LIZ ARMSTRONG - DESIGNING INNOVATION IN CORPORATE ENVIRONMENTS

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DESIGN + BUSINESS = INNOVATION

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  • 1. A THESIS1DESIGNING INNOVATIONIN CORPORATE ENVIRONMENTS!BY LIZ ARMSTRONG!

2. 21.!DESIGN FOR VALUEDESIGN IS A PATH TO INNOVATION! 3. 3The Innovation Buzz 4. 4The Innovation BuzzCEOs consistently report that innovation isone of their top three priorities. Yet a survey in2010 found that less than 25 percent ofmanufacturing firms in the United Statescreated an innovative product or service inthe last three years.!!- Jeffrey Phillips, Relentless Innovation! 5. 5The Innovation BuzzWhile executives regularly expound on the needfor innovation, in reality, innovation makes manyexecutives uncomfortable For most executives,innovation is a last resort when their products orservices are under attack and they have consideredand deployed all the other tools at their disposal. !!- Jeffrey Phillips, Relentless Innovation! 6. 6WHAT IS INNOVATION? 7. 7Defining Innovation 8. 8Defining InnovationInnovation produces positive change. !! 9. 9Defining InnovationThe term innovation may refer to both radical andincremental changes to products, processes or services.The often unspoken goal of innovation is to solve aproblem. !!- Wikipedia! 10. 10WHAT IS DESIGN? 11. 11Defining DesignWHICH KIND OF DESIGN?! 12. 12Design asan iterative, human-centric process of servingneeds & improving lives. ! 13. 13Defining DesignDesign is the transformationof existing conditions intopreferred ones.!!- Herbert Simon!! 14. 14Defining DesignCurrent Situation! Improved Situation!(Need)!Design Process!(Solution)! 15. 15Design ProcessesAlice Agogino!Hugh Dubberly, How Do You Design! 16. 16Design ProcessesJay Doblin!Hugh Dubberly, How Do You Design! 17. 17Design ProcessesNigel Cross!Hugh Dubberly, How Do You Design! 18. 18Design ProcessMost of the models, at their core, express an iterative,evolutionary process of learning, ideating, creating, andvalidating. !COMMON THEMES! 19. 19Design Process ModelCurrent Situation! Improved Situation!(Need)! (Solution)!Ideate!Create!Validate!Learn! Design Process! 20. 20DESIGN INNOVATION 21. 21How?1. Design is a process that leads to innovation.!!2. Design provides a context for innovation.! 22. Design Process Business ValueCurrent Situation! Improved Situation!(Need)! (Solution)!Ideate!Create!Validate!Learn! Design Process!22Innovation!Business Offering! 23. 23ContextHuman-Centered !Context!Design provides a contextfor creativity by channeling ittoward humanly satisfyingpurposes!!- Michael Shamiyeh, Creating DesiredFutures - How Design Thinking InnovatesBusiness ! 24. 24Human-Centric ContextThrough the study of people and theirenvironment, designers are able to obtaininsights about what people really want andneed. These insights lead to ideas on how toimprove peoples lives.! 25. 25DESIGN + BUSINESS= INNOVATION 26. 26Design | BusinessDesign!!You can come upwith greatsolutions thatdont make money.!Business!! You can offer productsand services that dontfully meet customerneeds.!$! 27. 27Three Factors in ProductDevelopmentLarry Keeley !DESIRABILITY!$! 28. 28Business Value! A business is simply an idea to make other people'slives better. !!- Richard Branson, Entrepreneur!! 29. 29Design & Business!Design skills and business skills are converging. To besuccessful in the future, business people will have tobecome more like designers When it comes toinnovation, business has much to learn from design.The philosophy in design shops is, try it, prototype it,and improve it. !!- Roger Martin, The Design of Business! 30. 30Embedding DesignINTO THE BUSINESS! 31. 31Embedding BusinessStakeholders!Users! Viability!Users!Feasibility!Ideate!Create!Validate!Learn! Design Process!Environment!Research!Diverge!Converge!Prototyping!Collaborate!Communication!INTO THE DESIGN PROCESS!Orange = Business!Grey = Design! 32. 32Innovation in BusinessDEFINING INNOVATION IN CORPORATE SETTING!Innovation in business produces positivechange that grows the company and delightscustomers. !! 33. INNOVATION EMERGENCE33 34. 34No Formula, No Magic PotionInnovation occurs as an organic emergence influencedand prompted by environment and cultivation.! 35. 35No Formula, No Magic Potion!Each companys approach to innovation is unique. !!WWGD?! 36. For true creativity and innovation to takeplace, we propose that design must harnessthe process of emergence; for it is only throughthis bottom-up and massively iterative unfoldingprocess that new and improved products andservices are successfully developed, introduced, anddiffused in the marketplace. !!- Greg Van Alstyne & Robert K. Logan, Designing for Emergence andInnovation: Redesigning Design!!36Emergence 37. 37Designing for EmergenceCREATING THE CONDITIONS FOR INNOVATION!Cultivating Innovation!1. Culture!As the soil, however rich it may be, cannot be productivewithout cultivation, so the mind without culture cannever produce good fruit.!- Seneca, Roman philosopher, mid-1st century AD!2. Adaptation !It is not the strongest or the most intelligent who willsurvive but those who can best manage change. !- Charles Darwin! 38. EMBEDDING HUMAN-CENTRIC PROCESSES!38DESIGN CULTURE2.! 39. 39CultureINNOVATION OBSTACLE!Without a doubt, ourbiggest obstacle toinnovation is our culture.!Vice President of Human Resources! 40. 40CultureINNOVATION OBSTACLE!46% ofExecutivesreportedculture as amajor obstacleto innovation! 1,757companies!25 countries & !30 sectors !2013 survey from PricewaterhouseCoopers(PWC) ! 41. 41Design-Minded CultureEMBEDDING DESIGN!If you wish to make an apple pie from scratch,you must first invent the universe. !! Carl Sagan ! 42. 42WHAT IS CULTURE? 43. 43CultureA DEFINITION!Culture is the reality of how people inthe company behave. ! 44. 44CultureINFLUENCES BEHAVIOR!Culture influences what, why, and how peopledo things. These behaviors create results. Thequestion is: Do you have the right culture toproduce innovative results?!It isnt what we say that defines us, but whatwe do.!!- Jane Austin! 45. 45Organizational Culture ModelEDGAR SCHEIN!ARTIFACTS!ESPOUSED!VALUES!ASSUMPTIONS! 46. 46Culture ExampleTHE CULTURE OF CHRISTMAS! Giving gifts shows people that you careabout them. ! Christmas is time for family. ! Christmas is a time for religious reflection.! We do kind things for others.!!Christmas is meaningful &important to observe.!ARTIFACTS!ESPOUSED!VALUES!ASSUMPTIONS! 47. 47Culture ExampleTHE CULTURE OF FINANCIAL SECTOR! Dressing in business casual demonstratesour professionalism to our clients.! We take everything we do very seriouslybecause we deal with financial data.! We want to impress upon our clients thatwe have a high level of security.!We are part of conservativeindustry.!ARTIFACTS!ESPOUSED!VALUES!ASSUMPTIONS! 48. 48Business ValuesDesign-MindedBusiness!! Exploration! Embracing Failure! Learning! Adapting! Empowerment!TRADITIONAL VS DESIGN-MINDED!TraditionalBusiness*!! Efficiency! Standardization! Planning & Control! Specialization! Extrinsic Rewards!*Gary Hamel, The Future of Management! 49. 49Business ProcessDesign-MindedBusiness!!Customer research leadsto insights that help youto iteratively develop asolution that sells itself.!TRADITIONAL VS DESIGN-MINDED!TraditionalBusiness!!Come up with an idea,fund it, build it and then,sell the heck out of it. ! 50. 50Business ProcessThe traditional businessculture of efficiency &bureaucracy stiflesinnovation.!TRADITIONAL VS DESIGN-MINDED! 51. 51Responsive CultureCompanies need to build a culturethat focuses on the economy oftoday and the economy of thefuture, not the economies of thepast.!FOCUS FORWARD! 52. 52Design-Minded CulturePURPOSE. SUPPORT. ACTIVITES.!A design-minded culture must :! have a customer-centricpurpose, ! have strong leadership support! be engaged in designerlyactivities - learning, ideating,creating and validating (thedesign process). !!User-Centric!Purpose!Leadership!Support!Designerly!Activities! 53. 53CUSTOMER-CENTRICPURPOSE 54. 54Business PurposeLACK OF VISION!In every successful transformation effort thatI have seen, the guiding coalition develops apicture of the future that is relatively easy tocommunicate and appeals to customers,stockholders, and employees. A vision alwaysgoes beyond the numbers that are typicallyfound in five-year plans !!- John Kotter !Leading Change: Why Transformation Efforts Fail! 55. 55Business PurposeLACK OF VISION!In failed transformations, you often findplenty of plans and directives and programs,but no vision !!- John Kotter !Leading Change: Why Transformation Efforts Fail! 56. 56Primary PurposeDesign-MindedBusiness!!Selling products and/orservices that improvelives!TRADITIONAL VS DESIGN-MINDED!TraditionalBusiness!!Selling products and/orservices that generateprofits! 57. What higher purpose does your companyserve? I hope you didnt answer, shareholderwealth. In most companies, gains in the shareprice mostly benefit those at the top. !! Gary Hamel, The Future of Management!57Business PurposePROFITS DRIVE BUSINESS TODAY! 58. 58Business PurposeTHE WRONG VISION!When you pursue onlyshareholder value, you get lessshareholder value. You actuallymaximize shareholder value byfocusing on the customers. Ifcustomers are delighted,shareholders will do just fine.!!- Roger Martin,!2014 AIGA GAIN Conference, NYC!Desirability!Viability!Feasibility! 59. 59Start with CustomerTHE MONEY WILL FOLLOW!Start with thecustomer and workbackwards.!!- Amazon! 60. 60Purpose Drives DecisionsTHE VALUE SYSTEM!Customer Focus!In a design-minded culture that hasa customer-centric purpose,decisions are more balanced.!!Will this enhance thecustomerexperience?!Can this directly orindirectly increaseour profits?! 61. 61Developing PurposeTHE WHY!Having a design-minded purpose providesbusinesses with a direct connection betweenwhy they do what they do and what theircustomers need and want. !!People dont buy what you do, they buy whyyou do it. !!- Simon Sinek, TEDx ! 62. 62Developing PurposeTHE WHY!Weve never gone into business solely to makemoney. We always start out to create somethingthat is missing from the market, which willshake up the industry, and enable us and ourcustomer to have fun in the process. Its soimportant that businesses focus on why they dowhat they do to drive human behaviour.!!Richard Branson!! 63. 63Developing PurposeNEEDS BEFORE COMPETENCIES!Shutterstock.com!In a world of rapid disruption, having a corecompetency - that is, an intrinsic set of skillsrequired to thrive in certain markets - is anoutmoded principle of business. !!- Mark Parker, Nike CEO !! 64. 64Developing PurposePURPOSE BEFORE COMPETENCIES!Nikes mission statement: !To bring inspiration and innovation to everyathlete in the world.! NIKE.com! 65. 65Developing PurposePURPOSE BEFORE COMPETENCIES!Click link to watch!Since we began, our artists and engineersdidnt set out to make electronics, or films, ormusic. We set out to make you feel something.!!- Sony! 66. 66Articulating PurposeDOs & DONTs!DONT:!1. Be vague.!2. Limit yourself by focusingon competencies alone.!DO:!1. Describe the why.!2. Share which needs youintend to serve.! 67. 67LEADERSHIP SUPPORT 68. 68Leadership SupportINNOVATION STARTS AT THE TOP!!...leadership and culture are fundamentallyintertwined. !!- Edgar Schein!Organizational Culture & Leadership ! 69. 69BehaviorsDesign-MindedBusiness!!In love with the problem!Failure is learning opportunity!Exploration!Comfort with Ambiguity!Question Status Quo!TRADITIONAL VS DESIGN-MINDED!TraditionalBusiness!!In love with the solution!Risk Averse!Fear of Failure!Lack of Trust!Orthodoxies!! 70. 70DisconnectACTIONS VS. WORDS!Simply demanding that the firm become moreinnovative without investing time or personal capitalonly confuses the organization and creates cynicismabout the request. !!- Jeffrey Phillips, Relentless Innovation! 71. 71Grassroots EffortsDIE OUT WHEN NOT SUPPORTED! 72. 72Grassroots EffortsDIE OUT WHEN NOT SUPPORTED! Morale! Trust! Passion! Engagement! Loyalty! Hope!! 73. 73DisconnectACTIONS VS. WORDS!!!Coating a veneer of design processes on the top ofinnovation initiatives that will promptly be stymied byinternal bureaucracy or politics doesn't help anyone. !!- Helen Walters, Doblin!Can Innovation Really be Reduced to a Process?!! 74. 74Leadership SupportINNOVATION STARTS AT THE TOP!McKinsey research and client experience suggest thathalf of all efforts to transform organizationalperformance fail either because senior managers dontact as role models for change or because people in theorganization defend the status quo. !!- Nate Boaz and Erica Ariel Fox, Change leader, Change Thyself! 75. 75Leadership SupportINNOVATION STARTS AT THE TOP!Corporate leaders make decisions about proceduralpractices and where to allocate resources. They alsoinfluence culture through their values and attitudes. !!Innovation leaders should:!1. Encourage experimentation and failure.!2. Demonstrate comfort with questioning thestatus quo.!3. Inspire through optimism. !4. Set aside resources for innovation.!!! 76. 76Experimentation & FailureINNOVATION LEADERS EMBRACE IT!Failure must be expected, discussed, and analyzedopenly in order for the organization as a whole tobenefit from it. !!FAILURE!"Getting good" at failure, however,doesn't mean creating anarchy out oforganization. It means leaders not juston a podium at the annual meeting,but in the trenches, every day whocreate an environment safe for takingrisks and who share stories of theirown mistakes.!!- Jena McGregor, How Failure Breeds Success, BusinessWeek! 77. 77Experimentation & FailureINNOVATION LEADERS EMBRACE IT!Originality demands a willingness to experiment,spontaneity in response to a novel situation, andopenness to trying something different thanperhaps first planned or intended. Rooted as it isin experiment, originality openly courts failure. !!- Roger Martin, Opposable Mind ! 78. 78Get Used To ItKEEP LEARNING!70%!of allcompanieschange effortsfail.!- John Kotter, Leading Change! 79. 79Failure Leads to SuccessTHE WRIGHT BROTHERS!Herring tests the Chanute's "oscilating wing" glider at the Wright brothers campin Kitty Hawk, NC in 1902.!http://www.wright-brothers.org!! 80. 80Failure Leads to SuccessOTHER EXAMPLES!Tory Burch! Rovio! Steve Jobs! Walt Disney!At the heart of innovation is an entrepreneurial spirit that doesnt give up andlearns from failure. ! 81. 81Dogmas of CEOs PastBELIEFS THAT TETHER TO STATUS QUO!All of us are held hostage by our axiomatic beliefs.We are jailbirds incarcerated within the fortress ofdogma and precedent Management dogmas areoften so deeply ingrained as to be nearly invisible, andso devoutly held as to be virtually unassailable. !!- Gary Hamel, Future of Management! 82. 82Question Status QuoTHROW OUT ASSUMPTIONS!The real voyage of discovery consists of not inseeking new landscapes by in having new eyes ! Marcel Proust!!!!Discovery is the ability to be puzzled by simplethings ! Noam Chomsky!!! 83. 83Question Status QuoTHE FIVE WHYS!The 5 Whys have been used as a counter-measure problem-understandingstrategy but they...