applied design management and design practice innovation

Kathryn Best 27.10.09 Casa Llotja de Mar (Sal de Contractacions) Barcelona

We live in interesting times. Because of the particular challenges faced by organisations in light of the global economic conditions and their local impact, and the increased sense of responsibility towards the environment and society, companies are looking for new ideas and new ways to do more with less (resources). The opportunity for design management is to demonstrate how design can help link creativity and innovation, in a way that can both add value and create value. If we think of creativity as developing new ideas, and innovation as exploiting these new ideas, then design becomes the way in which companies can make tangible customer propositions that can be experienced and touched - that is to say, in forms that can be taken to market.'

context the creative economy creativity, innovation, design applied design management design practice innovation

context and the creative economy

context
Shift: Industrial Economy Knowledge Economy Creative Economy The growing power of ideas social technological economic environmental political The ecosystem in which organisations exist is changing. In response, organisations will have to change.

Arup Foresight & Innovation Issues which are driving global change and most likely to have a major impact upon society and business.

The Economy: UK Context

The Financial Services Industry
Londons leading role arises from a long history of openness, easy access to markets, and a tradition of welcoming foreign rms. With changing circumstances, attributes that once made organisations ideal could cripple them under new conditions.

The Creative Industries

One of the best ways to increase competitive advantage, between commercial companies and even entire countries. The Creative Economy Programme (2005): move to make the UK the worlds creative hub.

Creativity is fun. Its also big business.

The Creative Economy: How People Make Money from Ideas (Howkins)

Credit: Patrick Bour/pbo31(Flickr/ Creative Commons)

The Economy: UK Context

The creative and knowledge economy thrives upon the generation and exploitation of inventiveness, innovation and imagination.

The YCE programme recognises the centrality of creative entrepreneurs to the development of a sustainable and competitive creative economy, and the bridge they provide between artists and the markets, between creative talent and consumers.

The Economy: The Netherlands

The added value of the countrys design industry totaled 2.6bn per year and provided work for about 46,000 people, making it a major domestic employer and an international calling card.
Dutch Ministry of Education, Culture and Science Report, 2005

Design: putting people rst

There is growing demand to take a more holistic approach to the cultural, environmental, political and societal impact of how commercial businesses and other organisations operate.
Credit: myeralan / Alan Myers (Flickr/Creative Commons)

Because design, by its very nature, takes a people-centred approach to problemsolving, it is well positioned to enable a more integrative, holistic approach to solving contemporary world challenges.
Credit: Alec @ Taiwan (Flickr/Creative Commons)

Design Thinking: enabling processes and ideas from the bottom up

Design Thinking is a process for practical, creative resolution of problems or issues that looks for an improved future result. There are no judgments in design thinking. This eliminates the fear of failure and encourages maximum input and participation. Thinking outside of the box can lead to more creative solutions.
Wikipedia

Since design avors virtually all of our experiences, from products to services to spaces, a design thinker must explore a landscape of innovation that has to do with people, their needs, technology and business.
Innovation through Design Thinking, Tim Brown, IDEO

The Empathy Economy (Bruce Nussbaum)

Bottom-up thinking: Sustainable Integrative Holistic People-centred Intercultural Interdisciplinary Social networking Social innovation Mass-innovation Collaborative Design Participatory Design User-centred Design

Compassionate Capitalism
The recession is a blessing in disguise as it will force people to work out what really matters to them. value values new ideas new ways to do things with fewer resources - doing more with less add value create value

The meaning of a thing becomes a measure of its value Robert Hartman

creativity, innovation, design

Creativity and Design are tools for innovation and change: in society in culture in the environment in business

Creative responses to change: context

You can do it Punk Zines DIY

I can do it Art The elite Monetizing creativity

We can do it Crowd sourcing The wisdom of crowds

Creative responses to change: context

them

you

we

applied design management

creativity, innovation, design

(a useful framework for how to think about them)

Creativity is the generation of new ideas - new ways of looking at existing problems or the discovery of new opportunities. Innovation is the exploitation of new ideas. Design is what links creativity and innovation. It shapes the ideas so they become practical and attractive propositions for users and customers.
Source: The Cox Review 2005

Design Management: Managing Design Strategy, Process and Implementation

AVA 2006; Parramn Ediciones (Barcelona) 2008

It promotes understanding of the relationship between things. Not a book of solutions but a book that opens up conversation and communication. It inspires you to take things further yourself.

FoDM

AVA 2009; Parramn Ediciones (Barcelona) 2009

Design does not operate in isolation to other disciplines and professions. The interdisciplinary nature of the creative industries (e.g. marketing, design, nance, law). The integrated nature of design management. The relationships between the people, the projects, the processes, and the products, services and environments.

Reassessing Value
A fundamental reassessment of the value of every asset everywhere in the world. Kevin Warsh, Federal Reserve, December 2008

Fundamental - basic or essential

Fundamentals are what is really important. Anyone who thinks deeply about fundamentals will, by denition, be a radical. And all actions that stem from that kind of thinking will also be radical in the sense that they will address and seek to solve lifes most important problems. Peck 1997

The management of the people, projects, processes and procedures behind the design of our every day products, services, environments and experiences.

key principles Design Management design management finance marketing & branding design and innovation

case studies

contextual perspectives

The management of the relationships between different disciplines (nance, marketing, design..) and different roles (clients, designers, stakeholders...)

Applied DM: Assessing value/criteria

Promoting best design management practices

1. Leadership in design innovation

Dening and implementing a vision for the whole organisation integrating design across a range of activities.

2. Driving change through design

Identifying signicant changes within the organisation where design has played a major role.

3. Excellence in design co-ordination

Demonstrating capabilities, processes and skills and resources in support of the application of design.

4. Strategic performance
Demonstrating performance based on objectives, deliverables and overall effect on the organisation.

Virgin Atlantic Airways Ltd.

(DME Award 2008 for Large Companies: excellence in design coordination)

xx xx

Managing the design of the products, services, behaviours, targets, incentives....

Designing towards Success...

Who is Venrooy Cable Equipment? Venrooy o ers technology solutions for four cable handling processes: storing, (un)winding, transporting and laying cable, in three markets: infrastructure, electro and maritime. Venrooy started in 1937 as a family company, and was taken over twice: in 1996 and in 2006. The company has 16 employees. The company operates in a highly traditional market, with low innovation levels. Generally speaking, competition is amongst me-too products with companies continuously involved in erce price battling. Mission (starting in 2006): Venrooy contributes to the success of clients by delivering cable-handling solutions with substantial competitive advantages: easier, safer, faster, more e cient to use, better serviced (functionally better) more advanced presentation (stronger on design) more sustainable whilst competitively priced

Madame Curieweg 4 NL - 5482 TL Schijndel The Netherlands T: (+31) (0) 73 54 92 379 F: (+31) (0) 73 54 78 641 E: info@venrooy.nl W: www.venrooy.com

1937 Ownership Venrooij family

From nothing to market leadership in The Netherlands with great vision, entrepeneurship and enthusiasm

1996 Company sold to private owner

Selnterest, decline of morale and marketshare; milking leads to stands!ll and deteriora!on of company

2006 Company sold to private (current) owner

Rejuvenate, redesign and invest to restore market leadership and ul!mately aim for top3 market posi!on EU

Designing the Plan

At the time of the take-over in 2006, Venrooy had been milked out for ten years and the company had come to a standstill. The company needed to get back on track. A growth plan consisting of two phases was designed. The rst phase was to reestablish Venrooy as a healthy and well organised company, enabling Venrooy to enter phase two: to create rapid growth. Venrooy completed the rst phase in 2009. The company is now healthy and growing, as a result of innovating its organisation, its processes and products. The company is ready to enter phase two now, developing Venrooy from Dutch marketleader towards a top-3 player in the European market.

past

now

future

Phase 1: Repair & Consolidate

Goals: Created: restore market one focus, one leadership in NL des!na!on create a pla&orm clear roles and to enable growth responsibili!es hire top quality Repaired: competencies trust, faith (can bo"om-up do) responsibili!es company values anchored fun! Built: innova!on into whole company 3D drawings of product por&olio scalability of business model self-propelling team external visibility o'ine/online great customer rela!onships

2006

Achieved: high velocity produc!on process full restore market leadership in NL +42% sales in 2008 (in -21% market) pla&orm to enter phase 2 (rapid growth)

2020 2014 (Phase 3: Progress into EU/World) 2009 Phase 2: Rapid growth
Goals: towards top3 market posi!on EU in 2014 8x turnover, 20x protability preferred suppliership with EU clients in Infrastructure, Electro and Mari!me markets Create: interna!onal commercial network decentralized, outsourced manufacturing with small, central HQ process unique values into great products/services open innova!on / crowd-sourcing New compe!!ve edges: sustainability as umbrella economical ergonomical ecological cultural

Designing the People part

Repairing, consolidating and growing the company requires high quality, highly motivated personnel. During the past two years, Venrooys internal culture has changed with the help of 7 clear core values emphasizing the companys focus for achieving a bright new future. Implementing these new values and other transformations helped to turn the culture into a focused, positive, con dent and ambitious one. High ambitions also created the need for high quality people: During the transition in 2007 and 2008, 70% of personnel (11 of 16 FTE) was changed. This was done in a socially responsible manner. All leaving personnel moved into other jobs or reached their pension.

Core Values
1. Customer focus: all we do, is aimed at making our client successful. 2. Winning! is our passion. 3. Integrity: we only want to win if we can do it honestly. 4. Top quality: we deliver top quality in all we do. 5. Powerful compe!!ve plusses in product, service, performance: (func!onality:) easier, safer, faster, more e%cient, (design:) more modern, (service:) be"er service. 6. Teamwork: we win as a team, we do it together. 7. Self development: we develop ourselves bene!ng the client, our company, the community we live in and ourselves.

2006
no shared values no metrics own interest I am the boss. So. authoritarian parasi!zing, greed no job descrip!ons unclear objec!ves and strategies we do everything ourselves, compe!!ve or not disloyalty to, thus from, people distrust and conicts topdown, one-way people stands!ll energy drain absence of focus introvert stands!ll reac!ve fear stress

2009
shared values clear metrics peoples interest we are the company par!cipa!ng symbiosis clear, shared job descrip!ons crystal clear objec!ves and strategies co-opera!on, connec!ng best competencies loyalty to, thus from, people trust and harmony bo"om up, holis!c people development energy boost sharp focus extravert innova!on, co-crea!on proac!ve safety joy

Designing the Processes

All processes within Venrooy were subjected to a critical analysis and actions were taken to improve how the company produces products, how supplies are sourced, how sales are generated et cetera: one, truly integrated approach. On another level, the di erent actors taking part in each process were made aware of their roles and the way the combination of each of their competencies most optimally contributes to the progress of the company. This not only involved internal actors but also external actors like clients, suppliers and industrial designers. Venrooy strongly moved away from a selfmanufacturing company to a head/tail networking business, owning - building protecting its intellectual capital whilst sourcing the market for the required capabilities to translate most promising ideas into strong, tangible products. Ideas are never rejected because of missing technologies inhouse; the sequence is to develop the best ideas, followed by crafting excellent supply chains to get these ideas into reality in the fastest and most promising way.

Process
Marke!ng

Actions
increased Direct Marke!ng ac!vity new product and services development professionalised marke!ng team skipped non-sales tasks at representa!ves added sales support professionalised sales team reduc!on of nr. suppliers by 80% selec!on of fewer, professional suppliers professionalised sourcing team digitalised product drawings implemented SolidWorks Professional professionalised Engineering team modulised assortment cra#ed external supply chain network professionalised produc!on team issued clear tasks & responsibili!es started annual performance cycles

Results
increased brand awareness created professional, leading image increased sales more !me-on-market spend (25% -> 80%) stronger customer rela!onships increased sales by +42% (during recession) achieved lower internal sourcing cost reduced prices more innova!on with proac!ve suppliers reduced manufacturing cost increased speed lowered failure cost lowered internal stocks drama!cally increased throughput +50% with lower headcount created ONE team improved performance personnel

Roles

Sales

Sourcing

Field research SWOT analysis Ideas for improvements Func!onal development Designing

Engineering

Manufacturing

Measuring Feedback Evalua!on before Evalua!on a#er

HRM

QA

launched QA program

reduced failure cost

Close collabera!on in the earliest stage to develop the strongest possible Suppliers product and supplychain

Admin / Finance

implemented ERP package (Microso#) professionalised Admin team

created reliable management informa!on gement reduced !me spent on admin. to 50%

! !! !! ! !

Guard t to mission/values Brieng Control quality/speed of design process Guards value delivered at client end

CEO

Industrial Designer

Commercial Director

Critical Clients

Operations Director

Choosing required mix for internal/ external supply chaining

DME Award 2009 Small Companies (under 10 employees)

al intern l e x te r n a

Internal Workforce

Check technical feasability

Designing the Products

Eventually, a lot of Venrooys success depends on its products. The changes made within the company with regard to its culture, its processes and quality output, created the basis for successful product innovation as well. New products were launched on basis of smarter functionality, on modern design and higher sustainability. New product ideaing is now in the companys DNA, constantly lling the pipeline of product innovation towards the customer. These innovation processes take place continuously, and the next ranges of new products are already planned for the near future.

Design is making things right

Ralph Kaplan

Product Innovations
Functionality
Upside opening rearbridge: much easier drum inser!on Quicklocks: enabling faster/easier closing, no loose ra"ling machineparts anymore Sidebars on front/rear end: be"er road safety, protec!on of mudguards, easy/safe to reach high for Operator Compact, strongly improved spring system Key operated built-in cylinder in frame: for safe document storage Drawbar lock: the# protec!on

Design
Automo!ve design: appealing to the users Modern/clean look: underlining the professional image of professional clients/users

Sustainability
Range of 9 versions built on two modular footprints: reduc!on of materialusage, of t i l t material storage No use of plas!cs but steelworks only

LTV-R
200 2007 07

LTV

ZW

ZW-R
200 2008
Automo!ve design: appealing to the users Di$eren!a!on: Di$eren!ate in design to o$er clients more choice Range of 4 versions built on one modular footprint: reduc!on of materialusage, of material storage No use of plas!cs but steelworks only

Similar to LTV-R Special spaces on rearbridge and side-fenders to stand on during (de)installa!on. Op!on for parking sensors

LTH
Easier cable winding and binding Safer for operator Spaces to locate workingdocuments and store tools Easier lengthdetermina!on of cables Improved mobility of the machine

LTV-C
2009

VEN-L

Modern design: underlining the professional image of clients/users, and a real breakthrough in terms of presenta!on marketwide

Range of 3 machines built on one modular footprint: reduc!on of material usage, of material storage

VEN-L
2010

Designing : the Results

Rejuvenating Venrooy led to a professional, modern company o ering products with strong competitive advantages, and a great fun place to work. It resulted into increased customer satisfaction, higher brand awareness, and increased sales with higher product margins. Venrooy moved into pro table growth mode and created its own, great new starting point for a bright future!
250

Sales index (1996=100)

210

170

130 100

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08
100 110 120 105 118 146 100 106 121 124 163 171 243

target

'10
325

'12

'14

743 1486

design practice innovation

The Innovation Backlash

A chorus of voices is calling for an end to the hype and a focus on the fundamentals that drive real bottomline-boosting innovation.
Boston Consulting Groups Howard Sirkin and James Andrews: "Companies use a lot of innovation platitudes. The question is, how do they overcome the platitudes? Companies get [innovation] wrong, and so many people misunderstand the topic." "There's a belief that innovation is about great ideas. But in the business context, it's also about bringing a great idea to market, and how to maximize the payback on the investment made in the idea." Focus on return on innovation investments, rather than on innovation itself.
BusinessWeek.com, 1/12/07. Reena Jana

Innovation
(the exploitation of new ideas)

Incremental innovation - exploits existing forms or technologies (eg small changes, improvements, recongurations based on established knowledge and existing organisational capabilities). Modular innovation - within one or more component of a system; not radical. Radical innovation - a departure from exiting knowledge , capabilities or technologies to create something new; often triggered by new opportunities, or capabilities that become obsolete.
Source: HBR 2003 & 2009

Innovation
(the exploitation of new ideas)

The internet is opening up new capabilities for design, management and innovation. Open innovation - collaborative methods, tools and processes Disruptive innovation - disrupting existing processes through technology Social innovation - emergence of new organisational models Eco-innovation - centred around environmentally aware challenges

Innovation
(the exploitation of new ideas)

Management innovation The implementation of new management practices, processes and structures that represent a signicant departure from current norms. It is transforming the way many functions and activities have worked in large organisations.
Birkshaw & Mol 2006 1. dissatisfaction 2. invention 3. diffusion

imagination open innovation innovation sustainability collaboration creativity (new) values create value add value meaning

sharing

Sony. make believe.

Feature Design: Sony Design actively seeks to create value in terms of product design, interface design, package design, editorial design and every other design aspect that enhances the user experience. At Sony we continue to design with the future in mind, and we actively promote internal and external collaboration. Concept Design is a key process in development that encourages new value systems for the next generation and shapes future lifestyles. Sustainable Design: eco-friendly and universal design principles. sustainability - an emerging priority in design

Sony. make believe.

New "odo" models were shown as an example of forward-looking design concepts, and workshops gave children a chance to use their own kinetic energy to power working odo prototypes.
sony.net/fun/design

Twirl N' Take is a working design prototype developed from Spin N' Snap, a design mock-up of a digital still camera. As before, the camera is shaped like a magnifying glass. Spinning the roller powers the camera, and users look through a round hole when taking pictures. Images are stored on Bitty memory cards in the tip of the handle.

Philips Design: Chuhla stove

Design for a sustainable future Philanthrophy by design Creating value for people Improving quality of life Open innovation Distribution models Entrepreneurship

creativity and design are tools for innovation and change. design management as a change agent. design managers as agents of change.

grcies. thank you.

kathryn.best@btpenworld.com