IndustryRecommendations

exportdesign thinking

competitiveness

Dr Sam Bucolo

INDUSTRY RECOMMENDATIONS - DESIGN THINKING FOR EXPORT COMPETITIVENESS | DECEMBER 2014

Professor Design InnovationDesign Innovation research centreUniversity of Technology, Sydney

Introduction The growth problem that Australian manufacturing is facing is well known and documented1. Industry needs the capability and mindset to approach the problem in a different way. Design led innovation is a model that will enable the industry to innovate differently – a model that shows evidence of success both locally and globally2,3.

As part of the UTS META Design Thinking for Manufacturing Competitiveness hub, a Roundtable was organised on the 25th November 2014 to consider how design led innovation can be scaled to enhance competitiveness, performance and profitability of manufacturers. The Roundtable brought together executives of manufacturing enterprises from around Australia who are currently implementing design led innovation practices to enhance their businesses as well as others having expertise in design and participating in manufacturing industry innovation practices.

The goal was not to focus on what is design led innovation but to explore how to build upon and scale the successes of the industry champions and their journeys across the sector. Design led innovation has been successfully piloted across many programs within Australia. With these learnings from the manufacturers themselves, the next step is to focus on how to scale this approach, and this roundtable was the first step in exploring how this could be achieved.

This roundtable sought to provide an industry voice on how to increase the numbers of Australian manufacturers successfully gaining a competitive edge from adopting design led innovation practices.

It was a formal meeting with industry representatives asked and even challenged to consider and develop clarity on how to scale design led innovation.

Approach

Individual priorities

Theme identification using affinity mapping

Individual weighted prioritisation

Call to action

Calculation of group priorities

Introducing DLI

Advancing DLI within

10 representatives from 8 manufacturing Organisations

9 representatives from: Academia, Industry Associations, Interested Parties

What are the three most important things that we must do to advance

Design Led Innovation in manufacturing?

Broader Industry uptake

Design led innovation (DLI) is a method of working based on commonly used design principles used for product and industrial design but applied to the entire organisation and its business model. This broad-systems approach allows firms to rethink and grow their businesses by transforming how they provide value to customers consistently better than their competitors. The approach is appropriate in today’s economic climate, where Australia has shifted from a low cost to a high cost nation and is being buffeted by globalisation headwinds. This shift has required firms to develop new management capabilities and a mindset that requires them to rethink their competitive strategy, collaboration opportunities, and markets they enter. A more comprehensive understanding of customer needs is also essential. By adopting Design Led Innovation, firms develop superior strategic capabilities across all business functions, which enable them to grow and lead in the markets they enter.

The workshop reinforced the findings of the recent research by Bucolo and King in their report “Design for Manufacturing Competitiveness”.

10 representatives from 8 manufacturing organisations

9 representatives from: academia, industry associations, interested parties

A.

B.

C.

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Summary of Roundtable DiscussionThe discussion generated in the Roundtable included the following three areas regarding the implementation and adoption of design led innovation: introducing design led innovation, essential actions and raising awareness, advancing design led innovation within the business and the broader adoption of design led innovation by the sector.

The first step that was suggested for introducing DLI into an organisation was to begin with an audit of the company in order to identify holes. In particular, it was recommended to focus on core purpose of the business to determine whether they are actually providing value for customers. It was also recommended to build in-house capability by appointing a design champion and compiling a toolbox of problem-solving techniques. Further emphasised was the necessity to look holistically at the application of DLI across the entire organisation, not just at the product-level. It was suggested to act with urgency now, but allow time for DLI to take effect. To validate the process in the meantime, it was suggested to access results of the successful outcomes of other companies.

To further advance DLI within their own businesses, the champions emphasised the importance of persisting with new mindsets – everyone in the company should embrace having clarity of purpose, being persistent, and allowing a prototyping mindset. There should be a vision and reason for change – the company needs to be brutally honest about the current state to make a case for change. To reinforce the benefits of change, it is suggested to aim for some quick short-term wins. Importantly, both the present business and new ventures should be managed simultaneously.

To promote the wider uptake of DLI in the manufacturing sector in general, several recommendations should be implemented. It is recommended to look outwards as the identification of new areas of demand creates new opportunities. Education at all levels is seen as important for making DLI more widely known and accepted as a legitimate business tool. This can be achieved through “Train the Trainer” programs aimed at business consultants and advisors, as well as through formal education as part of university, TAFE, and schooling. It is also important to provide a consistent message – a common ‘brand’ for DLI activities in business that is recognised and understood nationally. Furthermore, the champions strongly endorsed the idea of creating an infrastructure to enable them to act as champions and mentors.

The typical triggers for a design led change to traditional business practices from all those in the room revolved around the presence of a crisis situation. A situation where it was understood by management that change was needed in order to survive - this included a realisation that you cannot get bigger or more profitable by doing the same thing. Other identified motivators included:

It was felt that the main obstacle to the creation of a design led organisation was a lack of understanding around the creative, intangible assets of design. Identified sceptics included those within the whole supply chain – making it difficult to work holistically with them - as well as staff within. Having a better narrative with plain, accessible language would make design led innovation more credible to others involved. Being able to communicate meaningful metrics of intangible assets, and also link these to traditional business performance metrics such as sales and profit would also help.

• Needing next generation growth, the changing of the guard in family businesses• Feeling blocked around scaling the business – not knowing how to grow• Feeling frustrated with little progress and reward for effort, even when working hard and doing their bestIt was felt that companies in this situation would be additionally motivated through the visibility of stories of other companies that show how DLI could assist them in imagining a better way and create new opportunities that come from doing things differently.

Triggers and Motivation

Obstacles and Blockers

Introducing DLI: EssentialsA. Advancing DLI within

the BusinessB. Broader Adoption of DLI by the SectorC.

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Industry Call to Action

Industry-Backed and Targeted Promotion of

DLI

After reflecting upon the issues raised in the group discussion, the champions were each asked to indicate three salient priorities for increasing the number of Australian manufacturers using Design Led Innovation practices to compete successfully.

The points under each recommendation are individual priorities identified by each participant in the Roundtable - they have deliberately not been summarised. The high level recommendations - in order of determined priority by the group - form the basis of how the industry envisages the advancement, adoption and scale of Design Led Innovation summarised in the conclusion. They also outline who needs to act.

• Promote design led innovation success stories

• Industry bodies promote design led innovation

• Promote through business associations• Promote as a tool to help firms stay in

touch with fast moving markets and innovation

• Promotion of design led innovation as a means of new benefits, growth

• Engage with leaders of companies• Assistance to promote what we do and

expose our businesses.• Promote through media, publications,

TV current affairs, Awards• Enable communication through a

crisp, clear description of design led innovation, a common language

• Common language, brand and metrics as a prerequisite for promotion

• Use past users as champions to promote case studies

• Create a solid simple manifesto• Make design led innovation ‘visual’

in the workplace• Common language (jargon) and

branding• Common language and metrics• A crisp, clear description of design

led innovation; common language as enabler of communication

• Leverage existing Government programs to include design led innovation

• Leverage Government grants for approval and funding

• Government funds, networks, programs and Awards

• Common industry, education and Government design led innovation Strategy

• Establish leadership to develop a co-ordinated approach - industry led and government supported with community involvement.

• Educate through design led innovation as business module

• Teach philosophy• Get into formal education

system• Develop design led innovation

in appropriate areas of education system

• Accredited training• Design led innovation

education at all levels: school, higher education, business

• Build up design led innovation expertise in delivery, transformation of companies; build design led innovation mindset and capabilities from workers to Board

• Make design led innovation training available to businesses

Communicate DLI clearly

Engage with Government on DLI

Business training in DLI and Integrate into

Education System1. 2. 3. 4.

December 2014 Industry Recommendations - Design Thinking for Export Competitiveness Page 6

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Mentoring and Peer Support

Leading and Managing Design Led Innovation

• Make it mainstream• Get acceptance from ‘old school’

thinkers, advisers, leaders• Draw lessons from introduction of

lean manufacturing• Make it more easily implemented

as an organisational system and process

• Make design led innovation training available to businesses

• Use professional bodies, accreditation, conferences, Train and Trainer programs

• Needs everyone in company involved

• Communicate clear purpose to entire business

• Inculcate love in daily activity, work

• Get everyone on board and influence constructive mindsets

• Abandon growth, focus on quality• CEO Groups and internal

disruptor groups

• Mentoring to sustain design led innovation in business

• Peer business support groups.• Use past users as champions to

promote case studies• Pre-qualified design led

innovation mentors and auditors

• Must be willing to re-evaluate everything

• Strong demonstrable commitment from top management

• A sense of urgency but taking the time to get strategy, direction right

• Relate it squarely to profitable service and product outcomes

All eight high level priority actions are important by definition. The key difference between high priority and lower priority items seems to be a reflection of narrower, more specific actions being lower priority. In some cases they are specific examples of the ‘how’ relating to achieving the high scoring items.

When acting upon the recommendations above, it is important to be aware of the possible connections between items; for example, while clear communication is rated second (#2), it is clearly a prerequisite to enable the achievement of both promotion (#1) and education (#3).

Whilst priority actions have been identified it seems fundamental that an integrated approach to building an ecosystem to support the adoption of Design Led Innovation (incorporating aspects of all issues identified) would have increased prospect of success.

Create Mainstream Acceptance

Get All Involved and Get Organisational

Alignment5. 6. 7. 8.

December 2014 Industry Recommendations - Design Thinking for Export Competitiveness Page 7

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Consistent branding and terminology

Conclusion

The urgency for a common and easily understood language is key. Terminology used must make sense to business and industry - short, simple and compelling. Credibility can be built through links to the achievement of profitable product and service outcomes. It is important to continue the research and build the evidence base for DLI as driving strong business performance, using metrics to make the case. This will drive the required change in mindset within the manufacturing industry – from the Board down and from the shopfloor up. It is also vital to emphasise public promotion through case studies and success stories in order to shift community and government perception to a more positive view of Australian manufacturing and hence, the allocation of resources. Support from academia in this research and also access to mainstream media to promote DLI will assist this need.

Education

It is also recommended to employ the development of toolkits of DLI techniques to enable self-directed learning by manufacturing firms with back-up support services. This will help all levels of the manufacturing workforce and management learn and apply design thinking practices on the job - facilitating learning by doing. Other education choices should include intensive applied learning programs aimed at CEOs, introductory programs, DLI for engineers or marketers and other functional specialists, on-demand modules, and refresher and extension courses. It must be timely and practically applied not just awareness and information.

Mentoring program and the establishment of a community of practice

The communication, education, and mentoring in DLI should be further supported by the development of a strong DLI ‘community of practice’ among manufacturers. This will create a within-industry infrastructure that enables the members a place to facilitate knowledge flow, transfer of tacit knowledge, antidote to isolation, access to sources of case studies and war stories, joint problem-solving opportunities, a vehicle for business performance monitoring and metrics, and a point of contact for greater public awareness of DLI and its ability to transform Australian manufacturing.

This document presents industry’s voice and their desire and strategy to scale DLI to grow the Australian advanced manufacturing sector. This will need co-ordination and integration across the innovation eco-system and leadership from the sector. Through the Australian Design Integration Network (ADIN), the views of industry will be taken forward and lessons captured and reported back to the sectors and stakeholders.

The overarching challenge and priority identified by industry for how to scale DLI, is to make DLI and design thinking practices a mainstream integrated approach; rather than a fringe or self-serving specialist initiative. This includes the many existing approaches to transforming advanced manufacturing firms and innovation programs provided by the government. Current government programs and grants would benefit from being leveraged to create a mainstream approach. We believe this can be activated by positioning DLI as a general purpose technique for high performance manufacturing. This integrated approach would include the following priorities:

December 2014 Industry Recommendations - Design Thinking for Export Competitiveness Page 8

To be used and the outcomes it delivers to be developed. DLI is first and foremost a management capability which will enable other transformation activities to be achieved and mindsets to be developed.

Investment is needed in ‘Train the Trainer’ programs and education for the businesses themselves, accredited business consultants, industry and professional associations.

The mentoring and peer support programs from ‘experienced hands’ for those new to DLI should be reinforced, encouraging shared learning by interacting with others.

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Enable and support design led innovation and design thinking practices within Australian advanced manufacturing as a mainstream integrated approach through:

• Leveraging existing government programmes

• Developing a common and easily understood terminology when referring to Design Led Innovation within the industry, mainstream media and academia.

• Investing in Design Led Innovation Education across all levels and all professions, including the accreditation of consultant practitioners

• Providing the infrastructure and support for mentoring programs and the establishment of a community of practice

Industry Recommendations

December 2014 Industry Recommendations - Design Thinking for Export Competitiveness Page 9

Acknowledgements:

Project lead:

Jane CockburnKairos Now Pty Ltd

Facilitator:

Narelle KennedyManaging Director of The Kennedy Company Pty Ltd

INDUSTRY RECOMMENDATIONS - DESIGN THINKING FOR EXPORT COMPETITIVENESS | DECEMBER 2014

1 Design for Manufacturing Competitiveness, (Feb 2014), Bucolo, King : https://www.uts.edu.au/sites/default/files/Design%20for%20Manufacturing%20Competitveness%20Report_0.pdf

2 Design Delivers for Business: A summary of evidence from the Design Council’s Leadership Program (September 2012) UK Design Council

3 META case studies. Individual case studies www. meta.org.au: Design Thinking for Export and Competitiveness Hub

References:

© COPYRIGHT 2014