Design thinking: strategy for digital

transformation
Luca Vendraminelli, Laura Macchion, Anna Nosella and Andrea Vinelli

1. The problem of governing digital transformation processes Luca Vendraminelli,

Laura Macchion,
As new technology advancements are available on the market, firms tend to adopt them to Anna Nosella and
gain a competitive advantage. Industrial history is dotted with minor or breakthrough Andrea Vinelli are all based
technological innovations that encouraged companies to change, like the invention of the at the Department of
steam engine or the development of the microchip or internet. The same is happening Industrial Engineering,
nowadays. As technology advancements posed the basis for the ubiquitous spread of University of Padova,
blockchain, virtual and augmented reality, cloud computing and, above all, a vast kind of Padova, Italy.
artificial intelligence applications, these innovations are creating a broad spectrum of
opportunities for companies, pushing them to restructure their operating models to gain a
new level of efficiency or to enable new ways to create and capture value.
Although some firms are born digital without the need to transform, for a large part of the
incumbents adopting digital technologies means embarking on a digital transformation, that
means steering the process that goes from the exploration of digital opportunities to the reduction
of this complexity to a final set of projects to be designed and executed. These design choices
are likely to determine operating model reconfigurations and can enable new business models.
The design of digital transformations is a wicked problem for managers for its complexity and
uncertainty (Iansiti and Lakhani, 2020). First, managing a digital transformation process of an
operating model is complex as it involves diverse stakeholders with differences in values and
priorities, unique problems to deal with and resistances to change. A digital transformation
process is often transversal to the traditional organizational structures, and this makes it knotty to
synthesize stakeholders’ differences in a common operative strategy. Thus, incomprehension
and tension arise for differences in culture and backgrounds and the difficulty to solve disputes
leveraging a hierarchical authority often requires political negotiations, trade-offs and watered-
down compromises. Second, digital transformation processes have uncertain outcomes. Digital
technologies can be combined in many ways, determining esthetic changes, but also in-depth
and complex redesigns of firms’ operations. Thus, learning by trial and error is very problematic
because every digital transformation process is unique, and the rapidly changing dynamics of
technological and social evolution prevent companies to stick to long-range plans.
Given this backdrop of complexity and uncertainty, the purpose of this paper is to explore the
use of design thinking to plan and execute a digital transformation strategy, building on the
ideas published in this journal by Fraser (2007), Holloway (2009) and Golsby-Smith (2007).
Design theories fit the crafting of strategies for their natural flexibility, which enables to
dynamically tackle the stakeholder’s misalignment proceeding by small incremental iterations
instead of drawing long-term plans. Management research for a long time has focused on
exploring and theorizing best practices to solve complex problems with uncertain outcomes.
The research is funded by the
In this respect, design theories provide precious assets to solve them, recommending a Fondazione Cassa di
different mindset from analytical thinking, and a set of tools to be used in practice. Risparmio di Padova e Rovigo.

DOI 10.1108/JBS-01-2022-0009 © Emerald Publishing Limited, ISSN 0275-6668 j JOURNAL OF BUSINESS STRATEGY j
 The remainder of the manuscript is organized as follows. We begin by reviewing the
concept of design as a management theory. Then, we present the case of a large firm in the
fashion sector that adopted them to design and execute its digital transformation strategy.
We conclude the paper by framing the use of design in the development and execution of
digital transformation.

2. Design as a management theory

At the heart of any innovation process lies a fundamental practice: the way people create ideas
and solve problems. This ‘decision making’ side of innovation is what scholars and practitioners
refer to as ‘design’ (Verganti et al., 2020).

Design – as the art of rethinking the existent and changing it into a preferred one (Simon, 1982) –
is a pivotal task that managers exploit every day in their routines, in the arrangement of policies,
strategies and processes. With the term “design,” we refer to a theory of management that
draws inspiration from the way designers are used to tackle their challenges, applying their
mindset and practices in a business setting either to generate new meanings (Verganti, 2017) or
to solve problems (Brown, 2009). The concept of “Managing as Designing” was inspired by the
fact that managers cope habitually with a class of dilemmas complex and uncertain, resembling
the ones designers are wont to solve (Boland and Collopy, 2004).
Yet the research in this field tends to be normative, and the descriptions of design mindset
and practice vary from author to author in their details. Hence, in the following paragraphs,
we summarize the main pillars of design theory that we considered as the referential theory
for this paper, by introducing the mindset that drives designers’ decision-making and the
structure and tools belonging to the design practice.
The mindset that informs the work of designers is based on human-centeredness,
abductive reasoning and learning and iterations. First, when tackling a challenge in their
work, designers are human-centered, as they base every decision on a deep awareness of
the users’ profiles and habits. Second, designers embrace abductive reasoning. This
means that in the path to solving a problem, designers start from a random point in the
solution space, and they proceed through adjacent opportunities by making hypotheses
and testing them, converging this way on a path to follow. The adoption of abductive
reasoning implicates that:
䊏 the activity of design is largely committed to a learning process; and
䊏 the design activity is extensively based on iterations, as the learning process is
achieved by cycling through making a hypothesis and testing them.

Looking instead at the practice of design, the architectures of the most important design
processes[1] unfold in three phases: problem framing, ideation, and development and
release (Fraser, 2007). In each of these phases, designers are extremely mindful of the
objectives to achieve and of the toolkit they have at their disposal to tackle different
situations.

2.1 Problem framing

The design process begins with the designer focusing on the problem-to-be-solved, to
define the ideation space. This is done iteratively, starting from a data collection (e.g.
exploratory interviews) useful to refine the questions asked and then iterating the data
collection to focus on specific aspects of the problem. Interviews and field observations are
made to stimulate the learning process to acquire the right vocabulary, master the network
of relationships around the problem, empathize with the users and understand their
priorities, using, for example, mapping tools such as the customer journey map or job-to-
be-done analysis framework.

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2.2 Ideation
Acquired a sufficiently clear overview of the problem, designers begin to think about a
possible solution, ideating the first conceptualization. As the design process unfolds,
often carried out in teams, problem-solvers extensively rely on brainstorming to
discover, select and refine ideas. The structure of brainstorming typically iterates a
divergence–convergence generative approach to produce or search for existent ideas
at first (i.e. divergence) to be filtered in a second stage with an analytical-driven
approach (i.e. convergence). In opposition to the traditional belief that working in teams
is the best way to stimulate creativity, recent contribution has shown the benefits of
adopting within the design process also individual moments of reflection to stimulate
criticism, or pair discussions (Verganti, 2017).

2.3 Development and release

The ideated concept is furthermore refined and tested before its release, and its
development is done by developing a prototype to make it tangible. A prototype is a
representation of a concept that allows designers to interact with their ideas. It can be
crafted with physical materials or developed in the form of imagery, using “storyboarding,
user scenarios, metaphors, experience journeys and business concept illustrations”
(Liedtka, 2015). Displaying visually their ideas with physical prototypes or imagery
stimulates the learning process, anticipating the discovery of problems and speeding up
the concept development. Once a prototype attains a satisfactory result, the development
process is finalized with a test on a sample of users, to probe its efficacy in a real context of
application and understand if the problem identified has been successfully resolved.
Finally, the solution is released.

3. The study
This qualitative research aimed at exploring how to apply design theories to govern digital
transformation processes. Due to the exploratory nature of this aim, the case study
methodology was adopted as it allows for a deeper level of observations. The case study
methodology is appropriate when the research is exploratory and the phenomenon under
investigation is still poorly studied, as it offers the opportunity to achieve in-depth results
through direct experience. We conducted an in-depth case study by selecting one of the
leaders in the eyewear sector (renamed as EYEWEAR), producing sunglasses, optical
frames and sports eyewear as a contract provider for part of the most important fashion
brands in the world, counting thousands of employees in its operations, distributed across a
global supply chain. The choice of a single case study enabled a thorough examination of a
company that adopted design theories to develop and execute its digital transformation
process. Centering the paper around a single case offered the opportunity for a complete
in-depth analysis of how the design process was used, resulting in both high transparency
and comprehensibility. Specifically, this case reconstructs the three months process that
led to the definition of the list of digital projects to be implemented in the year 2020–2021, to
exploit the potential of digital technologies in the operations of six production facilities and
three distribution centers. The eyewear company was selected based on our professional
network: thanks to past collaborations, we were already aware of the digital policies in
place, helping us to get access to data more easily. Indeed, the case analysis is based on
the collection of primary data by direct observation. The digital transformation of EYEWEAR
was assigned to a focal team responsible for carrying out the process, which consisted of
eight people: Chief of Product Engineering, Chief Operating Officer, Chief Supply Chain
Officer, Head of Logistics, Head of Controlling, Head of Product Engineering, Head of
Supply Demand Planning and Head of Customer Demand Planning. We participated in
meetings, workshops and we constantly monitored their activity, but always as an external

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 entity, being careful in not being intrusive, ensuring that the decision-making process was
essentially their responsibility.

4. A design-driven framework for digital transformation processes

The EYEWEAR’s digital transformation process involved exploring the ample spectrum of
digital opportunities to select part of them and design their adoption in operations and
supply chain. The execution of the selected digital opportunities ferried EYEWEAR’s
operating model from its initial configuration A to its final configuration B (Figure 1). To
examine the use of design theories in managing digital transformation processes, in this
section, we will explore this change of state, framed as a three-stroke process based on
Fraser (2007).

4.1 Problem framing: representing reality

The first activity for the focal team was a one-day brainstorming on three topics: the
corporate strategy, to make sure to plan digital transformation aligned to it; a map of the
actual operating model of the firm; and the list of digital projects they were already
implementing.
To trace these inputs, they scheduled additional interviews with the CEO, the Chief of
Innovation, the Chief of Marketing and two external suppliers. A large part of the interviews
was also dedicated to the collection of explicit requests from the diverse stakeholders and
problems that they were facing in their routine. With this data on hand, they meet up in a
second brainstorming meeting, where they diverged by adding their reflections on these
topics, and they converged on a list of needs that future digital projects were supposed to
fix (see Table 1).

4.2 Ideation: design a digital transformation strategy

In the second phase, the team started from their representation of reality to ideate the
conceptualization of the digital transformation strategy. Within the adopted perspective, the

Figure 1 Mechanics of a digital transformation process

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Table 1 Problem framing – example of needs identified
Problems Descriptions

Data Data sourcing:

䊏 No data sources to monitor production status

䊏 No data from e-commerce
䊏 No data from suppliers
䊏 Data are stocked into locally saved excel spreadsheets not accessible to the organization
䊏 3D early prototypes are not used in the product engineering
䊏 We lose a lot of data for lack of sensing technologies

Data stock:
䊏 We don’t have a central data repository
䊏 We don’t have standards to manage data

Data accessibility
䊏 No visibility on relevant supply chain reports
䊏 We don’t have data and insights in real-time to make decisions
䊏 No visibility on supplier operations – suppliers have a lead time of 14 weeks (MTO)

Policy problems
䊏 For strategic projects, we need to open a ticket with the IT function and this requires time
䊏 We don’t have standard data governance (i.e. who is responsible for what)
Software 䊏 There is not a global demand forecast model. Marketing and Production have different models and data
䊏 There is no global track on digital projects
䊏 The return management is handled manually or with locally saved excel spreadsheets
䊏 There is no software for SKU tracking after they have been shipped
䊏 We don’t have a platform to run A/B testing
䊏 We need to run analytics to predict the value target for purchasing
䊏 We need a corporate platform to make data analysis
䊏 There are no predictions of future problems
People 䊏 Skills mismatch – “the last software implemented is not used because people don’t know how to use it”.
䊏 Operators miss the big picture
䊏 “People have no time for added value analysis”
䊏 People are stuck with solving an ordinary problem rather than focusing on innovation

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 word “strategy” recalls the Logical Incrementalism Theory of strategy-making, whereby
executives’ role consists of pinpointing a direction for the organization to be followed,
allowing tangible plans to emerge in a later stage (Quinn, 1978). Indeed, when talking about
digital changes in the configuration of firms, in this paper we refer to strategies designed to
explain actions or guide decision-making processes (Mintzberg, 1978).
In the EYEWEAR case, the ideation of a digital transformation strategy had the purpose to
coordinate people toward approaching the vast panorama of opportunities offered by
digital technologies, consistently with what was relevant for corporate success. The digital
transformation strategy consisted of two parts in practice. Initially, the team outlined a vision
of the configuration “B” that the company wanted to reach, which consisted of a description
of how EYEWEAR imagined leveraging digital technologies to transform its operating model
and enable new ways to compete in the market. Then, they operationalized this vision in a
roadmap of key strategic goals with a yearly horizon to describe how the company was
planning to execute its digital transformation (see Table 2).

4.3 Development and release: turn digital transformation strategy into digital
projects
The third phase was dedicated to turning the digital transformation strategy into a portfolio
of projects to be executed. Hence, for each key strategic goal, the focal team created one

Table 2 Digital transformation strategy of EYEWEAR

Vision Year 1 Year 2 Year 3

Infrastructure Paperless data Complete the migration to the Full visibility on the supply chain
development. We want collection Cloud space data for all the organization
to build an operational Build a “Supply Build a unique central data Development of the central
platform and develop Platform” to manage the repository for all the corporate platform to create a unique
the IT infrastructure to order from the upstream functions standard to make analyses and
enable future digital of the supply chain Real-time sync with Asia Pacific share them within the company
investments. Autonomous sensing of Team (e-procurement)
the within-plants data
sources
Algorithms and Build a unique Real-time product tracking in Insights produced by analytics
software development. forecasting model that the operations will be shared through the same
We want to develop integrates customer Real-time product tracking in platform
new models and and supply-demand the supply chain Processes will be people-less,
applications to data The order release process and as new autonomous problem-
substitute humans in Develop a real-time a large part of the planning solving loops will be created.
operations and quality control in the process will be automatic And people will focus only on
automate decision- operations processes Develop a central platform for value-added activities and on
making. Automatic financial future app developments improving the system
reports Use of 3D prototypes to The operation platform will allow
anticipate product engineering people to make A/B testing
Develop a tool for project Social media will become a tool
selection – project management for demand forecasting
People improvement. AI Hire a data science Create a reskilling plan Create a reskilling plan
developments will team
require training people Assessment of the
to become process digital skills of
engineers rather than employees
executors. Create a manifesto for
the digital
transformation to share
the defined strategy
A tool to manage the
workforce

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additional group of employees to run a design sprint (for details about the process, we
suggest referring to Magistretti et al., 2020). The assigned challenge was to design one
digital solution for each strategic goal (Table 3). At the end of the design sprints, the focal
team collected a portfolio of the business case that has been reviewed and evaluated to
select where to allocate the digital transformation budget.
The investment decision considered the fit with the Digital Transformation Strategy defined
and the resources required by each proposed project. Based on these two dimensions,
digital projects were quantitatively classified into four types: quick wins, elephants,
collaterals and boulders (see Figure 2).
Quick wins were projects demanding light processes redesign that, however, possessed
high strategic importance. Examples were the introduction of a set of sensors in a

Table 3 Examples of digital projects developed

Key strategic goal
Referential vision assigned Project description

Infrastructure development. We want to build an Paperless data The aim of the project was the digitalization of all the
operational platform and develop the IT infrastructure collection data sources within the plant to create paperless
to enable future digital investments. operations. To this purpose, the team worked on two
levels of analysis: (1) paper-collected data and (2) not-
tracked data. They conducted a deep investigation to
map the flow of activities, highlighting where data was
produced and how they were tracked. They collected
all the documents employed and for each of them, they
designed a specific solution that oftentimes required
the introduction of a specific workstation (i.e. a
computer connected to the corporate network), to
provide workers with the possibility to insert data
manually. They furthermore designed the introduction
of a set of sensors (e.g. RFID) to automatize the data
collection of data that were not tracked in the
operations yet.
Algorithms and software development. We want to Develop a real-time The quality control project was organized into two
develop new models and applications to substitute quality control in the layers. On the one hand, the team proposed a set of
humans in operations and automate decision-making. operations processes technologies to automatize the collection of quality
data, creating synergies with the “Paperless Data
Collection” team. For example, they automatize the
scratches detection and the size/shape measurement
by working with partners specialists in the optometric
field. On the other hand, they designed a set of
algorithms to mine insights from the data collected,
prototyping a cockpit to enable all the organizations to
access the data. Following the human-centric principle,
the cockpit was designed based on a study of users’
needs and behaviors.
People improvement. AI developments will require A design tool to manage The team developed a Workforce Management System
training people to become process engineers rather the workforce to optimize workforce scheduling. The algorithms take
than executors. into account the abilities and limitations of the
workforce. The software pivots on a central data set fed
with the skill matrix data (i.e. data per each worker,
describing what capabilities they have and which jobs
they are trained to perform). All decisions are tracked
and shared within the organization in real-time
improving cooperation and increasing knowledge
throughout it. The system uses ML algorithms to learn
how to best allocate people within the production lines
and departments.

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 Figure 2 A classification tool for digital projects

production line, or the shift from desktop computers to tablets. Elephants were instead
projects requiring long-term and complex processes that also required high budget
allocations. They were infrastructural projects, such as the migration to a cloud system, the
full redesign of a production line or the automatization of the entire accounting system from
order to invoice. Finally, collateral and boulders projects required the same resources,
respectively, of quick wins and elephants, but offered a lower strategic fit, which
determined their exclusion from the investment portfolio. Indeed, EYEWEAR’s investment
strategy was to search for an equilibrium between elephants and quick wins. The
surrounding idea was to balance short-term results to support a digital culture to get
traction, and leverage long-term investments to impact the enterprise architecture.
The exploitation of the digital transformation process allowed the focal team to learn better
the mechanics of their company and empathize with the technological opportunities that the
market offered. Consequently, when the investment decision was made, they cycled back
to the ideation phase to review the definition of the problem and strategy to identify new
strategic goals to be turned into new projects.

5. Reconnecting to design theory

We framed the EYEWEAR’s digital transformation in a three-stroke process (Figure 1). By
cycling through this design-driven process, the company redefined its capabilities, through a
new configuration of its operating model. The framework begins from the definition of the
problem that a digital transformation strategy was required to answer to. The identification of
the needs was done using ethnographical tools and visualization, following the design practice.
Based on this representation of reality, constantly working at an abstract level, the focal team
envisioned the company’s future state, breaking it down into a roadmap of short-term goals to

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be achieved. This move is very close to the theory of meaning in design (Verganti, 2017), as the
definition of a digital transformation strategy was a leadership act that aimed to create a shared
meaning for the role of technologies in the organization. In EYEWEAR, the meaning was
purposely created to align employees’ efforts with what was relevant for corporate success.
The consequent step was the attempt to turn the digital transformation strategy into a set of
projects to be executed. Reconnecting to the theory of design, this evidence suggests that
prototyping a digital transformation strategy by turning it into projects to be executed allows
designers to better learn its feasibility and utility, continuously moving between problem framing
and ideation. This paper furthermore contributes by proposing a classification of digital projects
in quick wins, elephants, collaterals and boulders. The classification of the project portfolio
allowed the focal team to make rational investment decisions among the designed projects.
Finally, the iterations made by the team suggest that when the future configuration B is
achieved, the company can use the experience acquired to criticize its problem framing
and digital transformation strategy, iterating the design process to target a configuration C,
then D and so on (Figure 3). Accordingly, a design-driven digital transformation becomes
an incremental learning process.
At a more general level, the evidence that design practice fits digital transformations probes the
usefulness of design outside the new product or services development sphere (Dell’Era et al.,
2020). Design thinking helps to navigate the complexity and uncertainty in digital transformation
processes where analytical thinking fails, providing mindset, processes and tools.

6. Conclusions Keywords:
Digital transformation,
This paper expands our awareness of the pivotal role of the design theory and practice in Design thinking,
managing, supporting and realizing digital transformations. This study is a research attempt Technology management,
Strategy,
at the crossroad between the fields of design, strategy and technology management and
Innovation,
groundwork for further field or lab experiments to examine the benefits for managers to Design,
adopt design-driven methodologies. Change management

Figure 3 Iterations of digital transformation processes

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 Note
1. IDEO, Continuum, Stanford Design School, Rotman Business School and Darden Business School.

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About the authors

Luca Vendraminelli is a Post-Doc Research Fellow at the University of Padova and visiting
fellow at LISH, the Laboratory for Innovation Science at Harvard University. His research
activity revolves around the design of digital transformation processes, the effect of AI
adoption on firms’ productivity, jobs characteristics and human behaviors. His work has
appeared in scientific journals such as the Journal of Product Innovation Management.
Luca Vendraminelli is the corresponding author and can be contacted at: luca.
vendraminelli@[Link]
Laura Macchion is an Assistant Professor at the Department of Management Engineering of
the University of Padua, where she teaches Quality and Operations Management and
Circular Economy. Her competencies are focused on Supply Chain Management and
Operations Management. Her research deals with the impact of sustainability on the
management of complex and international supply networks and with the possibilities
offered by new technologies to product and process personalization, assessing their
implications for supply chain configurations. Laura Macchion has also teaching experience
in Executive and Master Programs in Business Schools and is actively involved in national
and international research projects.

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Anna Nosella is Full Professor of Business Strategy at the Department of Engineering
and Management at the University of Padova, Italy. Her main research interests
concern innovation management, dynamic capabilities and strategy. She won several
“Best Paper” awards, and she is a member of the Editorial Board of three Journals
indexed ISI.

Andrea Vinelli is a Professor of Operations and Supply Chain Management and Service
Operations Management at the Department of Engineering and Management at the
University of Padova, Italy. His research and consulting interests lie in the areas of
operations strategies, supply networks and supply chain management, with specific
expertise in the fashion industry.

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