1 00:00:05,350 --> 00:00:08,240 Welcome to Count Me In. I'm Neha Lagoo Ratnakar. 2 00:00:09,020 --> 00:00:13,560 And today I'm speaking with Sérgio Tavares about design thinking and why it's 3 00:00:13,561 --> 00:00:17,320 crucial for leaders and management accountants to understand the basics of 4 00:00:17,321 --> 00:00:20,390 design thinking in a digital-first business world. 5 00:00:21,370 --> 00:00:25,430 Sérgio is a design leader at Frog where he researches humans, 6 00:00:25,739 --> 00:00:30,630 culture and society to create digital solutions that better meet consumer 7 00:00:30,631 --> 00:00:31,464 needs. 8 00:00:31,740 --> 00:00:36,070 This is a very interesting conversation as we discuss how management accountants 9 00:00:36,090 --> 00:00:40,780 can help shape the metrics and what data designers should be focusing on to 10 00:00:40,781 --> 00:00:44,180 alleviate pressure points and deliver better digital solutions. 11 00:00:44,800 --> 00:00:46,580 So let's get started with Sérgio. 12 00:00:53,730 --> 00:00:57,290 Welcome Sérgio. It's such a pleasure to have you on the show. 13 00:00:58,070 --> 00:01:01,890 Now let's start with the basics for people who might be new to design thinking. 14 00:01:02,590 --> 00:01:05,370 Can you give us a simple definition of design thinking? 15 00:01:05,990 --> 00:01:08,450 Hi, Neha. Thanks for having me on the show. 16 00:01:09,290 --> 00:01:14,190 I think design thinking is a term that came about already in 17 00:01:14,209 --> 00:01:18,860 the sixties and it talks a lot about what is 18 00:01:19,040 --> 00:01:21,459 the customer need, the end customer need? 19 00:01:22,100 --> 00:01:26,459 I think we came from an era of advertising and marketing that we're more trying 20 00:01:26,460 --> 00:01:30,260 to persuade the people to want certain things, 21 00:01:30,480 --> 00:01:33,260 to consume certain products and design thinking, 22 00:01:33,520 --> 00:01:38,410 subverted that by looking into what they really need the 23 00:01:38,411 --> 00:01:39,410 things they know they need, 24 00:01:39,470 --> 00:01:43,850 but also the things that they don't know yet that they need and supplying these 25 00:01:43,851 --> 00:01:44,684 needs. 26 00:01:45,200 --> 00:01:46,540 Wow. Okay. I love that. 27 00:01:46,541 --> 00:01:48,940 And I'm totally going to steal that in my next conversation. 28 00:01:49,390 --> 00:01:50,223 Great. 29 00:01:51,020 --> 00:01:55,490 All right. So I like how design thinking it keeps customers in the center 30 00:01:56,510 --> 00:02:00,490 and what are the challenges that companies these days are facing when it comes 31 00:02:00,510 --> 00:02:02,690 to this customer centricity? 32 00:02:04,760 --> 00:02:06,620 Yes, that's, that's an excellent point. 33 00:02:07,500 --> 00:02:12,210 I think many companies are finding a lot of challenge to 34 00:02:12,211 --> 00:02:14,410 compete with the startup scene. 35 00:02:15,330 --> 00:02:18,210 I think the startup scene is going through a change now. 36 00:02:18,669 --> 00:02:23,169 We're a little bit past the move fast break things 37 00:02:23,639 --> 00:02:27,850 time. So we are seeing the downfall of the first unicorns we had. 38 00:02:28,130 --> 00:02:32,919 We crash Zuckerberg had so many problems with democracy and then 39 00:02:32,940 --> 00:02:36,880 the whole thing with the fake news. And there's, 40 00:02:36,881 --> 00:02:40,240 there's all the ups and downs with Elon Musk going to Twitter. 41 00:02:40,500 --> 00:02:45,480 So there's a lot that is telling us that this first wave 42 00:02:45,800 --> 00:02:50,350 or this wave was over and companies are now need to 43 00:02:51,100 --> 00:02:54,550 compete in a different way with startups. 44 00:02:57,110 --> 00:02:57,943 I think that 45 00:02:59,060 --> 00:03:02,480 the challenge that companies are facing is also that startups, 46 00:03:02,510 --> 00:03:06,880 they have very well understood that they need to look into the customer needs. 47 00:03:07,220 --> 00:03:09,000 And it's very simple for them to do that. 48 00:03:09,110 --> 00:03:13,880 They just get out of the building as the jargon says and run interviews fast 49 00:03:14,050 --> 00:03:18,150 prototypes and then create their product or improve their product. 50 00:03:18,770 --> 00:03:21,230 And then when you come to AB corporation, 51 00:03:21,231 --> 00:03:26,150 this is very difficult because there's so much procurement hierarchy and 52 00:03:26,290 --> 00:03:29,389 it becomes very difficult to just move very fast. 53 00:03:30,450 --> 00:03:32,710 So when it comes to customer centricity, 54 00:03:32,870 --> 00:03:37,620 I think that is where startups have an advantage and companies have 55 00:03:37,650 --> 00:03:40,740 problem because they need to output the results. 56 00:03:41,170 --> 00:03:45,900 They need to push harder, their marketing efforts, their existing efforts, 57 00:03:46,200 --> 00:03:50,260 and rethinking their products around the customer 58 00:03:51,200 --> 00:03:52,500 is something quite demanding. 59 00:03:53,430 --> 00:03:56,090 Right. Wow. That, that was very insightful. 60 00:03:56,550 --> 00:03:59,050 And when you talk about being customer centric, 61 00:03:59,630 --> 00:04:03,530 how does that translate to being customer centric within the organization? 62 00:04:03,710 --> 00:04:04,350 For example, 63 00:04:04,350 --> 00:04:08,890 how does your work at Frog apply this customer centricity internally? 64 00:04:10,390 --> 00:04:11,223 Yes. 65 00:04:11,330 --> 00:04:15,760 I think the first thing that we come as a Frog consultant, for example, 66 00:04:15,780 --> 00:04:19,960 we come to a customer is like, tell me where the research room is. 67 00:04:20,779 --> 00:04:23,160 And that usually means that there is no room. 68 00:04:23,980 --> 00:04:26,760 And so that means that we need to structure that. 69 00:04:27,460 --> 00:04:31,800 So we need to ask first let's run a round of 70 00:04:32,630 --> 00:04:33,029 questions, 71 00:04:33,029 --> 00:04:37,950 a survey out there to your target customers or to a specific segment you want to 72 00:04:37,951 --> 00:04:38,784 work with. 73 00:04:39,431 --> 00:04:44,310 And that means also that this research that you order it'll fall 74 00:04:44,900 --> 00:04:48,589 into an empty drawer. So you need to create the drawer. 75 00:04:48,890 --> 00:04:51,700 You need to create a structure that will 76 00:04:53,490 --> 00:04:58,220 catalog and categorize research and put it into 77 00:04:58,279 --> 00:05:03,100 use in product development or marketing or on the operations. 78 00:05:03,760 --> 00:05:05,020 So I think that's the first thing. 79 00:05:05,800 --> 00:05:09,089 So building the airplane as you fly it. 80 00:05:10,200 --> 00:05:11,380 Yes, yes, exactly. 81 00:05:12,120 --> 00:05:17,020 That just gives us a bit of speed and it's easier to show that 82 00:05:17,279 --> 00:05:20,020 we are getting insights about the customers. 83 00:05:20,021 --> 00:05:24,779 We're getting ideas on how to make our product more desirable, viable, 84 00:05:25,600 --> 00:05:27,610 usable for customers. 85 00:05:28,230 --> 00:05:31,089 And that's usually a good way to start because in corporations, 86 00:05:31,110 --> 00:05:35,410 you need to start convincing like the whole hierarchy. 87 00:05:36,251 --> 00:05:40,790 So it starts to connect with the KPIs and it starts 88 00:05:41,130 --> 00:05:43,110 to need to connect to the financial numbers. 89 00:05:43,680 --> 00:05:44,513 Right. 90 00:05:44,820 --> 00:05:47,620 So it's not very easy to sell, like, okay, 91 00:05:47,621 --> 00:05:52,339 in 10 years this idea will pay off, but you can start by saying, 92 00:05:52,350 --> 00:05:56,140 let's discover what we can do to change things right now, 93 00:05:56,640 --> 00:05:58,920 and how a better experience, for example, 94 00:05:58,980 --> 00:06:03,800 of a digital service will mean less time that 95 00:06:03,801 --> 00:06:07,440 people take to let's say, use our product. 96 00:06:07,900 --> 00:06:12,440 And that means faster onboarding, and that means more revenue, right? 97 00:06:12,441 --> 00:06:14,560 So when you start to create this connection, 98 00:06:14,700 --> 00:06:18,110 that's when design thinking connects with financial 99 00:06:19,271 --> 00:06:22,950 departments management consultants and so forth. 100 00:06:23,790 --> 00:06:27,510 These connections are quite new designers. 101 00:06:27,511 --> 00:06:30,430 They were often seen as the creative side, 102 00:06:30,529 --> 00:06:35,020 and they are usually with high fly ideas. That won't be very sustainable. 103 00:06:35,780 --> 00:06:40,779 But when we start to work with business consultants that that's started 104 00:06:40,839 --> 00:06:41,672 to change. 105 00:06:42,080 --> 00:06:45,980 And you're right, the perspective on design is changing everywhere. 106 00:06:47,181 --> 00:06:51,339 I've also heard people talk about customer journey maps and our 107 00:06:51,970 --> 00:06:55,490 listeners who are many of them are from accounting and finance world, 108 00:06:55,779 --> 00:06:59,770 would like to understand how that helps clients with the accounting, 109 00:07:00,480 --> 00:07:03,890 most importantly, but also their KPIs, OKRs, 110 00:07:04,040 --> 00:07:07,610 metrics and operations, the hard facts of a business. 111 00:07:09,150 --> 00:07:13,680 Yes. So the customer journey is basically a map 112 00:07:14,860 --> 00:07:19,760 of all the interactions that the end customer goes through when 113 00:07:20,040 --> 00:07:22,080 interacting with your product or service. 114 00:07:22,961 --> 00:07:27,200 So that may seem very far fetched from accountants, but I would think it's not, 115 00:07:28,260 --> 00:07:33,110 for example, in a model that I have developed with the client during this year 116 00:07:33,890 --> 00:07:35,350 we have throughout the journey, 117 00:07:35,410 --> 00:07:39,790 all the pain points and highlights through the experience. So let's think of a, 118 00:07:41,240 --> 00:07:45,790 let's say a bank or an insurance company or 119 00:07:46,250 --> 00:07:47,190 any service, really. 120 00:07:47,730 --> 00:07:52,380 So you have a person that is first deciding if they're going to buy it, 121 00:07:52,690 --> 00:07:55,380 then they let's say in case of an insurance, 122 00:07:55,570 --> 00:07:58,420 then you have the time that a person's gonna make a decision. 123 00:07:58,760 --> 00:08:01,300 If they're gonna get a more premium account. 124 00:08:01,920 --> 00:08:04,820 And then they have another part of their journey where they're actually making a 125 00:08:04,821 --> 00:08:06,770 claim. So all these 126 00:08:08,510 --> 00:08:09,970 the customer goes through all these, 127 00:08:11,050 --> 00:08:15,290 what happens often is that the designers or the people taking care of the 128 00:08:15,291 --> 00:08:18,450 product are looking a lot on the customer pains. 129 00:08:19,350 --> 00:08:21,930 And they are telling for example, the company 130 00:08:24,390 --> 00:08:29,260 customers need to be able to claim very fast for where they have some, a broken, 131 00:08:29,560 --> 00:08:34,100 broken device at home. So we need to make this very easy. 132 00:08:35,000 --> 00:08:39,020 And then on the other side, you have the accountants, for example, 133 00:08:39,050 --> 00:08:44,020 that are saying, look if we make this just immediate, 134 00:08:44,300 --> 00:08:46,010 we're gonna have more fraud. So 135 00:08:48,140 --> 00:08:50,700 I developed this model where we add to the customer journey, 136 00:08:50,800 --> 00:08:53,420 the pressure points that are internal to the company, 137 00:08:54,261 --> 00:08:56,440 pressuring the solution stores customers. 138 00:08:57,220 --> 00:09:01,920 And then we can have a real timeline of everything we provide to the end 139 00:09:02,200 --> 00:09:05,800 customer and all the pressure that the company goes through 140 00:09:07,179 --> 00:09:09,840 in a map. So everybody can see the problem 141 00:09:11,441 --> 00:09:15,750 on a bird eye view and have a clear understanding 142 00:09:16,450 --> 00:09:21,070 of everything that is going on and how we can solve the problems together in 143 00:09:21,071 --> 00:09:21,904 alignment. 144 00:09:22,230 --> 00:09:25,110 I love the idea of pressure points. I'd never heard that one before. 145 00:09:26,429 --> 00:09:29,300 Thank you. Yes. I think this comes from, from really, 146 00:09:29,600 --> 00:09:34,410 and I think that's when we start to be customer centric in our day 147 00:09:34,610 --> 00:09:37,250 to day, that we started to listen to our customer, 148 00:09:37,930 --> 00:09:42,050 like the companies are saying, yeah, the design team is very happy, 149 00:09:42,830 --> 00:09:46,170 but they're not getting their ideas through. When they, 150 00:09:46,200 --> 00:09:48,570 even if they pointed out in the customer journey and, 151 00:09:48,850 --> 00:09:52,679 and then we came up with this concept that let's use the pressure points, 152 00:09:52,990 --> 00:09:56,080 because that's when we have our limitations, like, 153 00:09:56,179 --> 00:09:59,880 we simply cannot give this solution for free. 154 00:09:59,890 --> 00:10:02,280 Let's say there's a financial pressure here. 155 00:10:03,300 --> 00:10:07,650 And also one thing that might be, it'll be very important. 156 00:10:07,830 --> 00:10:12,280 The collaboration between accountants, for example 157 00:10:14,260 --> 00:10:18,920 and consultants on the business side to tell designers and 158 00:10:19,120 --> 00:10:20,559 decision makers, innovators, 159 00:10:20,870 --> 00:10:24,640 what are the differences in different OKRs KPIs, 160 00:10:24,860 --> 00:10:28,870 and even what is the difference between a lagging indicator or a leading 161 00:10:28,871 --> 00:10:33,750 indicator? Because designers, for example, when they're improving the product, 162 00:10:33,780 --> 00:10:37,550 they just hear the, the simplest ones, like we need higher revenue. 163 00:10:38,730 --> 00:10:42,910 But they can help to discover the root cause of a problem. 164 00:10:43,559 --> 00:10:44,170 Right. 165 00:10:44,170 --> 00:10:48,580 And the business consultant for the accountant can help them to convert that 166 00:10:48,581 --> 00:10:49,700 problem into a metric. 167 00:10:50,400 --> 00:10:55,059 And that will be their root metric or their leading indicator. 168 00:10:55,970 --> 00:10:57,660 This work is very nascent. 169 00:10:57,900 --> 00:11:02,100 I don't see many companies and I've been working in this model with our Milan 170 00:11:02,101 --> 00:11:06,929 studio in Italy and exchanging a lot of information with our American studio in 171 00:11:08,630 --> 00:11:09,490 San Francisco, 172 00:11:10,411 --> 00:11:15,170 it's rare to have the interaction between people that work only with 173 00:11:15,171 --> 00:11:18,450 numbers and then people that work only with product development. 174 00:11:19,309 --> 00:11:21,610 And thank you for being that bridge between these two parties. 175 00:11:22,120 --> 00:11:23,960 That communication is super important. 176 00:11:25,380 --> 00:11:27,160 Yes. I'm trying, I'm trying. 177 00:11:29,280 --> 00:11:29,361 All right. 178 00:11:29,361 --> 00:11:34,320 So let me pivot from that to some other things that I've heard in the 179 00:11:34,321 --> 00:11:38,760 field of design thinking like prototypes or minimum viable products. 180 00:11:39,380 --> 00:11:43,950 And I'm trying to connect that with accounting, for example, 181 00:11:43,960 --> 00:11:47,390 which is a very rules-based field. Now, 182 00:11:47,450 --> 00:11:51,550 how can what can accounting and finance people learn from the field of design 183 00:11:51,551 --> 00:11:55,520 thinking if they had to take some practical tips and start implementing tomorrow 184 00:11:55,660 --> 00:11:58,920 to become more design oriented, or more innovative, 185 00:11:59,309 --> 00:12:00,720 what is it that they can start doing? 186 00:12:02,010 --> 00:12:04,230 Yes. Neha, this is an excellent question. 187 00:12:04,250 --> 00:12:08,870 And I think I could say also things that the accounting teams can teach 188 00:12:09,790 --> 00:12:12,380 or coach the design teams with. 189 00:12:13,581 --> 00:12:18,500 But first I think accountants may benefit from thinking 190 00:12:18,580 --> 00:12:23,100 a little bit less on the big scale of what 191 00:12:23,260 --> 00:12:27,580 projects can become. So they start to do the number crunching. And if we invest, 192 00:12:27,830 --> 00:12:30,690 let's say in this new product, 193 00:12:31,100 --> 00:12:35,450 we're gonna be able to see figures break even in five years and so forth. 194 00:12:36,370 --> 00:12:40,170 This business case of five years is going really 195 00:12:41,470 --> 00:12:45,690 out of style because it's based on a lot of fictions, right? 196 00:12:46,030 --> 00:12:48,210 You have very good estimations and such, 197 00:12:48,670 --> 00:12:53,360 but the minimum viable product school of thinking and the design school of 198 00:12:53,361 --> 00:12:57,440 thinking, say, let's create just a trailer, 199 00:12:57,710 --> 00:13:02,280 just the first thing that we can get a signal from the market and see if people 200 00:13:02,350 --> 00:13:04,400 respond. If they respond, 201 00:13:05,179 --> 00:13:07,550 we can finance the idea for more six months. 202 00:13:08,620 --> 00:13:11,000 And and this can go 203 00:13:13,340 --> 00:13:18,000 it can save a lot of these initial investments and the CapEx of the whole thing. 204 00:13:18,001 --> 00:13:22,760 You don't need to put all the coins in the same basket all the eggs in basket, 205 00:13:22,980 --> 00:13:27,790 you can just work with the first signals and, and confirmations. 206 00:13:28,730 --> 00:13:32,630 But now we come to the idea, if this, 207 00:13:32,929 --> 00:13:37,390 if a company does this once and then twice, and then five, 208 00:13:37,450 --> 00:13:41,750 10 times, they need a system to govern innovation. 209 00:13:42,330 --> 00:13:46,220 And that's where accountants would be really valuable. Okay. 210 00:13:46,221 --> 00:13:49,900 Because they can create a system, like you said, thinking in systems, 211 00:13:49,970 --> 00:13:54,030 like how can we know that an idea is gonna pay off, 212 00:13:54,500 --> 00:13:57,950 they need to hit a certain target in certain amount of time. 213 00:13:58,809 --> 00:14:03,700 And it's not really a given to understand that people 214 00:14:03,701 --> 00:14:08,220 that have sometimes great product ideas, even when they are inside companies, 215 00:14:08,221 --> 00:14:13,100 they are not sometimes very good in governing this idea and keeping the tab on 216 00:14:13,690 --> 00:14:18,660 KPIs. And I think the accountants may take a role of not being the, 217 00:14:19,560 --> 00:14:23,810 the checking department or kind of the 218 00:14:25,310 --> 00:14:29,450 red stamp department, but more like the coaches that say, Hey, 219 00:14:30,120 --> 00:14:33,170 this is something that you may be able to do, 220 00:14:33,590 --> 00:14:37,170 or this is where you need to invest so that you hit your KPI. 221 00:14:37,990 --> 00:14:42,880 So you become a mindset of nurturing when you start to really 222 00:14:42,881 --> 00:14:46,360 help them to do the accounting, which is what you are best at. 223 00:14:46,900 --> 00:14:51,760 So one last question is is with the companies going remote first, 224 00:14:51,761 --> 00:14:53,960 these days, what is, 225 00:14:54,180 --> 00:14:57,640 how do you think has design thinking changed the way we think, 226 00:14:57,780 --> 00:15:01,840 or has design thinking changed as a result of how companies are changing? 227 00:15:03,550 --> 00:15:07,040 Yeah. Well, there's a lot going on in this cultural shift. 228 00:15:07,400 --> 00:15:11,750 And what we are seeing now is the rise of a truly hybrid mode 229 00:15:12,210 --> 00:15:16,440 of working. And by hybrid, it means, well, let's say 230 00:15:18,850 --> 00:15:21,050 our playing field is the workshop. 231 00:15:21,590 --> 00:15:25,410 So it's where we take all the very strong 232 00:15:26,331 --> 00:15:29,560 knowledge that every stakeholder has in their minds, 233 00:15:30,060 --> 00:15:34,960 and try to put together in a board with sticky notes and that kind of 234 00:15:34,961 --> 00:15:35,420 stuff. 235 00:15:35,420 --> 00:15:40,320 So it's more about organizing the ideas so that we come up with something 236 00:15:40,340 --> 00:15:43,200 new. And with remote work, 237 00:15:43,650 --> 00:15:47,430 there was like concerns that this process can happen, 238 00:15:48,090 --> 00:15:51,830 but they started to happen in online boards like Myro or Neuro. 239 00:15:53,760 --> 00:15:53,921 Actually, 240 00:15:53,921 --> 00:15:58,760 they start to open new possibilities that people can concentrate a little better 241 00:15:59,060 --> 00:16:03,680 in their own individual work, that they can contribute to that along the day. 242 00:16:03,700 --> 00:16:06,150 And only later join the workshop. 243 00:16:07,450 --> 00:16:11,830 And there is even a mode where we are experimenting now to use the digital 244 00:16:12,080 --> 00:16:12,740 board, 245 00:16:12,740 --> 00:16:17,630 even if we are in a room because it's just so easy to output more ideas, 246 00:16:18,090 --> 00:16:20,110 or then to erase and move. 247 00:16:20,410 --> 00:16:22,870 And also to read sometimes. So it's legible. 248 00:16:24,060 --> 00:16:25,980 Exactly, exactly. 249 00:16:26,120 --> 00:16:29,140 And there's not that person that will need to take care of all the post-it's 250 00:16:30,380 --> 00:16:31,100 right. 251 00:16:31,100 --> 00:16:35,900 Or all that kind of operations that the team needs to take upon. 252 00:16:36,680 --> 00:16:40,220 Also, it's common that in offices, 253 00:16:40,221 --> 00:16:44,770 you need to clear the room after you leave there's confidential information. 254 00:16:45,531 --> 00:16:47,130 So all these starts to be solved, 255 00:16:47,990 --> 00:16:52,370 and it doesn't mean that sometimes you shouldn't be all together without 256 00:16:52,720 --> 00:16:56,930 devices, because there's, there's an added value that to that too, 257 00:16:56,990 --> 00:17:01,680 you're able to maybe focus or pay attention to 258 00:17:01,910 --> 00:17:06,280 listening to more to each team of the, of the project. 259 00:17:07,220 --> 00:17:09,400 So I think there's a hybrid model going on. 260 00:17:09,740 --> 00:17:14,040 We are still discovering what it can do for these creative processes. 261 00:17:14,940 --> 00:17:19,710 And I think we should try to listen to what the teams are bringing and how they 262 00:17:20,330 --> 00:17:22,470 are most productive when working. 263 00:17:25,380 --> 00:17:26,670 This has been Count Me In, 264 00:17:27,300 --> 00:17:31,270 IMA's podcast providing you with the latest perspectives of thought leaders from 265 00:17:31,271 --> 00:17:33,950 the accounting and finance profession. If you like what you heard, 266 00:17:34,050 --> 00:17:36,990 and you'd like to be counted in for more relevant accounting and finance 267 00:17:37,060 --> 00:17:40,900 education, visit IMA's website at www.imanet.org.