The etymology of the word design goes back to the Latin 'designare' which means to designate, to give meaning to things... Design is not about styling. It’s not about technology. It’s about radical change in meaning. These are things that people were not asking for, but when they saw them, they fell in love. Roberto Verganti
Speaking at The Big Rethink, Roberto Verganti, Professor of Management of Innovation at Politecnico di Milano, explained how radical innovation through design can – and will – change the way in which companies compete in the future.
Read the transcript below.
Roberto Verganti, Professor of Management of Innovation, Politecnico di Milano
There is a concept in the strategy and in strategy theories that is very much used. This concept is the concept of differentiation. To win in competition, you need to be different, and innovation is about differentiation, and innovation makes you different. You can see the same concept from another side. It means that if every company and industry knows the same thing, this thing doesn’t make any difference. So we will not talk about things that doesn’t make any difference anymore.
We will not talk about the importance of design, every company knows that. I will not talk about user centred innovation, every company knows that you need to look at users to understand how to do innovation. I will not talk about the importance of having ideas, we have seen right now that there is plenty of ideas around. It’s so easy to have ideas. It’s so difficult to have visions.
So, given that this conference is about the next challenges, I will talk about the next challenges, not what every company already knows, but what a few companies have started to do experiments about. We’ll start from two stories. One story, it happened to me a few years ago. I’m Italian, and so what happens when my colleagues from abroad visit me, they always ask me to visit some of these beautiful design companies. Companies that use design at the highest level. So there was a professor from the MIT, who visited me in Milan a few years ago, and you know, he said, 'Can we go and visit one of these companies?' And I brought them to a company called Artemide. Artemide is doing high end lamps. And so we went there, and this professor was expecting to see beautiful lamps. This is a company that is investing in design for decades. So, we went there, and this company showed them this product.
There's no a lamp. Actually, the chair is not by Artemide, the chair is by a Swiss company called Vitra. The product actually is – and this is an advertisement of this company, so it’s how they show their product – that there is a system, a machine that creates colourful atmospheres, you know? This atmosphere is called Dream. If I put this atmosphere in your room, then you relax, and this light makes you feel better. Okay? There is a mechanism that even turns off slowly and brings you into your dreams. So, I mean, that was a shock for this professor. He expected to find beautiful things. There is nothing beautiful in terms of lamps. This is a light that makes you feel better.
This company told him, you know, every company nowadays knows that design is important. We have been using design for 40 years, and everyone now can design a beautiful lamp. It doesn’t make any difference anymore. You can go to Ikea and buy copycats of this company for 30 Euros. You don’t need to go to China.
So, I mean, everyone can do that. They needed to do something different. Something more radical, and they radically changed what a lamp is. It’s not about the lamp. It’s about the light. And, they started to make light that makes you feel better. You know, you can imagine, going into a shop where they sell lamps and usually buy a beautiful… lamps are sculptures, you know? You buy lamps because they are beautiful. But instead, in this case, you enter into a shop and you ask for a lamp that makes you feel better. Probably people in the shop will believe you are crazy.
Anyway, but this is important. They radically changed the meaning, the reason why people buy things.
The second story caught me a couple of years ago. I was in Boston, talking to the people of Microsoft, and they told me, 'We have been doing, spending tons of money to understand what the user wanted when they used a game console. We did thousands of analysis of teenagers in their homes, using game consoles, and what they understood, by doing this ethnographic or these kind of things, they understood that teenagers wanted to have more virtual reality, because when they use a game console, they basically want to enter into a virtual world. They want to see, you know, when they shoot the people, they want to see blood. They want to see this completely immersed and socialised reality. They immerse in that.'
So, what Microsoft and also Sony did, they developed very powerful game consoles, that recreate graphically a beautiful experience, if you want to enter into your television.
Unfortunately, they discovered that there was another company, called Nintendo that created the Wii. I know that everyone in the room know what is a Wii and how it works, even if you can pretend you don’t know it, but basically you play by moving. You play tennis by swinging your arm and so on. So, actually Nintendo proposed a completely different meaning. You don’t want to get into a virtual world. Many people want to stay in the real world, doing work outs, socialising with other people. You can organise Wii parties. It’s very easy.
So, this is again another great example of design, because it’s not about, you know, this is not about styling. Actually, the graphics of the Nintendo are very simple. It’s not about technology. The technology inside a Nintendo Wii is much more simple, less complicated than the Microsoft Xbox and the Sony Playstation. It’s about a change in meaning, and it’s a radical change in meaning. These are things that people were not asking for, but when they saw them, they fell in love.
So, this is the connection between design, innovation and business. Actually, I always use, typically, when you have people doing presentations on design, everyone has his own definition of what design is. I’m a Professor of Management, so I don’t know what design is, so I borrowed some definitions from theories, and I like this very much, because it says that design, the etymology of design goes back to the Latin 'designare' – and it means, designate, to give meaning to things.
And, it’s a quite precise definition of why design can make a difference in innovation, because through this design, you can understand better what people want and mean, when they buy things, but you can also innovate the meaning of things. You can change how things are, in terms of meanings, because design is making sense of things, and this happens always. This is an example.
Forgive me, this is an old Italian one, but just to bring some international flavour. I choose this, because you know, this is a post recession product. One of the worst recessions in the auto industry was in the mid '70s, so we can learn something from past recessions. And this product was conceived in 1975, right in the middle of the worst recession in the auto industry that we had seen before this one.
You know, wisdom would have said that Fiat, the company that designed this car, would have said, you know, people don’t have money, so just design a cheap, small car. Fiat is famous for designing small cars, you know? Instead, this one, the first ever time that Fiat designed a large car, in terms of – it’s still a city car, but it’s not a little little box that you squeeze people inside. Actually, they designed this car that it’s completely crazy. You know, if wisdom would say; if people don’t have money, they want to pay less for the car, so when you design the seats of the car, you simply use poorer materials, or poorer steel. It’s simply that you make it, try to save money everywhere.
Instead, this company, as you can see from the picture there, at the back seat, was a hammock. It was not a cheaper seat. It was a different thing. It was a hammock. You could put your baby in the back, and make it sleep. You can fold it. You can make as a bed. You could do whatever you want inside this car, so this is another instance. What they did is they didn’t cut costs. They changed the meaning.
I use the metaphor of the sneakers to describe this car. This is a car in sneakers, you know? You don’t buy sneakers because they are cheaper. When you buy shoes and you buy shoes that, you know, you would like to have beautiful leather shoes, but then, you know, you don’t have the money, it’s post recession. So if you buy, you know, leather shoes that are in plastic, you feel poor, but if you buy sneakers, you buy a different thing. It’s another meaning. You can even go to a wedding in sneakers, or give a presentation in sneakers. I don’t know if there are present speakers that will do that, but sometimes I do that.
So, it’s very important, because the post recession consumers, they don’t want to feel poor. This is very important. People don’t want to feel poor. Companies will have to cut costs, but they don’t have to cut meaning. In the post recession, if design is about meaning, design will become even more important, because when people will buy something, those few money that they dedicate to this thing they are buying, they want to buy valuable things, not things that will make them feel poor. This is very important, and design is everywhere.
This is an interesting product. In America, everyone knows this product. It’s called QuickBooks. It’s a software application. This company is called Intuit, it’s very famous in the US. When they developed this product, they said, you know, this is a software application of accounting for small businesses, and they became 28th in the industry. There were already 27 companies in the industry before them. And every company in this industry said, you know, if you want to do accounting, you buy our application.
This company came to the market and said, you know, if you don’t want to do accounting, you buy our application. Because usually, you know, car painters, architects, they don’t want to do accounting. And, all the other companies came from large accounting applications. They downsized these applications, but they used, you know, down for the great guy, they want to do everything about accounting. You know, normal people don’t want to do that. So that was another example, where every product, even software, something that has no form, but software has a meaning. And, this is business to business, also business to business products have a meaning. Everything has a meaning.
So, I always use this kind of framework to explain that when you think about innovation, we are used to thinking about innovation in terms of technologies – and you can change them incrementally or radically – but we always forget that people don’t buy just utility. People buy meaning and emotion and symbols. Think about the two most important things in your life that you buy – apart from your wife – it’s your house, and your car. Okay? Think if you are completely utilitarian when you buy your house? Of course not. You will live there for the rest of your life.
So, meanings are very important, and you can change that. You can change meanings incrementally or radically, and in the past decade, we have learned a lot of how to understand how people give meaning to things, but this leads to very incremental things. People, companies don’t think that they can radically propose new meaning. Meanings can be innovated, and we have seen a lot of examples.
So, we will focus a little on this area. This is a little unexplored. We do not know exactly how you can innovate the meaning of the thing. We have been doing research about all these cases, where or how companies could propose, you know, a game console that is a workout, when people actually asked for something different. This is a radical change in meaning. How can you come out with something like the Nintendo Wii?
And, what we learned is that actually radical innovation and meaning does not happen by using the imperatives we all know. Radical innovation and meaning doesn’t come from users. It’s not just a matter of having a lot of ideas.
When we went to, with this Professor from the MIT, after we visited Artemide, we came to dinner. Artemide was paying, so it was great, and at a given point, this Professor from the US asked, you know, how could you come out with this light that makes you feel better? How do you analyse user needs, and the Chairman of the company said, 'Market. What market? We do not look at the market, we make proposals to people. Because if you ask people, or if you look at people using lamps, you can make better switches, but you will never come out with a lamp that makes you feel better.'
And, the same is with the Nintendo Wii. They say, 'Oh, we did not look at the market, user needs. We actually worked with other kinds of people. We work a lot with the software developers, with the developers of games, and actually what we have learned is that these companies don’t get close to users. They step back from users, and they get close to interpreters.'
What are these interpreters? They have learned that actually every company is surrounded by other players, outsiders that have this same problem. They have this same kind of intuition. Like to make an example, if you are a company like Artemide, you are doing lamps, and your problem is, how can we make people feel better when they come home, seven o’clock in the night? I think it is not the only company having this problem.
Also, Phillips, who is making TV screens have the same problem. How can we make people feel better when they come home at seven o’clock in the night? Also, architects who design apartments have the same problem. How can we make people feel better when they come home seven o’clock in the night?
So, there are many other players around the company that are looking at the same people in the same time of context, and they are making research. Architects are making research about how people live in their apartments, Phillips is doing research about people living in apartments. You can share this knowledge, because architects are designing apartments. We are designing lamps, and we are both interested, so this company has developed unique rules, a unique way to find out the right interpreters, and what they have discovered is that they are good at finding the right interpreters before other companies and other competitors will find them.
Just a little example, a little one, which is the last one. Imagine you’re a company in the computer industry, and you want to design a new computer, and you need the chief designer, you need to appoint a chief designer as a new head of the design unit. You know, you have to ask a designer to design a new computer. What would you do? If you are a CEO of a company? You will ask for the most famous computer designer in the world to design your computer.
What we will have next is another computer, so this is the choice. I’m in the UK, so I have to use this. This is the choice that this crazy guy did. He hired as a chief designer, Jonathan Ive that you know, because he’s British, he was not the most expert computer designer in the world. Actually, he was famous to design products for houses, bathrooms.
Is the CEO a crazy guy? Many people believed that he is crazy, but he was not crazy, because this is the first product that Jonathan Ive designed for Apple. Actually, in the web era, a computer was starting to be used at home. If a computer is used at home, you need a new interpreter, an interpreter of how people live at home. Everyone was saying, wow, this is a colour computer. You know, everything was completely new. No colour computer before, but if you discover that the same kind of colours, the same kind of plastic. You can see little Chinese guys creeping behind the picture. These are products by an Italian company, called Alessi. They took a lot of inspiration from these materials.
The same materials were in the home before. That was not a crazy choice. It was the right choice of the right interpreter, before you competitors find the same type of interpreters.
So, it’s not about looking for the superstar designer, it’s about looking for the great interpreters on the future, before your competitors get there, and this is the last one, which connects to one of the questions that was given before. How can you do that? There is a process.
Sometimes, people believe that, you know, CEOs that can find new interpreters, they are kind of gurus. They have this great intuition and this is an interesting sentence by marketing manager who was probably fired by Apple. They said, you know, Apple market research was…this is the most nastiest, if you’ve done an MBA, coming back to the MBAs problem, if you’ve done an MBA claim you can see. 'Steve looking,' that’s the way Apple do research, 'Steve looking in the mirror and asking himself what he wants.' And I said, that’s great. The difference is that he can see in the mirror things that an MBA student cannot see, because we teach them not to see the mirror, and the mirror is the personal culture of a person that you develop by being immersed among interpreters, by interacting with the people, and we always teach our students not to look in the mirror, just look on the spreadsheet, so we have to do something about this also in business school. Thank you very much.
Vijay Vaitheeswaran, The Economist
Terrific. So, Roberto, fascinating. People buy meaning, you tell us, and design can help us discover that meaning, to give meaning to things. There has been a backlash against consumer driven capitalism. There’s a lot of soul searching, particularly in the Western economies. There has always been some scepticism in Eastern economies. Where do you think design fits in, if we are rethinking values? Values of companies, values of society. If we find meaning in objects and things we acquire, what is the challenge for designers in an age where people might want to reconsider their values?
Roberto Verganti, Professor of Management of Innovation, Politecnico di Milano
My feeling is that the field of design should speak to designers – that in the past ten years, designers have been much less visionaries than they used to be. There’s been a movement trying to say, you know, against the designer who had a vision, and everything was transformed into processes. If you look how designers have evolved in the past ten years, if you buy books on design, it’s everything was about processes. You know, creativity, brainstorming, ethnography, metals, tools, and actually the effect is that designers are looking much more as businessmen and MBA students today than they used to be, and they risk losing the capability of vision.
We need to have designers that keep having visions, because business people that want to be radical – if you want to be radical – business people need designers who have visions. And these visions are important, because if we connect to the challenge of sustainability, you will not solve sustainability through user centred innovation, because users don’t want to be sustained.
Vijay Vaitheeswaran, The Economist
These are fighting words to a lot of people, including some who have spoken here on stage today. Because not only did we hear this morning, but also some great gurus – Professor Von Hippel at MIT – some others have written tomes about how the future belongs to user driven innovation, how the Internet and the globalisation and Googlisation of the world economy means ideas will come from the bottom up. We're a world of seven billion innovators. Are you just a cranky contrarian? I mean, how can you claim that this is not the case?
Roberto Verganti, Professor of Management of Innovation, Politecnico di Milano
No, I mean, there are two possible answers. One is – I had a nice conversation with Eric Von Hippel and I always tease him, because he’s exactly the example of a non-user centred theory. He is a visionary. I mean, he started to do research on lead users and user centred innovation in the '80s, when this was nothing popular, and so you can do theories on user centred innovation by being not user driven but being visionary, the same.
Vijay Vaitheeswaran, The Economist
Very clever response, I must say.