Design and innovation can spark off each other in different ways, not only directly by designers being involved in the development of a product, but also indirectly through the physical work environment. The following case studies provide examples of both these phenomena.
Making design centre-stage at Procter & Gamble
When A.G. Lafley decided to put design at the centre of his strategy as Procter & Gamble's new CEO, he caught the attention of the business world. Lafley has gone on to create a central design function and enabled Proctor & Gamble to work closely with leading design consultancies, with an aim to make design part of every step of the new product development process.
Procter & Gamble uses an internal 'interpreter' to make sure that design and design language is 'translated' in a way that the company's traditional functions, such as sales and finance, can understand. The company also places strong emphasis on bringing-in ideas from outside.
For more about design and innovation at P&G in Fast Company’s article ‘What PG Knows About the Power of Design’
Umpqua's flagship bank redesign
Umpqua bank, from Oregon US, is known for its innovativeness. It introduced coffee shops into its branches as early as 1996, and it uses design as one way to ensure its distinctiveness and differentiation.
In a recent redesign of the bank's headquarters, designers and architects worked together closely to develop a new environment that would be highly attractive to consumers. They have come up with an environment that is offering an experience, rather than just facilitating a transaction. 'We asked people: Why go to a bank when they can go online or to ATMs?' says Sohrab Vossoughi, founder of ZIBA. 'We found that people want peace of mind from financial services.' Umpqua's branches now look and act more like community centres than banks.
Find out more about the Umpqua Bank
Pitney Bowes's innovative workplace
Pitney Bowes Credit Corporation (PBCC) - the financial services division of an office equipment manufacturer - decided that in order to step up its innovation activity, the company would have to change its work environment. The traditional office layout was not conducive to encouraging collaboration and exchange - two aspects that are fundamental building blocks for successful innovation. So PBCC decided to change the design of the workspace so that 'bumping into each other' and working together happened naturally.
The makeover of the physical work environment resulted in something like an indoor theme park with cobblestone look-alike carpet, town square clock, café and diner. This relaxed and inspiring work environment, combined with an inspirational leader, led to the introduction of a number of new products in 1996, including 'Purchase Power' a revolving line of credit that helps companies finance their postage costs and 'Business Rewards', a credit card geared toward small companies.
While accounting for only two per cent of the parent company's workforce, PBCC brings in annual revenues of $800 million - 36% of the parent company's net profits. In this case, design has been used to create an environment stimulating creativity and innovation. But while the work environment was obviously an important stimulant and facilitator, without the corresponding company culture, vision and leadership style, innovation is not likely to have occurred.
7 Series BMW
Car manufacturer BMW has always placed strong emphasis on design and the need to innovate. But with increasing competition, the need for differentiation had become stronger than ever. BMW decided to respond to that and move its designs away from the increasingly similar look of many current car models.
While the radical look of the new 7 Series cars initially shocked some critics and buyers, the figures would prove BMW right. Sales were 17% ahead of those for the previous 7 Series during the same early months of its life (in the mid-1990s). And while the US auto market was down 1.3% in 2001, BMW achieved a 10% sales gain in the United States and a 12% gain worldwide. BMW Group Director of Design Chris Bangle feels that four principles contributed to this success: first, protecting the creative team; second, safeguarding the artistic process; third, being an inventive communicator; and finally, the close collaboration between designers and engineers. BMW has used design to drive innovation and stretch the boundaries of the existing brand.
External collaboration at Philips
On its website, Philips states: 'At Philips, design is far more than just creating good-looking products. Design at Philips is a key element in the innovation process and is applied throughout the Philips Group companies as a business method.' In other words, the company is innovative not only in terms of product design and development, but also in its business approach.
In recent years Philips has entered a number of cross-industry alliances to create new markets. In 2002 Philips announced a joint venture with Nike to develop products that would integrate technology to stimulate and enhance the athletic experience. A second joint venture was set up with the Italian furniture manufacturer and designer Giulio Cappellini to design, develop, manufacture and market an exclusive range of furniture featuring integrated home-entertainment appliances such as flat screens and DVD home-entertainment systems.
Building on its expertise in design and technology, Philips applies its design and innovation capability to creating entirely new markets. With increased convergence of previously separate industries, the ability to collaborate to allow companies to combine their strength is essential. Designers are likely to work at the interface between the collaborating organisations in such projects.
Read more about Philips' approach to innovation.
Swatch Watches
Swatch is an example of what design combined with an innovative concept can achieve. The Swiss watch making industry was very weak in the early 1980s, faced with competition from Japanese digital watches. Swatch's revolutionary business concept reversed the decline by redefining the watch market. It transformed a watch from a time-measuring instrument into a fashion statement and a collector's item. Nicholas G Hayek, the consultant who had been brought in to wind down the Swiss watch making industry had the idea of marrying Swiss watch making skills with Italian fashion design. To add to the mix he borrowed plastic-engineering skills from Lego to produce watches that were dramatically different from the feature-laden watches offered by the Japanese companies. As a consequence, people started collecting these relatively cheap watches - choosing a different one, depending on their mood and the occasion. Design and innovation here not only led to the successful establishment of a new company, but to the turnaround for an entire industry.
Find out more about Swatch and other companies that have employed design and innovation to overcome a downturn.