Family businesses are unique organisations that usually mix tradition and innovation to ensure their legacy endures through generations.

However, the need to innovate in today’s rapidly changing markets might drain the entrepreneurial spirit of such firms. In this regard, design thinking, a human-centred problem-solving approach, may foster entrepreneurial thinking and drive transformational growth within family businesses.

What is design thinking?

Design thinking (DT) is a systematic, iterative process aimed at recognising customer needs, generating novel ideas, prototyping solutions, and testing them. It presents a well-designed pathway, curated on empathy and collaboration for solving complex problems through the identification of hidden opportunities.

In consequence, family businesses could leverage the realistic framework provided by design thinking to foster innovation with due consideration for values and traditions defining the basic identity of the family business.

Key avenues by which design thinking fosters entrepreneurial thinking include:

• Promoting Empathy through generations: Family enterprises sometimes involve numerous generations, each with its own set of values and perspectives. Empathy is the principal constituent of the DT Process, in this pursuit, the members of the family business would need to empathize with the changing customer needs and the traditional business values. For instance: If a third-generation family member has realized the importance of digital transformation for business growth, however, if the founders emphasize maintaining conventional ties with the customers. Then, empathy-building exercises would help capitalize on new opportunities for growth while respecting traditional practices.
• Embracing ideation to break the mould: The principal component of Entrepreneurial thinking is the capability to visualize new opportunities. On the other hand, no concept is off-limits in DT, as it promotes open-minded discussions and brain-storming sessions. Thus, family firms could replace long-standing practices with DT practices to stimulate innovation. Additionally, the organization of frequent ideation workshops involving family members and staff could result in innovative ideas in the form of customized offerings for customer delight.
• Rapid prototyping for experiential learning: Prototyping facilitates experiential learning by testing novel concepts and ideas for usability.  However, Family firms stand cautious with regards to innovation, as they fear that it might compromise their legacy. Contrarily, DT provides family businesses with various cost-effective and low-risk avenues for prototyping and testing novel concepts for business growth and prosperity. Within this context: A family-owned bakery business, for example, could avert the risks of a full-scale launch of a new concept through market testing the new concept using a digital app or through limited-time offerings.
• Enhanced collaboration for problem-solving: The DT process is highly collaborative in nature, as it aims to define common goals based on all the stakeholders’ inputs within each of its stages. Hence, family businesses could leverage the DT process to promote transparency and inclusive decision-making while reducing family conflicts. Thus, enhanced stakeholder integration, facilitated through DT, ensures that the proposed changes for growth and survival are positively embraced and successfully implemented by all the principal stakeholders.
• Being aligned with changing market needs: Awareness of changing market needs stands essential for Entrepreneurial Thinking. Herein, DT convenes constant feedback from consumers facilitating the family businesses to stand flexible to changing customer preferences while adhering to their fundamental core values. To illustrate: A family-run business in fashion merchandise, could rely on constant customer feedback for enhanced awareness of changing customer needs and consequently align the business outputs to modern customer requirements by diversifying their product lines into clothing that is customizable and eco-friendly.

An actual instance of a family business leveraging on DT for market survival

Imagine a situation where a family owns a winery. Faced with severe market competition, the family business adopted DT to enhance its product offerings. Within this context, they realized the importance and need for personalized wine tasting to convene immediate customer feedback.

Hence, the business started to introduce new variations within the products as prototypes and organized personalized wine-tasting events to gather instant customer feedback, and consequently used the feedback to refine their new product introductions. The personalized wine-tasting events additionally helped the winery to be created, tested in small groups, and refined based on input from the customers.

As a result, the family-owned business was able to able to reinforce the family’s reputation for quality and hospitality while simultaneously generating additional revenues from younger clientele.

The process of integrating design thinking into a family business includes:

• Promoting Awareness: Employ workshops or online courses to educate family members and employees about the principles of Design Thinking.
• Making a Modest Start: Choose a manageable endeavour, like enhancing customer service or testing a new product.
• Formulating a Cross-Generational Team: To ensure a varied range of opinions, include representatives from all levels and generations.
• Targeting on Customer Delight: Use interviews, surveys, and observations to uncover customer pain points and aspirations.
• Emphasizing recurrent Iterations: Each new solution should be seen as a prototype that could be further improved based on the feedback.

 Conclusion

There is more to Design Thinking than just a simple methodology; it stands out as a philosophy that positively contributes to the entrepreneurial spirit. For a family business, the DT serves as a pathway to innovation honouring their heritage, while ensuring survival within a competitive landscape.

Thus, family businesses could engross design thinking into their culture, convene identification of hidden opportunities for survival, face unique challenges with ease and preserve their heritage for upcoming generations.

Ready to take your family business to the next level? And witness how design thinking could help flourish entrepreneurial thinking?

Kavitha Reddy Gurrala is an Assistant Professor at Woxsen School of Business, Woxsen University.

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