Design-Inspired by leader6


									The Evolution
of the   Design-Inspired

Enterprise           by Gabriella Lojacono and Gianfranco Zaccai
A focus on design translates into a focus on customers’ true
needs and unarticulated aspirations, ultimately creating
better-informed, more nimble companies.
                                         In the literature on design, product devel-      sumer. There has been discussion of the
                                         opment and innovation, the word ‘design’         role of consumer knowledge in driving
                                         refers to many things: a creative art, a phase   innovation, but not of the practical tech-
                                         of product development, a set of functional      niques for letting consumers’ unspoken,
                                         characteristics, an aesthetic quality, a pro-    often unconscious, needs and desires
                                         fession, and more. In the lexicon of more        emerge and for infusing such insights into
                                         and more companies, however, the word            all functional teams.
                                         has come to denote the totality of activities          Nevertheless, consumer-centred pro-
Gabriella Lojacono   Gianfranco Zaccai   and competencies that gather all relevant        duct design is an emerging best practice in
                                         information and transform it into a new          many industries, particularly those charac-
                                         product or service.                              terized by practical products that hold no
                                               Design is now understood as a core         emotional appeal; in which competition is
                                         activity that confers competitive advantage      based on increasingly less profitable
                                         by bringing to light the emotional meaning       attempts to cut cost or improve perform-
                                         products and services have – or could have       ance; where once-distinctive products are
                                         – for consumers, and by extracting the high      becoming commoditized; or where there is
                                         value of such emotional connections.             little room left for product innovation.
                                         This evolution is creating the design-focused          Among these best practitioners, design
                                         enterprise, an organization that uses con-       is viewed as the art and science of putting
                                         sumer-centred product development to             all the pieces together – technical, finan-
                                         move quickly and effectively from intimate       cial, operational and emotional. As most
                                         customer knowledge to successful product         companies already lavish quite a bit of
                                         and service offerings.                           expertise on the technical, financial and
                                               Much has been written about design’s       operational aspects of what they do, it is
                                         ability to increase productivity, product        this equal focus on the emotional connec-
                                         performance and the value of the emo-            tion with customers that stands out as
                                         tional connection with customers, but            novel.This newly co-equal dimension influ-
                                         little about design’s contribution to an         ences and informs the others, producing
                                         overall better understanding of the con-         new and unexpected results.

                                                                                                             Rotman Magazine Winter 2005 • 11
     Design-focused enterprises still have        pletely automatic system would have been             The best practice in design is to inte-
strong technology, operations, marketing,         an affront to the pride its customers take in   grate people from different backgrounds
research and manufacturing competencies,          their driving skills; it correctly determined   into a design research team. When
but these are guided by an organization-          which emotional connection to make and          Johnson Controls wanted to develop an
wide, shared understanding of who their           which one not to violate.                       electric room thermostat for hotels, the
customers are and how the design of their              When Master Lock Co. learned               company assembled a design research team
products or services can best shape the cus-      that its customers were not as interested in    of technical consultants, architects, hotel
tomer experience.                                 its locks per se but on the possessions the     managers, building managers, HVAC
     Traditional consumer research – sur-         locks protected, it switched tactics from       installers and hotel guests. The team’s task
veys, focus groups, etc. – asks people what
they want. However, while customers can
reliably express their preferences for incre-     Design is now understood as a core
mental improvements in existing products
and services, they cannot reliably express        activity that confers competitive advan-
their higher-order needs and aspirations,
which may call for radical redesign or            tage by bringing to light the emotional
entirely new offerings. Although these
higher-order aspects are what form the            meaning products and services have.
basis of a customer’s emotional connections
to any offering, the customer himself may         selling padlocks as hardware to selling         was to gain firsthand insight into the
deem them irrelevant, insignificant or even        security for specific possessions. Similarly,    customer’s world and what specific
embarrassing, or may simply not be con-           when Sunbeam Products Inc. (now                 products or services meant to them.
scious of them. Because traditional               known as American Household)                    Multidisciplinary teams are even more
consumer research is unlikely to bring such       discovered that people who bought its           effective when the team is made up of mul-
insights to light, it often provides technical,   Coleman barbecues associated the brand          tidisciplinary individuals who can mentally
marketing and operational departments             with fond childhood memories of camp-           juggle the trade-offs among the competing
with inadequate information and debatable         ing, it changed the focus of its marketing      goals of various disciplines. When
strategic objectives, resulting in rejection      from highlighting the product’s perform-        ergonomics says one thing, the company
by the marketplace. Design-focused com-           ance to reinforcing the pleasant memories       culture says the opposite and customers say
panies, on the other hand, use design             it evokes.                                      something else again, multidisciplinary
research to glean such insights, which help                                                       individuals can integrate the three disparate
guide them to a profitable emotional con-          Methods of Design Research                      sets of clues into an optimal solution.
nection with their customers.                     It has been shown that front-end activities,         In the cases we observed, design
     For example, when Procter &                  such as brainstorming, which precede the        research teams started with a variety of
Gamble sought to provide a better way to          detailed design, prototyping, pilot produc-     ‘ethnographic techniques’, watching and
clean floors, it discovered that its cus-          tion and manufacturing ramp-up of               recording what people do in real life. They
                                                                                                  followed consumers into stores to watch
                                                                                                  them buy padlocks, into their homes to
The best practice in design is to                                                                 watch them mop floors, and even into their
                                                                                                  bathrooms (via videocamera) to watch
integrate people from different back-                                                             them take showers.This provided an under-
                                                                                                  standing of the environment in which the
grounds into a design research team.                                                              product would be used. For instance, by
                                                                                                  observing customers in their homes,
tomers did not wish for better mops but to        a new product, can powerfully influence          Cambridge SoundWorks learned that
have clean floors without mopping. P&G             the outcome and significantly determine          men who buy premium audio systems like
took the ‘mopless floor’ fantasy seriously         downstream costs. But brainstorming             to display them in their living rooms,
and developed the highly successful Swiffer       and concurrent development have to be           whereas women would rather hide them
line of dry and moist cleaning tools.             informed by customer values and aspira-         behind plants or furniture. In an attempt to
     BMW found that drivers of its high-          tions. In a design-focused enterprise, the      appeal to both sexes, the company
performance cars were not stressed by             front-end activity is design research, a        launched its Newton Series in 2001, which
high-speed driving but by parking, so the         systematic process for understanding the        featured powerful speakers designed to
company integrated proximity sensors              consumer’s unexpressed needs and desires,       blend in with living room furniture. It
and an acoustic signal to assist drivers.         then envisioning and testing new ways to        became the company’s most successful
Interestingly, BMW realized that a com-           meet them.                                      product to date.

12 • Rotman Magazine Winter 2005
     Design research also employs
‘psychophysiological techniques’ such as
bio-feedback, eye tracking, vocal analysis
and facial coding to understand the emotions
underlying observable behaviour. By corre-
lating physiological characteristics such as
heart rate, brainwave level, skin response or
body position with a person’s preferences,
researchers can design the offering to maxi-
mize the desired physical responses.
     ‘Brand personification’ is another
technique used to make hidden values and
emotions perceptible. When Master Lock
asked consumers to associate their current
classic padlock with a person, the name
most often mentioned was John Wayne;
when they were asked to associate it with
another product, the frequent answer was a
military Jeep. Asked with whom or what
they equated Master Lock’s prototypes of
innovative new concepts for padlocks, con-
sumers most often named Arnold
Schwarzenegger and the Humvee.When
the company created a promotional cam-
paign to launch the new locks, it was
informed by these associations.
     Testing prototypes with consumers is
nothing new, but design researchers make
sure to do so in a real-life context. Thus,
Master Lock’s design research team
observed customers using prototypes of
the new padlocks on their own luggage,
toolboxes, gun cases, garden gates and
trailer hitches.
     Methods of gathering data can be com-
pared in terms of their degree of customer
involvement. Some traditional methods,
such as brainstorming, are entirely internal.
Surveys involve consumers, but the con-         it wouldn’t have taken much design                Following are useful design research
sumers can only answer what they are asked      research to learn how important it is to      techniques:
and can only express what they consciously      U.S. car buyers.The manufacturers, forced
know. Focus groups allow more freedom of        to retrofit, created some of the most com-     Issue mapping.    Identifying all the stake-
expression, but still cannot probe the          plex, expensive, unreliable and least-user    holders and decision influencers involved
unconscious. Design research, by observing      friendly cup holders ever produced.           with ordering, stocking, displaying, pro-
consumers buying and using products in               Design research findings are not typi-    moting, buying, using, servicing and
real life, with no external guidance, offers    cally assembled in the form of data and       disposing of a product or a service helps to
the highest possible consumer involvement.      reports but are instead stories and charac-   paint a fully dimensional picture of its
Skilled observers have a chance to see non-     ters, often captured on video. Such findings   impact and interaction with consumers and
verbal evidence of subconscious feelings.       resemble and evoke real experience more       the marketplace.
     Skipping design research can be costly.    powerfully than data and reports can,
For example, high-end German automo-            vividly conveying the desired emotional       Metaphors. Having consumers suggest
bile manufacturers were stunned when            connections between people, products and      similar products or scenarios, as Master
U.S. customers would not buy cars with-         services, and they help a company to trian-   Lock did, can help consumers express their
out cup holders. While drinking coffee in       gulate these findings with appropriate        emotional connection to a particular prod-
the car seemed unthinkable to Europeans,        technologies and economic objectives.         uct, while stimulating researchers to think

                                                                                                                 Rotman Magazine Winter 2005 • 13
along new lines. A good metaphor may end       related to a project on the walls of a meet-    segmentation. This made the rationale for
up as part of the design to communicate the    ing room, design research team members          the resulting strategy far more tangible
emotional connection to the consumer.          can immerse themselves in information.          than any written description or statistical
                                               Being literally surrounded by a wealth of       data could have done. Each market seg-
Consumer archetypes. Personifying the          inputs in a room can cause designers to         ment was represented by a consumer
typical consumer can be enormously help-       make connections among elements that            archetype: real people who the
ful in keeping everyone’s thinking focused     might have initially seemed unrelated.          researchers had met and with whom peo-
on the emotional connection to consumers.                                                      ple in R&D, manufacturing, sales and
The archetype can be a real person or a        Building Design Focus Into                      finance could naturally empathize.
composite creation. For example, AMF           the Organization                                     Companies can use this technique to
Bowling Worldwide used archetypes to           Corporate strategy is often shaped by           communicate their connection with cus-
help make sense of an extremely broad          macrodata – industry trend analysis, com-       tomers to important outside stakeholders,
                                                                                               from Wal-Mart buyers to Wall Street
Corporate strategy is often shaped by                                                          investors. In a risky and unusual move,
                                                                                               Master Lock shared its presentation and
macrodata and carried out by specialists                                                       prototyping with selected mass-merchant
                                                                                               buyers. By allowing Master Lock to ‘tell a
focused on quarter-to-quarter sales.                                                           complete story’, this approach won the
                                                                                               buyers’ enthusiasm and collaboration, and
                                                                                               it garnered the company valuable time dur-
potential target market for a major product    petitive analysis, technology assessments,      ing which key buyers agreed not to reduce
development. Facing a mature market in         demographics – and carried out by special-      their shelf space despite their declining
the United States, the maker of equipment      ists focused on quarter-to-quarter sales,       market share.
and furniture for the bowling alley industry   technical invention, measurable perform-             Even with such vivid communication
set its sights on overseas markets, where      ance and operational efficiency. These          tools, it is necessary to continually repeat
bowling often has novelty and even signifi-     individuals are often in separate depart-       the message so that it sinks into the fabric
cant prestige and where the penetration of     ments that do not communicate well with         of the organization. Once organization-
bowling centres is still very low. AMF         each other, and the voice of the customer is    wide empathy is achieved, however, every
assumed that it needed to design for those     often drowned out by the voices of various      aspect of the organization can add value
markets specifically, and it embarked upon      departments. In contrast, the findings of        to the emotional connection. Not only can
user-centred design research. However, the     design research become important tools for      the traditional design areas of product
research revealed that regardless of market,
the distinguishing characteristics among
bowlers had to do with why they bowled:        The findings of design research
for competition, to perfect their game, for
the joy of participation or for the sense of   become important tools for building
occasion.These archetypes allowed AMF to
efficiently develop a product system that       organization-wide identification with
had global applicability.
                                               the customers’ needs and aspirations.
Work-flow mapping. The visual mapping
of the steps an individual takes to complete   building organization-wide identification       packaging, point of purchase, corporate
a given activity has been a standard tech-     with the customers’ needs and aspirations,      communication and the Web site be coordi-
nique for 75 years, but it can reveal new      keeping everyone’s eyes on the same prize.      nated to meet consumer needs and
insights and opportunities when combined       As people develop, manufacture, stock or        aspirations, but engineers can find ways to
with the other techniques listed here.         maintain a product, they are much more          meet those needs and aspirations while still
                                               likely to keep in mind a real person who        delivering function and performance.
Storytelling. Creating storyboards, associ-    they’ve watched in a video washing his car,          In fact, implementing a design-inspired
ating imagery and other techniques can be      or putting her kids to bed, than on a page of   strategy tends to provoke some redesign of
used to elicit feelings and aspirational       market survey results.                          the company itself. Once Master Lock real-
insights from consumers.                            At Master Lock, video ethnography,         ized how much could be accomplished with
                                               in-context interviews and early concep-         its new approach, it took steps to embed
Bulletin boards. By taping, pinning and        tual sketches and models were integrated        consumer-centred product design at all lev-
hanging all sorts of objects and information   into a presentation for the proposed new        els. Rather than simply selling hardware to

14 • Rotman Magazine Winter 2005
hardware buyers, the sales and marketing            also all saw the value in, and had the capabil-      was later able to successfully reintroduce its
groups were reorganized and staffed to              ity of, making as many mistakes as possible in       steering-wheel lock.
serve different market segments, such as            the front-end phase, when they could learn                Design-focused companies don’t get
automotive and recreation. Product, pack-           the most at the lowest risk and cost.                everything right the first time, but they
aging, point of purchase, corporate                      For example, Master Lock’s first foray           can make quick course corrections due to
communication and the Web site became               into the automotive market was the pro-              the depth of their customer insight and
coordinated, supporting the segmentation            duction of an innovative steering-wheel              their techniques for rapidly and vividly
strategy with messages and visual languages         lock. Although the company’s reading of              conveying new ideas to all parts of the
appropriate to each consumer archetype.             the market potential was accurate, it mis-           company in order to put that knowledge
Engineering became responsible for increas-         judged the obstructive power of an                   into action.
ing perceived value as well as actual               entrenched competitor. Master Lock was                    In a world in which consumers cannot
performance. Manufacturing developed                able to quickly change course and pursue a           always convey (and may not even know)
more flexible channels for getting more new          new customer in the same segment that had            what would delight them, design-focused
products to market sooner without compro-           already been identified by its existing              companies are best equipped to glean the
mising quality or efficiency. The company            design research – the trailer owner. With            information through careful and imagina-
also became more open to incorporating              customer archetypes and video clips                  tive observation, to respond accurately,
outside innovation that complemented its            imparting to all parts of the company the            quickly and flexibly, and to define and lead
design-inspired strategy.                           common image of a consumer for whom                  in rapidly-evolving markets.
                                                    the trailer means ‘freedom and security’,
Cheaper Mistakes and Faster Solutions               and whose worst fear is that the trailer
The successful practice of customer-centred         might be stolen, Master Lock had enough              Gabriella Lojacono is a professor of business administration
                                                                                                         and design management at Bocconi University, Milan.
product design varies from one design-              focus and cohesion to rapidly develop and            Gianfranco Zaccai is president and CEO of Design
focused firm to another, but the companies           introduce a unique trailer lock. This suc-           Continuum, an international design firm whose clients
                                                                                                         include BMW, Procter & Gamble, Sunbeam, Samsung and
we observed have many of the above-                 cessful entry into the automotive market             Moen. Contact the authors at gabriella.lojacono@uni-boc-
discussed best practices in common. They            gave Master Lock a position from which it   and

                           A CONFERENCE                             ON        BUSINESS DESIGN™
                                       THE NEW COMPETITIVE WEAPON
                                      January 28, 2005 — Four Seasons Hotel Toronto
      Reserve your seat at the Rotman School’s 15th annual business conference. You’ll learn first-hand how being strategic
               about the design of services, products and processes will enhance your competitiveness from the
                                         most talented experts in their fields including:
                      Meg Whitman, President and CEO, eBay Inc. and            Claudia Kotchka, Vice President, Design, Innovation and Strategy,
       Corporate Director, Gap Inc. and The Procter & Gamble Company           The Procter & Gamble Company
                        (Fortune’s 2004 Most Powerful Woman in Business)       (P&G’s first-ever Chief Design Officer who is building design into the
                                                                               DNA of the world’s largest consumer products company)
            Kathleen Taylor, President, Worldwide Business Operations,
    Four Seasons Hotels Inc. and Corporate Director, RBC Financial Group       John Byrne, Editor-in-Chief, Fast Company magazine
       (Four Seasons has won more awards than any other luxury hotel brand)    Dilip Soman, Corus Chair in Communication Strategy
                               Tim Brown, President and CEO, IDEO Inc.         and Professor of Marketing, Rotman School
     (IDEO has won more Industrial Design Excellence Awards from Industrial    Roger Martin, Dean and Professor of Integrative Thinking™
         Designers Society of America and BusinessWeek than any other firm)    and Business Design™, Rotman School
                                     Please don’t delay. Register today. Seats are selling fast.

                                                                                                                                   Rotman Magazine Winter 2005 • 15

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