Traditional companies are governed by inductive and deductive reasoning. The former shows that something works by observing it; the latter reveals that something must be because of a set of existing principles.
Designers use a third type: abductive reasoning, the logic of what might be. It was abductive thinking that led AG Laffley, chief executive of Proctor & Gamble, to switch his company's traditional line of big-box detergents to compact ones.
Innovative companies also apply design-shop methods to management, such as repeating work, building a prototype, getting feedback, refining it and doing it again.
The CEO of a company that combines the best of both worlds must manage the paradox of functioning like an accountancy firm and a collaborative workshop. Designers admire people who crack difficult problems, and not those who run big budget divisions. This means that design-led companies should also find new ways to reward and motivate high-flyers.
Fast Company, October 2006