Abductive Thinking

I was given as a birthday present, a ticket to the 2011 Design Indaba in Cape Town. I have only heard good things about the Indaba and am looking forward to attending. I have long been interested in how design thinking and business relate. This is not a new relationship. Way back in 1950s Thomas Watson of IBM argued that “Good design is good business.” More recently Roger Martin has put forward in a book entitled The Design of Business: Why design thinking is the next competitive advantage, will come from imagination – intensive industries or as he calls it those that play between the mystery (complex problems with limited empirical data) to heuristics (rules of thumb or sets of guidelines for solving a mystery by organized exploration of possibilities) space.

My interest is primarily focused on how design principles and approaches to both idea generation and problem solving, can be utilised in business innovation, which is a key ingredient to sustainable business growth.  My interest extends beyond new product or service development to more conceptual aspects like business model and strategy innovation as they are all ingredients to finding new growth platforms.  That said, I am not trotting out design thinking as the cure for internal innovation difficulties or the solution to practical competitive and differentiation challenges. I simply believe they may offer businesses alternative thinking tools that are useful.

Defining the term design thinking is inherently problematic and probably as difficult as trying to define art or aesthetics. While hardly a design expert or purist I would butcher some of Paul Rand’s quotes into the following; Design thinking is a way of creating meaning to a mass of unrelated needs, data and ideas by combing or synthesizing form and content into practical and usable solutions that solve new or existing or unpredictable problems in better ways.

For me the definition is less useful than some of the principles inherent within good design, namely:

  • The use and inclusion of abductive thinking
  • The focus on the end users usage context
  • Are you solving the right problem
  • Exploring new ideas via smart prototyping

The dominant and hugely useful thinking styles within business are primarily deductive and inductive reasoning. These two  styles are typically declarative in that they attempt to find or declare the truth about something i.e. the market size is growing by greater than 10% or not. They take existing data and attempt to analyse it, until as a friend of mine suggests, it confesses. The logic is that the better the analysis the greater the chance of new insights being attained. These new insights offer opportunity for new products, services and business models.  One of the problems, pointed out by Julietta Cheung, is that reductivist logic tends to reduce possibilities down to the least number of nouns, which can cause misunderstanding of the (sometimes subtitle) complexities that are emerging and thus missed opportunities for innovation.

 The American philosopher Charles Peirce argued however, that that new ideas did not emerge from the conventional forms of declarative logic. His premise was that no new idea could be proved deductively or inductively using past data.  By definition, this meant that a third fundamental logical mode needed to exist that relied on logical leaps of the mind. He called this abductive thinking. It applies when the thinker attempts to “inference to the best explanation” for a never experienced before observation.  This is modal thinking where the observer simply postulates what might be true. By actively examining new data points, challenging existing models and explanations we are able to start inferring new worlds without any substantive proof. (Enough to make any sane business person shudder)

Going back to my hackneyed definition, how might form and content be represented within “business speak”.  Within the context of a business model, form would be the archetypical design of what activities/processes you decide to pursue (or not to) in support of delivering on a chosen value proposition(s) and content would be how the value proposition(s)are actually presented and delivered for consumption. By way of example, Threadless.com a t-shirt manufacturer and on-line retailer created a very innovative way of solving an old problem. How do you sustainably design, manufacture, distribute and sell cool t-shirts at a profit.


  • The end customers are the t-shirt designers (Thus very low design costs and many more good designs)
  • Winning designs are rewarded and designers validated within their community
  • Only highly rated designs are produced in demand qualified run sizes
  • The model is primarily on-line


  • The designs themselves
  • Site layout and usability thereof (the ease of submitting, voting and conversing with community members)
  • Pricing, availability, quality, sizes etc

At the time of inception, there was probably “no quantifiable proof” that building an online community of active and contributing designers and t-shirt loving customers could be created and scaled to the point of significant profitability.

Another interesting aspect of design thinking is the process designers use to figure out actual needs, form and content. Asking ten years ago, the average cell phone or music lover via user or focus groups, what changes they would like to the device, interface, functionality and pricing of supporting content and you would probably not have been offered the insights required to design the i-pod or i-phone. Most of us can’t easily describe what we cannot see or imagine. This needs to be postulated out through observation and imagination. Apple have been superb at this.

Lastly, most problems have no single best solution, certainly to start with. Design thinking espouses the concept of learning by doing.  Start with a variety of solutions, pick a couple, prototype, get feedback, refine the problem and evolve the solution.  As business people we tend to spend lots of time trying to create the best solution and then create a strategy (positioning, educating and overcoming resistance) for rolling it out. The counter to prototyping is that it is too time consuming in an increasingly time competitive world and typically costs too much. The upside however, may be better products, services and more effective business models and strategies.