Case Study Report

Introduction IDEO is a design and innovation consulting firm that was founded in 1991 and has been a successful example of what innovation and innovative design can accomplish. Its Palm V program was quite successful and created new expectations for what PDAs could look like and do, while maintaining a functional simplicity. Jeff Hawkins had started the original Palm Pilot program in 1996 and found enthusiastic acceptance among consumers. Senior project leader Dennis Boyle was chosen to head up the development of the Palm V, which would integrate a slim, more colorful and sleek design, which wouldfocus more on emotional appeal than souped-up hardware. IDEOs culture could be described as eccentric, fun, creative, and innovative. The outside-thebox working styles and shifting of working groups help to keep thinkers fresh and constantly on their toes. In the early 90s it was innovative to the point of being ambiguous at times for staff and management, but this was seen as providing fertile conditions for the generation of innovative thinking and ideas. However, by the late 90s this culture had become slightly more bureaucratic, to the chagrin of the executives and founders. This is because the management itself is a creative and inspired group that is very comfortable with ambiguity. This is exemplified by founder David Kelleys dismay when asked permission by employees to leave early or bring a spouse to a company event; he would much rather there was less hierarchy. IDEOs product creation process is unique in that it embraces the eccentricities of its corporate culture, and does so to increase the creativity and value of the designs it produces. Having a team together for only one project at a time, dispersing them and changing team formations for other projects, makes the input for new designs diversified and the thinking of the participants fresh. Healthy teams are extremely important for stimulating creativity, but once a team has been established for a long period of time, people can have the tendency to fall into patterns of thought or take on a set team role or persona, both of which can restrict their creative ability and flexibility of thought (Latendresse, 2006). The proof of the IDEO systems effectiveness is in the long and distinguished list of awards the company has received over the years, and its reputation as an industry leader in innovative thought (IDEO, 2010). Concurrently to the design of the Palm V, a new company called Handspring was formed in 1998 with the intent to create lower-cost PDAs with expansion ports and the ability to synchronize with personal computers. They would also be more colorful and easier to use than previous PDAs. However, because of time pressures, low-cost goals, and the fact that the

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founders were none other than Jeff Hawkins and Donna Dubinsky (from 3Com and Palm), the company decided that market research would essentially not be needed for the development of its first project: the Visor. Dennis Boyle was called in to submit a proposal for the project, although because of the close ties to the competitor Palm, details of the project would have to be kept relatively secret and he would have to develop the product nearly twice as quickly as the Palm V. Problems The problem facing Dennis Boyle was whether or not to put aside his companys tradition of spending substantial amounts of time and energy on the design phase of a product in order to rush the Visor PDA to market, which would be cheaper and have more potential for expanding functionality, but would lack the trademark high-quality and well-researched design that had made IDEO designs the front runners of innovation in the industry. Alternatives Boyle could reject the offer to assist in the Handspring Visor product, but considering the fact that so many of the Handspring team members have close ties to IDEO, it could create animosity or resentment between the teams. Alternatively, he could ask the management to delay the release so that more time could be spent designing it properly for the market it was intended for. This comes at the risk of missing out on valuable market entry timing, which could cut into profits or allow competitors time to gain control of the market and gain followers that potentially could have been Visor customers. Boyle also has the option of accepting the project timelines and constraints, allocating to it the resources that he sees necessary to make it the best product it could be, given the limitations of the development time and cost target. Included in this process would have to be the identification of differentiating factors (aside from the improved functionality) that would make it a popular, useful, and competitive product. This option, if chosen, should include giving the IDEO team adequate creative control in order to maximize the potential for market success. Issues In a way, it seems that the priorities of IDEO and Handspring were at odds with each other. IDEOs focus was on creating innovative, high-quality products that were successful and effective due to thoughtful, creative design. The rigorous, customer-centered development, design, and refining stages, as well as the comprehensive use of creativity in the office and in team development underscore the commitment to creating the best design possible as the primary focus of IDEO teams. Deadlines were not a primary concern, as IDEO had a good track record for delivering their world-class designs under tight schedules. Handspring, however, despite being consumer focused and according to Hawkins, wanting to make this work well for
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the consumer, felt it unnecessary to engage in market research or time-intensive experimentation. This, by nature, makes it a different animal than IDEO due to the fact that the primary focus of the company is to introduce the predetermined product (while open to some cosmetic adjustments), as opposed to creating a product that has been determined to be desired by and useful to consumers. IDEO had worked long and hard to create a supportive culture for creativity and innovation, one that was continually awarded recognition for its cutting edge products and design. This reputation could be damaged by taking on a product that has such tight cost and time constraints. Boyle knows that the product could be significantly better if it were given more time to be developed, but given the esteem and experience of the team it would be difficult to call into question their wisdom and competence. However, with the reputation of the firm on the line, one must take a long-term approach when having to choose between such difficult options. Decisions If Handspring were to produce a lower-cost, less stylish device, it would have to be marketing its product to a different group of consumers than those who would buy a Palm Pilot V, ones who were more price sensitive, less concerned about design, and could include less tech-savvy customers, given the improved simplicity of the functionality. Perhaps emphasizing games and add-ons (much like the aps of the ipod) would create a new market area that wouldnt actually compete with the palm pilot. Competing for this same market could fail because of: a) The established brand value of Palm V. b) The customers of Palm Vs were less price-sensitive and more concerned about design. Improved features, versatility (due to the slot function), and colors would be the positive differentiators for these people. Some market research would have to be done to determine the relative value of these different components of the device for the consumers. The option of going ahead with the Visor project at the desired speed of the Handspring management would all but cut out Stages 0 and I, which involve getting to know the customer of the product, the company producing it and its history (although the companies felt this was less necessary because the team members, for all intents and purposes, invented the market for the Palm Pilots and similar PDAs). These initial phases of doing the background work would be skipped to develop a product that was already in mind, using the product development model more widely used in the mainstream industry. Given that IDEO was far from a mainstream design company, with such a unique culture and methodology that had proven itself to be successful again and again, it is understandable how much apprehension Boyle must have felt.

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IDEO has conflicting interests for the two projects, on its way to releasing a new innovative product; it cant afford to take away from the market share of its Palm Pilot V. However, if the Visor project is successful, it could have its name on another successful project. However, if the product is rushed to market before it is as good as it could be, it could flop with IDEOs name on it. If I were in Boyles position I would: Request more time for the development phase, emphasizing that IDEOs job is to create great products, and the Visor could be one such great product if it were given the time it deserves. Emphasize the need for market research; the Palm V and the Visor are similar products in some ways, but are, in fact, different in fundamental ways that will affect the appeal for the target customers. Knowing who their target customers are in the first place will help them to design the product that their customers want, not just a pet project for the management. Offer to dedicate a large amount of resources to the Handspring team if they decide to allow more time for development. IDEOs reputation is on the line and can help do what they do best if they are allowed to carry out the proper design process that they are known for. This will help to not only make the Visor a better product in on the whole, it will give IDEO a chance to live up to its reputation as a world-class innovative designing consultancy. If Handspring declines the request to extend the roll-out deadline I would request that they engage in whatever market research they are able to do before pushing ahead the design and production of the new device. This will contribute to a better product that is more tailored for the consumers who will want it, giving the Visor a better chance of success when it does enter the marketplace. Perhaps I would have two or several independent teams working simultaneously on the Visor project to increase innovation over the short period of time.

Handsprings management should be able to see that more market research and time for design means a better, stronger product for the market. This will make sales and customer retention more robust, as well as improve the reception from critics, setting a good precedent for the new company. The fact that the founders were senior executives and experienced professionalsmay have made it more difficult for them to believe that they didnt know something about the market. But considering that they were introducing a new product, and especially from a new company, a healthy amount of humility could save the team a substantial amount of time and money by helping them make better decisions that are more in alignment with the desires of their potential customers.

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Sources:

Nimgade, Ashok,M .D.,Thomke, Stefan, IDEO Product Development, Harvard Business School, April 26th, 2007 Latendresse, Frank J. (n.d.). INDIVIDUAL AND ORGANIZATIONAL CHARACTERISTICS THAT FACILITATE AND RESTRICT BOUNDARY SPANNING OF TEAM LEADERS, Graduate School of Bowling State University, 2006. Retrieved October 13, 2010, from http://docs.google.com/viewer?a=v&q=cache:xwwm7LRo6_MJ:etd.ohiolink.edu/sendpdf.cgi/Latendresse%2520Frank.pdf%3Fbgsu1151007725+set+teams+restrict+creativity&hl=en &gl=us&pid=bl&srcid=ADGEESi_ta6IO1Wh1UROvNroeIPgVqAvAP4AzZZgQfOkJrc37v5M dc2Qo8kfw04AgnA225nvVpGzUjNte6vO49gF7ge4whN8Hk0TW1tkdzUZYKKXf1j6QswZ7EN52nZMekJgKSX88u&sig=AHIEtbQCGqO27yNBjbKV85r6K-MwFT86Jw News - Awards - IDEO.(n.d.). . Retrieved October 11, 2010, from http://www.ideo.com/news/awards/ Shim, Richard. (n.d.). Palm V to get pager functions - CNET News. Retrieved October 13, 2010, from http://news.cnet.com/Palm-V-to-get-pager-functions/2100-1040_3-273970.html

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