Observe
Observation is actually a specific type of research, but it's so important that it deserves its own step. Products of all types do not exist within a vacuum. They exist in the world and they interact with other things. When you're creating a product, very often it replaces an existing product or process and becomes one piece in a larger overall process.
A simple example of this would be something as ordinary as a coffee cup. If you created a 'new' type of coffee cup, it would be expected to at least do the same things as a traditional coffee cup. These would include things like the ability to hold a liquid beverage; having a handle so hot beverages don't burn your hand when you hold it; etc. It may also have different specialized requirements due to its usage location. For example, if it's to be used in a coffee shop, it may have additional constraints such as being 'break resistant', being 'easy to clean', or even 'being made of cheap recyclable materials so it's disposable'.
These are all things that the designer needs to be aware of early in the process. Obviously, in many cases design constraints are added into the process at late stages, but this ALWAYS results in delays and additional costs. These are things that are best found early for the benefit of both the client and the designer.
