Project CUE: Design Thinking from Day One

February 24, 2016

Design thinking is the search for a magical balance between business and art, structure and chaos, intuition and logic, concept and execution, playfulness and formality, and control and empowerment– Idris Moutee

In our first blog post about Project CUE -- an undertaking by AEO and the Department of the Treasury’s CDFI Fund to test a technology-based solution that screens small business applicants referred by lending partners and matches them to solutions available through CDFIs -- we used the term “design thinking.” Design thinking is the idea that your product’s user experience is front and center in every phase of its development process. But design thinking goes much deeper than bringing together potential customers and asking them their favorite colors for your product’s eventual packaging. Design thinking is about being empathetic to your user’s feelings as they first consider and then use your product.

PepsiCo’s CEO Indra Nooyi recently shared how their design thinking research helped them discover some really interesting distinctions between their male and female customers. 

When men finish a snack bag, they pour what’s left into their mouths. Women don’t do that. And they worry about how much the product may stain—they won’t rub it on a chair, which a lot of guys do. In China, we’ve introduced a stacked chip that comes in a plastic tray inside a canister. When a woman wants to snack, she can open her drawer and eat from the tray. When she’s done, she can push it back in. The chip is also less noisy to eat: Women don’t want people to hear them crunching away.

While Apple is famously known for its user-centric design approach, even more traditional tech companies like IBM are moving away from an “engineering-centric” approach and encouraging thousands of its employees to participate in design thinking “bootcamps.” They’ve gone so far as to publish their manifesto to further push their corporate culture in this direction.

We are also embedding design thinking into every phase of product development for Project CUE. We’re already working with four CDFIs, who represent the eventual customer, to truly understand the various marketing, operational, technological challenges confronting their organizations and to help inform the solution’s design and user experience. “The CDFIs we’re working with are high-performing and collectively cover 17 states, which will help us increase the adoption rate of the Project CUE solution,” says Tammy Halevy, Senior Vice President of New Initiatives at AEO. 

A recent two-day design thinking session included the following reps from the four CDFIs:

~ Joshua Brackett, Chief Financial Officer, ACE (Georgia)

~ Courtney Lynn, Microloan Underwriter, ACE (Georgia)

~ Vanessa Carter, Vice President, Risk & Operations, Intersect Fund (New Jersey)

~ Sheri Flanigan-Vasquez, Chief Operating Officer, Justine PETERSEN (Missouri)

~ Celina Peña, Chief Program Officer, LIFTFund (Texas)

In one session, the group was asked to dig deep and earnestly discuss role-specific and industry-specific issues. Some of those conversations were framed around things they wished their organization or their specific job role would start doing, what practices should be stopped, and what practices should be continued.

While there were no topic parameters, the bulk of the responses fell into three major buckets within those three categories: marketing, technology/operations, and the small business owners they serve. When it comes to things the group felt should be started, it was clear that there are some pain points regarding technology. Among the responses on their wish list were: to use SEO (Search Engine Optimization) tactics and to incorporate text messaging for notifications and communications. Unsurprisingly, they all felt there was room for technology to play a vital role in helping CDFIs make lending decisions faster. For the operationally-minded, their wish list included enabling instant pre-approvals, so that applicants could have an answer the same day they apply for a loan.

Other highlights from the group’s responses include an industry-wide effort to improve the awareness of CDFIs as a lending source (which would also attract more qualified candidates), simplifying communications, and letting partners know (more often) what criteria makes a good applicant. It’s apparent that this group feels strongly about the overuse of jargon in communications and the need to move away from relying on word of mouth to garner business. Other responses, however, pointed to staying away from talking about a CDFI’s fundraising needs AND their lending services in the same conversation. The messaging confuses people about intentions.

Finally, the group was optimistic about things that should be continued. They include: seeking growth by deepening relationships with existing clients, using technology to automate and radically improve processes, using scorecards to support underwriting decisions and thinking about how to better meet the unique needs of different customer segments in their target markets. 

It was great to spend time with our peers in the industry to chat openly and honestly about the state of our market, how we might do things better and where there are opportunities for high-value collaboration.”  - Celina Peña, LIFT Fund

While it’s too early to define exactly how the Project CUE solution will work, this exercise was critical at this early design phase of the project because we were able to mine insights and ideas from future users, understand their challenges, and pinpoint areas for innovation. “We are not creating a solution in a vacuum, and this exercise helped us understand what the user sees as opportunities for improvement in their sector,” says Keith Catanzano, Project CUE’S product design and development lead. 

Stay tuned for the next blog post, which will dive into the group’s predictions for the future of the CDFI / lending landscape!

Have some of your own ideas for innovation in the CDFI small business lending space? Submit a comment below or find us on Twitter.  

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