. The concepts in the manifesto developed in the 20th century from other emerging methodologies, such as Scrum and Extreme Programming, that aimed to speed up the software-development process and make it more responsive to change.

The Manifesto for Agile Software Development states the authors’ preference for changing the way
software development was managed. Their preferences are as follows:

  • “Individuals and interactions over processes and tools
  • “Working software over comprehensive documentation
  • “Customer collaboration over contract negotiation
  • “Responding to change over following a plan”2

Although Agile was developed for managing software development, its principles can be used for developing other products and services in short, iterative sprints and getting incremental feedback.

Origin and Overview of Lean: Improving

The term “Lean” emerged in the 20th century as a set of techniques for the continuous improvement of both manufacturing and service processes. The Japanese automotive firm Toyota is credited with developing many of the foundational concepts of Lean. After the Second World War, Toyota focused on controlling costs not by increasing scale, but instead by focusing on the elimination of waste. Toyota developed concepts of steady flow, continuous improvement, just-in-time inventory and small batches as ways of reducing waste.

The essence of Lean is to create an organization with people who are trained and empowered to explore increasingly better ways to provide and create customer-defined value. Lean thinking frames every request for value as an opportunity to improve by teaching participants to notice wasteful action (or inaction), then carefully remove that waste, leaving the value intact.

Michael Ballé, noted Lean author and blogger, describes three approaches to defining Lean:

  • Operational excellence: Lean is the relentless pursuit of creating value through the strategic elimination of waste.
  • Value-stream organization: Lean attempts to minimize the cash conversion cycle by reducing lead
    times.
  • Business strategy: Lean continuously strives to improve safety, quality, flexibility and productivity
    by involving all employees in problem-solving every day.3

     

To paraphrase Larry Culp, current CEO of General Electric and former CEO of Danaher, Lean is common sense, rigorously and vigorously applied.4

Choosing Which Methods to Use

Design Thinking, Agile and Lean have similarities in their methods of incrementally experimenting and testing ideas. Many organizations will use one or more of these methodologies as they look to innovate and
improve their products and services for customers. However, managers may be interested in suggestions of when to use which methodology.

Project Types for the Different Methods

Design Thinking works well for projects that have an ambiguous problem when the organization wants to create something very new and different for the customer. In addition, projects that have goals to focus on
the usability of the product or service to the customer are great for Design Thinking because of the focus on observing and understanding customers and their behaviors.

Agile methods work great when there is already a customer problem identified and a general idea of the type of solution to be built, and when you want a collaborative team to iteratively develop a solution and test it with stakeholders. Agile’s methods of self-organizing teams and short, iterative building of features allows for a product or service to be built quickly and incrementally so as to get feedback along the way of the product development.
 

Lean works well for analyzing existing products and services and assessing what changes can be made to reduce waste in the existing process to improve the value to the customer. Lean’s analytical methods for
assessing value streams are great at helping people better understand what can be improved for a current product or service and piloting changes to greatly improve productivity and value.

Combining Design Thinking, Lean and Agile

An organization may decide to use multiple methods of Design Thinking, Lean and Agile to innovate within itself. For example, Design Thinking’s tools for identifying and understanding customer problems and
providing insights into behavior can be a very helpful input to the Agile development process, to ensure that the Agile team’s development is solving the right customer problem. Once a product or service is developed through the Agile process, it can be assessed and improved by using Lean to identify any waste in the current value stream that can be eliminated to improve the value to the customer. Lean methods of value-stream analysis can also be used as an input to the design thinking process in understanding current pain points in an existing service or product.

At their core, these management philosophies are about building products and services that customers value. They all have methods to take the risk out of innovation by incrementally building and testing solutions.

The preceding is drawn from the technical note Design Thinking, Lean or Agile? (Darden Business Publishing) by Darden Professor Elliott N. Weiss and alumna Kelly Connors (MBA ’20).

  • 1. Common elements adapted from Interaction Design Foundation article summarizing design thinking and listing common design thinking frameworks. Rikke Friis Dam and Teo Yu Siang, “Design Thinking: A Quick Overview,” Interaction Design Foundation, (June 2020), https://www.interactiondesign.org/literature/article/design-thinking-a-quick-overview (accessed June 26, 2020).
  • 2. Beck, K., et al. (2001) The Agile Manifesto. Agile Alliance. http://agilemanifesto.org/.
  • 3. The quoted material is from Michael Ballé, “What’s Your Definition of Lean?,” Lean Enterprise Institute, August 13, 2018, https://www.lean.org/balle/DisplayObject.cfm?o=4741 (accessed Jun. 27, 2019).
  • 4. Culp’s actual words were “common sense, vigorously applied.” Douglas Lavin, “Opinion: Larry Culp is the Production ‘Nerd’ Who Could Just Transform GE,” MarketWatch, October 30, 2018, https://www.marketwatch.com/story/this-is-why-investors-should-believe-larry-culp-will-transform-ge- 2018-10-17 (accessed Jun. 27, 2019).