Design thinking - For solving real-world problems

The Stanford University very much deserves the reference for the discussion on ‘Design Thinking,’ as it has played a foundational role in developing Silicon Valley - a home to numerous major tech companies like Apple, Google, Meta (Facebook), and Intel, as well as countless startups and venture capital firms, including Khosla Ventures, which Vinod Khosla founded, an Indian-American, IIT-Delhi, Carnegie Mellon University (MS), and Stanford University (MBA), with a net worth of $7.9 billion (Forbes, 2025).

In 2013, I completed a six-week Stanford online course on ‘Design Thinking Action Lab’ and I led a global team as part of this program. Since then, I have always sought out opportunities to experience Stanford University - it stands as an inspiration not only for its students but also for its visitors as a symbol of ‘intellectual curiosity’ and architectural beauty.

My most recent visit to Stanford University campus inspired me to write something on the application of ‘Design Thinking’ in a larger business context. As a matter of fact, Stanford University has been instrumental in shaping ‘Design Thinking’ into a powerful, globally recognised approach. The Hasso Plattner Institute of Design, Stanford University, most commonly known as ‘d.school’ - a design thinking institute, serves as a central hub for fostering creativity, empathy, and innovation.

Some photos from my visit:

Before deep diving into the subject of ‘Design Thinking’ which takes a human centred stance for solving real world problems, let me share some facts about its impact in solving real world problems.

Over 20 million premature and low-birth-weight babies are born each year around the world. Four million of these babies die, and those who survive often grow up with life-long illnesses. 

One of the main causes of this is hypothermia; these babies don’t have enough body fat to maintain their own body temperature.

Traditional incubators are expensive, require constant electricity, are complicated to use, and are often only found in major urban hospitals. 

In the absence of any appropriate equipment, the local solutions, particularly in rural Africa, included wrapping hot water bottles around babies, placing them over hot coals or placing them under light bulbs - all extremely dangerous and ineffective methods.

Applying design thinking, Jane Chen and three other Stanford graduate students, as part of a class project in a "Design for Extreme Affordability" course, created the 'Embrace Warmer' (right) - a low-cost, portable infant warmer that used a phase-change material (a substance which releases/absorbs sufficient energy at phase transition to provide useful heat or cooling)  to maintain a steady temperature for hours with no need for electricity and easy-to-use design, it saved countless newborns.

By focusing on the needs of the users (a human centered approach) and the constraints of the environment, the innovators truly turned a complex problem into a life-saving solution.

Considering the above, let's look at the definition of Design Thinking, highlight its key stages, and explore how to apply it effectively in the case of ‘Business transformation’ in a tractor manufacturing company in India.

What is Design Thinking?

Stanford’s d.school (Hasso Plattner Institute of Design) defines Design Thinking as a human-centered, iterative approach to problem-solving that focuses on understanding the user, challenging assumptions, and redefining problems to identify innovative solutions. It involves a combination of empathy, creativity, and rationality to meet user needs effectively.

The five key stages of Design Thinking, as taught by Stanford, are:

1. Empathise: Understand the experiences and emotions of users by observing and engaging with them.

2. Define: Clearly articulate the problem by synthesising insights from the empathy phase.

3. Ideate: Brainstorm a range of creative solutions without judgment.

4. Prototype: Develop low-cost, simple prototypes to test ideas quickly.

5. Test and scale: Gather feedback from users to refine and improve the solution.

Stanford emphasises that Design Thinking is not a linear process but a flexible and iterative one, encouraging teams to revisit and refine their understanding as they learn from users.

Consider applying Design Thinking in a tractor manufacturing business, aiming to double the profit in the next three years and taking the route of ‘business transformation’ which refers to a comprehensive, strategic shift in the company's operations, processes, and culture to achieve significant improvements in performance, competitiveness, and long-term growth. It often involves adopting new technologies, optimising supply chains, enhancing product innovation, and expanding market reach.

The starting point, as mentioned above, will be ‘Empathise’.

1. Empathise – Understand farmers, dealers and internal teams

Why? Doubling profits requires understanding the real pain points of customers (farmers), dealers, suppliers, and employees. These are the steps involved - 

• Conduct field visits and interviews with farmers to understand their challenges (e.g., fuel efficiency, maintenance, financing).

• Speak with dealers and service centres to identify bottlenecks in sales and support.

• Get input from the shop floor / factory workers and engineers to improve production efficiency.

For example, John Deere invested heavily in precision farming after identifying farmers' struggles with manual operations and cost inefficiencies. The outcome - identified real opportunities for product and service innovation.

The next stage will be ‘Define’.

2. Define – Reframe the business challenge

Instead of just saying, “We need to double profits,” we can reframe the problem - 

• How might we increase tractor sales without just lowering prices?

• How might we develop new revenue streams (leasing, financing, service plans)?

• How might we reduce production costs without sacrificing quality?

For example, Mahindra Tractors redefined its challenge from “selling tractors” to “empowering farmers through technology,” leading to innovations like smart tractors and digital farm advisory.

This may help companies to come up with a clear problem statement that may align well with their innovation efforts.

3. Ideate – Brainstorm solutions for growth and efficiency

• Conduct cross-functional ideation sessions with R&D, marketing, finance and supply chain teams.

• Explore ideas like - Product Innovation: Smart tractors with GPS, automation, fuel efficiency, subscription-based software., New Revenue Models: Leasing tractors, financing options for farmers, pay-per-use models, Process Optimisation: AI-driven supply chain efficiency, predictive maintenance for fleet services and Market Expansion: Focus on exports, emerging markets, and small landholder needs etc.

For example, one of the tractor companies in North India partnered with Agritech firms to integrate IoT-based farm solutions, helping farmers optimise yield while boosting tractor sales. The business impact for the company – 

• Company can now actively engage with farmers even after the sale of their tractors, thereby giving them a first mover advantage.

• Company has a complete visibility of their tractors even after they are sold and the solution also opened up a new avenue for after-sales revenue.

• By staying connected to end customers, they were able to supply genuine spares at the right time, which would ensure the longer lifespan of tractors.

4. Prototype – Test new ideas with small-scale pilots

Instead of over-investing, test solutions quickly in a controlled manner:

• Launch a pilot fleet of smart tractors with early adopters.

• Partner with banks and fintechto offer new tractor financing models.

• Implement AI-driven predictive maintenance in one factory before scaling.

For example, CNH (New Holland tractor in India) tested autonomous tractor technology with select farmers before a global launch to minimise the risk while validating ideas for scaling.

5. Test and Scale - Implement the best strategies

• Gather feedback from early adopters and refine solutions before a full-scale launch.

• Roll out the most successful innovations across product lines, dealerships, and service centres.

• Set up performance metrics to track revenue growth, cost savings, and customer satisfaction.

For example - John Deere’s shift to precision agriculture tech helped it increase revenue while optimising costs. The outcome was scalable, profitable transformation strategy that is customer-driven.

The expected business impact of Design Thinking in the next three years

• Increased revenue: new product lines, financing models and market expansion;

• Higher profit margins, reduced production costs via AI-driven efficiency;

• Competitive advantage: smarter, more efficient tractors and services;

• Stronger customer loyalty: Farmer-centric innovations and financing.

To summarise, applying Design Thinking to the business transformation of a tractor manufacturing company fosters a culture of innovation, empathy, and continuous improvement. By placing farmers and agricultural communities at the heart of the problem-solving process, the company can develop solutions that are not only technologically advanced but also deeply aligned with real-world needs. This human-centered approach ensures sustainable growth, operational excellence, and long-term market leadership in an ever-evolving agricultural landscape.

In conclusion, I find it worthwhile to mention one notable quote on Design Thinking by David Kelley, the founder of Stanford’s d.school and co-founder of IDEO - "The main tenet of design thinking is empathy for the people you're trying to design for. Leadership is exactly the same thing - building empathy for the people that you're entrusted to help.” 

While this quote emphasises the functional and practical aspect of design, Kelley also often speaks about the importance of human-centered innovation and ‘creative confidence in problem-solving’. It is the belief that everyone has the ability to be creative. It’s not limited to artists, designers, or traditionally “creative” professionals, rather, it’s a mindset that enables people to approach challenges with curiosity, innovation, and a willingness to experiment.

As Reid Hoffman, the co-founder of LinkedIn, rightly said: "Silicon Valley is a mindset, not a location.”