CPH127

I recently bought Gary Hamel’s New Book - The Future of Management. VERY interesting and if I may say “spot on” when it comes to a description of what is necessary for companies to understand. Companies should organize them selfs as social systems, not as mashines.

When reading through the book I experience page by page that I’ve got my self a new friend. I knew that already when reading Gary Hamel’s comment on my post about “beta mindset“.

His book is interesting because it links Enterprise2.0 to Enterprise survival.

“Look around you; what things have demonstrated their adaptability across decades, centuries and eons? What sets the benchmark for adaptability? From my vantage point, life, markets, democracies, faith and cities all seem surprisingly adaptable. Each of these biological and human systems has proven itself to be far more resilient than any large corporation. They must become the role models for 21st century companies.”

and

“Many companies devote 5, 10 or even 20 percent of their revenue to R&D. Why not set aside a small share of discretionary funding for ideas that don’t pop up at the right time, or in the right place, to make it into the formal budgeting process? My guess is that a community of hundreds of mid-level managers spread out across a large company would, in the aggregate, make better investment decisions than a few folks in a corporate new ventures unit.”

I do of course agree, but many managers doesen’t understand the dynamics that web2.0 unfold internally in organisations…..I’ll come to that in another post

Do you have any takes on how the organization of a company would look like in the future? Which leadership competencies are in play? And what role does design play in the development?

It´s been a while since I wrote last time and while I am not about to start my own busieness, like Hans-Henrik the workload both at the office and at home have been overwhelming so far this year.

Nevertheless, the interest in design, innovation and leadership has not vanished - on the contrary - and so I would like to raise a relevant question in relation to design and business. How do you measure the effect of design from a business point of view?How do you know that design played a role in achieving business success?

I think that measurement is one of business primary decision-making tools and a cornerstone of the scentific world and since design wants to become as integrated into the business world as possible there is no way around it. We need to be able to explain what difference design makes and what value we create.

Perhaps you could look at market share, the turnover or profit, analyze percieved customer value, or customer loyalty or maybe the effect can be found in brand equity? Perhaps - and probarbly - the impact of design can be seen in many or even all of the above, depending on the type of design assignment.

This challenge becomes even more tricky if design is deeply integrated in the company and thus cuts across the organization to interact with different divisions. Do you individually measure the parts that design contribute with across the organization and add it all up?

On October 22-25, 2006 some of the worlds design managers and business managers will gather in Manchester Village, Vermont, USA for the 31st International Design Managment Conference to discuss this topic, but perhaps we can start talking about it here and now?

What is your view on measuring the impact of design? How could it be done in practice?

Deloitte has put out a new survey that has some very interesting findings in it. It’s called “Gambling with the House’s Money: The Randomness of Corporate Innovation,” and this gives a hint of the subject. (Free registration required, allows you to watch the webinar, and download a PDF of the Powerpoint.) Their finding is that the processes that many companies have in place are no better than a coin toss at nurturing winners. This is true whether the companies develop internally or work with an outside partner.

The majority of the time, respondents said that their most effective innovations came from “rogue inventors or under-the-radar skunk works” - these required savvy executives to spot the innovations and nurture them along, circumventing “official” processes. Unfortunately they don’t provide any hints as to how to better spot winners early.

What’s also interesting is what the survey reveals about why companies deny funding to budding innovations: insufficient profitability (55%); lack of consistency with existing core competencies (43%); or lack of consistency with existing strategy (41%). This means that companies have a surplus of innovations which are either promising but which they don’t know what to do with, or which are draining resources even though they don’t connect with the company’s strategy or capabilities. As I talked about in my earlier post, this is something I’ve seen anecdotally, so was intrigued to see Deloitte report on it quantitatively.

(A caveat pursuant to the earlier comments on ideas vs. innovation, the Deloitte study uses a rather inconsistent definition that’s not clearly spelled out, though they bring a bit more focus toward the end of the presentation.)

(Tip of the hat to Bruce Nussbaum for the pointer to the survey.)

“Don’t worry about other people stealing your ideas. If you’re ideas are any good, you’ll have to ram them down people’s throats.” – Howard Aiken, IBM Engineer

This is my favorite quote at the moment, and it gets a smile from everyone. Why? Because we’ve all seen great ideas get squashed, misinterpreted beyond all recognition, or just plain lost in the bureaucratic cracks. The problem today is, there are lots of great ideas swimming around, the problem is spotting which ones are applicable to the business, and nurturing them past their seedling status to become concrete and actionable in a way that is broadly understood within the organization.

Innovation is currently the holy grail of many companies, but too often it is treated as an end rather than a means. Innovation is simply a tool, and as with any tool it can be used effectively and ineffectively, but simply having it doesn’t give you a competitive advantage. For the most part, I would argue, any company worth their salt has dramtically improved their innovation capabilities in-house, or they can easily acquire innovation from outside firms. Procter & Gamble until recently was not considered a particularly innovative company, but they executed better than anyone. Now they are ramping up their internal innovation capabilities, which when combined with their proven execution abilities, is making for a very powerful one-two punch.

This has raised the competitive bar significantly, and means that companies must work harder to identify new growth opportunities that will get them ahead of the competition. Everyone has improved, and all the "obvious" stuff has been done. This is why innovation is valued so highly today, but by itself it is not enough.

I’ll make a perhaps provocative statement: Innovation is not the hard part anymore, and we are in fact in a state of innovation surplus. The challenge now is less coming up with innovations, but identifying which of the available innovations best support new business opportunities, and seeing how those opportunities support top level business goals.

A common problem is that top-level business goals are stated so broadly or vaguely that they are less than helpful when trying to identify the best opportunities and innovations to pursue from a suite of available options. How do you decide if, for example, the top-level goal of “Create Growth” is best satisfied with a new technology that improves product performance by 20% and will allow you to take market share from your current competitors; or instead should you innovate new products or variants that will allow you to tap into new markets (though require new sales channels and brand positioning)? More clarity is needed.

At the About, With & For conference last October I gave a talk on “wicked problems”, which I’ve been thinking about recently as I believe they are what stand between accurately connecting top-level business challenges with selections of innovations.

I first came across this phrase over ten years ago in an essay by Richard Buchanan called "Wicked Problems in Design Thinking" (it originally appeared in Design Issues and was subsequently included in the anthology The Idea of Design. I was immediately intrigued, but over time forgot about the concept. I was reminded of it again about a year ago and started pursing the concept more vigourously, and was struck by the fact that a) with few exceptions such as Dr. Jeff Conklin, almost no-one had done anything with the idea, and b) that it had tremendous relevance to the types of problems I see clients grappling with in my work at frog design.

"Wicked problems" was a term first coined by an urban planner named Horst Rittel in the 1970’s, when he recognized a new class of problems arising from extreme degrees of uncertainty, risk, and social complexity. He was dealing with issues such as crime, poverty, and racial segregation that were the outcomes of the planned housing projects of the 1950’s and 60’s. He recognized that not only was there no clear answer, there was not even a clear understanding of the problem they were trying to solve.

This is in contrast to the other types of problems we are more familiar with, which Nancy Roberts, an instructor at the Monterey Naval Post Graduate School, classifies as:

Simple problems: Both the problem and the solution are known. Example: You have a leak under your kitchen sink. It’s obvious what the problem is, and two plumbers will likely agree on what the solution is.

Complex problems: The problem is known but the solution is not. Example: You need to design a higher capacity disk drive. The problem is clear (though defining “higher capacity” needs to be agreed on), but understanding how to solve that problem is far from clear.

Wicked problems go beyond these in terms of difficulty, largely because they are inherently social in nature. Rittel identified several key aspects which, once listed, you will likely recognize as features of your toughest business decisions (this is not an exhaustive list, I’m paraphrasing a bit):

1. There is no definitive statement of the problem; in fact, there is broad disagreement on what ‘the problem’ is
2. Without a definitive statement of the problem, there can be no definitive solution and therefore no “stopping rule” signaling when an optimum solution has been reached. In actuality, there are competing solutions that activate a great deal of discord among stakeholders
3. The only way to really understand the problem is by devising solutions and seeing how they further knowledge about the problem (thus reversing the normal flow of thinking: with wicked problems, a solution must come before the problem!)
4. Solutions to wicked problems are not right or wrong, merely better, worse, good enough or not good enough. There is a high degree of subjectivity and each stakeholder brings their own perception to the table, causing discord.

Because they are so difficult to identify and define, wicked problems tend to go unaddressed, even if there is an underlying sense that something needs to be done (though about what exactly no-one can say).

So how do you deal with such intractable problems? In my AWF talk I followed the theme of the conference - work and play - by using sports analogies to identify a number of capabilities and states of mind that are valuable in addressing wicked problems. These are:

• Having wide peripheral vision to spot opportunities and threats at the edges
  Using pattern experience to sense the shape of wicked problems before hard proof is available
• Treat solutions as questions
• Have a high panic threshold and don’t be tempted to "tame" the problem prematurely
• Treat wicked problems as a full contact sport - get the whole system in one room and hash it out, and stay close to your customers

My plan is to do follow-up posts on my own blog to explore each of these in more depth.

Brianna Sylver makes some very good points in her article "What does ‘Innovation’ really mean?" about the need to understand the hiring organization or client’s motivation for seeking ‘innovation services’. As we all know from our previous attempts to define the word, ‘innovation’ means different things to different people and this can give rise to mismatched expectations. From the article,

Corporations typically seek innovation services in response to one of three situations:

1. They are currently engulfed in the flames of the "burning platform"
(as Russ Ward, Director of New Product Development at IMP, Inc. calls
it). Their profits are dropping, their products are not selling and
they don’t know what to do about it.

2. They have emerged from the days of the "burning platform" and have
come to understand that innovation is not a start/stop process, but an
evolving one that requires constant attention.

3. They are a leader in their industry and are determined to stay
there. Failure is accepted within their organization because they
understand and fully embrace the numbers game in product development.

In addition to understanding the motivation, she goes on to write about the importance of understanding the client’s ‘innovation tolerance’ level which in turn helps define the success criteria for the project. This helps ensure that the project and it’s deliverables are relevant and useful to the hiring organization - instead of situations where the consultant offers a ‘blue sky’ radical solution while the client just wanted an incremental product improvement. There’s much more in the article including tips on understanding your client’s culture and effective ways to improve the consultant/client relationship. Go read the whole thing!

After I wrote my post titled "Innovation Lessons from the BoP" it struck me that it would be far more appropriate a post for CPH127’s global focus on design and innovation. It’s a very long article, so I’ll repost an excerpt below for context. I look forward to discussions on  what we can do to assist those at the bottom of the pyramid with their efforts in innovation and design.

Prahalad states, in the introduction to his book Fortune at the Bottom of the Pyramid, that:

If we stop thinking of the poor as victims or as a burden
and start recognizing them as resilient and creative entrepreneurs and
value-conscious consumers, a whole new world of opportunity will open
up.

IMHO,
the focus of the world, however, has been on the products and services
that can be designed for the BoP, they have been recognized as
"value-conscious consumers", which is but one aspect of Prahalad’s
assertion. The other side of the story, less visible in the public eye,
is the opportunity to co-create with those he recognizes as "resilient and creative entreprenuers".

The question, that arose in my mind, after reading this recent article, is "Where
is the venture capital, the product development support and the
marketing opportunity for the innovations that rise UP from the bottom?" It seemed to me, that all I ever read about were products FOR the BoP.

Now there is an opportunity to really make a difference. As Prahalad says, four billion* poor can be the engine of the next
round of global trade and prosperity, and can be a source of
innovations.

Continued.

I have been done some thinking on how design, as it is discussed here and across the global business media today, fits into the corporate world of today. How the discussion on "new design" or "design thinking" sounds in the ears of a CEO who knows nothing of design - to whom design is something you see in some smart shops or at a museum. These are the guys I talk to and I try to convince that design can make a difference in their business. On the other hand, events like Index has opened up for a new definition of design which again opens up for new questions; does design have to look good? Does the design has to be designed in a traditional sense?

I need some way to structure the different business related views on design today. One thought I dwelled with lately is that design is like Abraham Maslow´s "the hierarchy of needs", often presented as a pyramid. Basically, a human has to fullfil his or hers needs from the bottom and up. If you want to build a pyramid you need to start with a base. You can´t jump into the middle of it. While Maslow´s pyramid has 5 levels the one I think of related to design has 3.

At the base you have "design practise". Related to the business use of design, "Design practise" represents the basic use of design: the definition of a design brief, the identification, selection and contractual engagement with a  designer (if the business does not have internal designers) etc. A company needs - at least - understand the most basic use of design, if even to start thinking about how design can apply to their corporation. The work is most likely not focused on user-centered design but rather on styling.

In the middle you have "design process". Related to the business use of design, "Design process", represent an organizational and structured use of design. Typically, it is focused on the use of an explicit process which can include cross-functional competencies. However, it is focused on the organization and leadership of design in the design and/or development department where other departments are looked upon as "clients" to the solution. The work is most likely focused on user-centered design.

At the top of the pyramid you have "design thinking". Related to the business use of design, "Design thinking", represent an top-level, cross-organizational use of design. Typically, it is also focused on the use of an explicit process which should include cross-functional competencies. It is focused on the use of the design process as an problem solving/opportunity realizing tool on a corporate strategy level where all departments are involved in the process. The work is most likely focused on user-centered design.

Again - from a design perspective - a company cannot start at the top. They need to establish and master the other levels before they can persue the level above.
The middle part, "design process" could have been called design management but I choose not to because of the need for management or leadership across all parts of the pyramid. Much the same could be said of "design process" since all design activities (like all other activities) follow a process. However, in the "design practise" level the process can be totally internal in the given designer and not involve the company (client) at all.

Hmm…what do you think? Does it make sense? These thoughts are by no means concluded - they are just thoughts - so I would love some comments on them!

Five tips for agencies and companies that aim to develop their competencies in strategic design.

STRATEGIC DESIGN AGENCIES MUST BE
PREPARED TO:

1. Separate content from process. WHAT and HOW are two different questions.
2. Develop a habit of evaluating design processes and learn from the conclusions. Make the learning your intellectual property.
3. Recruit people with different competencies and backgrounds and learn from them.
4. Encourage curiosity and collaboration. Have your employees stretch beyond their own discipline specific boundaries.
5. Develop the ability to teach and transferskills to the clients.

COMPANIES HIRING STRATEGIC DESIGN
AGENCIES MUST BE PREPARED TO:

1. Separate content from process. WHAT and HOW are two different questions.
2. Ask the agency to walk you through their approach – HOW they work.
3. Be ready to invest the human resources necessary to be part in the design process.
4. Expect design processes to be learning journeys.
5. Changes, new insights and opportunities will occur. Be ready to act on them.

I think I need to have a chat with Silje Kamille Friis - she is doing a Ph.D. on the new understanding of design methods and processes at the forefront of strategic design agencies. The article is part of her Ph.D.-project.

Got it from Mark

The DMI has created an Innovation Blog, but without some drastic changes and added features I fear it will not become as influential or as useful as it should coming from such a great institution. Here’s a link to the blog: DMI Innovation Blog

IMHO the DMI has an enormous opportunity for influence on the Design blogoshpere, if it can only put the right framework in place to take advantage of its amazingly talented membership. If it could use blogs to facilitate the capture and distribution of it’s communities intellectual capital it has the potential for huge influence in the business arena.

The first problem with the innovation blog is where it lives, it seems to have been created as an adjunct to one of their conferences, it’s breadcrumb illustrates where it lives:
Home > Conferences > DMI International Summit > Innovation Blog. That doesn’t bode well for any permanence, as soon as it gains any sort of popularity they’re going to want to give it a home and detach it from its conference genesis

The second problem with the innovation blog fails to take advantage of many of the features and best practices that makes blogs successful, three major problems IMHO are :

1. Commenters don’t get a link back to their own website
2. Commenters email addresses are exposed to harvesting
3. No permalinks or trackback (imagine how much faster they would see this feedback if they had tracback enabled)

Don’t get me wrong, i love the DMI, I just feel that it squanders opportunities to facilitate the design community, when it could really become a lynchpin.

It was when I threw out a reference to the movie, Rashomon, by Kurosawa, while talking to a young designer at work, only to have him blink at me in response, that I was moved to write this ‘rant’ or ‘view’ or, in my case, ‘informed opinion’. ‘The Rashomon Effect‘, has become a reference for contextual truth or subjective reality, i.e. shared experiences may be interpreted uniquely by each member of the group or team, and for a practicing professional designer, one who deals in the world of interpretation, to be unaware of this seminal piece of creative work, appalled me.

When I asked him what his educational background was, he said it was a BFA (Bachelor of Fine Arts) in Visual Communications from a better known school in the USA. This is a four year degree on a university campus, where one assumes, one is exposed to the great works of film, literature and the arts in near human history. How then, can one be ignorant of the influence of Francois Truffaut, Peter Brooks’ 10 hour long epic, The Mahabharata or even Leonardo’s use of The Golden Ratio?

My intention here, today, is to begin a conversation on design education, and to ask all you, a global audience, to share your own experiences in education. Is this issue one that is only faced in the United States, where I’ve met and interviewed hundreds of designers seeking graduate design education, or is it prevalent in Europe, Asia and Oceania? Ian, as an educator based out of Australia with significant Chinese experience, what is your opinion?

In my own experience, I’ve been educated in the British system until the O levels, followed by a year in an american high school, then undergraduate degree in Bangalore and of course, a year at the National Institute of Design, Ahmedabad. From an early age, my schooling was such that I was exposed to world literature and culture, culminating in an intense experience at NID. In the 10 months I was there, I was exposed to Bharata Natyam through the AISEC, French filmography, the Battleship Potemkin, The Caucasian Chalk Circle et al. Every weekend, there was a film festival or a dance recital or an art exhibition. All of these influences, states the philosophy of the design school, written by Charles and Ray Eames, converge to create design professionals who are able to manifest in tangible form, their enhanced aethestic sensibilities.