Design-Driven Innovation

Managers are people first and managers second.

A marketing manager for Apple described its market research as consisting of “Steve looking in the mirror every morning and asking himself what he wants.” This claim seems preposterous and illogical—almost blasphemous. It contradicts popular theories of user-centered innovation. We have been bombarded by analysts saying that companies should get a big lens and observe customers to understand their needs.

The framework provided in my book, Design-Driven Innovation, shows that even if a company does not get close to users, even if it apparently does not look at the market, it can be insightful about what people want.

That mirror in which Steve Jobs metaphorically looks at himself is not a magic gizmo that delivers soothsayings; it is the mirror of an executive’s personal culture. It reflects his own vision about why people do things, about how values, norms, beliefs, and aspirations could evolve, and also about how they should evolve. It is a culture built from years of immersion in social explorations, experiments, and relationships in both private and corporate settings.

All executives have their own personal culture, their own vision of the evolution of the context of life in which their products and services will be used. Every person relentlessly builds a culture, often implicitly, by simply being immersed in society and through the individual explorations of life. Executives do not need to be experts in cultural anthropology or pretend to be like gurus or evangelists. Culture is one of the most precious gifts of humanity. Everyone has it.

Often, however, this gift remains latent. Management theories do not help us unleash it. Rather, they often suggest that people hide it. The innovation tools, analytical screening models, and codified processes that experts recommend are typically culturally neutral or even culture averse. When innovation is purely technical (such as when it optimizes an existing feature), these methods may work well. However, when a firm wants to radically innovate the meaning of products and propose new reasons why people could buy things, these culturally neutral methods fail miserably.

In Design-Driven Innovation, I take a look at how companies have transformed breakthrough ideas into acclaimed business successes right after other firms dropped them as uninteresting or outlandish. My question is, Why do some executives recognize the stunning business value of breakthrough proposals better than others? How can you prepare yourself to create and recognize these opportunities?

The answer, in terms of management practice, is in the book. However, there is a more subtle notion underlying the stories in each chapter. Many of the executives I talked to revealed an interesting combination of two personal characteristics: a belief that culture is an essential part of everyday life (and therefore of business), and a significant unawareness of established management theories.

That is definitely true of, for example, Steve Jobs. But it is also true of the Italian entrepreneurs I discuss. In Italy, primary and secondary education have been sharply focused on the humanities, making culture an essential part of the personality of entrepreneurs. Management sciences, in contrast, have developed much more slowly in Italy than in other countries (almost none of these entrepreneurs has an MBA). These managers somehow did not come in contact with what prevented other executives from leveraging their cultural assets. This does not mean that these leaders did not fulfill their role as executives. Simply, their management practice was completely different from existing theories.

What I’m suggesting is that you can direct your personal culture—your treasure, and the treasure of colleagues both inside and outside your firm—toward the creation of economic value. If properly nurtured and shared, this asset can become an integral part of your being a business leader‚ so that you will be unafraid of looking into the mirror to leverage your personal culture and of seeing in that culture things that others do not. Not because you are creative. Not because you are a guru. Because you are a businessperson.

Designers Are People Before Being Designers

My book is not about design. But I hope designers will appreciate it, because it unveils one of the forgotten angles of their contribution to business and society.

When executives think about design and designers, they usually have two perspectives. The first, traditional one is styling: They ask designers to make products look beautiful. The second, more recent one is user-centered design. Designers have an amazing capacity to get close to users, understand their needs, and then creatively generate countless ideas. First styling and then user-centered design have been portrayed as vehicles by which companies differentiate themselves from the competition. Design, many analysts say, makes a difference.

And indeed this message has hit the target. No company would dare release a product without caring about its style and attentively analyzing user needs. Design is in its heyday, even more in this period of economic turmoil.

Yet, as always, success brings greater challenges. As these practices diffuse to every company, they are losing their power to differentiate. They are mandatory and not distinctive. Curiously, the same argument that has been used to promote design is now turning against it.

This phenomenon in business is not novel. It happened 20 years ago with total quality management (TQM). In the late 1980s, firms considered quality a top priority: The highest-quality performers were succeeding, and every company adopted TQM principles. Each had a manager responsible for quality, and each had six sigma or control charts. Two decades later, quality is no longer among the top corporate priorities. It is mandatory, of course, and each firm still has quality managers, but quality is not considered a strategic differentiator.

However, designers sometimes forget, or have been told to forget, a third angle involved in innovation. Some firms—although they use styling and user-centered design for incremental projects—look for a different type of expertise when it comes to radical projects: radical researchers. These are experts who envision and investigate new product meanings through a broader, in-depth exploration of the evolution of society, culture, and technology. These experts, who pursue R&D on meanings, may be managers of other companies, scholars, technology suppliers, scientists, artists, and, of course, designers. Curiously, however, designers have recently been moving in a different direction.

In presenting design as a codified, predictable, and mandatory process—making it more digestible for executives educated in traditional management theories—designers risk losing their ability to do such forward-looking research. They have enjoyed being epitomized as the quintessential creative people. But creativity has little in common with research. Creativity entails the fast generation of numerous ideas (the more, the better); research requires relentless exploration of one vision (the deeper and more robust, the better). Creativity often values a neophyte perspective; research values knowledge and scholarship. Creativity builds variety and divergence; research challenges an existing paradigm with a specific vision around which to converge. Creativity is culturally neutral, as long as it helps solve problems; research on meanings is intrinsically visionary and built on the researcher’s personal culture. In attempting to mimic the language of business, design seems to have followed the pattern noted among executives: It values methods more than designers’ personal culture, thus losing the capability to harness this precious asset.

Design-Driven Innovation does not question the essential value of user-centered design, styling, and creativity, which are relevant for incremental innovation. However, people need different attitudes and skills when it comes to breakthrough innovations—and those attributes are scarce. When more than 30 percent of the population belongs to the creative class, as urban studies theorist Richard Florida has suggested, creativity is not in short supply: It is abundant. What is in short supply, I’m afraid, are circles of forward-looking researchers whom firms involve in breakthrough projects because of their culture and vision and because they have something to say. Now that designers have become highly effective at being creative and user-centered, they can pursue an exciting new challenge that taps into their unique cultural background: that of being radical researchers.

Roberto Verganti is professor of the management of innovation at Polytechnic University of Milan and a member of the board of the European Institute for Advanced Studies in Management. He has served as an executive adviser, coach, and educator at a variety of firms, including Ferrari, Ducati, Whirlpool, Xerox, Samsung, Hewlett-Packard, Barilla, Nestlé, STMicroelectronics, and Intuit.
www.verganti.it

Reprinted by permission of Harvard Business Press. Excerpted from Design-Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean. © 2009 Harvard Business School Publishing Corp. All Rights Reserved.

The Meaning of Business

About

In light of the economic crisis, companies have a historic opportunity to transform the way they do business and provide customers with more value-rich, sustainable, and meaningful products and services. With this special series on “The Meaning of Business,” design mind invites business leaders from various industries and disciplines to explore new, innovative models of value creation.

A New Era of Meaning - An Introduction
By Tim Leberecht
Chief Marketing Officer, frog design

Articles in this series