By Gigi Kalaher, VP Design Strategy, Fidelity Labs
Fidelity Labs has had a growing Design Thinking team since 2005, helping people in all parts of the company adopt a design-forward approach to their work. More recently, the practice has evolved to focus on design strategy in the firm’s incubators, or small startups run by Fidelity tasked with exploring adjacent spaces to its core business. Fidelity’s design strategists apply a human-centered lens to uncover unmet needs and hidden opportunities.
Design thinking has always been seductive—the promise of creating new products, services and businesses from a process that oh, by the way, happens to be fun, creative, and satisfying. It looked so different from business thinking or engineering thinking. There were colorful Post-its and foam core prototypes instead of Excel spreadsheets and rows of code. This very difference, however, lent it an air of frivolity, and as a result, in many minds it came to be thought of as something peripheral to business growth.
Many companies experimented with design thinking. Some did it lightly, taking a Design Thinking boot camp at the Stanford d.school or hiring a design consultancy such as IDEO or frog to do a project. When the results were not business-changing, they turned away, saying, “Well that didn’t work.” But Fidelity Investments committed to design thinking early on and continued to iterate, learn and refine the methodology until they found what provided the most value.
Fidelity Labs has had a growing design thinking practice since 2005, helping people in all parts of Fidelity Investments incorporate a different approach into the way they work. Over the past decade, we have used traditional design thinking as a stance, a way of approaching a problem. We have taught thousands of our colleagues the methodology, started a Boston-based Design Thinking Meetup and collaborated with the d.school on several classes.
More recently, we have evolved our practice to increase our focus on design strategy—application of design thinking to identify opportunity spaces and create new businesses. This work has happened primarily in our incubators—small startups run by Fidelity tasked with exploring adjacent spaces to our core business. The expertise and craft of design strategists is in uncovering real opportunity in non-obvious places because of their human-centered lens.
Here’s how design strategy works on incubators in Fidelity Labs. Our design strategists home in on a human need and work with our product managers to size that need. When there’s an opportunity that is both emotionally deep enough to be meaningful for people and sizable enough to make a business, the incubator team goes after it and builds a new product, service, platform or experience.
Something that starts very broad, like “Why aren’t people in their 20s saving for retirement?” becomes something specific and actionable very quickly (“Young professionals have crushing student loan debt”). With an opportunity space defined, the team digs in to understand the texture and nuance of the ecosystem. They explore what it’s like for students applying to college, for their families, for college administrators and for employers trying to attract young talent after graduation. They map out the needs, pain points, personas and opportunity spaces. This knowledge, layered together with all the market information, competitive data and business models that the product manager drives, becomes the lens the team uses to find the best business opportunity.
The team moves fluidly between the human need, to how that need could be met, to what kind of business growth that could bring. Each variable is adjusted until the opportunity is too compelling to ignore.
A project might start with a larger trend. For illustrative purposes (this is not a business that Fidelity Labs is pursuing!), imagine it’s something like “people are eating more sugar, and so the dental business is booming. How might we serve the dental business community?” So, design strategists go out and talk to veteran dentists, aspiring and new dentists, schools educating those in the dental profession, patients, makers of dental equipment and people who run dental offices. We do this in-person and in-context, over video, using mobile research, or whatever it takes to get the stories and data points we need. We then identify the biggest set of unmet needs. Let’s say in this instance it’s:
- The first and last person the patients interact with when they walk into the dental office overwhelmingly influences the quality of their experience, but hiring staff is an extreme pain point for dentists
- Getting new patients referred in and referring some patients out to specialists is time consuming and can involve inconvenient manual transfers of dental records
- All the technology in the office breaks regularly, and there’s no one who knows how to fix it
The next step is sizing the opportunity. While the first unmet need might be the most intensely felt, we see on the competitive landscape that there are already a number of emerging startups addressing this need on a platform level. We start conversations about partnerships and keep looking.
What about referrals? We size a couple of different plays—marketing support to help get new patients in, and record transfer opportunities to help with referrals out. But even if we grow the number of patients in our model aggressively year over year, we’d have to build something dental offices would be willing to pay $40,000 a year for to build a business. So we don’t start there.
What about helping dental offices with technology support? We found in our design research that every time a machine or computer goes down and the dentist steps away from a patient, their business suffers. Even more than that, the mental weight and stress of this hassle is something dental business owners would pay to remove. We come up with a couple of directions and market-size each. They seem like big opportunities. So then we start to create concepts and get them in front of people, and when we do, dental workers at all levels become physically animated in the conversations. They don’t want to let go of the materials in front of them. They ask how soon we can start helping them.
This is the moment we’re looking for, so we set out to build a business. As the team grows, the design strategist stays focused on user need. They test prototypes in the field to get data around product direction, service ecosystems and business models. They test the highest risk assumptions so the business can be built as fast and as lean as possible. They capture insights and feed them back to the team so that everything that’s being built has the best chance possible of serving deep, unmet needs. The design strategist also keeps the user need top of mind as the new business either transitions back to the larger Fidelity organization or spins off into a separate entity. They make sure the powerful user stories and key motivators are woven into the fabric of the business.
Now, the dentist example isn’t literally one we’ve done, but watch as our incubator launches soon, because you’ll see how this example is perfectly analogous to the new business we have created. Design strategy isn’t just for making things. It’s for growing revenue, too.