innovation by design

© copyright 2006, youngjin yoo

innovation by design

1


0.0

2


youngjin yoo

http://yoo.cwru.edu

3

http://yoo.cwru.edu

http://yoo.cwru.edu


innovation

4


information infrastructure

5


ubiquitous information environments

6


0.1

7


two ideas

8


first idea:

how to find innovation idaes that are not obvious

9


“If I had asked my customers what they

wanted, they’d have said a faster horse”

-- Henry Ford

10


Performance

Time

Ferment

Takeoff

Maturity

Disruption

11


how to spot the next curve in knowledge

economy?

12


the problem of innovations

13


14


15


assumption:

innovation is different from creativity

16


innovation is a result of systematic, organized, and disciplined efforts

17


the morning is about methods

18


second idea:how to organize to

continue to innovate

19


afternoon:

structuretechnology

culture

20


1.0

21


what is the most famous innovation over the last

three years?

22


23


since 2001

42,000,000 iPods850,000,000 songs8,000,000 videos

24


14 million iPods in a quarter

25


108 iPods per minute3 million songs per day

26


There are many MP3 players and iPod clones.

But none of them copied its success.

Why?

27


28


multiple meanings

29


buy it

30


take it

31


watch it

32


from things to actions

33


1.1

34


deep changes in the economy

35


CFO of the year

36


CFO magazine

37


1998 - Scott SullivanWorldCom

38


1999 - Andrew FastowEnron

39


2000 - Mark SwartzTyco

40


sponsor - arthur andresen

41


ethical issue?

42


fundamental shifts in the economy

43


from industrial economy to knowledge economy

44


from things to meanings

45


1.2

46


one more personal example

47


TV series

Movie

On-line game

Trading card GameBoy pack

Toys

Yu-Gi-Oh Economy

48


more than just cards

49


connections create unique experiences

50


knowledge economy

51


from possessions to connections

52


from having to experiences

53


from nouns to verbs

54


from single meanings to multiple meanings

55


from or to and

56


from foreground to background

57


1.3

58


traditional goods

service products knowledge products

physical elements

yesno

intangibleelements

no

yes

59


Starbucks vs.

Dunkin’ Donuts

60


Lous Vuittonvs.

grocery bag

61


Mon Blancvs.Bic

62


solution selling

IBMUPS

Rockwell AutomationParker Hannifin

63


products with layers of knowledge

64


what is your company’s iPod?

65


it takes a paradigm shift

66


67


2.0

68


Netflex vs. Blockbuster

69


2.1

70


what do they sell?

71


video vs. experiences

72


different meanings of video rental experiences

73


opens up new innovation possibilities

74


requires new combination of resources

75


outside-in approach to innovations

76


most R&D focus on inside-out perspectives

77


how can you see the outside-in opportunities that customers cannot

articulate?

78


how can you beat the curse of disruptive

innovations?

79


three approaches

80


2.2

81


understanding the hierarchy of innovation

82


Performance

Time

Ferment

Takeoff

Maturity

Disruption

83


Performance

Time

Main frame

Micro computers

Personal ComputersMobile Computers

innovations in computer industry

84


disruptive innovation is not as disruptive as it

looks when you focus on parts

85


Number of Transistors Per Chip

110

1001000

10000100000

100000010000000

1000000001000000000

1959

1983

1965

1970

1973

1978

1985

1993

1999

2002

Year

Num

ber o

f Tra

nsis

tors

Microprocessors

Logic Chips

Source: (Moore, 2004)

86


Declining Feature Size of Semiconductors

0.001

0.01

0.1

1

10

100

1960 1970 1980 1990 2000

Year

Mic

rom

eter

s (M

icro

ns)

Gate OxideThickness

Junction Depth

Feature length

87


Growth in Hard Disk Recording Density

1

10

100

1000

10000

100000

1000000

10000000

1957 1962 1967 1977 1982 1987 1992 1997

Year

Rec

ordi

ng D

ensi

ty

88


89


radical distruptive innovations comes from novel combinations of parts that are following linear innovation paths

90


new combinations of parts offer meanings of

the product

91


creates new competitive space with new customers and competitors

92


personal computer

personalcalculator

potential new market through

expansion of meaningsof computers

93


portableCD player

mp3players

potential new market through

expansion of meaningsof computers

94


incumbents are not well equipped to see the new

meanings, failing to capture the opportunity

95


2.3

96


focus on the meanings not the product in thinking about the

innovations

97


if you are the product manager of

Tide, how would you create the Tide

killer?

98


asking right questions

99


Q: why do you use Tide?

A: to have clean cloth

100


product-focused question

101


Q: what do you mean by clean cloth?

102


meaning-focused question unlocks the

door for product innovations

103


fresh smell

soft fabric

clean color

ready for important meeting

no dirt

104


multiple meanings of experiences

105


physicalcognitive

social cultural

106


who is your customer

107


when and where

108


what do they do before and after

109


customer experience map

Activities

Actor A Current experience

Actor B

Actor C

110


where do you get these ideas?

111


• Ask

• Watch

• Learn

• Try

Design Methods

112


• Cognitive Maps

• Scenario Cards

• Conceptual Landscaping

• Visual Journals

• Customer Experiences

• Narrative

• Extreme User Interviews

• Personal Archaeology

Ask

113


• Behavioral Mapping

• A Day in the Life

• Fly on the Wall

• Immersion / Shadowing

• Video / Photo Journal

Watch

114


• Cognitive Task Analysis

• Profiling the Users

• Affinity Diagrams

• Competitive Product Survey

• Cross-cultural Observations

• Historical Analysis

• Activity Analysis

• Scenarios

• Error Analysis

• Flow Analysis

Learn

115


• Paper prototype

• Multiple Model with different scale

• Bodystorming

• Try it yourself

• Role Playing

• Rapid Prototyping

• Rewriting Narratives

Try

116


two most important methods

117


observation

118


prototyping

119


not to collect databut to get inspired

120


not to convergebut to open up new

possibilities

121


to understand the context and background in order to

innovate foreground

122


123


2.4

124


small group exercise

125


the meanings of keychain

126


what’re on your keychain?

127


2.5

128


analyzing the innovation space

129


Business model

FinanceNetworking

2. Networkingenterprise’s structure/value chain

1. Business model how the enterprise makes money

Channel

DeliveryBrand Customer

experience

10. Customer experiencehow you create an overall experience for customers

8. Channelhow you connect your offerings to your customers

9. Brandhow you express your offering’s benefit to customers

Core process

Process.Enabling process

3. Enabling processassembled capabilities

4. Core processproprietary processes that add value

6. Product systemextended system that surrounds an offering

Product performance

OfferingProduct system

Service

7. Servicehow you service your customers

5. Product performancebasic features, performance and functionality

Source: Doblin Consulting

130

http://www.fedex.com/us/search/?link=1

http://www.fedex.com/us/search/?link=1


• More space for info

• Flat space for easier readability

• Clear visual hierarchy to differentiate really important vs required information

• Space for individual comments

• Sleeve for patient info card

• Color coded neck rings for different patients

Target Story

131


2.6

132


summary

133


the big idea

134


how to spot next breakthrough innovation

opportunity?

135


outside-in

136


customer driven

137


seeking multiple meanings of your product

138


understanding the hierarchy of innovations

139


applying design methods to understand meanings

140


understanding innovation space

141


3.1

142


Sony Case Discussion

143


what was the symptom of the problem

144


why could not Sony build “walkman” iPod?

145


strong product organizations

146


fiefdoms

147


language

148


mental model

149


innovation processes

150


Sony is not alone in this struggle

151


IBM

OneIBM

152


NASA

OneNASA

153


Nestle

OneNestle

154


HP

Front and Back

155


TechnologyInnovation

OrganizationalInnovation

InstitutionalInnovation

156


3.2

157


158


159


who killed it?

160


organization kills ideas

161


why organization is the problem?

162


detour: a brief history (1)

Human Resources Finance

New Products Operations Marketing Sales

CEO

Single business with a function structure

163



Human Resources Finances

Staffs IT

Division A Division B

CEO

Functions Functions

A diversification strategy with a product or a market structure

164



Functions Staffs

Divisions International

CEO

Functions Countries

A international strategy with a division+international structure

165



Functions Staffs

Divisions International Customer

CEO

Functions Countries Global accounts

A customer-oriented strategy with a multi-dimensional structure

166


innovations require both specialized expertise and

integrations of knowledge

167


Geographicfocus

Product/Customer focus

Functional focus

ideally,

168


Geographicfocus


Functional focus

in reality,

169


Geographicfocus


Functional focus

innovation strategy should focus on

170


managing the tension between the two

171


the problem of knowledge

172


situated

173


contextualized

174


multiple meanings

175


customer

176


Integrated Knowledge Infrastructure

solution A solution B

177


leadership providing design vision

178


organization structure

179


technology platform

180


culture

181


3.2.1

182


“What happened was, the designers came up with this really great idea. Then they take it to the engineers, and the engineers go, ‘Nah, we

can’t do that. That’s impossible.’ And so it gets a lot worse. Then they take it to the

manufacturing people, and they go, ‘We can’t build that!’ And it gets a lot worse.”

Steve Jobs, Oct 14, 2005, in Time

183


Apple’s solution

184


deep collaboration

185


cross pollination

186


concurrent engineering

187


design engineering manufacturing

188


design

engineering manufacturing

189


when there are more than one product organizations

190


Functional structure Lightweight team

Heavyweight team Autonomous, “tiger” team

MarketConcept

MarketConcept

MarketConcept

Source: Kim Clark and Steven Wheelwright Revolutionizing New Product Development

alternative project structures

191


Functional focus

Product/Customerfocus

“Heavy weight” teams

“Tiger” teams

“Light weight” teams

192


Functional focus

Product focusGeographicfocus

Centers of excellence:Different parts of the firmare organized in differentways: line authority issplit

Matrices:Everyone has “two bosses”:both functions and products/customers have line authority

two other alternatives

193


matrix organization

Function 1

Function 2

Function 3

194


centers of excellence

Function 1

Function 2

Function 3

195


importance of aligning incentive and power

196


there is no silver bullet

197


3.3

198


from organization designto organization designing

199


projects as the generative mechanisms for

knowledge integrations

200


investing on people

201


building “T” people

202


tension between

the logic of familiarity and

the logic of variety

203


what killed Segaway?

204


why Rokr did not succeed?

205


why did Walkman succeed?

206


How does Frank Gehry organize his organization to consistently deliver remarkable buildings that are

distinctive yet all bear his design character?It is a balance between familiarity and variety.

207


Gestalt of Organization Designing

• Cognitive Psychology

• Music

• Product Design

• Organization Design

• Notion of family resemblance

208


209


210


211


212


Projects Owner Funding Time Size Cost

Barcelona Fish Olympic committee Public 6 months 180 ft x 115 ft $2.2 M

Bilbao Basque govern’t Public 1991- 1997 256 K ft2 $127.5 M

EMP Paul Allen Private 1995- 2000 140 K ft2 $110 M

PBL CWRU Donor + University 1997- 2002 150 K ft2 $61.7 M

Four Very Different Projects

213


four different conditions

214


four different sets of available resources

215


four different purposes

216


without losing your identity

217


3.3.1

218


Gehry’s Design Practice

219


it begins with

220


221


vision

222


dream image

223


what makes you to be in the business

224


response to customer

225


226


227


228


229


230


231


232


233


234


235


236


237


238


239


240


241


242


243


244


245


246


247


248


249


250


251


252


253


254


255


256


257


258


259


260


261


262


263


264


265


3.3.2

266


building on information infrastructure

267


centralized database

268


layers of local information

269


modular design

270


same syntaxcoordinate

271


multiple meaning

272


attending to local contexts

273


while seeing the global

274


intense collaboration

275


no more “throwing papers over the wall”

276


FIREWALL

DESIGNCONSULTANTS

ARCHITECT

DESIGN

SUBS

CONTRACTOR

CONSTRUCTION

FABRICATORS

277


engineer

architect

contractor sub-contractor

fabricatorCentral

Database

278


other examples

279


what if other people tell me what they know

280


market place of knowledge

281


when I need them

282


del.icio.us

283


flickr.com

284


RSS feed

285


all need strong technology infrastructure

286


3.4

287


Architectural Vision

The use of representation

tools

Collaborative & participative

project management

Buildings

Organization Structures for

Projects

is projected into the environment by designing

Gestalt of organization design

gives forms to

288


familiarity and variety

289


O

G

S1 S2

(a) Fish

Fish Project

• Most ideal experiences

• First use of Catia -- paperless

• Gave a birth to their organization design gestalt

• Becomes a dream image of future projects

290


O

G

S1 S2

AA

P7 P6

P5 P4

P3

P2 P1

S3

S4

(b) Bilbao Gugenheim

• Working with public funding and foreign labor

• 7 prime contracts

• Catia -- for exterior and communication & coordination

• Intense collaboration in gallery and exterior

Bilbao

291


(c) EMP

T8 O

G

S2 S3

PC

T77 T6

T5 T4

T3

S4 S1

S6

S5

T1

T2

• Strong prime contract

• Key subs were negotiation-based

• Catia -- bi-directional flow of information; five key subs using the system

• Minium paper-based drawing

• Intense collaboration at T2 -- structural steel

EMP

292


(d) Peter B. Lewis building

O

G

S2 S3

PC

S4 S1

S22

S5 • Initially reluctant PC

• Catia used for design & no tape measures

• Class room and metal enclosure were key areas of intense collaborations

Weatherhead Building

293


design gestalt

294


intense focus on form-giving as means to

mobilize resources

295


design attitude

296


297


liquid vs. crystal

298


multiple models

299


being functional

300


constraints

301


reinventing wheel

302


intensely collaborative

303


building on the image of the past and tradition

while creating new path

304


innovation is not done by a lone genius

305


what is the design gestalt of your company?

306


3.5

307


big idea

308


two tensions for organizing for innovation

309


tension one:

specialization and integration of knowledge

310


organizing principle one:

build project-based, customer driven

collaborative teams

311


tension two:

the logic of familiarity and the logic of variety

312


organizing principle two:

build on organizational gestalt

313


market customer

engineering design

noun verb

or and

average exception

foreground background

data inspiration

314


designing interactions within and without

organizations as mirror image of each other

315


http://yoo.cwru.edu

316

http://yoo.cwru.edu

http://yoo.cwru.edu

innovation by design

Business

youngjin yooorganizing

youngjin yoofrom

youngjin yoothe

youngjin yoofrom

youngjin yoowhy

youngjin yoowhat

youngjin yoo1

youngjin yoo0