This is part of a series, "The 5-Minute Innovator", which describes concepts and theories in the field of innovation without jargon and in no more than 1200 words, which you can read in five minutes without being a speed-reader. May contain traces of snark.
What is it?
Depending on whom you ask, design thinking is either a tremendous model for bringing the magic of human-centric design to innovation, or a rather trite way of re-packaging obvious truths about the design process for corporate consumption. The modern take on the term is often traced back to the work of the design firm IDEO, Stanford's d.school, and the man who was a founder of both – David Kelley. There were of course earlier influences, such as Herbert Simon's work on The Sciences of the Artificial, Horst Rittel's ideas about wicked problems, and the design research of Rolf Faste and Nigel Cross, but it was Kelley's work that made the notion more broadly known. The real popularizer, however, was Tim Brown, who became IDEO's CEO in 2000 (though some sources suggest it might have been late 1999). He not only continued Kelley's work, but made design thinking into a buzzword in books such as Change by Design and articles in Harvard Business Review etc.
All that said, it isn't always easy to define what design thinking is. It is both a process and a mindset, it stems from design practice, and there is a model that is sometimes referred to: Empathize – Define – Ideate – Prototype – Test. Even in this latter model, a lot can be found in other models for creativity and innovation. What sets design thinking apart, at least in theory, is the emphasis on empathy, i.e. listening to end users and their challenges, and quickly creating prototypes for users to engage with. This might not seem like rocket science, but it is still enough of a deviation from how things are done e.g. in an R&D lab that it caught on as a new thing. In a similar manner, the way IDEO emphasized the importance of challenging assumptions and figuring out the real problem (in the Define-phase) would be influential to many.
More than anything else, the notion of there being such a thing as "design thinking", with frameworks and all, was part and parcel of the way in which design became a respected part of corporate innovation as a whole. Whereas designers had earlier often been considered strange, flighty, and problematic, the notion of design thinking showed that design could be directed towards a broad range of concerns. This, again, helped concepts such as "service design" get traction and acceptance in the corporate world. In other words, design thinking helped to get design taken seriously in corporations, and that's a good thing!
There can, however, be too much of a good thing. As of late, there has been a fair amount of criticism directed towards the sloppy use of design thinking, and the way in which it has been reduced to simplistic models (like "the double diamond" that my students quote as if it was God's own) – see for instance here, here, and here. Many of these criticisms are grounded in the fact that design is far more complex than much of what is written on design thinking lets on. Designers have many skillsets beyond empathy and prototyping, and this is often marginalized in the literature. Further, real design often has a critical bent to it, questioning assumptions (and users!), whereas the models of design thinking are often very wedded to what already exists. It has also been noted that design thinking seems to be accompanied by a substantial number of Post-it® Notes and business bullshit, where fancy terms such as "ideate" and "interdisciplinarity" get to stand in for "thinking" and "thinking a bit more". Here, as in many, many cases of concepts in innovation and creativity, it is important to note the difference between the idea and the representation. Yeah, one can turn design thinking into utter bullshit, but does that mean that the underlying idea is nonsense? Here, going back to the time before IDEO can be quite helpful, and reading e.g. Horst Rittel can be quite bracing after having read what today goes for design "thinking".
Why is it important?
Much of what is written about innovation focuses on either processes or policies, and thus tends to speak the language of either engineers or politicians – or, heavens forbid, engineers who've become politicians. When design thinking came on the scene, it introduced terms such as empathy, diversity, a focus on artifacts, and the human-centric dimension, and this was (as strange as this sounds) highly novel at the time and in that context. Innovation theories can get a bit bloodless and abstract, and then a bit of design thinking – even if it gets a bit fluffy – can be a nice antidote. Empathy is a good thing in innovation, and so are prototypes. More significant than this, though, is that design thinking showed that good design is a skillset and a serious engagement with the world. While it did make a bunch of suits believe they too could be designers, it also helped designers to become more central in corporate innovation, and at times you have to take the bad with the good.
What now?
Design thinking is pretty much assumed as a key tool in the contemporary innovation toolbox. The principles it introduced are today taken for granted and normalized, to the point that they sometimes become a bit trite and up its own ass. For me, the biggest problem has been that there has been scant progress in the field. Sure, every so often someone comes with their own twist on it, but by and large design thinking seems to become less complex and more cartoonish from year to year, and at times turns trivial. Where Rittel and Faste were serious in their attempts to turn design into something more scientific, later pundits have tended to go for the colorful and easy to put on a poster. Design thinking is unlikely to go anywhere, though, for the core ideas it brought to the fore are important in innovation work. Thus only time will tell if the concept starts developing anew, or if we're stuck with nice but rather shallow models of it all. For most companies, the best bet will still be to hire good designers and let these do their thing, but if a commodified model of design helps in this, then so be it.
Where can I learn more?
There is no lack of books, including very good ones, on design and thinking. This list is rather excellent, and most everything on it is worth a read (if you're really interested, that is). If you just want something more detailed than this 5-minute bite, this somewhat critical article has more details and quite a few of the pretty pictures that have become the hallmark of the concept. If you want to start exploring the field more academically, there are worse places to start than here (paywalled, though…).