Management Report: Design Thinking Implementation at Commonwealth Bank

This report delves into the application of design thinking at Commonwealth Bank, highlighting its transformative impact on the bank's operations and customer relationships. It explores how the bank leverages design thinking to navigate challenges in the digital age and foster customer-centric financial services. The report outlines the phases of design thinking, including empathize, define, ideate, prototype, and test, illustrating how these steps drive innovation and address customer needs. It also examines the evolution of the bank's approach to customer interaction, moving away from traditional models to embrace open, collaborative designs. The conclusion emphasizes design thinking's role in creating opportunities for the bank through enhanced customer centricity and improved understanding of customer needs, even before they are explicitly articulated. This approach has allowed the bank to foster customer trust and deliver superior financial services.

RUNNING HEAD: Management 0
Management

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Executive summary
This report defines the advances of design thinking in the Commonwealth Bank. The
challenges are faced by the bank in the digital age which requires new ways of thinking.
Design thinking provides an effective method of delivering customer centered financial
services. Commonwealth bank is using design thinking to bring itself closer to the customers.
The report includes the advances of design thinking in the bank. The phases of design
thinking have been also defined which comprises empathize, define, ideate, prototype, and
test.
In the end, it can be concluded that design thinking has created opportunities for the bank
through customer centricity. It helps the organization to access the real needs of the
customers even before they might have initially started.

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Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................3
Advances of design thinking......................................................................................................3
Phasesof design thinking............................................................................................................4
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The banking segment is going through the phase of disruption. But design thinking marked
the origin of the banking segment new gene. Design thinking has advanced the business
process. This paper describes the impact on Commonwealth bank caused by the advances of
design thinking and its role in solving specific problems. The protagonist of the
Commonwealth bank is changing and the focus of the bank is at sustaining customer needs in
the advance means by personal associations and world-class technology. The organization is
changing to assist quality interactions with a move away from the outdated counter and
service counter to more open cooperative design. The role of design thinking has been
defined in bringing the bank closer to its customers. It has created opportunities for the
members and customers to interact by using design principles. The design thinking seeks to
comprehend the operators, challenge, supposition, redefine problems and creating innovative
solutions. The Commonwealth Bank empowers both savings and general banking services.
The bank provides a complete choice of financial services to support Australians in
constructing and dealing with their finances. Commonwealth Bank is Australia’s prominent
provider of assimilated financial services comprising premium, retail, business and
institutional banking, insurance, superannuation, investment, funds management and share
broking products and services.
Advances of design thinking
The role of the Commonwealth bank is changing in the retail network. The focus of the bank
is to satisfy customer requirements in further ways through personal relationships and world-
class technology. The Commonwealth Bank used design thinking in order to attain customer
proximity. The design thinking is regarded as a customer-centric approach for assimilating
end customers in the innovation process (Sia, Soh & Weill, 2016). The customers are
required to trust more in the banks and to attain this there need to be pellucidity in the way
bank delivers products and services. In order to gain trust, there should be an incorporation of
customer centricity in the innovation process. The bank should offer information concerning
menaces and probable assistance of the specific product and services although the problems
are faced in undertaking customer’s needs in the innovation process. The bank is required to
develop a deep understanding of the customer needs so that customer concerns can be
addressed at the time of developing new services.

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Currently, the bank does not comprise potential customers until they are finalized. When the
customers are intricate in the innovation process then they are classically engaged in a
particular business division like IT. It is complex for the IT division of any bank to
comprehend and convey customer needs. It is because the information passes from business
partition to software engineer, to the coder and more. As a result, misunderstandings and
falsifications can take place. The IT division of the Commonwealth bank interacts directly
with the potential customers in order to understand their requirements. The customers attain
attractive financial services from the financial institutions and this is the problem faced by the
bank. The commonwealth bank had to be better at innovations in order to response to these
challenges and design thinking is the Collin.
Phases of design thinking
The design thinking is a proved method which permits organizations to view the biosphere
through the senses of their customers. The application of this innovative strategy better
understands the needs of the end customers. The design thinking includes 5 phases,
empathize, define, ideate, prototype, and test. It is more useful when used by the
Commonwealth bank in tackling problems which are unknown (Sangiorgi, 2015). The design
thinking leads to better products, services, and internal processes. The customer centricity
comprises systematic detection of the customer needs. The foremost phase of customer
centricity is that final customer are constantly united into the company’s innovation process
so that company’s acquaintance is broadening concerning necessities and motivations
(Rodrigues, Costa & Oliveira, 2016). The design thinking approach empowers the
organisation to attain constant feedback from the end customers. It helps the organization to
access the real needs of the customers even before they might have initially started.

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Empathize
Empathize is the central concept indesign thinking. It is all about the understanding the
experience of others and behaves the way they do. The first step in the design thinking is to
focus on the situation where the organization feels it lacks i.e. customer centricity (Probst &
Bassi, 2017). Empathize is the ability to explore deep and meaningfully, physical and
emotional needs of the customers. It saves a lot of time. In the case of the banking industry,
the issue of customer centricity might be whether credit cards will be in requisite by the year
2020. The techniques used for empathizing are given below:
Observe: Commonwealth bank observes the actions of the customers visited and recount
times. The realization can be attained by observing the disconnect between what customers
say and what they do.
Engage: The customers are engaged by the banks through the interview as it really helps to
know what they feel. The customers are asked questions regarding their experience and
expectations. The engagement can come through encounters and longer arranged
conversations (Muratovski, 2015).
Watch and listen: The observation can be combined with the engagement. The customers
should be asked for the steps taken by them in order to attain banking services. What comes
in their mind at the time of performing tasks?
Define
Framing precise problem is the way to generate the appropriate solution. Commonwealth
bank focuses and discovers the credit card framework through explanations of the end

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customers and intricate parties, interviews, undergoing credit card usage and more. This step
of design thinking forms instant expertise regarding credit card related problems such as the
need for easy access of funds for the payment. The need which arises could be for liquidity in
any condition. It certainly varies around the world depending on the customer’s condition
(Dery, Sebastian & van der Meulen, 2017).
Ideate
This step emphases on creating a large number of notions for some requirements, out of
which one is a necessity for the customers to have accessibility to funds all times. The ideas
might comprise a smartphone application or mobile money printing mechanism. Instead of
deliberating ideas, they are prototyped in a concrete way so that these can be directly verified
by the end customers (Carlgren, Rauth & Elmquist, 2016). This provides instant feedback of
the end customers. On the other side, unanticipated problems can arise like the battery of the
smartphone dies when the customer is waiting at the cashier and the mobile printing machine
could also print in one currency. Such feedbacks assist in revising the team’s conventions
regarding customer’s needs along with the initial problem (Liedtka, 2015).
Prototype
The unsuccessful prototype is as appreciated as one which is adjacent to the forthcoming
solution. The recapitulations through the consecutive prototypes will offer deeper perceptions
into everything from who customers are to the ideal customer journey. It also includes the
concrete solutions need to be constructed in order to ideally address the acknowledged
customer requirements. This process is known as rapid prototyping (Brenner, Uebernickel &
Abrell, 2016).
Test
The testing is a prospect to learn about the solution. The rapid prototyping helps in testing
ideas concretely. It is equally helpful to the bank in comprehending the future need of the
customers and to put it carefully at the center of efforts (Herrera-Restrepo, et al. 2016).
It has been realized that the team of Commonwealth creating prototypes of future services
cautiously built to comprise people with different backgrounds. The pursuit for diversity is
majorly the biggest encounter for the bank’s HR department as HR is frequently comprised of
extremely intensive profile searching (Dumay & Dai, 2017). Though comprising varied

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personalities and several proficient backgrounds like IT, business, HR and marketing and
potential customers enables the bank to overcome the restraints of the organizational silos. It
is critical that all prototypes are tangible. The authorities and end customers regularly
misinterpret each other right up to the product in the development stage. Promptly created,
tangible, prototypes offer a way to ground communications between team members and end
customers. Evolving successive prototypes assurances the team discovers the higher number
of innovation opportunities (Brenner & Uebernickel, 2016).
The design thinking stances some precise encounters in addition to those already confronted
by the bank tracking innovation initiatives mainly in the concern of end-customer closeness.
IT segments are adapted to having necessities offered to them at the initiation of a scheme
without enquiring them. The design thinking approach makes project requirements to not
only revise but constantly advanced as per the consideration of the customer’s concern
(Elsbach & Stigliani, 2018). It results in the advanced set of requirements which can be
different from the initially assumed. Another challenge ofthe design thinking approach to
innovation is that it goes against aspiration to be lean. The design thinking approach is an
appreciated decision but it is inflexible to execute in the huge organizations like
Commonwealth bank. Offering IT division with direct immediacy to end customers is quite
different from the prevailing innovation practices. The Commonwealth faced the encounters
of implementing design thinking approach in the IT division. It offers understandings into the
evolutionary path for entrenching this approach in IT operations (Baek, Meroni & Manzini,
2015).
The advancement of design thinking practices at the Commonwealth bank fostered customer
understanding. The basic to success was the initiation with the small projects and then it
constantly grew the adoption of design thinking. This advancement was categorized into 3
phases, learning, adapting and diffusing. The Commonwealth bank implemented design
thinking with the focus on adopting business-IT alignment. The IT division had no contact
with end customers initially (Andrews, 2015). The design thinking approach offered an
auspicious method for comprising end customers in IT development procedure and hence
fostering alignment. The shortage of resources caused a new approach to be lean with the
least of resources. The difficulty was also faced in the organization by the design thinking
team. As the design thinking initiative was severed from other IT projects. It aligned 3 to 5
internal staff functioning on the current projects and the jobs have been tough. The design
thinking is there for the bank to surely add value in the future (Haisken-DeNew, et al. 2019).

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The interns were hired for the first design thinking project. It helped the bank in attaining
fresh spirit. The hired staff made easy to grip the design thinking approach in the
organization. The design thinking was also executed at various organizational levels. It
helped in attaining more customer insights (Grenha Teixeira, et al. 2017). The design
thinking made enhanced the understanding of the bank towards customer insight along with
the involvement. Commonwealth bank even attained a substantial increase in contact with the
end customers.
Conclusion
Design thinking is a customer-centric approach for solving problems. It comprises
understanding people’s need and describing their challenges, ideate solutions, prototyping
and then testing the solutions. Commonwealth bank has acknowledged the significance of
design thinking and gazes the ways to transform the organization. This process is optimistic
but still, it is a fresh method of managing the business for banks. The banks have
comprehended that they no longer dictate how they do business and what they produce but
what their customers do. It provides an effective method to offer customer centered financial
services. The design thinking is moreover a practical tool which can assist banks in their
activities.

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References
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sustainability. Local Economy, 30(3), 305-31
Baek, J. S., Meroni, A., & Manzini, E. (2015). A socio-technical approach to design for
community resilience: A framework for analysis and design goal forming. Design
Studies, 40, 60-84
Brenner, W., & Uebernickel, F. (2016). Design thinking for innovation. Research and
Practice.
Brenner, W., Uebernickel, F., & Abrell, T. (2016). Design thinking as mindset, process, and
toolbox. In Design thinking for innovation (pp. 3-21). Springer, Cham.
Carlgren, L., Rauth, I., & Elmquist, M. (2016). Framing design thinking: The concept in idea
and enactment. Creativity and Innovation Management, 25(1), 38-57.
Dery, K., Sebastian, I. M., & van der Meulen, N. (2017). The Digital Workplace is Key to
Digital Innovation. MIS Quarterly Executive, 16(2).
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Grenha Teixeira, J., Patrício, L., Huang, K. H., Fisk, R. P., Nóbrega, L., & Constantine, L.
(2017). The MINDS method: integrating management and interaction design
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Haisken-DeNew, J., Ribar, D. C., Salamanca, N., Nicastro, A., & Ross, J. (2019). Improving
the Commonwealth Bank of Australia-Melbourne Institute Observed Financial
Wellbeing Scale.
Herrera-Restrepo, O., Triantis, K., Seaver, W. L., Paradi, J. C., & Zhu, H. (2016). Bank
branch operational performance: A robust multivariate and clustering
approach. Expert Systems With Applications, 50, 107-119.

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