ARTD6077 Design 2 Assignment 1

Design and business: an analyse of the IDEO case

study

MA Design Management, Design Management Pathway

Student name: Jinyu Li Student ID:

26694344

Date: 13 March. 2015 Word Count: 2840w

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Figure 1. Instagram ， IDEO, (https://instagram.com/ideo/p/QpWar3Eer3/)

AbstractThe purpose of this analyse is to discuss whether IDEO should design the required product for Handspring regardless the bypass of the most identified and the most important early stages in IDEO design phase, or negotiate with Handspring to add more time to the research process of the product which will at the end influent the company’s profit. This paper will analyse the situation from the view of both organizations and focus on the different impacts on both companies through the discussion about corporate culture, product development process, business profit and design transformation.

ContentAbstract……………………………………………………………………………..02Content…………………………………………………………………………...…03Introduction……………………………………………………………………...….04Analysis for the selected question………………………………………………..05Details of discussion: IDEO ………………………………………………….……06

Product development process……………………………………………..…..07

Corporate culture………………………………………………………..………10

Handspring: design and profit………………………………………….………13

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Conclusion and Recommendation………………………………….……………15References………………………………………………………………………….17Figure reference…………………………………………………..…………….….19

IntroductionIn the year of late 1999, IDEO, one of the celebrated and innovative design firm intended to develop a palm-sized device module for the Handspring company. With the goal of coming up with a smaller and cheaper module than the last palm-sized computer IDEO did, Handspring requires to shorten the product develop process time by cut off the early investigate and research time of design process.“New product idea is as the trigger for a product development project.”（Susterova. M, 2012）. For IDEO and Handspring, the new product idea is make the product smaller and cheaper so it can be affordable to everyone. (Thomke. S & Nimgade. M .D. A, 2007) A mature product idea should contain eight elements(Figure. 2), not only have to consider the features of product itself, for example, the quality and the consumer experience issues, but also have to address the business part like the profit and strategy problems.

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Figure. 2, Eight dimensions of a product idea, (Thomke. S & Nimgade. M .D. A, 2007)

Analysis for the selected questionThe main confliction between IDEO and Handspring is that the request of Handspring to reduce the time for IDEO’s traditional early design phase as researching and analysing. For IDEO, it is a potential risk to conduct “non-completed” product design process, especially when there are enough evidence and article data suggest that the early research and analyse phases are crucial for the result quality of the final product and the consumer experience of the product. There will be an influence to the corporate culture of IDEO once the coming product are perceived as “low-quality” or “non-consumer centred”. But for Handspring, by reducing the research time, the company can introduce the product earlier, which means more benefit and competitive advantages for the Handspring. Also, another issue is that, the creation of certain corporate culture is depend on job design, leadership styles, human resource practices, the distribution of power, and other elements. (Klein Andrew, 2011). When the two IDEO’s early phases of understand/observe and visualize/realize contributes the specific corporate culture of IDEO, changing the rule of the design process may cause an effect to the overall corporate culture and hens to cause an influence to the way the employer works and a damage to the efficiency of the company. In his research, Klein (2011) also

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suggested that “organizations would be advised to manage their cultures as a strategic resource by establishing flexible, adaptive, constructive cultural norms regardless of the type of strategy being implemented.” To create specific competitive advantage, innovation companies like IDEO should focus on their exclusive corporate culture which ideally should not be easily copied by others. For Handspring, it is unnecessary for them to especially focus on the design sector, which based on the design transformation theory, Handspring still stays in a comparatively low position in design strategy. (Hands.D, 2009)

Details of discussion: IDEO (Product development process and corporate culture)

Product development processThe product development process module illustrate the phases of product from being designed to eventually facing the market. There are two equally-important elements in the process of product development, one is focused on the product generation, the other concentrate on the previous research and market analysis. (Thomke. S & Nimgade. M .D. A, 2007)

Figure 3. Product development process. (Thomke. S & Nimgade. M .D. A, 2007)“A key challenge for companies engaging in new product development (NPD) is to reduce uncertainty by accurately forecasting demand.” (Gemser.G et al., 2012). In Tim Brown’s book Change by design (2009), as the former CEO of IDEO, he brings up a theory that during every design process, the design team should all come cross three spaces which are: inspiration, ideation and implementation. Those three process space conclude the product design process with the beginning as “information collection” then moving to “idea translation” and finally end up with the real

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“product built”. He also believes that at the first “inspiration” space, information should be researched and gathered through any possible sources. And once the information has been gathered through conducting interviews, reviewing patent and data collection, it is necessary and very important to start the analysis and synthesis right away, therefore to translate the data and information into meaningful patterns or strategies. The whole creative process rely on the analysis and synthesis actions, and can make a remarkable influence on the whole design process and the orientation of design.However, admittedly, through the information gathering or the project researching, large amount of time, budget and resources need to be used to support the action. At the same time, the possibility for the team to generate a correct and perfect solution at their first try seems not that large. It is a time-consuming action to conduct the “experiment” at the first stage of design process and to do research which also normally requires large investment. But “a creative team must be given the time, the space and the budget to make mistakes.”(Brown. T, 2009)One of the main content of the earlier stage of research is focusing on consumer’s behaviour. “The designer must get a clear sense of the functions that the target consumers want in the new product.” (Kotler G. P and Rath. A, 1984) Much articles and researches have talked about “human-centered design” and Tim Brown gives us his three elements of a successful design program which are: insight, observation and empathy. In terms of insight, he suggests that the attention should be moved from the creation of the product to the analysis relationship between users and products. He also mentioned that to conduct this change, the best way is to observe and to learn from other people and then to truly wear their shoes and connected with people. A typical example of the important impact of conducting the earlier user research is the Apple mouse design by IDEO. Jim Yurchenco design the core feature and solved the technic problem of the first Apple mouse. He is also the first full-time employer in IDEO and the designer of the inner guts of the famous Slim Palm V project. As the time the design of mouse for Apple was being processed, a cheaper and lighter product was being expected. The traditional assumption of user behaviour suggested that it is so important to keep the mouse operate accurately and move directly, however only after Jim’s research to find that the consumer actually cares less about the accuracy of the movement of the mouse, what they cares more is as long as the cursor goes exactly where they want it to be on the screen. Less people pay attention to their hand movement while

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they using computer, their attention will be focused on the screen, just like their attention will focus on the direction and road instead of how the wheel moves when driving.(Vanhemert. K, 2014) It turns out that the mouse for Apple computer is a big success and the revolutionary design of replacing the complex moving technic which being used in the mouse to a simple Free-moved ball has last for more than decades. Another example also from IDEO project is that instead to reinvent the school lunch, the whole design team embedded themselves in San Francisco, where the school located, to gather the first-hand information by observing and listening the school students. (Stinson. Liz, 2014) The consumer’s view and experience are so important to the design process even sometimes, companies allow consumers being participate in the new product development (NPD) to come up with the consumers’ idea about the coming product. The traditional NPD module of designing and producing the product exclusively by the company and its expert is being challenged by the new way of empowering consumers to take part in the design process ( Fuchs.C and Schreier.M, 2011).

Corporate cultureSince the early 1980s, corporate culture has been highlighted on (Bruce. M and Bessant. J, 2002). In peters and Waterman’s research which based on a study of the most successful companies in U.S in 1982, corporate culture becomes the key issue that drove those companies to success (Peters. T and Wterman. R, 1982). In this study, the financial statues of the companies are estimated along with interview data to address the characteristic which make those companies performs better than others. The result shows that those companies have one thing in common, they all have a strong corporate culture, therefore, the conclusion has been drawn that a strong corporate culture will lead the company to success (Peters. T and Wterman. R, 1982).Also according to research result released in 2009, published in the journal of marketing, Gerard. J et al. found that corporate culture are more important to the success of companies than labour or government influence after investigating 759 companies based on 17 different industries. Despite the fact that the corporate culture can be very different, even in the same industry, with the respect to the level of corporations and teamwork, (Kosfeld. M and Siemens. F, 2011), corporate culture still represent the shared value, meaning and belief. In Bruce. M and Bessant. J’s book (2002), corporate culture is especially important to innovation industry. Another research published in the Sloan MIT Management Review

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located six fundamental building blocks of corporate culture (Rao. J and Weintraub, 2013).

Figure 4. Six fundamental elements of corporate culture. (Rao. J and Weintraub. J, 2013)When all the employers are agreed on a basic, fundamental rule, it is more likely for them to conduct their woks without too many interruptions from the external power. And the innovation itself may be effected dramatically by the inner value system or corporate culture in company. When applying the six fundamental rules to IDEO, it’s not hard to find that the product development process in IDEO encourage productive creativity and a relatively playful working environment.The corporate culture in IDEO can be seen from the playful way which they use to generate creative ideas and the rough and quick methods which are using to produce the prototype, also through role-playing “game”, the creative team produced their empathy for the users. In conclusion, in IDEO’s corporate culture, they: encourage wild ideas, defer judgement, build on the ideas of others and stay focus. (Rao. J and Weintraub. J, 2013)All of the factors that can make IDEO different from other companies through IDEO’s corporate culture are based on the earlier development stages (phase 0: understand/observe). After the first step of the innovation process, the team will build a feasible but rough prototype based on the reality and market research. The “from playful to business like” produce development process is what makes IDEO’s specific corporate culture.

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What Handspring ask for is going to partly negatively influent the existed corporate culture of IDEO, which is also proved to be a quite successful and desirable corporate culture. To reduce the earlier phases of the typical IDEO design process, the most identical and innovative product development process of IDEO will also be neglected.

Handspring: design and profitIn the published article Design: a powerful but neglected strategic tool, (Kotler G. P and Rath. A, 1984), the definition of design is:

Design is the process of seeking to optimize consumer satisfaction and company profitability through the creative use of major design elements (performance, quality, durability, appearance, and cost) in connection with products, environments, information, and corporate identities.

The definition of design given in this article claims that design, as a process, should both achieve the aim of profitability for the provider (company) and the aim of consumer-satisfaction. Kotler and Rath not only highlighted the importance for marketers and financial teams to understand designers or innovation teams, but also addressed the need to improve the ability for designers and creative teams to understand marketing process.The problem in this specific Palm V project is that once IDEO insist to stick with b its product development process rule and decide to not to risk the corporate culture, the introduce date of the product will be delayed. However, in business context, time is everything. According to Marc. Annacchino (2007), timing is the key factor in product developing process, it is even more important than the real developing cost of the product. In his opinion, it is more important to put a product to the market in a short time, so that it will give enough time for the market response and win the market. Also, the opportunity for a specific company to win the market will only exist in a quite short time, in other words, the reaction time for the company in a specific industry to see the market opportunity and put its new product to the market is just a blink of eye. Once the opportunity is caught by a company, it will generate a general action of other companies in this industry. From this point of view, it is reasonable for Handspring to bring up the requirement.From the design thinking view, the importance of innovation and design in different company are different. There are five stages of design which based on different levels of design engagement. Only when a company or organization reached the fifth stage of design

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thinking will the full value of design as a strategy can be understand (Hands.D, 2009). The ladder of different design thinking can be changed through time and by moving up from the category, the company will achieve a better understanding of the function of design and design management. Even though to achieve the stage of “design as innovation” is appealing to companies and organizations, it is unnecessary for a company to go for it with a reckless mind. If the Handspring company is not at the stage of “design leadership”, it shouldn’t force its organization and its strategy to adapt a more creative rule. Additionally, according to Bruce. M and Bessant. J (2009), for many industry, it is easily for consumers to switch to a more updated and better-developed product rather than stick with brand loyalty. Apply this rule to Handspring and its design stage in the design transformation, instead to get a competitive advantage, it is a better strategy to simply focus on the added function and the more acceptable price than the brand building or too much consumer experience design.

Conclusion and RecommendationThere are three different type of philosophies of how the company combine design and marketing (Kotler G. P and Rath. A, 1984). Except the two extreme type of either being design-oriented or marketing based, the ideal formation is that a good design process or new product development (NPD) should be neither design-dominated nor market-dominated. However, it should be tested by market and also be generated with appropriate innovation.Based on the three categorise being mentioned above, companies which normally choose to focus on marketing as their main strategy are those companies in packaged food and small appliances industry (Kotler G. P and Rath. A, 1984). Handspring is considered to be a company who focus on appliances and small technologies, it is also understandable for Handspring to require cutting the produce time because during product development process, timing is everything. It is also indicated that the first company who present the new product to the market has the best position in the market, for other companies who didn’t managed the timing, they may end up serving for a segment of the market which they won’t possibly be interested into (Marc. Annacchino, 2007). Admittedly, in the IDEO and Handspring project case, portable computer device is not a new conception comes from Handspring, 3Com has already began earlier than Handspring. Additionally, the ideal module of Handspring’s Palm V product, is a “fully compatible, slightly smaller and less

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expensive clone of the palm-size computers.” (Thomke, S and Nimgade. M. D. A, 2007)Above all, Handspring is trying to add more functional features to the new product to make the Palm V project gain competitive advantages when facing the market. They want to improve the feature of the certain product to make a comparatively new product to obtain a share of the market instead of serving for the segment of the market. However, it must take proper design process which also contains understand and observe to achieve the goal. Only after conducting research in this phase will the innovation team generate a feasible information and discover the consumer’s behaviour (Thomke, S and Nimgade. M. D. A, 2007).Even it looks like that the main conflicts of the Palm V project are the market (timing is everything) and the design (design phase of understand and observe takes time), there are, actually, symbiotic relationship between design and marketing. (Bruce.M and Bessant. J, (2002) The marketer and designer should work together to gain a same goal and it is essential that the marketers understand the value and benefit which design can create, also it is important that the designers understand the way the market operate in a business context. Therefore, it is suggested that IDEO and Handspring to work together yet a negotiation should take place based on a mutual goal.

ReferencesBrown. T, (2009), Change by design, New York: Harper Collins.Bruce. M and Bessant. J, (2002), Design in business, Edinburgh: Pearson education limited.Fuchs.C and Schreier.M, (2011), Consumer empowerment in new product development, Product development & management association, [Online], 28 (1), pp.17-32, Available from: 10.1111/j.1540-5885.2010.00778.x, [Accessed 07 March 2015].Gemser.G, Leenders. M and Weinberg. C, (2012), More effective assessment of market performance in later stages of the product development process, Marketing Letters, [Online], 23(4), pp 1019-1031, Available from: 10.1007/s11002-012-9208-z, [Accessed 07 March 2015]Gerard. T, Jaideep. P and Rajesh. C, (2009), Radical innovation across nations, Journal of marketing, [Online], 73(1), pp.3-23, Available from: http://faculty.london.edu/rchandy/innovationnations.pdf, [Accessed 09 March 2015]Hands. D, (2009), Vision and values in design management, Switzerland: AVA publishing.

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Klein. Andrew, (2011), Corporate culture: its value as a resource for competitive advantage, Journal of Business Strategy, [Online], 32 (2), pp. 21 – Available from: http://dx.doi.org/10.1108/02756661111109743, [Accessed 07 March 2015]Kotler G. Philip and Rath. Alexander, (1984), Design: a powerful but neglected strategic tool, Journal of Business Strategy, [Online], 5 (2) pp. 16 - 21 Available from: http://dx.doi.org/10.1108/eb039054, [ACCESSED 08 March 2015]Marc. Annacchino, (2007), Pursuit of new product development: the business development process, Oxford: Butterworth-Heinemann.Peter T, Waterman R, (1982), In search of excellence. Lessons from Americans Best Running Companies. New York: Harper & Row .Rao. J and Weintraub. J, (2013), How innovative is your company’s culture, Sloan MIT Management Review, [Online], 54(3), pp.29-37, Available from: http://sloanreview.mit.edu/article/how-innovative-is-your-companys-culture/, [Accessed 09 March 2015]Stinson. Liz, (2014), Wired, California, Available from: http://www.wired.com/2014/04/how-to-reinvent-the-school-lunch-and-get-kids-to-eat-better/, [Accessed 06 March 2015]Susterova.M, et al, (2012), Risk management in product development process, Annals & Proceedings of DAAAM International, [Online], 23 (1), 2304-1382, Available from: http://www.daaam.info/Downloads/Pdfs/proceedings/proceedings_2012/0225_Susterovaatal.pdf, [Accessed 07 March 2015]Thomke, S and Nimgade. M. D. A, (2007), IDEO product development, case study, Harvard business school, NO. 9600143Vanhemert. K, (2014), Wired, California, Available from: http://www.wired.com/2014/08/the-engineer-of-the-original-apple-mouse-talks-about-his-remarkable-career/, [Accessed 06 March 2015]

Figure reference

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Figure. 1, Instagram， IDEO, Available from: https://instagram.com/ideo/p/QpWar3Eer3/, [Accessed 13 March 2015]

Figure. 2, Eight dimensions of a product idea, (Thomke. S & Nimgade. M .D. A, 2007), Available from: http://dx.doi.org/10.1108/02756661111109743, [Accessed 07 March 2015]

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Figure 3. Product development process. (Thomke. S & Nimgade. M .D. A, 2007), Available from: http://dx.doi.org/10.1108/02756661111109743, [Accessed 07 March 2015]

Figure 4. Six fundamental elements of corporate culture. (Rao. J and Weintraub. J, 2013) Available from: http://sloanreview.mit.edu/article/how-innovative-is-your-companys-culture/, [Accessed 09 March 2015]

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