Design begins a bit almost during the first research. The stages overlap:

Research begins at time point 1. Design begins at point 2, taking a small percentage of time away from Research. Before point 3, Research is complete and Design is taking 100% of time, etc. Research begins with reading. You may not know at first what you are looking for. Depending on your temperament, you may find a general history of the campaign and just start in on page one. I tend to start with the index, and look at topics that receive a lot of references. I like to flip around alot and see what strikes me. I also look at references to particular military formations to find out strengths and weaknesses of the fighting forces. Often the most significant things are mentioned in passing.

How do you recognise those telling details? It is not the voice that says, 'it would be neat to put that into the game.' The result of this is kitchen-sinking. What you need is a clear interpretation of the factors which led to the success of one side and the failure of the other. There are two main flavors: strengths and weaknesses of the armies, and environment and geography. Sometimes you cannot even see what the most significant factors are until you have assayed your first prototype and can step back and see the whole event. In The Eagles Turn East, I had this problem with assessing the importance of Thorn.

My main source (Petre) only mentions in a footnote that the town on the Vistula might have been threatened in the Russian offensive prior to the battle of Eylau, and it was only after looking at the printed map that I realized the importance of that town to the strategy of both sides (the town itself lies just off the map). Since the Russians failed to take the town, historians didn't bother to consider what would have happened: the French troops relying on Warsaw for supplies would be cut off, since the barges had to pass Thorn on their way to Warsaw. As a game designer, you have to see possibilities.

A game design reveals corners of history that traditional histories never illuminate. The narrative historian is primarily concerned with keeping the spotlight on the man of action at the crucial moment as things actually transpired. He gives little attention to the hero who might-have-been. Assembling the whole picture can become a fascinating detective job akin to Archaeology.