Ideo: the Organization and Management Innovation in a Design Firm and the Role of Alliances and Collaboration

Introduction Schumpeter (1949) wrote of the individual and collective contour of the entrepreneurial spirit the Unternehmergeist. One company that channels this geist is the Sillicon Valley, California-based construct and consultancy firm, IDEO. Founded in 1991, this self-styled mutation and envision firm balances branch and product innovations grounded in a human-centred design philosophy. Through this approach IDEO elided the pitfalls of the engine room push versus demand-led innovation dichotomy to produce products and services that feel just as good as they work.In the latest rankings IDEO was listed at no. 10 on Fast Companys Top 25 most(prenominal) Innovative Companies (2009) and no. 15 on Fortunes 100 most-favored employers by MBA students (Universum 2009). This paper attempts to analyse the principles and practices at IDEO utilize devil fabrics namely 1. the organisation and charge of innovation and research and development (R&D) and 2. strategic alliances and coa ction. The discussion on organisation and management would be foc apply primarily on innovation since R&D as a portfolio at IDEO is still emergent.As a consequence also, its alliances and collaboration strategies and activities ar described in the context of IDEO as a highly sought-after development partner. Analysis of the responses of senior origin managers to what they considered to be the top terzetto challenges of innovation management revealed that creating an innovative culture, attracting and maintaining diverse talents and finding the right balance of the additive and the radical were uppermost (Tidd and Bessant 2009).Smith (2008) identified nine key factors that impact on an organisations ability to manage innovation management style and adeptership, resources, organisational structure, corporate strategy, technology, friendship management, employees and the innovation parade. The Oslo manual defines Innovation as the implementation of a revolutionary or signifi w adtly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations. (OECD 2007). This definition encompasses the common elements of innovation as proposed by arlier authors much(prenominal) as Schumpeter, Freeman, Rothwell and Gardiner, Drucker, Porter, Schumann, Merrifield and so forth (Tidd and Bessant 2009 Innovation Zen 2006) Organisation and management of Innovation Since the introduction of creative destruction Schumpeter (1942), at that place has been a growing confidence that the basic elements of in(predicate) innovation can be distilled through and through prudent observation, and that they can be adopted and managed by firms to create and sustain competitive advantage. A issue of authors (Abernathy and Utterback 1978 Teece 1986 Henderson and Clark 1990 Tushman and Anderson 1990 Christensen 1997 etc. have proposed various bivariate frameworks for assesing p ossible innovation types (incremental, radical, modular, architectural, product, process, market, organizational, complementary, disruptive etc). See encrypt 1. Despite the variety, a basic conclusion however is that this mode of analysis can adequately inform strategic and organizational decisions and that different kinds of innovation require different kinds of organizational environments and managerial skills (Tushman and Anderson 1986). Figure 1 Component and architectural innovation (Henderson and Clark 1990) denotation Tidd and Bessant (2009)Models of the Innovation process and the dynamics of its articulating phases have been proposed by a number of authors (Myers and marquis 1969 Von Hippel 1976 Tidd et al 2001 etc. ). Tidd and Bessant (2009) detailed a linear role model with four phases (search, select, implement and capture). The authors made the note that innovation management is essentially intimately creating conditions within an organization to increase the likel ihood of a successful resolution of multiple challenges under high levels of uncertainty (Ibid, p. 70).This view reinforces Tushmans (1977) assertion that organization and management of the process is characterized by different types of decisions, coordination challenges and patterns of communication. It is important to note here that though the innovation process is commonly picture as a linear unidirectional sequence, in practice, the activities argon inherently iterative and often transcend in parallel (Rothwell 1992 Weiss 2002 and Brown 2008). Innovation and R at IDEO IDEOs approach to the organization and management of innovation and R&D can be summarized by the phrase design thinking.Tim Brown (2008), chief executive officer of IDEO, explained that it is centred on meeting peoples needs in a technologically feasible and commercially viable way. Design thinking is an example of the systemic and integrative approach to innovation highlighted in Hughes (1983) and Rothwell (199 2). The model attempts to understand the innovation challenge as a dynamic interplay of human, business and technology factors. See Figure 2. Figure 2 Designing thinking at IDEO Source adapted from Weiss 2002. IDEOs variation of the innovation process (cf.Tidd and Bessant 2009 etc. ) comprises five phases Understand the market, the users, the technology, the constraints observe people in reallife situations visualize new-to-the-world concepts and the potential users evaluate and amend the prototypes and implement for commercialization (Kelley 2001). Empathetic research, brainstorming and rapid prototyping be core routines developed in the exploit of the IDEO innovation process. Brainstorming is the idea engine of IDEOs culture.It is used to generate multiple and varied ideas or so possible solutions to the innovation challenge. A session lasting no more than sixty minutes is conducted under the chase rules defer judgment build on others ideas one conversation at a time retain on topic encourage wild ideas go for quantity be visual (Kelley 2001). Rapid Prototyping involves betimes development of a wide range of low-fidelity prototypes from which to read. Teams evolve and refine ideas, answering multiple detailed questions through rounds of successively higher-fidelity prototypes.This routine permeates the companys design practices in all spheres (Coughlan et al 2007) and is universally codified in two IDEO mantras build to learn, and fail forward (Kelley 2001). The company organizes its R&D portfolio into 19 Focus Areas supported by 13 teams as shown in defer 1. Teamwork is an imperative at IDEO. For each project a number or relevant teams would be assembled from persons within the company, or externally from persons within their talent ecosystem. The teams meet regularly to exchange in organic law on progress and to make sure each others activities remain focused and eulogistic (Hawthorne 2002).Table 2 summarizes some of the human-centred research w ork undertaken at IDEO. The popular Method separate is result of this kind of research and development work at the company. The collection of 51 cards is used to evaluate and select the empathic research methods that beaver inform specific design initiatives. How and when the methods are best used are explained together with demonstration of how they have been applied to real design projects (www. ideo. com). Table 1 IDEO Focus Areas and Teams Source Adapted from www. ideo. com Table 2 A sample of research at IDEOSource Adapted from Venkatraman 2005 The ten personas shown in Table 3 were developed by Tom Kelley for enhancing innovation at IDEO. Consideration of these personas influences the companys policy of recruitment of T-shaped people with at least one deep area of expertness and a broad reach of other skills and recognizes. (www. ideo. com). Weve found that adopting one or more of these roles can wait on teams express a different point of view and create a broader range o f innovative solutions (Kelley 2001, p. 7). Table 3 IDEOs innovation personasSource Adapted from Kelley 2001 At IDEO the shipway to Grow tool (Figure 3) is a framework used to a) identify the type of growth intended, b) scope the challenge and deploy an appropriate innovation process, and c) mensurate the effectiveness of the portfolio of innovation efforts. It identifies four possibilities for growth and three basic archetypes of innovation outcomes Incremental, evolutionary, revolutionary (Jacoby and Rodriguez 2007). Cf. Henderson and Clark 1990 etc. Figure 3 IDEOs Ways to Grow and Innovation Outcomes cf. Figure 1. Source Jacoby and Rodriguez 2007The model suggests that an incremental project requires execution-focused process and people while a revolutionary project would require exploration-focused processes and people (Jacoby and Rodriquez 2007). Ways to Grow is employed in this manner by IDEO to track, understand, and assess its in-progress portfolio of innovation projects u sing measures of innovation effectiveness. The projects can be mapped onto this tool creating a dashboard of initiatives that can be updated and referenced. All these organizational and management approaches signify little without a way of integrating them in a creative and sustainable organizational culture. acculturation is difficult to define, but for IDEO its probably the not infrequent managers informal chats with their carefully selected T-shaped employees (Brown 2007) the company-wide Monday morning meetings and Friday afternoons show and signalize the playful open layout of the workspaces decorated with individualized eccentricities (Kelley 2001) the formal and informal reward systems where some compensation decisions are based largely on reputation among fellow designers and formal peer reviews (Hargadon and Sutton 1997) or just the personal satisfaction of the team members knowing that they are part of something big and exciting and creative.Strategic Alliances and Coll aboration Gulati (1998) defines strategic alliances as voluntary arrangements between firms involving exchange, sharing, or co-development of products, technologies, or services. They can take a variety of forms, and occurring crossways vertical and horizontal boundaries. The fundamental imperative for strategic alliances and collaboration as suggested by authors like Teece (1986) is that it is extremely difficult for one company to possess all the requisite skills and competencies to implement all the phases of the innovation process.Among the motives for the formation of alliances and collaborations are reduction of cost, uncertainty, and time of R, response to changing customer and market need, lack of internal resources and association transfer (Kogut 1988, Gulati 1998 Littler 1993 in Tidd and Bessant 2009). IDEO is not a R-intensive firm, its motivations for participation in strategic alliances and collaboration are not necessarily those of an active seeker. However, IDEO ha s benefited from its role as consultant and a highly ought-after collaborator. Whats unique about IDEO is that we straddle both sides of the innovation business, as both practitioners and advisers. (Kelley 2001, p. 4). IDEOs 5000+ employees in more than 20 studios on three continents do work for clients in multiple industries across the globe. The companys website lists an astonishing diversity of products and services created in collaboration with some 300 clients in 28 different industries.Hargadon and Sutton (1997) aggregated qualitative data which indicate that IDEOs employees learn about potentially useful technologies through their extensive work and incorporate that knowledge into the creation of new products and services for industries where there is little or no prior knowledge of these technologies. This movement of technologies between industries is a form of technology transfer and diffusion (Rosenberg 1982 Hughes 1989).The company recognises the potential of its networ k position (Conway and Steward (1998) and instructs its employees in the Methodology Handbook to Look for opportunities to expand network and/or industry knowledge. (Hargadon and Sutton 1997). These integrative activities according to Hargadon and Sutton are an example of technology brokering. IDEOs brokers in effect act as technology gatekeepers as described in Allen (1977) and Rothwell (1992).IDEO is uniquely positioned to facilitate R&D-intensive firms in the completion of their innovation process through to commercialization. The companys positioning is formalize not only by its rapidly expanding client portfolio but by industry outlook. Ferguson and Taylor (2004) affirmed that galore(postnominal) innovation-focused organizations, including those with extensive R programs, are looking outside for assistance, especially in the early stages of searching for lustrous technologies and developing a vision based on working models.For established firms with strong technology-focuse d research, the services of design firms, with expertise in user knowledge, is useful in balancing exploration and exploitation of their technical knowledge (Venkatraman 2005). Eastman Chemical, HP, Intel, P and Samsung initially sought IDEO as an exploration alliance partner. P have extended the collaboration to joint product development with product ideas mainly generated by IDEO (Ventkatraman 2005).As IDEO continues to deliver award winsome products and services to clients firms along the entire value chain it may soon have to think about if and how it should reposition itself for example mass production and marketing of high quality innovative consumer goods. Issues like these lead to considerations about the possible alternative opportunities available for leveraging a companys resources, position and linkages to create sustainable value.In the light of global challenges such as poverty, health, water, energy, and economic empowerment what is the role of innovation and researc h and their management and what sort of alliances and collaboration would be needed to deliver adequate responses? What is the future of social entrepreneurship? To deepen brain of these challenging questions, Paul Bennett, chief creative officer at IDEO, visited Nobel Laureate Muhammad Yunus of Grameen Bank fame to get an immersive experience of this maturing entrepreneurial spirit.Reflecting on his encounter in the Financial Times Bennett (2009) asserted that sustainability and growth for the organisations of the future demands judge responsibility for the bank accounts of purpose, people and learning. Bennett summarizes his own thinking with a quote from one of his clients The future isnt termination to be designed on an Excel spreadsheet. Whatever new tools emerge for future planning, its not dangerous to imagine that some of those would emerge from the studios of IDEO.