Welcome to season 2 of Great Minds Design Think Alike. In this episode, we speak to James van der Westhuizen, the owner and founder of Knowhouse, which turned 21 the week we did this podcast – HAPPY BIRTHDAY!
James chats to us about what he believes to be the next revolution in design thinking and taking the next step for innovation transformation to happen within organisations. We talk about the organisational changes that need to happen for innovation to take place, with a specific look at organisational design and leadership support in relation to business strategy and how design thinking, empathy and the other mindsets and tools can be applied and incorporated.
We also take a look at elements such as prototyping and capital funding of innovation and ideation, to ensure that the innovative ideas that originate as part of the design thinking process, are actually implemented and embraced by the organisation.
We talk extensively about business model innovation that will be required for businesses to survive and thrive during and after the COVID-19 pandemic. We also talk about taking design thinking virtual and creating online, virtual spaces for design thinking training and design thinking studios in companies. What is working really well in these virtual spaces, as well as the pitfalls thereof.
The conversation with James:
Welcome to Great Minds Design Think Alike. Where we investigate design thinking, the challenges, the successes and the problems it solves. If you are unfamiliar with the concept of design thinking, check out episode 1. Be sure to subscribe so you get the newest episode as it’s released. Great minds design think alike is hosted by Stuart McDougall, owner of Tenaka, a leading Design thinking consultancy in Johannesburg, South Africa and is proudly brought to you by Mac Media.
This is season 2 of the Tenaka’s Tribe podcast, Great Minds Design Think Alike. And I’m pretty excited today. I’m sitting with James Van Westhuizen. He is the founder and owner of Know House, a consultancy that has done extensive work through Africa, Europe, Middle east, Particularly in training and helping businesses with strategies etc. we gonna dig a bit deeper with him today.
Thanks James, I appreciate you joining us and the time that you are gonna give us. I’m excited to talk to you cause you know, I mean you are pretty well known in the industry. You got 20 years, Know house has been going on now. Maybe a bit more even. And you have connected with some really top people globally that excites me. Those kinds of mentors, we need them. So Just to kick off, give us a little bit about that journey that I have sort of briefly introed and tell us like how Know House got into particularly design thinking and the other areas of business you are in. And those relationships that you have built.
So it’s great to be with you Stuart. I have always loved your work and the work that you guys do. A lot of cool creative stuff comes out of Tenaka. So it’s great to have this conversation.
Yeah actually this week it’s 21 years of Know House. We started Know House in the early days of the dot.com era where anything with IT stuck to a drive on a PE of 150 and that sort of thing. And of the things that happened to us as we came and started a new consulting company at the time. We realized that the business logic that you have to apply to a service or to a knowledge based business is fundamentally different from the manufacturing business. And that sounds very try today. I think it’s almost crazy that someone would make a point like that. But at the time a lot of our business models and our perspective on business was very focused on a business, it’s a factory. Whether it’s a factory that delivers pizza, or a factory that sees patients, or a factory that makes wedgits its a factory. So that is where we started. And a lot of work in those dotcom era days implementing SAP and processes and systems. We started realizing there is something else happening here.
There is a human element to businesses that really need to be optimized and respected. That’s how I got slowly but surely into the space of change management. And then later on we started realizing that actually. Ideation without bringing in new ideas is not really valuable. And at that stage I started working with a Canadian company called Experience Point. They have a very close relationship with IDO. so we got to work closely with IDO. and we have got a very long relationship with Experience point and IDO. working specifically in teaching people design thinking methodologies. And reflecting a little bit on what needs to happen for that to be in the organization. So we spent a lot of time with Tim Browns and the guys and lately we have also started seeing that possibly our focus in terms of a lot of what we were doing in design thinking has been too narrow. I think there is a lot of reflection now with the guys from Strategyzer and Tender Vickey and these guys from . they talk about this kind of slightly discouraging comment of innovation theater. It’s kind of like a little show that you put on with a lot of post it notes and bean bags. I think that’s really pushed us towards thinking about what needs to happen for this innovation transformation to happen in organizations.
That’s kind of where we are focusing a lot of our energy at the moment. Yes we still believe 100% in the IDO design thinking methodology. We still train people on that. But we kind of begin to see that the organizational transformation that has to happen around it is really crucial.
So I mean to dig a bit deep into that point.some of the stuff that we have done in the workshops that we have worked with corporates. We find that it’s really exciting on the day. It’s fully immersive and its practical. But then when they walk away from there to implementate it in their organization it seems to be a bit of a struggle. Do you go hand holding? Is that what you are alluding to? It’s like how do we get this to be practically used within the businesses?
You know there is a lot of thinking at the moment about what does that full innovation process look like? And I guess that a lot of the work that we have done. I think we have done great work both you and myself and other practitioners has been in the space of innovation practice. What are the tools? What are the processes? You know there is a lot of thinking at the moment about , what does that full innovation process look like? And I guess a lot of the work that we have done. We have done great work, both you and myself and other practitioners. Has been in the space of innovation practice. What are the tools? What are the processes? What are the skills people need to be able to innovate? But if you look at some of the work that’s coming out of Strategiser , Alex Osterwalder’s work and Tender Vicky and all these guys. They really say there are two components that are absolutely crucial. One is organizational design and the other one is leadership support. And I think that what we have done, we have created in some way a situation where people are kind of all dressed up and have nowhere to go. So I think what’s happening at the moment is that we have to situate innovation in a much more holistic sequence of saying what is the actual business strategy and what is the actual business model that needs to be there that we can then feed the design thinking and empathy and ideation skills into. You know the real kind of dirty little secret with the innovation i have seen, i’ve gotta put up my hand cause i’m guilty as the next person. We have done a lot of innovation, a bit like a 12 year old kid walking into a car showroom and looking into a porsche. It’s almost like it’s a lovely experience and you are sitting there going brrr. But you don’t have the capital allocation to do something with those ideas. I think it’s a little element of I guess complicit honesty between us and the corporate folks who hire us is to say.
You know we really need to make sure there is appetite and funding to actually industrialize and bring the stuff into being. I think that’s a crucial piece. That we really have to look a lot more and say what happened at the tail end of the ideation. We are great to go from a design challenge which needs to be strategically informed. And I think practitioners like yourself have always been ethical, at least making sure that piece is done. But quite often we end up with prototypes that kind of don’t know where to go because there isn’t an industrialization pipeline. There isn’t the capital funding behind them. I think that’s where we are positioning these ideas in tough times, let’s face it, in really really tough times at the moment. We need to make sure that whatever we design is either so quick and easy to implement. That it’s something that we can just go for. Or it really needs to be funded and people must have an appetite for funding it.
Do you think what you are talking about there comes down to the feasibility and viability of the prototype that comes up. Do you think that to a certain extent sometimes that phase of any kind of project is brought into a bit too late. And a whole lot of it is being invested in this empathizing and understanding what the ideal solution will be to the problem. And then when that feasibility and viability gets looked at the capital infrastructure is not there or the resources are not there to actually implement it. I mean is that?
Yeah absolutely. Even if we do. We can do that desirability, feasibility, viability cycle many times and still end up with a prototype that doesn’t get traction. Just simply because the organization hasn’t really come to terms with the funnel that is required In Alex Osterwalder’s terms goes from exploy to explore. And I think you know, one of the things that have become a big reality check in the business that we are both is you really have to take a lot of small bets to have a few pay off. I think we had a discussion with the folks from Bosch the other day. He said it’s about 150 ideas or ventures that are properly funded that eventually translate to 5 to 10 industrilizable businesses at the end of that process. I did a lot of work at FNB in the early days, later on at Standard bank with Paul Steenkamp. Who is one of the good thinkers in the space. One of the ideas that he had was, you should actually put capital pressure behind innovation. So you actually have executives walking around with a budget of internal capex they are pushed to spend on internal innovation. So you almost put them in a dragon s den environment saying you know what, go and look for stuff to invest. That’s an area we need to be direct with our clients upfront to say you know what this is gonna generate a lot of potential ideas we quite far down the line in terms of validating those prototypes. But we need to get into the practice of making those beds. Even if they are small beds in the beginning. And actually trying them out and driving them.
Yeah I totally agree with you. I mean that sort of mini cycle that you are talking about. Those small little loops can definitely save time and money in the long run of course. And obviously you will be able to see whether or not the feasibility or viability is gonna be a problem. So yeah I totally agree with you. I just wanna jump back to something that you said a little bit earlier when you were speaking about tough times that we are in now. We are in the middle of Covid. For the purposes of this podcast and this video. And so the South African economy has taken a huge knock. In my mind it’s a time when there is opportunity actually. Not necessarily from the perspective of economy , earning revenues or economy from the work that we do.but definitely from a perspective of solving problems. I mean there is multiple things which I think are just changing because of the environment that we are in. because we are forced to have those changes. But they haven’t been really thought through and tested correctly. We are rushing into it now because we are forced to. Whereas now is an opportunity to test minimum viable prototypes products. Try new things and put new things out there really quickly and rapidly. Yeah
Yeah, such a great point. We do a lot of work. I belong to a group in Norway called Strategy tools. Headed up by Christian Roman. We talk about 3 reactions and 3 ways of transforming. We talk about shock shifting evolution. Evolution is sort of your long term transformation where you are constantly innovating and driving the process forward. And you are kind of creating consistent change. I think Microsoft is a good example of a company that’s advanced with that sort of proactive evolution. You could just shift, which is a short thing where you realize that something needs to change and you change it quite proactively. But what we have at the moment and that’s where I agree 100% with what you are saying. Is that the transformation is happening about its happening at a shock basis. So you have a situation where the value logic of a business just disappears overnight. And you know I feel the pain out there. I’m doing a hell of a lot of free work. Just because I want my clients to still be there when we accept this process. When we look at it, I do a lot of work in hospitality for example. It’s truly truly disastrous out there. So I think that one of the things that we need to get our heads around at the moment is how do we? I think we are great in terms of the tools and processes that we have. In product services and solution transformation we are good with that. That’s what design thinking does really well: it comes up with great products and so forth. But I think what this crisis has done is that it has pushed us into forced shock driven business model innovation. And that’s a whole new ballgame and I think you know we are unfortunately in a situation where organizations have driven an efficient mandate for so many years. They typically have very little left in their balance sheet, very low cash reserves, very efficient and trimmed down capabilities and in the supply chain. And all of that together leaves you in a situation where you need to innovate but the resources are very thin and the depth of transformation. I posted today on linkedin our innovation perimin and said it’s not just a question on whether you need to innovate, but how deep you need to innovate. It may not be enough to do product and service innovation, we might have to do business model innovation. That’s a tough bit. It’s a very tough bit.
I mean essentially you are changing the future dramatically once you start to get into that . I know you have worked with some really big organizations across Africa into Europe and Asia. you know in terms of design thinking and the teachings that you have taken to a number or organizations, is there one in particular that stands out for you like a real success and what was the result of that. Like what came out of it from your perspectiveWhat you could see that you used design thinking to create that success in their business
So I think we have seen there are all kinds of ways of measuring success. I think where we have seen the most tangible output in terms of product and service innovation, because that is the way we used to measure a lot of our success. I think that the work that we have done in financial services in some of the banks in terms of accelerating product innovation has been really good. and then we have done quite a lot of work with MTN around how to better understand their customer value proposition and bringing new products and services. Some ways if you ask me that question 6 months ago I would’ve given you as a final answer i would have said, we are very proud of the fact that there are new products out there that are profitable, that are operating that for me have always been the holy grail of what i have done. I think now we are kind of looking for success case studies where we have successfully changed the business model of organizations. I have done a lot of work with companies and groups specifically in Mauritius where we have done a lot of work with some banks and large combo marantz there and i think some of the work that we are seeing at the moment i can’t take full credit for it because i didn’t drive that process but i have got a college called Adrian Unisco who works with Dale and they have really done amazing stuff with the design thinking tools in terms of really creating critical masa around their customer experience specifically. I think that’s one thing that I have learnt. I think a secret to success was they have really created the office of the customer, really that kind of core process. I think that there is good leadership there. But I think we are beginning to see in many cases organizations that are able to try out new business models, new value creation logic and I think actually those ones that we can on a journey with now will be some fantastic case studies. I have become a lot humbler in the past i used to be super proud of just live products. If there is something that is live there and running that would give me massive satisfaction. The fact that there is a kids app or there is a snap scan or there is a you know, a way of accessing wifi router or a mobile router from a phone those kinds of things that we have seen some of them forex innovation, we have seen some of the bank used to give me an enormous amount of satisfaction. Obviously they are still very relevant. But i think the business model innovation is the stuff that has to come out of this is gonna be our next kind of holy grail
What you are talking about is interesting as well because everything that you have spoken about from outside possibly Dale, has either been the financial services sector or telecommunications and we find the same thing it’s like most of the people that want to be innovative or have the appetite to put capital behind innovation, seem to be the most
sectors. But South Africa is a country that has come from an industrial sort of perspective with mining and manufacturing and those kinds of industries and they tend to not be or have a bigger appetite for design thinking or innovation as such. I don’t know what , do you have a perspective on that?
Well there are 2 reasons for that I mean I do quite a lot of work in the mining industry. I have done quite a lot of work with Anglo American Platinum in terms of their mechanization efforts. There is massively innovative stuff happening there. The challenge is with an industry such as mining it is far more difficult to draw a clear line of sight to the customer , you know and design thinking is very empathy based and very customer based. So I think we struggle a bit more in the mining industry because the line of sight to the end customer is not as clear so quite often you got internal customer processes. But definitely if you look at the way that mechanization is transforming mining in south africa. I think it is probably one of the most high impact transformations that’s happening at the moment. The challenge is I don’t know if our tools always work there because we are so used to working almost in that consumer space where the voice of the customer really gives a lot of energy to the process. So i think there is some work that we need to do to adjust the tools for that environment definitely.
Are you saying innovation from an automation perspective cause i know there is always this fear of unemployment particularly from a South African landscape and social aspect. Is it, are you saying it in automation and AI and those kinds of things?
Absolutely. I think what we are kind of trying to do is if you wanna do this in a just way, you are trying to take out underground jobs and you are trying and create more above ground jobs. You know, a lot of the mechanization that is happening at the moment and it’s very challenging South Africa is absolutely at the leading edge of that. Because if you think of a narrow reef underground environment, then we are putting mechanized equipment into that. That extreme low profile machinery that you bring into that space. Those can really increase production massively. Take a lot of people out of dangerous horrible underground environments. I think what tends to happen is that you are going to need a much bigger above ground workforce to be able to maintain the equipment, remanufacture it, work with it and develop it. And I think that’s where Anglo are doing amazing stuff in terms of skilling up local communities specifically to use technology and so forth.
So I think that obviously open cast mining is generally a massively innovative thing. And I think we are not really necessarily leaving the pack there. Because a lot of it is mechanized or automated and all of that. But I think where we are seeing some movement towards underground mechanized mining. I think there is really exciting stuff happening . and it could create a whole new economy which is more around, some cases you have almost a 2:1 ratio of an artisan to a piece of equipment. So you can really create a lot of jobs and much better quality jobs. If we can just improve the skill levels. And that there is a lot of opportunity for creative thinking as well.
Yeah definitely i mean knowledge is power and training and that seems to be what motivates people and gives people purpose and if you can incorporate that and upskill people i think it’s fantastic. And going back now to Know house and the kind of work that you guys do. Experience point in particular. You are using quite a lot of technology in that space to transfer the skills of design thinking. Just for the purposes of people listening. Just give us a breakdown of what that is? How it works, and where you see the benefit in relation to the normal university training etc.
So I think what we have all had to do, all of us who are in this space, we have had to pivot really really quickly to moving from in room type of experiences to virtual ones. And I think that the design thinking community, in some way if you think of the stuff that the guys from Treehouse innovation and Sprint base. These guys have done, they have done a lot of virtual stuff already and a lot of that is already in place. We have pivoted all of our training to the virtual spaces whether you use a miro or mirol, those kinds of environments. I think what’s happened is that the design process that we found, it actually translates very well in the virtual space. I’m doing a lot of work to create virtual design studios for them. Where you actually invite customers into a virtual space. You create virtual white boarding, you create pre existing processes and the translation from the interaction from the room to process design, for example we are working quite closely with a company that does a lot of Robotic Process automation and virtual assistance and chat box and stuff like that. It’s fantastic how we can actually use the design thinking tools in a virtual environment and then translate it very easily to the process mapping.
The area where I’m really concerned in terms of what we are doing. I think the virtual environment is not as rich as the face to face environment in terms of the customer empathy and customer observation and customer engagement. That’s where I don’t know if we have the very front end of the process where we really observe for empathy. You know we have been able to transition all of our experience points. Design thinking in training to online platforms so we could be able to transition most of our design sprints and our design studio work too. You know virtual white boards and virtual conferencing and those kinds of things. The area that I’m really worried about is Staurt is that direct observation and engagement with customers and how they are grappling you know. The in situ observation which we now kind of tend to either do indirectly or we do as a test exercise, that’s something i haven’t figured out and we have a lot of work to do. To say how do we actually bring the energy, the empathy and sense of being there to the virtual space. But everything after that. After that, It’s kind of bizarre. I think you kind of experienced it in the beginning and sitting with this board and Marcus moving around. For folks like me and you who love the energy in the room. You sit there and everybody is working on the miro board.There is little, it’s quiet and people are moving around with posted notes and stuff. To me in the beginning it was quite bizarre. We have got good stuff out of it. Yeah but i think where we are, if i think of a good interview and a good customer observation. You know walking around the market and taxi rank and really seeing what people are doing. Which people are scared to do now. I think that’s something that’s gonna probably impact the quality of some of the work that we do.
No I agree with you, I mean there are certain things I think you just can’t get from a digital space. Particularly the empathizing phase of design thinking. You have to be there, you have to be in an environment and you have to feel it. You know there is a lot that you can get from that. Really unexplainable in a way. you have to document it and you take it back. When you start to look at it. It’s like ok you have got some real gems here that can spark ideas and get the ideas going. Particularly in this environment. But we have been missing that. We have been working also with a couple of big companies on a few projects and we are doing it all with whimsical. And we found that collaboration actually quite fun. You almost get some collaboration from the customer from the whimsical board as well. Where they can fill in some details and that. So that’s fun and that’s been a learning curve for us as well. You know again, this environment creates these new challenges for us and new opportunities. And that on itself is fantastic cause you get to test to see whether or not.
One massive change in our industry which I’m sort of sitting and getting my head around is, you go on to the miro verse or the miro library or, there are not so many world class templates and processes and design sprints guys are just putting out there. It’s actually quite interesting, you know. If you think of the evolution of intellectual capital in this time , there is literally a canvas and pre-made design sprints. A thing that you can just grab. For example in the strategy tools environment we are putting a lot of those things into the miro templates you can get a lot of that stuff. It’s quite interesting. I’m wondering what the differentiators are gonna be. Because it’s almost like tools that used to be differentiated for us just isn’t any more. People are putting tools out there free. And I think the differentiator more and more is gonna be the energy that you bring in sites and the conversations. That sort of stuff is gonna become a bit different. So we are in for a very interesting period because I can’t really see us bringing something to a corporate innovator that they can’t just get access to on a miro board or a miro library or somewhere like that. So it’s really a question of bringing some of those deep smarts in the conversations and the questions that we ask. So it’s a big shift. You know I have not seen this before. I think it’s probably catastrophic for the big consultancies. We are very protective of their IP and they have got the methodology of the house that they bring. You know now there is the very best of virtual techniques and sprints and templates and processes out there. And if you have a license for miro, or whimsical, you have them. And it’s a question of how do we work with them. That’s been really interesting to see how the communities actually transform in that sense.
It’s amazing actually hey. You know I look at that , I look at it. This environment we are in is so positive in that sense because once we move out of it back into sort of a normal economy, a normal sense. We can take a lot of what we have learnt from this now. It makes things more efficient. You know, everything is documented digitally almost immediately. Which is i think is amazing as well. You dont lose anything. And I think it’s quicker. I’m finding stuff can get done a lot faster than the way we used to do it. Yeah there is a question mark around quality and i think it comes back to that question that you said just now. Where you start to empathize with people and their spaces is that kind of thing. That’s where quality starts to become a question mark. Are you getting quality data yeah. It’s gonna be interesting, the future. Put it that way.
Absolutely. You know I think also the fact that we are now kind of being somehow pushed and invited into the spaces of business model innovation. It’s a very exciting space because it kind of has to do with thinking about the implications of what we are doing from a business model perspective. Recently I lectured at the Joburg business school as an MBA faculty and I have got the privilege of running a program called contemporary management. It’s a very entrepreneurial MBA. in my courses I had to deal with whatever comes up. And we went through the whole process of talking about black lives matter and systemic racism and so forth. You know we got the 3 circle model that we operate on. Desirability, viability and feasibility. There was a really interesting article from the board of innovation recently, where they valid the fourth circle which is ethical. Is the integrity of what you are doing. And in some ways we have kind of assumed for a long time that if something is desirable and if something has a customer requirement and a customer need attached to it that is good. And all of a sudden we have to say; does this perpetuate injustice? Is it environmentally responsible?Is it sustainable? Is it safe for people to engage with it? I think that’s gonna be a very interesting progress where awkwardly we have to extend the innovation Swiss port to go beyond just desirable, feasible and viable. And we have had to say is there integrity? Is it ethical what we are trying to achieve? And I think that’s a very interesting area reflection for us to get into and say how do we increase the lense size we look at some of these things going forward?
That’s amazing because, as you said it, I thought to myself it’s so logical. Why didn’t we have that lens on there before? I suppose it just gets highlighted when certain instances or circumstances happen. And then you start to say to yourself, hold on, we need to consider how ethical our decision making processes are. You know, in the design and the innovation that we are doing. I mean it’s actually quickly logical rather. I’m surprised that we are only really looking at it now.
I think we’re gonna be complicit in saying that we are in the world of human centered design. And if it makes sense to a human and it has value to that human and we empathize with the human. And it’s got a desirability element its good. But we have not really thought about that human in that context. It can be highly human centered for someone to put something quite exploitative on the table. But which has a huge amount of injustice and a built in system of racism packed into that. I think that’s one of the challenges that’s looking thats coming out of this crisis is we have to look at silicon valley not just as the space that chains these highly innovative disruptive moves fast and breaks things. But also what does it mean? If you look at Uber and the way that UBer highly desirable from a customer perspective. But is the job that it creates. The moment you start that desirable. I think as we are moving to ecosystems it’s kind of. I think the definition of an ecosystem is that it needs to have a value proposition that is attractive to more than one party. So it needs to be as attractive to the driver as it might be to the client. As it might be to the organization.and we are seeing how You know parts of that preposition have just crushed. Imagine being someone who has staked their financial future on air bnb and they have bought loads of apartments by the sea side. They have covered their bond with that. And air bnb are in situations where they are simply saying sorry there is no demand. And we are actually gonna refund everybody regardless of whether it works for you or not. So I think that ecosystem thinking is gonna push us to say we have got to do that desirability, feasibility, viability piece together with sustainability. But from all angles. Otherwise we are just contributing to something which is not a sustainable future.
Wow that’s amazing man.Cool thank i really appreciate your time and just as a sort of to leave people with a thought about where you guys are, what you are doing, where you see the future going, I don’t know if there is anything in particular that you can let us know and then obviously how people can get hold of you as well.
I think we are really focused at the moment about how do we use our tool sets and approaches to help companies deal with uncertainty. That’s really important. And I think that we have started realizing that the same ethos of learning and iteration and discovering can be also applied to strategy. I think that we are really thinking quite deeply at the moment. How do we create transformational businesses? So businesses that can actually ride the waves. Rather than trying to do the innovation on one transformation. So we don’t know all the answers. We are doing a lot of fun stuff in that space. Our website is www.knowhouse.co.za I’m very active on linkedin and twitter. Love people challenging and engaging and talking. I love the work that you guys are doing. And I think the community is really facing up to this in an amazing way. It’s great to speak to a king ring spirit. someone who is doing amazing work in the space. So thanks for the opportunity. It’s been wonderful.
Yeah, no awesome. Thanks James. We wish you the best of luck. I’m sure we will chat soon in the future again. Hopefully not the bigger gap again as we had before.
Looking forward to it Stuart.
Quite different circumstances. Probably the next time we talk the landscape would have changed considerably .
As my friends in the Middle east say Inshallah. Maybe we will have a face to face conversation over a cup of coffee again soon. I hope that will be the case soon. Wish you well . Thanks for the opportunity, I wish you the best, well done on the work that you guys are doing as well.
Thank James. I appreciate it man.
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