PHASE ZERO: INTRODUCING NEW SERVICES

AT IDEO (A)IPMI E-MBA PROGRAM (MARCH 2015)

EMM 219-KNOWLEDGE BASED ECONOMYFACILITATOR: MR. ANDRE V. WENAS.

GROUP 2 – QUEEN RATIH: RACHMAT MAKKASAU, ARIEF SUGITO, IRDHAM TIRTO, PRASETYO SUMANTRI, RATIH ARIE UTAMI, DENNY

SITUMORANG

BACKGROUND

IDEO is an award-winning global design firm founded in Palo Alto, California, in 1991, that takes a human-centered, design-based approach to helping organizations in the public and private sectors innovate and grow.

IDEO is a community of 350 people, active in a variety of realms, from Brand, Business Design, Design Research, Innovation Strategy, Materials and Manufacturing, to Social Innovation and Sustainability, led by CEO Tim Brown since 2000, and held by founder David Kelley and Steelcase, Inc.With roughly $60 million in revenues in 2001 and located in 8 worldwide locations, IDEO supported global clients, from companies such as Apple (mouse), Ely Lilly (disposable pre-filled insulin injector), and TiVo (personal video recorder), well funded startups, as well as the public sector.With David Kelley’s philosophy of IDEO’s mix as a fleet of boats anchored together which goes out and comes back with new ideas and competencies, Tim Brown commented, “…go and get on with it, figure it out, and do well!, We’re here to support you but believe you can figure it out.” Success for IDEO was due to its ability to empathize with clients, and design products and services to meet needs of the end user.

PROBLEM STATEMENT

Although IDEO’s reputation for technical excellence made it highly competitive in its industry, it faced fierce competition in 2001 from Design Continuum and Fitch Inc. offering a wider, interdisciplinary integration approach of strategy design consulting. IDEO Boston was competing for fewer and smaller contracts

Price was also becoming a primary factor in IDEO’s contracts, with some clients willing to pay for IDEO’s quality, but with other potential clients being driven to lower-priced, “bigger bang for the buck” competitors.For the Simmons project, IDEO rolled out a new service called, “Phase 0” to help Simmons, a mattress company, to understand and innovate after IDEO identified unmet needs and new product opportunities. Douglas Dayton, IDEO Boston head, wondered what lessons can be learned from the Simmons Project experience to affect future projects.

PROBLEM ANALYSIS

■Until end of 1990’s, IDEO services went through 4 basic phases, concept generation, concept development, detailed engineering, and manufacturing liaison.

■Since the boom of Internet in, potential customers were involving IDEO more in the business design aspect of consulting, shifting from the usual product design aspect. Setting the context for the product was more requested by clients.

■By providing, “Phase 0” IDEO set-out to set context for product, where projects began in the business development phase, with IDEO staff presenting to potential clients, and finding out whether clients has clear sight of what was wanted. If not, Phase 0 was implemented to help clients to find out first what the client wanted.

PROBLEM ANALYSIS

■ In March 2000, Kurt Ling, VP and general manager to Simmons’ Beautyrest line, asked IDEO ,”to find new opportunities for a mattress”.

■ With IDEO team of three, Kate Schreiber, a human factor specialist; and Bill Stewart, an industrial designer; led by Michael Meyer, a business factor specialist, Phase 0 were set to three sub-phases of Phase 0a (multidisciplinary research), Phase 0b (system map ideation), Phase 0c (concept integration and product specification).

■ Two “opportunities” were found by IDEO’s team in the highly-mobile, young “nomads” segment needing a mobile, and light bedding, and the “empty nesters” needing bedding which can be folded to make space of the room for other needs. Products identified were, “high quality, without the bulk” mattresses for the nomads, and ,”high modularity” mattresses with easily customized and compacted layers for simple moving.

■ Most of the 11 solution categories identified for these “opportunities” needed new manufacturing processes and distribution channels, with some as add-ons to Simmons already existing lines.

PROBLEM ANALYSIS

■ After Phase 0, IDEO moved to Phase I by creating ”Soft Inside” book, containing an especially beautiful and compelling deliverable, to drive Simmons to the next level of engagement.

■ After the September 11, 2001 terrorist attack, communication with Simmons were interrupted due the flight travel restrictions and fear of it in the U.S.

■ Final IDEO presentation only happened on May 16, 2002 with the CEO, CFO, COO and marketing department of Simmons, and Douglas Dayton as head of IDEO Boston attending. Ling felt it was successful.

■ But Douglas did not hear more from Simmons on their Phase I result. After contacting Ling in July 2002, Douglas received little feedback from Ling. Douglas was puzzled.

CONCLUSION AND RECOMMENDATION

Simmons was a “manufacturing-oriented” company, and was not familiar with market-oriented product strategies. IDEO clearly did not factor this into their final presentation.

Simmons was not effectively involved in the initial Phase 0b and Phase 0c deliberations, hence could not have had a clear vision as to the “opportunities” being presented by IDEO at the time.

While Ling enthusiastically received the IDEO recommendations, Simmons executive leadership felt no compelling need to change their manufacturing process and distribution channel when at the time, Simmons was already in the leading position in the market.

CONCLUSION AND RECOMMENDATION

IDEO should involve more of their clients leadership during Phase 0, not only the client’s marketing department, so not only are they looped in the business development research insights during this phase, but their trust is also gained by IDEO in the process.IDEO should be more empathetic to the client’s business culture in Phase 0, so that IDEO may get more of their client’s trust when presenting their vision of their client’s new opportunities and innovation in the future.IDEO should also be more engaged with client in the final stages of Phase 0, emphasizing on following-up with feedbacks, so client could be more comfortable to decide to move on the next level of engagement.Change only happens when the pain of holding on becomes greater than the fear of letting go – Spencer Johnson. Make client understand that in the future, the pain of holding on will be greater than the fear of letting go.