Tim Brown and Roger Martin have been talking to each other about design thinking since 2002, and their influence on each other’s thinking has helped to shape the way the discipline has been practiced in the business world since. This is an edited excerpt of their most recent conversation, moderated by IDEO’s editorial director, Shoshana Berger. You can find a transcript of the whole conversation here.

Roger Martin: I’m very worried about the fact that in America we’ve now gone 24 years without the median household income rising — it was the same in 2013 as it was in 1989. That’s unprecedented in American history. The longest that’s ever happened before is when it took just under 20 years to recover,after the Great Depression. This long period of stagnation has coincided with the top 1% of the economy doing spectacularly. In the Great Depression, when median incomes were falling, the top 1% absolutely took it in the teeth. Income inequality shrank during that period because they were getting killed even worse.

Democratic capitalism depends on the vast majority of the citizenry believing in the system. I’m worried that because of this steep rise in inequality, the public’s belief in that system is going to fade away, and in its absence we may try something else or do radical things that over history haven’t worked out so well. The machine of democratic capitalism also relies on a great deal of infrastructure. There’s physical infrastructure — roads, subways, the internet, etc. — there’s transactional infrastructure — voting systems, capital markets, and the laws and regulations governing business transactions — and finally there’s knowledge infrastructure — education and the accumulated knowledge that we use. If we are to come up with ways to make the democratic capitalism system work better, we need to ask the question; is the current stagnation and rising inequality a function of the infrastructure not being invested in properly, or is the infrastructure no longer fit for its purpose in more fundamental ways?

Tim, are there ways in which designing thinking can help answer this question?

Tim Brown: Absolutely. The underlying pieces of infrastructure — the education system, the health system, the way we design and build our cities, and even our financial system — rarely get looked at from a design perspective. What happens if you radically redesign this system, or what happens if we radically evolve this system over time in order to meet some purpose that we’re clear about and in order to meet the needs of the participants in this system in a better way than we’ve being doing it?

These are design problems. We need to use the techniques and methodologies of design to bring hypotheses and proposals out into the world much more rapidly and try them out and evolve them in real life, rather than spending months, years, or even decades writing hypothetical reports in policy think tanks where it doesn’t actually have much of an impact in the end. We also need the skills of storytelling that come along with design to helps describe new possibilities in ways that can create some action.

Shoshana Berger: Is the idea of rapid prototyping taking hold at all in government?

RM: I don’t see it taking hold much. I think the way that government generally works is to think, think, think, think, and then finally create legislation that brings about some change, and then they ignore their legislation and say okay, we’re finished with that. Then people go and figure out how to game that legislation, and the government doesn’t do anything about it. Whereas if they had a design view of it, they’d say when they passed a bill, that’s just the best idea we’ve got now, we have to go see how it works in practice, and then fix it. That’s just not the mentality.

So many government investments in infrastructure get perverted and end up not benefiting the folks they were designed for. The Patent Trademark Office was built to reward people for being innovative so that all Americans might benefit from an innovation culture. Now it has become a vehicle that benefits patent trolls. If government had a design mentality, they would have created the Patent and Trademark Office and said, it’s not going to work the way we had hoped and we’ll tweak it again and again and not feel we have failed. What IDEO would say is, you can’t ever figure out whether something is awesome until it’s used by users. I think that’s the mentality governments are going to have to use to a greater extent.

TB: Washington works on completely anti-design principles, and that’s what leads to gridlock. Everybody thinks, we have to stop those Republicans or we have to stop those Democrats because if they get that thing done, then it’s done and we won’t have another shot at it. If instead the mentality was that all bills are prototypes, I think the motivation behind gridlock would go away.

SB: One could argue that the founding fathers thought of amendments as iterations, but it was a much slower moving culture than today. Tim, are there modern enlightened leaders who you’ve seen adopt rapid prototyping and design thinking?

TB: There are plenty of business leaders who have done that, and have taken it beyond just the latest innovative product or service. AG Lafley committed to that in his first tenure at P&G, and used it not just to reform innovation at P&G but also to reform the culture to some degree, expanding how business leaders at P&G were expected to think about growing their businesses and serving their consumers.

Somebody else we work closely with today is a very successful entrepreneur in Peru, Carlos Rodriguez Pastor. His stated purpose is to double the size of Peru’s middle class. He runs a holding company called Intercorp which has many different companies, several banks and various other financial services and organization, a big supermarket chain, a cinema chain, Home Depot-like retail, schools and universities, pharmacies, all the businesses that serve the emerging middle class in Peru. One of the first engagements that we carried out with him was to design a new school system for Peru that’s capable of delivering high quality education at private schools at $100 a month – a middle class price — and that is scalable. A couple of years into it, we’ve now got 23 schools built, and we’ve doubled the math and English achievement compared to the national average. Carlos thinks really big.

What worries me a little bit is that we have a lot of people out in the world who think of themselves as design thinkers without any of the actual skills that it takes to do design thinking effectively. We have to find ways of training for these skills at scale because design schools have certainly never done that—they failed miserably to get to any kind of scale.

RM: My friend Dan Pink argued in an HBR piece in 2004 that the MFA is the new MBA. I wrote to Dan to say that if that’s the case we have a problem because America pumps out a mere 1,500 MFAs a year versus 150,000 MBAs. Thirty MFAs per state per year is just a rounding error. This is one of the reasons I was so keen on transforming business education. It’s a huge infrastructure: 27% of all graduate students in America are in an MBA program. If they’re all being taught how to analyze things to death, that’s going to affect how they’ll shape the future of business.

Sumantra Ghoshal wrote a great article in 2006 that said there’s a self-fulfilling prophecy created by MBA programs. They teach you that everything is a tradeoff—it’s guns or butter. His argument was if you have enough people going out into world saying everything is a tradeoff, they will make it so.

The only way that you can get organizations to change is to give them different tools. People want to succeed. They will go to all sorts of lengths to succeed, including setting the bar so low that they will always succeed. If you don’t have a tool that you have confidence in, you’ll use something else so you can succeed. If we give you economic tools and we say everything’s a tradeoff, you’ll calculate the NPV of guns and the NPV of butter and decide how much butter to have and how many guns, and you’ll have succeeded.

TB: I couldn’t agree more. The big challenge is to figure out how to empower people who are used to thinking in this way to raise their sights and design a better future