In the search for solutions to complex challenges posed by climate change and sustainability transitions, organizations often turn to innovative approaches and new cognitive frames. Particularly in the public sector, however, entrenched institutional logics often impede progress toward novel solutions. This paper explores how a public organization in the Dutch water sector navigates competing and sometimes conflicting frames and institutional logics through design-thinking. The object of study is a 6-month project initiated by a regional water authority in response to a severe flooding in 2021. The project aimed to develop and reimagine instruments for inclusive and climate-adaptive water management in collaboration with diverse actors. Based on participant observation and qualitative interviews, we analyze a series of design-thinking workshops where diverse stakeholders co-created tools for climate-adaptive water management. The findings disclose the existence of significant conflicts between the frames and institutional logics and offer details on how these were addressed through repeated stakeholder interaction and institutional work. We found that individuals showed varied responses to the emerging institutional logics, and that dominant institutional logics were diversely interpreted by different actors within the organization. Our research shows how iterative, participatory design methods can help actors temporarily shift institutional logics, but also reveals persistent challenges in achieving enduring changes to dominant institutions.