22
Research proposal: “Volvo Group – The design challenge vs. hierarchies in large organizations” Artur Lipin M.Sc. Industrial Management Saint-Petersburg, 30 April, 2012

Volvo Group - Design Management

Embed Size (px)

DESCRIPTION

How to involve design managemnet in company activity

Citation preview

Page 1: Volvo Group - Design Management

Research proposal:

“Volvo Group –

The design challenge vs.

hierarchies in large

organizations”

Artur Lipin

M.Sc. Industrial Management

Saint-Petersburg, 30 April, 2012

Page 2: Volvo Group - Design Management

Structure of research proposal

Introduction – overview of my interests and possibilities

1. Research design (strategy) ....................................................................................................... 1

2. Preliminary literature analysis .................................................................................................. 3

3. Framework and central concepts .............................................................................................. 5

4. Research questions ................................................................................................................... 7

5. Limitations ............................................................................................................................... 7

6. Research methods ..................................................................................................................... 8

7. Possible answers ....................................................................................................................... 9

7.1. How can be creatively used design processes and methods in new ways in Volvo

Group? ......................................................................................................................................... 9

7.2. Cases from companies .................................................................................................... 10

Conclusion ..................................................................................................................................... 12

References ..................................................................................................................................... 13

Appendices .................................................................................................................................... 15

Page 3: Volvo Group - Design Management

Introduction – overview of my interests and possibilities

Over the last years design management was under the focus of many researches, therefore there

is a large number of articles that brings different points of view of how design can be used, but

generally the process of implementing design functions is not so manageable.

My background in Innovation management and previous work experience are directly connected

with design management in different areas. I started to review the challenges of creation and

implementation of design driven innovation and design management during writing my master

thesis in 2011. I found the gaps caused by poor cooperation between design group and group

composed of management, marketing, and engineering representatives. As a result a formal tool

to simplify decision making process and make design process more efficient was proposed. The

tool contains deployment matrix with values for customers, design elements and manufacturing

costs. In master thesis the score was calculated and the success of concept was measured

depending on market segment. In future PhD work I want to enlarge research framework and

take into account all aspects of design management and prepare a range of tools and methods to

modernize current situation. Diverse working experience in huge companies like Carlsberg

Group, Unilever, Kone Oy provides me with vast knowledge basis to look at these issues from

different perspectives.

“Innovation killers” article of Christensen et al. issued by Harvard Business Review (2010)

showed the typical challenge for innovators (more specific for designers) to protect new idea and

to provide its potential value in terms of ROI (return on investments). During personal discussion

with Vice-President of Marketing of Unilever about organization of work with external

companies like design studio Pininfarina it was highlighted the necessity of creation online tool

to visualize online NPD project in order to make the process more transparent for top

managers(see Appendix A for more details).

During research I also want to focus on implementation process of different tools and methods

for designers because all the changes in large companies should be matched with strategic

directions and targets that additionally require internal long-run submission procedures. For

these purposes I would like to take the Bower-Burgelman (B-B) process model which contains

methodology of integration of strategic initiatives into the corporate programs.(Noda,1996)

These programs are in concordance with the company’s development vision including design

management changes.

In order to gather best practice and experience about what are other ways of using design process

and how it can be fit to the total company’s hierarchy small reference case studies with IKEA,

H&M can be applied. The case-companies should have the same scale as Volvo Group and put

into use eco-rational design principles. Synergy created by this knowledge transfer will cause the

design management improvements. An alternative source of design management knowledge

could be design-oriented Swedish firms like Nudie or Dr Demin.

As for Volvo nowadays Digital Product Development (DPD) is used which allows to present

mock-up that replaces physical items. In addition to this computer tools are steadily replacing

sketching design. For these reasons together with CAD specialists and engineers the designers

should be more effective integrated in this project process. The target is to reduce total time for

product development, minimize the costs and improve the quality. This increasing number of

Page 4: Volvo Group - Design Management

researches shows a growing interest in the Industrial Design Organizational Function considering

that this topic becomes more and more important since severe competition in the market is

making tougher. Industrial Design is important since the organization has a strong impact on the

boundaries of engineering design. (Fuxin, 2005)

In some situations in the companies marketers and brand managers often find themselves

responsible for giving design feedback and making decisions on design concepts but they don’t

have adequate skills. The possible solution to this problem is to receive from these specialists the

brief which includes only one lead insight correlated with the company strategy about directions

of design creation. At the same time from financial point of view for design innovations it is

difficult to calculate ROI. To increase the level of effectiveness in terms of design common

templates with transparent evaluation tools should be provided. Moreover, it is important to

divide the design meetings into three distinct sections: concept presentation, the critics and

discussion, and decision making/ evaluation. Short design research based on interviewing of

customers (for example 5 persons) about their future design vision and feedback can be very

effective and useful. (Alexis, 2011)

Page 5: Volvo Group - Design Management

1

1. Research design (strategy)

The strategy of research contains few steps. Firstly, all communication between design

department and others as well as current situation with design management will be observed (see

Fig.1 Research strategy, “Current situation”). In order to achieve final targets several different

approaches how to measure communication and integration between design group and other

departments will be utilized. In Chapter "Framework and central concepts” communication

measurement described in more details. For these purposes business processes modeling will be

drawn (Appendix B as simplified example). Internal guideline, document workflow,

responsibility matrix, KPIs (key performance indicators), non-formal interactions of design

department with other structural divisions with be observed. Decision making is one of the

important parts of organization theory. If the company is going to be more design directed it

should involve new methods for decision making and argumentation. AHP (analytical hierarchy

process – method for evaluating an idea or concept based on comparing criteria) helps to

distinguish influence and preference of design during decision making. The list of currently used

tools and methods will be described and their effectiveness will be measured. Type of working

mode with external design and graphic studious will be presented. Artifacts can be found in

digital product life-cycle systems transactions (SAP as example) which support the activity of

design division. If this system is not in use, in this case the supporting software will be proposed

for launching to increase transparency of design projects. Special attention will be paid to the

role of design leadership in Volvo and improving motivation program.

In parallel with this activity information about design applications in other businesses will be

gathered. In order to make it the extra case studies with transferring knowledge and checking

applicability are proposed. Analyzing scientific articles as well as theories and methods from the

literature the basis for design initiatives will be formed. Examples of such research result can be

found in Chapter “Cases from companies”.

Discovered knowledge will create united data pool ("Accumulator" as presented in Fig. 1.

“Research strategy”) with new design tools and methods which have influence to the corporate

hierarchy. In order to prove my standpoint I suggest variants of possible usage of design in non-

standard ways and will try to argue that design knowledge and tools can be applied across many

functions in the organization, but these functions should be not separate but united under one

idea.

It is important not only to develop new design tools and methods which can be used in new way

inside Volvo Group but also to implement them successfully. Concepts like B-B model and

integrated design management are responsible for promote design initiatives in large

organization and advocate their value as competitive advantage. (Noda, 1996)

Page 6: Volvo Group - Design Management

2

Fig. 1.Research strategy

The final target is to create the influence to the hierarchies to use design in a more effective way.

Based on design thinking, theory of organization and applying practical examples the influence

can be created by redesign of existing relationships, improving information sharing across

project teams, creation of well-balanced decision making tools, providing for top management

new design activities with clear contribution, resource allocation for the new risky innovative

design projects with long-terms perspectives, proposing new tools for cooperation, development

KPIs which reflect fruitful design activity, improvement managerial skills of designers to help

them argue breakthrough design based on future customer needs and trends, application of

design in non-standard situations, for example to use visualization to solve the company’s

problems, improvement of design culture to make the design an integral part of Volvo Group.

The success of implementation would also be measured by feedback metrics – what changes

were made with the maximum efficiency. The positive changes can be easily detected by

comparison picture and graphs “as is” and “to be” after proposing new design thinking and new

communication bridges.

In the article “Design and Business Transformation” Design Council suggests the conceptual

model and a specific survey tool to detect the level of maturity of a company in terms of design

management. The higher company’s level the greater strategic importance of design. Four levels

are as follows: design management has no applications, design management as a Project, design

management as a Function, design management as a Culture. This model has 5 metrics:

awareness of benefits, design planning, resources for design, design management expertise and

design management process. (Best et al., 2010)

Page 7: Volvo Group - Design Management

3

2. Preliminary literature analysis

Design management literature has a diverse range of scientific approaches. In this research the

highlight is on several Swedish books which have good interconnection of production

companies’ experience with case study. The book “Mötenkring design: om relationer mellan

design, teknikochmarknadsföring” (2008) by Ulla Johansson describes creative use of design

processes in the companies like Pergo, SKF, Swepac, BabyBjörn and Berifors/Stoneridge.

Marcus Jahnke in his book “Från Fråga till FärdigProdukt” (2011) review design in technical

oriented company to create new clothes by means of working very closely with operators in

order to understand actual needs.

Bangle (2001) in his work provides the experience how to act in creative environment and depict

what happens inside BMW Company. He argues that communication of designers with others is

a complicated task and it requires having some protective barriers and transmitter with the help

of which designers will deliver their vision to others.

Keith Goffin in his article “Maximizing the Value of Industrial Design in New Product

Development” (2010) explores the gap in managerial and design languages and metrics which

causes the conflicts during new product development. The author proposes how to fil up this gap.

Michael Antioco in his paper “Integrating service and design: influences of organizational and

communicational factors on relative product and service characteristics” (2008) discovers

antecedents and consequences of the information use by design department and proposes the

theory of reasoned actions including following parts: conflicts, functional dependence, perceived

knowledge and communication that in turn divided in performance, ergonomics, and aesthetics.

Another Antioco’s work “Reducing Ongoing Product Design Decision-Making Bias” (2008)

devotes to the influence of functional membership on the concern for decision-making criteria

during ongoing product design decisions.

Marcus Jahnke in his work (2008) highlights the effect of design methodology in innovation

process. According to him, the companies are quite often can’t fully use all potential of design.

In large companies it is very important to get support of top managers to involve design in

corporate business processes. Jahnke’s paper provides the review of NPD in an organization and

references referring design. The fact of design contribution as firm’ competitive advantage

became obvious.

David Holston in his book “The Strategic designer, tools and techniques for managing the design

process” outlines that design processes such as creation of software are not linear, but clearly

defined processes can increase understanding of measurable results, facilitate resolution of

interdepartmental conflicts, accelerate development of innovation concepts, bring respect and

manage document workflow. Many designers work in idiosyncratic ways that make it difficult

for others to participate in design process. By adapting transparent process that can be shared

with stakeholders the designers take a step forwards in allowing others to take part in the

process. This helps to integrate design into organization. Design processes and obtaining effect

can be measured by different metrics: customer experience, financial performance, brand

relevance. Estimations of Return on investments derive from design activities help to understand

financial drivers. (Holson, 2011)

Page 8: Volvo Group - Design Management

4

One of the main challenges of large companies is to organize creativity groups and to make this

activity easy to understand for other divisions. Margaret Bruce and John Bessant in their book

“Design in Business, Strategic Innovation Through Design” explore these challenges. Firstly,

they outline that in creativity activities there are twice as many managing persons as in other

divisions. Everyone knows their huge contribution and at the same time worries about future

results. Methods of creation of something new are numerous that’s why it is complicated to unite

all tactics into one guideline. In the companies there are various ways to control the design

department and others and divide the tasks among them – by functions, by products, by parts of

the product. The challenge is to do this puzzle and create the whole structure. In car

manufacturing industry the core team comprised of about 100 people and they have direct

responsibilities for NPD, but across the company much more actors are involved. (Bruce, 2002)

Team Dynamic reflects the efficiency of a project. Environmental issues, time frames, size of the

team primary influence on the result and action plan in organization. Bruce Bessant in his work

discusses the mechanical and organic structure of the organization. Effective innovators

including creative designers do not suit well to clearly defined top-down structure of the

company, their roles are not so clear. Hierarchy allows uniting diverse activities and finding the

compromise between individual creative efforts and aims of the enterprise. (Bruce, 2002)

Fig. 2. A complex functional organization, major actors of NPD

Functional structure gives limitations. As depicted in Bruce Bessant’s book processing approach

in this case can be applied to unite and transfer knowledge between actors from different

functional units. The challenge is to recombine actors from a complex functional organization

presented in Fig.2 into product-based structure. During building of a comprehensive product-

based structure sometimes the roles of actors even duplicated or some components/some

expertise are lost. During responsibilities’ sharing in this structure driving forces also can be lost.

The major difficult in KPI measurement is that it’s hard to separate the influence/contribution of

design because design is subdiscipline comprising R&D, engineering and marketing. Anyway, in

particular situations the value should be measured especially for decision makers who are more

concentrated on market share, cash flow, production costs and profits. In this case quantitative

matrix of design engineering project and qualitative matrix for the product identity can be

measured, for innovation design the uncertainty is dramatically increasing. Data about movement

through product lifecycle stages is also a source of information to measure design performance.

The following list of methods that are able to help to make right decision about inputs and

Page 9: Volvo Group - Design Management

5

outputs of design: 1) Product Lifecycle Costing; 2) Target Costing; 3) Activity-based costing; 4)

Design for Manufacture and Assembly (DFMA); 5) Value Engineering.(Bruce, 2002)

3. Framework and central concepts

Integrated design management

To integrate design into the corporate management system it requires to determine a few steps:

put design culture and drivers, determine how design can support culture and business

objectives(industrial design, service design, media design), create awareness and influence of

design (environment), develop appropriate design organization and operations (project

management), measure the value gained by design (design quality), train and empower others in

design thinking methods, get information from end users, experience about design.

Fig. 3.Integrated design management

Integrated design management is a composition of key concepts and methods necessary for

developing the design-minded organization and generating innovations. The companies should

develop these competencies by growing internally and with the help of right external experts.

The most effective way is to build a combination of internal and external resources.

First of all, the role of design as a process (an artifact, communication or the environment)

should be recognized. The role of the designer in corporation also transferred from solving

simple problems and working independently to solving complex problems conjointly with cross-

functional teams. Designers must be independent enough to use the best design processes, but to

integrate design into the business the fully integration of design into the existing company’s

Page 10: Volvo Group - Design Management

6

processes is required. Stage-gate process is not the most convenient way of managing projects in

comparison with an open and explorative methodology. If the company needs to solve its

problems and to really make an impact, in that case from the very beginning the designers should

be on the team and design-oriented processes have to be organized putting design into corporate

culture.(Lockwood, 2009)

Sometimes it happens that executive team does not support a full product redesign caused by

many reasons. General targets of designers are: decrease product cost, decrease new product time

to market and improve the expression of the brand. In addition to this, design can create value in

four categories: more profit, more brand equity, more innovation and faster change. The great

challenge in building design strategy is to bring strategy department and the design department

into alignment. It is also important to understand that every activity and output of the company

depends on design. For these reasons the design vision and a roadmap should be developed as

well as the design principles, signature elements, visual language and businesses need metrics for

measurement. By combination of key design methods and customer research with an emphasis

on observational processes the new solutions of difficult business problems can be

found.(Lockwood, 2009)

Cross-Functional Cooperation

According to previous studies, researchers have suggested a wide variety of definitions for the

cross-functional cooperation with designers. Generally speaking, terms such as “collaboration”,

“cooperation”, “interaction”, “communication” and “coordination” have been used in the papers

exploring the particularities of interfunctional integration in NPD process and other project

processes. These definitions are ranging from simple measures of the frequency of interaction

between two departments to multidimensional measures of collaborative behaviors and attitudes

(Kahn, 1996). Some sources present an interaction underlining the use of communication in the

form of meetings and information flows between functional departments (Ruekert, 1987). Others

see the cross-functional integration as collaboration where departments work cooperatively in

order to achieve mutual goals and strategic aims. For instance, Lawrence and Lorsch (1986)

defined integration as the process of achieving unity of efforts among the various subsystems in

the accomplishment of company tasks.

Some researchers have implied a multidimensional perspective of integration. Gupta, Raj, and

Wilemon defined interdepartmental integration as information sharing and involvement (Gupta,

Raj et al. 1986).

This study also utilizes the definition of Olson et al. (2001) who state that cross-functional

cooperation is the cooperation which includes both the frequency of interaction and the amount

of information and resources shared between functions involved in cross-functional projects.

This overview was adapted for design issues and presented in Appendix C.

B-B model

The Bower-Burgelman (B-B) process model of strategy making in a large complex firm depicts

managerial activities on three levels of organizational hierarchy (designers, middle design

managers, and top managers) and conceptualizes intraorganizational strategy-making processes.

B-B model is a process according to which strategic initiatives are developed primarily by front-

Page 11: Volvo Group - Design Management

7

line managers – designers, marketing department who usually have specific knowledge. Strategic

design initiatives are adopted by middle managers whose role is to translate from design

language to managerial language. Top managers can exercise critical influences on these

activities by setting up the structural context to reflect the corporate objectives. The development

of these strategic design initiatives can lead to the improvement or change of the concept of

corporate strategy. The central feature of the B-B model is a resource allocation process in which

bottom-up design initiatives compete for scarce corporate resources and top managers' attention

to survive within the corporate contexts-structural and strategic contexts. (Noda,1996)

4. Research questions

The purpose of this research is twofold: firstly, to gain a profound understanding of how

communication between design group and other departments can be improved, the influence of

design on the company’s business and hierarchy; secondly, to examine the companies in order to

determine – in what stage of design process integration Volvo group is located, and in what way

it has an impact on the firm’s performance. For these purposes identifying the factors that affect

design management integration is valuable.

For these reasons, the central questions of the research are as follows:

How design methods and processes can be used in a new way and how design activities

should be implemented correctly in the structure of the company?

What are particular characteristics of design management in large manufacturing

companies?

Which design processes from other contexts can be applied to create additional value for

Volvo Group?

What communication modes would be the most effective for Volvo Group?

How to overcome challenges connected with design processes in bureaucratic large

companies?

How current processes and communication between Design Division and other

departments in Volvo Group can be characterized? What should be improved?

5. Limitations

First limitation is connected with the fact that my focus will shift on more practical things. For

analysis of current situation of Volvo Group as a base the business model of only Volvo 3P will

be taken. In order to conduct small case studies those companies which have capability to

cooperate for transferring knowledge will be involved. Another limitation refers to the

applicability of design management tools and methods from other fields to car manufacturing

area. The specific of Volvo 3P is that it is a large manufacturing company with lead engineering

view. Reference case studies with interviews and case study meetings requiring personal

participation are possible first of all in Scandinavian companies and international companies

which have design activity in north part of Europe.

Page 12: Volvo Group - Design Management

8

Research examines communication and all design processes inside the company. For external

communication analysis the most typical experience with design agencies will be selected. For

generalization of results the number of examinations could vary.

6. Research methods

The following research methods will take place in this paper:

1) Empirical study with Volvo Group case study;

2) Small case studies to gather detailed information and to support the main research;

3) Observations of the most advanced design management practice internationally through

participating in the conferences and meetings;

4) Participate in debates of different professional design organization (for example DMI) to

develop the network.

In terms of academic and business value the most effective is a case study with collaboration

elements that are reflected in knowledge sharing and consultancy during research project. For

validating data collected during the case study various methods will be used: qualitative and

quantitative. It is planned to interview different people individually through the meetings, e-mail

discussions, phone interviews as well as observations and involvement in daily activities to

uncover tacit knowledge about communication standards. The aim is to understand non-formal

communications during collaboration projects especially from the perspective of big

manufacturing companies where all processes should be formalized and supported by transparent

document workflow. The main reason is to compare logic of managers about design and find

indicators for decision making. In this case Analytical Hierarchy Process (AHP) software can be

used to compare the preferences of design values. The examination of documents and

instructions (best practice “To be”) creates a complex vision.

In-depth case study approach was chosen as the best-suited research method by reason of that it

can provide the most elaborated information for each case. As a result, the integrated analysis of

the target research problem will be explored. The research process of this thesis is based on two

research activities: one part is a data collecting; the second part is the data processing. The aim

of this research process is to produce a solution to explicit practical problem that can be further

implemented. The research should also have the utility and a benefit as well as it needs to be

verified and validated. Therefore, the proposed solution needs to be tested by users of the target

organization.

One of the alternatives of the research process is presented. The research process map is shown

in Fig.4.

Page 13: Volvo Group - Design Management

9

Fig.4. An example of the research process map

Qualitative methods: interview, focus groups, case studies, sketches, artifacts.

Quantitative: surveys, databases, measurements.

For collecting secondary data the development of design management from historic perspective

in the company will be observed as well as the changes and key projects which had influence on

the structure of the company and interconnections. For these purposes the documents which

reveal the target of these projects will be used as well as indicators of challenging situations.

Secondary data: bibliometrics, context analysis, media, briefs, presentations, Internet activity.

In addition to findings and concepts about methods of improving the contribution of design

group it will be valuable to make a few minor case studies of other projects which will provide

the results of implementing structural changes or improving internal methods and tools.

Basically, the source of information will be interviews and study visits of those companies which

presented impressive results in certain projects according to public statistics. The reason is to

find applicable sources of ideas and identify measures of evaluation of new model impact on

Volvo performance indicators. By observation outside the study will become more general.

7. Possible answers

7.1.How can be creatively used design processes and methods in new ways in Volvo

Group?

How to use design in different ways? To answer this question the list of possible applications of

design is proposed:

Steps in new product development (coordination activity with different agents);

Commercial materials (as said in my previous work all NPD sketches could be used in

future promotion as the brochures);

Design of documents, reports (typography, composition – art of preparing information or

visualizing it for users);

Photo of customers with product (collecting artifacts for marketing purposes to detect

covered customer needs);

Find a practically relevant

opportunity

Obtain comprehensive

understanding of the topic

Discuss and edit the questionnaire

Data collecting: fill the questionnaire

Data collecting: brainstorming

sessions

Analyzing the data Find a problem-

solving construction

Create a solution

Examine the scope of applicability of

the solution

Page 14: Volvo Group - Design Management

10

Design of office space (create comfortable environment for workers, furniture

allocation);

Logos, brand style, corporate style (labels, business cards);

Cooperating with IT for development web services, interfaces for external and internal

users, mobile applications;

On production line - design ergonomic tools, posters, instructions (coloration of

indications), graphics, user-friendly architecture;

Internal communication, journals, magazines;

Artistic video about workers in Volvo as part of motivation;

New businesses or business models proposed by design thinking which have value for

main business of Volvo Group.

Exhibitions, presenting new tracks (Appendix D as example)

7.2.Cases from companies

Many manufacturing companies under stiff competition begin to compete on the basis of value

creation and providing new competences. Taking into account the large scale of these companies

it’s hard to transform quickly their business. Most of them have a formal product development

process and not enough working experience with design, for example IDESTA Foodtech AB.

(Marcus, 2008) For Carlsberg Group one of the market drivers is a new package but design is

involved only via external agencies. (Appendix E)

If the company generally gets innovations from technology push and minor improvements like

Alfa Laval, it follows permanent improvement way through stage gate system and standard tools

for NPD like TRIZ. During further development of my master thesis the concept of design

involvement through different tools can be developed.

The existing literature sets a stress on the fact that the companies like Procter & Gamble,

Phillips, Samsung could have big amount of designers and use different modes of integration

(internal and external) but the main reason of their success is to define design thinking

leadership. If the company has Chief innovation officer or Chief design officer on the staff it

represents firms’ high design expectations as well as proper resource allocation (Lockwood, n.d.)

In some situations in the companies marketers and brand managers often find themselves

responsible for giving design feedback and making decisions on design concepts but they don’t

have adequate skills. The possible solution to this problem is to receive from these specialists the

brief which includes only one lead insight correlated with the company strategy about directions

of design creation. At the same time from financial point of view for design innovations it is

difficult to calculate ROI. To increase the level of effectiveness in terms of design common

templates with transparent evaluation tools should be provided. Moreover, it is important to

divide the design meetings into three distinct sections: concept presentation, the critics and

discussion, and decision making/ evaluation. Short design research based on interviewing of

customers (for example 5 persons) about their future design vision and feedback can be very

effective and useful.(Alexis, 2011)

One of the main questions of this work is what is the designers’ contribution and how through

hierarchy system increase the effectiveness of designers. Scientific literature provides the

tendency to involve designers into NPD process as team players. Océ (Netherland) had

Page 15: Volvo Group - Design Management

11

experience of integration of designers as inside workers in a project using one collaborative

project room with chemists, physics, mechanical, strategic marking specialists. After some time

the company decided to make separate design department for NPD. After that design department

performs only consulting role which means that project teams are free to choose – use or not

design competences. Now it is impossible to work without designers, but designers are able to

select the location of their studio. On one side it provides the freedom for designers, on the other

side it also can be the cause of intercommunication lack. In this research the fact is mentioned

that more often managers during decision making process prefer more functional product

prototypes than aesthetic beauty. That is why the problem of expressing designers’ arguments

and making their judgments strong during decision making discussion. Company also applies

rotation of designers within the projects and even in different project phases for better

collaboration. One of important goals of in-house design at a large company is to provide

unifications across all brand products. (Stompff, n.d.)

Page 16: Volvo Group - Design Management

12

Conclusion

The case company, Volvo Group, has the intense interest to the task of improving the

communication channels between design group and other departments and gets a good

understanding what contribution the design group is generated and how this group’ efforts can be

evaluated. This is caused by the company’s intention to use design at the maximum extent

exploring its full potential opportunities and integrate design to the corporate hierarchy in the

most effective way. As far as Volvo Group is known for its dedication to creating value, this

work is initiated to contribute new solution to the firm’s business model.

The proposed research in design management has significant value for the companies because

not all of them have high level of design integration into internal processes. New design thinking

provides the competitive advantage for the company and develops competencies. Nevertheless,

the subject of this research is up to date issue for those companies to tries to create additional

value, the literature has significant lack of studies concerning this narrow theme. Every case

regarding design integration into hierarchy in large organizations is unique. Thus, there is a huge

gap between the company’s intent to provide new solution of the problem and its scientific

support. As a result, supporting the case company, Volvo Group, by the methodologies and

approaches for new solution development is a vital problem to which this research is addressed.

Thus, the relevance of this work is proved.

Volvo Group as a leader in the market accumulates all novelties. The main aim for preparing

Volvo Group’ future design is try to predict the future needs in 2020 by developing innovative

concept that refers to the safety, ergonomics, and operator comfort. Focus of DESMA

organization supports the idea of new value creation through design. The academic interest of

this research is also reflected in unprecedented cross-disciplinary efforts to understand how

design can be exploited as a driver of innovation and competitiveness in Europe.

The methods and tools for implementation new proposed solution will be chosen based on

scientific literature investigation, conducting interviews and case studies with experienced

companies to collect the best practice of the topic. This study provides the formalized methods

for the solution development coupled with the different analysis techniques in order to evaluate

the obtained results better. All of these will form a useful managerial tool for Volvo Group that

can be applied in various design areas.

Page 17: Volvo Group - Design Management

13

References

1. Alexis, J., (2011), How do you evaluate design concepts? Brand Packaging, November,

pp 26-28

2. Antioco, M., Moenaert, R.K., Feinberg,R.A. andWetzels M.G.M.(2008), Integrating

service and design: the influences of organizational and communication factors on

relativeproduct and service characteristics, Journal of Academy Marketing Science, Vol.

36, pp.501-521.

3. Antioco, M., Moenaert, R.K., and Lindgreen, A., (2008) Reducing Ongoing Product

Decision-Making Bias. Journal Product Innovation Management, Vol.25, pp.528-545.

4. Bangle, C., (2001) The Ultimate Creativity Machine, How BMW Turns Art into Profit.

Harvard Business Review, January, pp.47-54.

5. Best, K., Kootstra, G. and Murphy D., (2010) Design Management and Business in

Europe: A Closer Look, Design Management Institute Review, pp.26-35.

6. Bruce, M., Bessant, J., Design in business, Strategic Innovation Through Design, Pearson

Education, 2001.

7. Christensen, C.M., Kaufman, S.P., Shih, W.C.,Innovation Killers: How Financial Tools

Destroy Your Capacity to Do New Things, Harvard Business Press, 2010.

8. Fuxin, F., (2005) Evolution and Communication of Geometry Based Product Information

within an Extended Enterprise, Volvo 3P, Doctoral Thesis, Luleå University of

Technology.

9. Goffin,K., and Micheli, P., (2010), Maximizing The Value Of Industrial

Design In New Product Development, Research Technology Management, September-

October, pp.29-37.

10. Gupta, A.K., Ray, S.P. and Wilemon, D., 1986. A model for Studying R&D – Marketing

Interface in the Product Innovation Process. Journal of Marketing, 50 (2), pp. 7-17.

11. Holston D., The strategic designer: tools and techniques for managing the design process,

HOW books, 2011.

12. Jahnke, M., (2008) Design Methodology as a Foundation for Improved Innovation

Capability, International DMI Education Conference, Design thinking: New challenges

for designers, managers, and organizations, 14015 April, 2008, Paris La Defense, France

13. Jahnke M., Loft M., Från Fråga till Färdig Produkt, iissuu.com, 2011

14. Johansson, U., Svengren, L., (2002). The Logic of relationships in Strategic Innovation.

On the design process, its management and link to competence, rationality and

exploitation in corporate value creation. EURAM (European Academy of Management),

Stockholm.

15. Johansson U., Svengren L., Mötenkring design: omrelationermellan design, teknik och

marknadsföring.,Studentlitteratur, 2008.

16. Kahn, K.B., (1996) Interdepartmental integration: A definition with implications for

product development performance. Journal of Product Innovation Management, 13 (2),

pp. 137-151

17. Lawrence, P.R. and Lorsch, J.W., (1986) Organization and environment: managing

differential and integration. Boston, MA: HBS Press.

18. Lockwood, T., (2010) Design Thinking in Business: An Interview with Gianfranco

Zaccai, Design Management Institute Review, Volume 21, Issue 3, September, pp.16-24

Page 18: Volvo Group - Design Management

14

19. Lockwood,T.,(2009),Transition: How to Become a More Design-Minded Organization,

Design Management Institute Review,Vol. 20, No. 3

20. Noda, T., Bower, J.L.,(1996) Strategy making as iterated processes of resource

allocation, Strategic Management Journal, Vol. 17, pp.159-192

21. Olson, E.M., Walker, O.C., Ruekert, R.W. and Bonner, J.M., (2001). Patterns of

cooperation during new product development among marketing, operations and R&D:

Implications for project performance. Journal of Product Innovation Management, 18 (4),

pp. 258-271

22. Ruekert, R.W., (1987) Marketing’s Interaction with Other Functional Units: A

Conceptual Framework and Empirical Evidence. Journal of Marketing, 51 (1), pp.1

23. Sompff, G., n.d, Being part of it- design inside NPD teams, Department of Industrial

Design, Océ Technologies B.V., Netherlands.

Page 19: Volvo Group - Design Management

15

Appendices

Appendix A

Design innovation: result of cooperation Unilever and Ferarri designers (Pininfarina)

Fulvio Guarneri, Vice President Marketing Home &

Personal Care Russia

In the interview with Mr. Fulvio Guarneri the NPD

procedures and their effectiveness in order to create

new products were discussed. Unilever is basically

marketing driven company with user-centered

approach. Its principle is as follows: to support 1

engineer 10 marketing specialist are required. This

fact caused by the necessity to adapt products to local

preferences and tastes Globally responsible for new

products Innovation R&D department is supported

by local division management (ice-cream, food,

beauty and health care). Marketing is one of the core

departments that evaluate innovations and new

design. The company is characterized by high level

of bureaucracy but to make the processes transparent

it uses IPM software (Innovation Project Management) where CEO of the company can see

online and check all innovations. To develop new design Unilever always uses external agencies,

and for different segments it engages various actors. For the new design of toothbrush the

company had marketing survey according to which possible end users were asked about their

feedback of the product’s high-tech design. The survey was organized in Italian market that’s

why the most probable supplier was Pininfarina. When the agreement between these 2

companies was reached, in Unilever the internal process from innovation stages was started:

ideas generation, feasibility study, capacity and market identifying (launch).

Unilever internal process has gates with quantitative and qualitative tests and techniques are

focused on customer feedbacks. For example, on the first stage they check product by focus

group that consists of approximately 300 customers (depends on the country). Each concept has

its score. The duration of a good project is 9 months. Probability to success in each step is 38%,

42%, 8%, 12%. During all the stages Unilever works with the same team of designers, it means

that the same designers make the product, package, materials for commercial.

Page 20: Volvo Group - Design Management

16

Appendix B

Business processes modeling

Fig. 5. Example of business processes modeling in NPD, simplified figure for package design

Bottom blocks are main actors with arrows that support the process (required human resources).

The main chain is sequence of processes. After each stage the result is documented for the

following proceeding in the next phase. According to IDEF0 all processes should be supported

by internal standards and templates (gaps) to formalize the output in each block of processes.

Page 21: Volvo Group - Design Management

17

Appendix C

Communication models

Fig. 6. Communications between the actors, “As is” model. Lines mean the strength of

connections.

Fig. 7. Communications between the actors, example of “To be” model

Page 22: Volvo Group - Design Management

18

Appendix D

Volvo Exhibition

Fig. 8.Volvo Exhibition/Show room space model

Appendix E

Carlsberg Group case

Russian market for Carlsberg Group is untypical because of

customer vision. New products driven basically by design of the

battle that’s why NPD focused not on the new taste but on the new

forms and brand reflection. For this market was implemented

complicated glass battles which reflect innovation design and visual

effects. Design of new glass bottle introduced based on sensetive

observation of customer vision. The main point to have angle in case

of Tuborg is take brand name horixontal during drinking.