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How Design Becomes Strategic

Birgit Helene Jevnaker, Associate Professor of Industrial Development, Norwegian School of Management BI, Department for Innovation and Economic Organization

This article was first published in Design Management Journal Vol. 11, No. 1

Suffusing Design Throughout the Organization

Copyright Winter 2000 by the Design Management Institute. All rights reserved. No part of this publication may be reproduced in any form without written permission. To place an order or receive photocopy permission (617) 338-6380 x223 Tel (617) 338-6570 FAX E-mail: dmistaff@dmi.org

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EDITOR 'S NOTES Managing Design as the Way to Do Business Thomas Walton, Editor, Design Management Journal KEYNOTE ARTICLE Design as Advantage No. 1: The Design + Identity50 Tom Peters, Founder, The Tom Peters Group THE EXECUTIVE PERSPECTIVE Redesigning the UK Andrew Summers, Chief Executive, British Design Council Suffusing the Organization with Design Consciousness Stefano Marzano, Managing Director, Philips Design CASE STUDY From Desktop Publishing to Knowledge Management Kate Horne, Former Manager, Corporate Identity and Design Systems, EDS STRATEGY Living the Brand Dave Allen, Chief Executive Officer, Corporate Branding, Enterprise IG How Design Becomes Strategic Birgit Helene Jevnaker, Associate Professor of Industrial Development, Norwegian School of Management BI DEVELOPMENT Beyond Stewardship to Brand Infusion, Inc. Karl D. Speak, Principal/Founder, Beyond Marketing Thought, Inc. Design Leadership at Herman Miller Deanne Beckwith, Global Services Program Manager, Herman Miller Business Services Group PRODUCTION Strategic Realization: Building Fundamental Design Values Tom Hardy, Design Strategist Kook Hyun Chung, Executive Design Director, Samsung Electronics Co. Ltd. Shin T. So, Senior Manager, Corporate Design Planning, Samsung Electronics Co. Ltd. MARKETING Beyond the Corporate Sphere Roger Sametz, President/Founder, Sametz Blackstone Associates SUPPORT Sailing the Seven Cs: Or How to Enlighten an Organization Without Losing All Your Friends Alison Rieple, Director, Graduate CentreHarrow Business School, University of Westminster, UK 00111RIE84 00111SAM70 00111HAR65 00111BEC54 00111SPE48 00111JEV41 00111ALL35 00111HOR28 00111MAR22 00111SUM18 00111PET10 00111WAL06

STRATEGY

How Design Becomes Strategic

XTRAPOLATING from detailed case studies, Birgit Jevnaker describes three approaches to managing assets that allow organizations to leverage design resources more effectively. First, executives should integrate competencies in a dynamic, rather than a linear, fashion. Second, they should nurture talent-rich design/business relationships and a broad range of external and internal multidisciplinary networking. Third, building on what is ideally a creative mix of talents and content, they should emphasize the modeling of design experiences capturing value from business/design opportunities.

By Birgit Helene Jevnaker

For some time, I have wondered what it takes to create and sustain a dynamic design capability in a real-life corporate landscape. One challenge, as we know, is that management and designers typically come from different schools of thought, and the resulting design/business knowledge gap tends to persist in practice. Yet particular firms become design-aware. Who or what can facilitate this process? I have chosen two design-conscious manufacturing companies from my research to illustrate some of my ideas about how design-capable firms accumulate a hidden treasure of creative competencies, alliances, and experiences that have suffused their companies with design in a beneficial and, sometimes, even poetic way. TOMRAHelping the World Recycle Around the world, environmentally conscious legislators are passing legislation requiring that retailers take back empty beverage containers and refund the deposit to the consumer. This means that supermarkets, for instance, need to sort the refillable containers by brand so that the beverage distributor can pick them up; they must also sort the one-way containers by material type (glass, plastic, aluminum) to facilitate further recycling. Before TOMRA introduced its first vending machines in 1972, retailers had to handle such a system manually. This Norwegian high-tech recycling company now operates on three continents via its international organization and networks of distributors

BIRGIT HELENE JEVNAKER, ASSOCIATE PROFESSOR OF INDUSTRIAL

DEVELOPMENT,

NORWEGIAN SCHOOL
OF

MANAGEMENT BI,

DEPARTMENT FOR INNOVATION AND ECONOMIC ORGANIZATION

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and is an international market leader in its niche. Behind its success is a persistent struggle to improve its vending machines and service system to dispose of empty containers faster and more conveniently.1 In the years 1993 to 96, TOMRA was responsible for close to 90 percent of all new installations in the US market, bringing its market share up from 30 percent in 1993 to 70 percent by the end of 1996. Recently, the firm was listed among the worlds 200 most environmentally friendly firms. TOMRA was ranked at the top of its industry for pollution control and waste handling.2 Lessons. Behind this companys profitable growth, we may trace a unique combination of dynamic capabilities that have helped seize and capture value from new opportunities. The cornerstone of this companys success has been a particular interest in knowing its customers everyday needs in returning their empty beverage containers, combined with an unconventional attitude toward finding innovative solutions. TOMRA continues to invest in R&D, as well as give ear to suppliers, research alliances, international partners and, of course, their customers. Petter and Tore Planke, the brothers who identified a market for a more convenient recycling process, invented the reverse vending machine, and started TOMRA, had the personal capacities and willingness to recruit talented people within and beyond their own professions (one brother was an economist, the other an engineer). TOMRA has built a solid engineering and design capability by recruiting the best available talent. The brothers began to investigate industrial designers after they found that Tore Plankes first vending machine needed some refinements. While working with a professional design firm, TOMRAs founding brothers were introduced to Roy Tandberg, a talented industrial designer educated at Los Angeless Art Center. Although he was willing to take on the TOMRA job, the brothers foresaw that someone like Tandberg would soon look beyond the walls of the design firm he worked for to establish his own business. Their solution was to encourage Tandberg to set up his

own design business and take on commissions for other firms (albeit not rival ones) from his office within TOMRA. The arrangement has brought the company a perhaps unexpected benefitTandbergs work with other clients has educated him about using, for instance, new materials for TOMRA machines. Industrial design is now an integral part of nearly every product development project at TOMRA; and, incidentally, TOMRAs design solution anticipated trends in internal design departments by nearly 20 years. Design-explorative networking may be essential for coming up with new and better solutions. Tandberg, for instance, sometimes teamed up with human-factors experts and often collaborated with an R&D manager skilled in recognition technology. This small design/R&D team videotaped new users interacting with TOMRA machines in the US and Europe, and shared the tapes with TOMRAs product development department. As most designers know, being the sole industrial designer among engineers can be challenging; one issue, for instance, is making sure that design is integrated early enough into R&D. In TOMRAs culture, however, design is considered part of corporate and market strategy. Design and design
1. As often happens with new businesses in embryonic markets, the company, after its initial success, met with serious difficulties, particularly in the US market. TOMRA later created a second profitable market space by launching its expanded service concept, which involved pick-up of containers, material handling/ processing, and advanced administrative services. 2. G. Kagge, Aftenposten (newspaper), quoting the Dow Jones Sustainability Group Index, October 11, 1999.

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solutions have been discussed and explained by the top management group, as well as within development teams. Recently, Tandberg designed a horizontal mode of feeding containers into the vending machine, which became an instant and highly visible success in the domestic and international market. This helped design awareness to be further suffused within this pioneering company. Although it takes a team, as Jim Stewart of Microsoft has said,3 industrial design can be appreciated over time as a cospecialized asset. It is also worth noting that spillover of knowledge from one project to another is facilitated even in the midst of shifting project leaders and teams. HGRefurnishing the World HG maintains that people are not made for sitting still. Theyre really designed for hunting, walking, running, and other activities. Yet most of us participate in a daily sitting marathon, especially at work. The challenge for manufacturers of office furniture, like HG, is to make chairs more fit for humansmore movable. At HG, this type of design thinking emerged during the mid-1970s, partly by serendipity and partly through a deliberate search for new ideas.4 Most critical for putting the new ideas on the corporate agenda and making them strategic was the development of a working relationship between an entrepreneurial middle manager, Torgeir Mjr Grimsrud (who later became CEO), and a particularly creative designer. The process was not without difficulties. For example, when this young designer had just finished his first design for HGa redesign of one of the companys office chairsthe then-CEO nearly succeeded in sending him home with a handshake, since he had finished. The new marketing manager, however, disagreed. This was merely a beginning, he insisted, and thus the relationship with this young designer, Peter Opsvik, was not discontinued but instead strengthened. Opsvik went on to design a whole range of products for HG and is today recognized as a leader in furniture design. At the time of that first design for HG, he had already designed the first ergonomic childrens chair in the world (the Tripp Trapp) and was generally inspired by ergonomic thinking as a fundamental concern in chair making. At HG, Opsvik met physiotherapists

and benefited from their ergonomic expertise. Moreover, both Opsvik and HG collaborated with a loosely coupled creative group of one inventor and two other furniture designers. This initially autonomous design group developed radically new prototypes within a new concept of posture and sitting that they called Balans, referring to, for instance, the active sitting posture one assumes when one is riding a horse. Their innovative models were adopted by HG and two other manufacturers, though the idea originally met with much skepticism.5 HG absorbed the concept of active sitting and made it part of its organizational culture, communicating a consistent message that the world needs to be refurnished with more ergonomic seating. From a point of near-bankruptcy in the early 1970s, HG has achieved considerable growth and is currently the leading manufacturer of chairs in Scandinavia and one of the top 10 in Europe. Although it is a small corporation in international terms, it has managed to be highly competitive in its markets and sustain a creative company profile. An indicator of continuous innovation is the fact that new product designs have been awarded repeatedly to HG. Lessons. HGs success is the result of a range of initiatives spurred by a proactive and entrepreneurial manager, who has been critical in championing creative design. His ability to recruit new expertise, as well as maintain the social glue of the whole firm is also worth noting. HG also benefits from several organized processes that are important for its continued renewal; the firm invests in both innovation and continuous

product creation is inspired and backed by the companys dynamic philosophy on movement and variation while seated

3. Jim Stewart, Some Things Never Change: It Takes a Team, Design Management Journal, Summer 1999, p. 3. 4. Historically, ergonomic chair design has been more or less neglected by the furniture-making industry; see P. Sparke, Furniture: 20th Century Design (London: Bell and Hyman, 1986). 5. B. Jevnaker, Inaugurative Learning: Adapting a New Design Approach, Design Studies, 14 (4), 1993, pp. 379-401.

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improvement. The companys product development director has also installed a debriefing procedure as a post-mortem routine to learn from product design and development projects. Moreover, product creation is inspired and backed by the companys dynamic philosophy on movement and variation while seated, and this is brought consistently forward in corporate communications, which emphasize the companys guiding vision or ethos (rather than mere image-building). When tracking this furniture-makers long-term relationship with designers, I noticed a persuasive and frequent involvement of its stakeholders in the consideration of product designs. This inaugurative learning also encompassed the more-general thinking behind the new design concepts. Designers and managers did not just inform people of new design insights or specific product models; they submitted design ideas to multiple stakeholders with a reminder of the companys ethos and the addition of thought-provoking visualizations throughout a range of design-focused learning activities. Many of these communications included some lively metaphor to illustrate a product idea. For example, management and designers presented designs, along with illustrations, of the seated human throughout historyon a horse, a bicycle, and so on. Similar lively communication and learning practices could be observed within HGs corporate academy. The company cultivates unusual educational events, as well as more-routine communication tools, to raise knowledge and understanding among its networks of dealers, physiotherapists, workplace experts, and students of physiotherapy. This suggests that design can create or expand original thinking about business opportunities, as well as synthesize and transform this thinking with the kinds of metaphors described earlier. These design-based symbols are incorporated into corporate communications and

inscribed in rituals and procedures for future use. In companies in which design is used as a last-minute or short-term service, these learning opportunities may not be explored. Increasing Returns of Suffusing Design Searching my notes on TOMRA and HG for answers to the question of what it takes to suffuse a company with design, I have found three important elements present in both firms. 1. Integration of competencies as a dynamic, rather than a linear, process 2. Relationship building 3. Repeated investments in creative design opportunities When these elements combine, they increase the probability of a new and beneficial dynamican uncovering of the hidden treasures waiting for companies that use strategic design.
INTEGRATION OF COMPETENCIES

Both TOMRA and HG have benefited from the ability to sense and seize opportunities via a skillful design approach. These opportunities relate closely to everyday needs that were previously neglected. New design thinking helped to see these challenges from an empathic perspective that is still rare in industry, and disciplined imagination and a consistent creative drive crafted novel solutions. In these companies, design is a personalized business, even in a world of teams. Supportive coaching, as well as design championing,6 can be a silent and secret business in product and business development processes. However, design can also be exploited through the strategic communication to customers and other stakeholders of corporate philosophy as it relates to products. Championing design can be a living and fascinating process, rather than a single event; in this way, it also integrates design expertise into corporate processes. Even though modeling, prototypes, and simulations have long been used in design and manufacturing, the interaction
6. B. Jevnaker, Championing Design: Perspectives on Design Capabilities, research paper presented at DMIs 9th International Forum on Design Research and Education, Pratt Institute, New York, June 1999.

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opportunities to be gleaned from using them are not fully explored by most companies, according to MITs Michael Schrage.7 Actionable insights may be gained when we learn to appreciate how firms can better manage innovation by better managing prototypesfor example, by proceeding more rapidly into lots of quick-and-dirty (and less costly) prototyping. This process may, more often than not, discover good solutions faster and with better use of talent and imagination from stakeholders. At both TOMRA and HG, managers have emerged as ambassadors for a qualified design approach in multiple business arenas. Designers are also persistently trying to move design toward more-strategic innovations. These combined efforts to seize opportunities via design can lead to unforeseen positive consequencesa renewal, or a strategy stretch. As illuminated at HG, new design-influenced thinking can even create a new corporate raison dtre. At least in these two companies, the value of this escalating design dynamic increases, rather than diminishes, over time.
TALENT-RICH DESIGN/BUSINESS RELATIONSHIPS

Both of these companies tend to mobilize the best expertise available, wherever it is; they establish constructive alliances and networks. Long-term alliances emerge and are deliberately retained in the complex field of industrial design. Designers Opsvik and Tandberg began with their core clients in the early 1970s and 1980s, respectively. A longterm arrangement was beneficial, since both TOMRA and HG needed to build on previous knowledge and experience if they wished to climb the quality ladder rather than merely adopt new product ideas. Yet it is striking that both firms searched for design-relevant knowledge and expertise in multiple settings within and beyond the firms boundaries. This combined approach may help to sustain dynamic capabilities; design alliances were crucial to keep new knowledge flowing into the companies core products.
CONSTRUCTIVE DESIGN EXPERIENCE

need for richeven tension-richcommunications also emerged as a significant aspect of design/business working relationships. Warring ideas may bring about entirely new perspectives. At HG and TOMRA, creative design was initially protected by individuals rather than part of a formal plan. Over time, a kind of perpetual and expanded design dialogue emerged as part of these companies development processesdriving product innovation, an improved user interface, a better message, or a more attractive service environment. I found that management and designers tended to acknowledge each others expertise even when perspectives or knowledge were not fully shared. This mutual acknowledgment seemed to be highly significant for allowing creative friction while designing, which may enhance the type of frame-breaking learning typical of what Michael Schrage calls prototyping cultures. Becoming Strategic From ethnographic research on engineering design teams,9 we know that their design conversations involve social assumptions and beliefs underlying the social construction of meaning, intertwined with technical design development. Based on companies I have investigated,10 I suggest that strategic prototyping may be facilitated by an enhanced appreciation of the way in which
7. Source: speeches at the Norwegian School of Management BI, Oslo, September 1999. Michael Schrages view is more fully presented in his new book, Serious Play: How the Worlds Best Companies Simulate to Innovate (Boston, MA: Harvard Business School Press, 1999). 8. B. Jevnaker, Absorbing or Creating Design Ability, in M. Bruce and B. Jevnaker (eds.), Management of Design Alliances (Chichester, England: Wiley, 1998), pp. 107-135. 9. See, for example, L. Bucciarelli, Designing Engineers (Cambridge, MA: MIT Press, 1994). 10. Bruce and Jevnaker, op. cit.

strategic prototyping may be facilitated by an enhanced appreciation of the way in which dynamic design actually unfolds, rather than through conventional strategic ideals

In HG and TOMRA and other cases,8 several corporate managers were involved or immersed in creative conversations relating to product design. A certain intensity and

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dynamic design actually unfolds, rather than through conventional strategic ideals. In the two companies presented here, a creative interplay among designers, entrepreneurial managers, coaching engineers, and top management teams tended to foster more-imaginative thinking, not merely sensing but also exploiting new opportunities. Over time, this can lead to the kinds of highly successful commercial outcomes demonstrated by TOMRA and HG. Perhaps the creative efforts achieved by the fusion of design and business start a chain reaction that affects corporate design, as well as business development and, eventually, corporate strategy. Whatever the right analogy, corporate design and design alliances may become strategic in multiple ways over time. Indeed, this seems to be a perpetual process at TOMRA and HG. DesignA Hidden but Visible Treasure Corporate design capability, design/business relationships, and constructive design experiences should not be fostered in isolation or for the short term only. They should be combined or blended in multidimensional processes involving champions and skeptics, core researchers and developers, marketing managers, and customers. The spirit, intelligence, and knowledge that can emerge from this lively process triggers a new set of potential strategic responses and illuminates design as a strategic force, as illustrated in the chart below. In essence, combining talents in rapid prototyping and other shared processes can create a beneficial dynamic among the three elements Ive described earlier, transforming corporate design and revitalizing the

company. At best, this dynamic tends to mobilize the strengths (and weaknesses) of existing core resources/capabilities and send fresh flows of knowledge and ideas through alliances and networks. It is worth noting that design is typically suffused as an embedded part of design-creation or product-communication. In my research on design/business alliances, Ive begun to call this collaborative work-experience and knowledge accumulation a hidden treasure,11 because it accumulates into an experience bank of potentially high value. The hidden design treasure tends to be embodied in knowledgeable persons or in relationships and networking. Innovative design assets are also accumulated, cultivated, and made visible, albeit not fully codified, in brands and memorable offerings that design customer experiences. This process of suffusing design is stimulated by creative friction and personal drives, as well as through ongoing working experiments and relationships backstage, which are themselves fostered by the companys enhanced ability to enable constructive design development. Relevance for International Design Suffusion: The Case of IDEO The international relevance of this broader strategic design perspective can be illustrated by a brief visit to the American product development firm IDEO, which offers an intensive and interdisciplinary capacity in what the firm calls applied innovation. This design firm, established in multiple settings, including Palo Alto and London, is already
11. Bruce and Jevnaker, ibid.

Strategic Design Perspectives and Associated Strategic Responses Strategic Design Perspectives Dynamic capability perspective Tend to Focus On Internal resources and capabilities External relationships Material and social construction Prescription New Structures for Design The strategic core of the firm Strategic Response Building firm design capability, integrate design Alliancing as capability

Build and internalize design expertise, if valuable and rare

Relational perspective

Source and sustain alliances, if valuable and strategic Make small-scale experiments continuously and engage in sense-making within social networks

The extended enterprise The imaginative value-shop and beyond

Constructive industrial design perspective

Creative transforming in suitable time-space

B. Jevnaker, 1999

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exploiting a rich multidimensional strategy approach in its search for improved product knowledge, distinctive designs, and interactive relationships with clients. Serious fun is also essential; IDEO designers tend to keep a lot of toys on their desks. During a recent visit (July 99), I learned a bit about how the firms designers search for new opportunities and untried combinations. One method involves a tech-box of new materials, the content of which can be physically or digitally searched as an innovation tool. IDEO has also developed a focused interaction process called deep dive to come up with new and better ideas and prototypes faster. Business firms ally with IDEO to expand or extend their creative capacity. Clients are trained to foster creative behavior through a repertoire of various process-oriented enablersfor instance, brainstorming sessions. Far from being simply an attempt for companies to learn about or from design, the IDEO approach depends on a creative learning environment and emphasizes the often-neglected people side of innovation. Interestingly, at both HG and IDEO, designed innovation is part of a broad philosophy that complements a powerful, indeed pioneering, mission of design-in-business. Conclusion and Implications The above findings on the dynamics of design can expand recent thinking in design and strategic management. Yet this applied strategy perspective is not meant as a final vocabulary. More multidimensional ways of seeing are recommended and may help management and designers to nurture design awareness as a part of constructive action. The existing models of design management are often concerned with how design successfully fits with corporate strategy. Grounded in the observations Ive described, we may appreciate the increasing returns of a vivid design-and-business dynamic. In fact, leveraging design, more often than not, includes show and tell, engaged talking (aloud, or in an inner dialogue), creative arguing, envisioning, and other means of raising awareness, and it is an intimate part of an imaginative and genuine design collaboration. Also, it is worth noting

that pioneering firms extend their guiding visions by staging a design-sensitive experiential communication with multiple partner and customer networks. The cases of TOMRA and HG indicate that there are ways firms can build a dynamic design capability intertwined with an enhanced appreciation of design. Although it takes time and much effort, it is possible to suffuse a company with the values of design through collaborative experience and shared cultural beliefs. Through this process of making new designs more valuable and meaningful, increasing returns may be experienced. Innovations vary widely, yet insights into companies such as TOMRA, HG, and IDEO illuminate that designers and design champions in business can pick up signals about potential or already-felt needs and construct new meanings by involving themselvesand othersin a timely and sometimes poetic fashion. And designing with a smile might help! (Reprint #00111JEV41) Acknowledgment Research support from the Research Council of Norway (FAKTA and Productivity 2005/IPU programs) is gratefully acknowledged. Thanks also to the Norwegian Design Council and the Ministry of Industry for previous financial support. Suggested Readings Dyer, J.H. and Singh, H. The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage. The Academy of Management Review, Vol. 23, No. 4, 1998, pp. 660-679. Hirschberg, J. The Creative Priority. New York: Harper Collins, 1998. Teece, D. Capturing Value from Knowledge Assets: The new economy, markets for know-how, and intangible assets. California Management Review, Vol. 40, No. 3, 1998, pp. 55-79. Bruce, M. and Jevnaker, B.H. Management of Design Alliances: Sustaining Competitive Advantage. Chichester, New York: Wiley, 1998.

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