The digital transformation of the enterprise should trigger an unprecedented wave of innovation and collaboration. However, the precise nature of the digitalized enterprise and the digital journeys heading to it are yet to be explored. Design management, which places the product and the customer experience at the heart of management practices, can illuminate the digital path to a culture of collaborative innovation.
The design management revolution since the 1980s
The term ‘design management’ refers to two successive approaches. The first was developed in the German industrial world in the early twentieth century to better manage design activities. The second appeared in the United States in the 1960es-1970es when large industrial conglomerates were threatened by a bureaucratic drift and had to reinvent themselves by placing the design of the product at the heart of the organization. Design management then took a larger scope by addressing the company organisation and its finality: from now on, the whole company should be managed by design.
Conception and design are the fruit of a unique process from which original and individual solutions may be developed to move beyond the limits of mere functionality and encompass those elusive qualities that become strategic assets and serve to differentiate and make desirable a given product.
At the product level, design starts at the very conception of the product idea. It then develops into engineering which ensures that the product fulfills the client expectations in an efficient way and delivers the features that should differentiate the product from the competition. But not only. The design is a result of a special creative work that goes beyond the mere functionalities of the product and adds an original and genuine touch that would deliver to the user a unique experience.
Apple has emerged as the undisputed master of this comprehensive approach and has over the course of its history succeeded in creating and commercializing innovative signature products that create a consumer experience to be integrated and felt in a manner that is so deeply personal as to border on intimate.
Taken alone, the phrase management by design would seem a contradiction of terms or at the very least an audacious play on them. Design conjures images of freedom, emotion, and creative expression while the term management could be perceived as a straitjacket connoting prudent organizational principles and a sober analysis of facts and performance metrics, notably in of financial nature.
In practice, corporate DNA gets rewired to make it all about the user and the way a product or service makes someone feel. This new kind of relationship has been long in the making and is self-reinforcing. The digital revolution has added an entirely new dimension, the repercussions of which can be felt far beyond the glow emitted by computer screens. The goal of an enhanced “user experience” has been elevated to a point where a range of key processes (marketing, R&D, production, quality assurance, communications, distribution, etc.) are now oriented toward its fulfillment. An example of the dynamic can be observed from the earliest stages of the innovation cycle where focus may be placed on bringing design processes into alignment with those deployed during rollout. This holistic approach integrates technical and commercial services from the moment an idea is conceived.
Design management offers a useful approach to explain how innovation, by its very definition, has outgrown the limited confines of the engineering department or R&D lab. If nothing else, today’s innovative organizations are defined by their ability to tap into the infinite possibilities that burst forth when the cloistered world of invention (or creation) collides with the outside world.
Meticulous preparation provides the framework for a meeting of minds. Best practices in corporate governance create an innovation lifecycle where a clear strategy can be broken down into a series of stages.
A more formal approach to the life cycle of an industrial product might typically proceed with: market research, technical studies, development, industrialization, and commercialization. As processes are channeled through the various stages of a board room approved cycle the emergence of innovation can be closely monitored as it passes from one phase to the next. In this way corporate resources are optimized.
Principles governing innovation have expanded outward from their traditional center of gravity (R&D labs, product and upstream marketing teams) to encompass all facets of enterprise culture. In this context, innovation can be better understood as participative. The notion has penetrated as far as the French defense ministry where the term participative innovation is understood as “innovative projects proposed, realized, and signed off on by decision makers who need not necessarily have a background, whether in research or exploratory studies, in the domain for which an innovation has been created.” The idea is being diffused through the Mission Innovation Participative grant program whose recipients receive resources that may be financial (for outreach), administrative (bidding for contracts), technological, legal (protection of intellectual property), and moral (consultation, encouragement, accompaniment, incentives). The framework allowed the vision of a non-commissioned officer tinkering away in a ship repair yard to become reality and his system for treating polluted water produced in maintenance facilities has been widely diffused (in French).
Collaborative innovation: new questions, new solutions
Business innovation can be taken to the next level through “collaboration” to the extent that key processes are shared among several economic actors, as much in the early phases of development (R&D, industrialization) as further downstream (marketing, sales). Within this context, the role of key stakeholders is redefined and made less contingent on internal talent pools and more on a range of autonomous agents. Emblematic of the approach is the recent example of Google Glass where initial announcements of the technology were made directly to programmers using the company’s Android operating system during the Google I/O keynote. Other examples spring up in some unexpected places such as a series of frameworks for IT governance published by US-based professional association ISACA. The most recent series Cobit ®5 has been diffused to more than 100,000 constituents in 180 countries.
Raised eyebrows over the security of “open” innovation compel project managers to rethink the standard approach to IP protection measures.
Through the implicit rules of internal innovation, such as confidentiality agreements or limits on communication between employees, siloed organizations are able to guard their best ideas. The subject of security is so embedded across all levels of corporate governance that it hardly merits a mention in the minutes of boardroom discussions.
Under the collaborative model no such assumptions can be made and finding alternative ways to protect ideas takes on critical importance. Clear lines separating vendors from clients blur to create alliances in co-innovation. Ideas are no longer walled off from external forces and knowledge flows fluctuate according to the modalities of a given partnership.
To manage the new reality legal departments must be mobilized to conduct negotiations over levels of exclusivity and reach agreements on confidentiality and intellectual property (IP). Accords can take on a life of their own and extend far beyond the nominal framework of a given project. With so much at stake strategy should be assessed through the addition of ad hoc board meetings across the innovation life cycle.
When it comes to the innovation life cycle, from the moment of conception onwards, a radical shift in perspective has occurred in those organizations who have successfully departed from an over-reliance on traditional approaches such as “invention – protection – development – commercialization.”
Changing tack in corporate governance creates a ripple effect that spills over into the nuts and bolts of daily operations. Information Systems (IS) constructed around a robust client – supplier relationship provide a case in point. Specifications for a given project are transmitted from businesses to solutions providers who in turn are contracted to formulate a response. The client defines the parameters. At delivery, the knowledge deployed during the innovation life cycle becomes inseparable from the solution and the entire package is transferred from the supplier to the client who then becomes its undisputed owner.
This model made sense in the 1980s when IT services companies provided external pathways for corporations to accumulate control by specifying solutions and eventually taking ownership of them.
It makes rather less sense in an ecosystem based on collaborative innovation where the flow of knowledge runs in two directions. Clients should no longer assume any control of the intellectual underpinnings of a given solution and must adapt to sharing—or indeed surrendering—them completely. In this new reality, the client – supplier model is showing its age and could use a makeover.
Enter a trilogy of targeted responsibilities: development, ownership, and use.
In response to questions over how to share out responsibilities between clients and suppliers a family of three contractual regimes has emerged for management of the knowledge component and related intellectual property of IS solutions. Under the first, ownership and applications are in the hands of the client while solution building falls to the supplier. In the second, the role of suppliers expands as ownership is handed over by the client who nevertheless retains control over use. Under the third scenario responsibility of ownership is shared.
The genuine design of this governance framework has the potential to resolve any of the uncertainties over ownership of IP that tend to hover over collaborative innovation when IT services are contracted out. Besides, it opens the door to a transformation from the one-size-fits-all approach to client – supplier relationship regime and allows for a more differentiated style of governance based on a pertinent family of regimes that would eventually develop into batteries of contractual arrangements. Such governance proves extremely useful when it comes to selecting and guiding policy on offerings such as cloud computing where the service, intangible in nature, is largely defined by its contract.
The rules of collaborative solution building
Through the process of collaborative innovation consumers are invited into a transformed relationship. A new approach toward marketing surveys creates a frame for the canvas on which the outlines of collaborative marketing can be drawn.
Online surveys are a classic instrument for operational marketing between businesses. The sponsoring organization appeals to the self-interest of participants by providing feedback based on the opinions they express. The format is designed according to a proven and clearly defined process—diffusion of surveys, collection of responses within a specified time frame, statistical analysis, editing and publication of “official” results, targeted follow up limited to participants.
Unfortunately, the transactional nature of the process creates conditions unfavorable for transfers between the organizers of a survey and its participants thus extinguishing any chance for a truly collective intelligence.
First among limiting factors is the latency that exists between the delivery of a statistical analysis and the moment of actual participation. Next, is a tendency for market researchers to keep their cards close to their chest when it comes to sharing data, or even explaining how it was collected. Moreover, they remain largely silent on the subject of any bias introduced during statistical analysis. This last point is crucial because it creates an uneven playing field when it comes to knowledge and status. Whether they like it or not, participants are forced to rely solely on survey designers to ensure the accuracy, integrity, and reliability of the exercise.
In the service of collective intelligence latency can be eliminated, the tunnel effect eased, and information asymmetry reduced through “collaborative surveys”.
The mechanisms used to construct reliable statistics must be unbundled from the process that delivers an analysis of them if the new approach is to be successful. The statistics can be updated in real-time and provided to participants upon completion of a questionnaire. Instead of waiting for the release of “official” results to gain an appreciation of the data contained within, participants become implicated at each stage of the survey. No longer limited to a canned version of results participants are invited to observe trends and evaluate their relevance. At any moment, they have the opportunity to form their own conclusions and, if desired, share them.
Participants grow into an enlarged role. They live an original experience through the observation of incremental changes to statistics and are propelled to an entirely new form of intelligence.
To harness the true power of this survey design, the experience needs to be formatted to move beyond a reliance on technical details understandable to only a handful of specialists. Editorial and stylistic considerations are elevated to new levels of importance: a title, a rhythm, a format, talking points, reminders … The launch of the study ‘Open Survey no. 8: 60 Seconds to Imagine the Innovative Digital Enterprise’ was made with such objectives in mind and readers are encouraged to sample the experience for themselves.
As the digital frontier expands innovative business is drifting towards increased collaboration. Evidence of the shift can be felt at the strategic, tactical, and operational level allowing enterprise to migrate out of the fortress of internal innovation toward a more collaborative model. A differentiated approach to IT services management replaces a monolithic one. Marketing is made less transactional and collaboration is encouraged.
Change arrives at every level, from strategy to organizational principles and from HR to IT. It is driven by a set of management practices rooted in observation, measurement, and analysis. The art of design, with its appeal to the senses and emotions, completes the picture and gives design management its force. Viewed through a different lens the image, actions, and behaviors of enterprise become observable – and thus manageable – in an entirely new light.
Exploring the Starry SkyRobert Burnham
List Price: EUR 15,92
Strategic Management of Innovation and DesignPascal Le Masson
List Price: EUR 57,38
Design Management: Using Design to Build Brand Value and Corporate InnovationBrigitte Borja De Mozota
List Price: EUR 23,54
This Is Service Design ThinkingMark Stickdorn
List Price: EUR 37,00
101 Design Methods: A Structured Approach for Driving Innovation in Your OrganizationVijay Kumar
List Price: EUR 34,78
101 Design Methods: A Structured Approach for Driving Innovation in Your OrganizationVijay Kumar
Design Thinking: Integrating Innovation, Customer Experience, and Brand Value
List Price: EUR 23,54
- “Open Survey N°8 : 60 seconds to imagine the Innovative Digital Enterprise” (a collaborative survey conducted by Dô-Khac Decision, in French)
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On the topic
- Sharing ideas… and emotions: why innovation needs cooperationBy Norbert Alter on January 11th, 2013
- The social side of strategyBy McKinsey Quarterly on May 25th, 2012
- Is modular design the key to fast innovation?By Nicolas Bry on May 23rd, 2012
- Is there a model for fast innovation?By Nicolas Bry on February 29th, 2012