Unlike technology, design seldom follows a neat curve. When it comes to questions of style, it’s hard to chart steady improvements. At the moment, however, design does seem likely to become an even more powerful business driver—provided it isn’t undone by its own popularity. In a number of sectors, executives are becoming more and more aware that smart design can be a shortcut to competitive advantage. The growth of Starbucks and the rise of Apple are two stories about the power of good design, but a number of industries have been similarly transformed by an idea that was less technically novel than packaged in a more appealing way.
Economists and business strategists have long noticed that industries tend to converge on just a few places. Milan for fashion, London for finance, Silicon Valley for technology—for any given sector, there are usually one or two points on which the whole world revolves. Over the past few decades, this insight has led many policymakers to try to nurture not just individual companies but a whole ecosystem—a cluster—around a single industry. When does a cluster strategy work to spur innovation and when does it backfire? Should creative clusters be engineered by governments or should they be allowed to evolve and flourish on their own?
For nearly 25 years now, IDEO has stood at the cutting edge of the possibilities of design. Founded in Silicon Valley in 1991 by David Kelley, an early popularizer of the design thinking methodology, IDEO has grown into a diverse global organization, with experts on tap in disciplines ranging from behavioral service to software engineering. Thirteen years ago, IDEO opened an office in Shanghai. Charles Hayes, a partner at IDEO and Managing Director of IDEO China, talks about the evolution of IDEO China, IDEO’s approach to design thinking in a Chinese context and evolving Chinese business and consumer cultures.
A number of businesses have made remarkable gains by integrating design thinking into their development process—not the least of which was Hovey-Kelley, which morphed in the early ’90s into IDEO, the international design giant. Some universities are even beginning to include a mandatory course in design thinking in the general curriculum. Some corporate strategy experts argue that design thinking is nearing the kind of inflection point that the Quality movement reached in the late 1980s, when the total quality methodology became an inescapable part of doing business. Yet some critics are saying design thinking is dead. But the truth is its value lies in the worldview it propagates.
Once upon a time, designers were considered a fairly rarified breed in the corporate world—people with more interesting hair, eyeglasses and talent than the rest of us, but not a key part of the “real” business. Today, however, that’s changing. As more and more companies face the need for constant innovation, design is earning more respect. In fact, these days, many organizations are training their employees to think like designers. Jeanne Liedtka, a professor of strategy and author of three books on design thinking, argues that learning to approach problems the way designers do can be a useful way to spark innovation in almost every company.
Once upon a time, design was a coat of paint on the locomotive of the real economy. Today, value depends less on oil, steel and sweat, and more on how a product looks, runs and, most importantly, makes the consumer feel. In this series, we look first at the factors that have made design a prime economic force; next, at how executives have learned to create value by training the entire company to think like designers; then at ways in which cities are seeking competitive advantage with design; and finally, at how design itself is changing—and what those changes will mean to the way we work and live.