Entrepreneurial Thinking Within a Company - IDEO
Entrepreneurship and innovation are often used interchangeably, or within the same sentence, or breath, but usually regarding business start ups and new ventures. However, one innovative, established company, IDEO, believes that every new project and every product it designs is a new business venture.
Considered by many to be the world’s number one product development and design consulting company, IDEO built the company based on the scientific research uncovering principles of business innovation and creativity. It assimilated the best creative discoveries and thoughts from psychology, engineering, business, the neurosciences, and the arts.
The foundation for this company’s ideology came from IDEO founder David Kelley who studied creativity and product design at Stanford under renowned creativity researcher and engineering professor Bob McKim.
Founded in 1991, IDEO began with a singular mindset: to combine innovation, human values, and aesthetic concerns to create the most user-friendly products on the market. From its inception, it focused exclusively on product design, attempting to uncover how users interact with, use, and appreciate the design and mechanics of products. It has designed highly technical medical equipment, ski goggles, the 25 foot mechanical whale in the movie Free Willy, Apple’s first mouse, Microsoft’s second mouse, and Steelcase’s Leap chair, among hundreds of others.
Stated in terms using today’s buzzwords, IDEO is a “design-oriented” firm, but not because it actually works on designing products and services but because the firm places design as its first, principal strategy. Nearly every company trying to survive in the today’s highly competitive markets now states that design – user-defined design – is as a top priority.
At first this might seem ridiculous. What company that produces products and services isn’t concerned with design? But consider how many products consumers buy and complain about in some way – something is overlooked, from positioning a steering wheel over the speedometer, to websites that are nearly impossible to navigate. Up until recently, most companies seemed to relegate design to the insular cubicles of few idiosyncratic “creative-types.”
If anything positive came from the latest economic downturn, it was the shift to a focus more on product design – and innovation. In 2010, 83% of those surveyed in the Bloomberg/BusinessWeek/Boston Consulting Group (BCG) annual survey of top executives placed innovation as an important strategic initiative to help their companies to recover from the economic downturn of the previous decade.
More specifically, the survey noted that 72% of companies see innovation as one their top three strategic priorities, and 61% said that their companies will increase spending on innovation.
Design has become so important, in fact, that business schools across the world are partnering with other academic disciplines, such as art and psychology, to offer design-focused graduate degrees. But the stress on design does not mean that business students must become graphic or industrial designers. The emphasis placed on design means that companies must become more innovative, learning more about how people act and behave, and what they desire – before they even know that they desire it.
IDEO hires individuals not with expertise in specific products but with expertise in a wide variety of areas – all focused on how humans behave, interact, think, and function in today’s world. Teams consist of psychologists, anthropologists, engineers, biologists, designers, marketing specialists, and human factors experts, among others. IDEO teaches these professionals how to follow a design process, putting them together on teams to gather as many fresh ideas – ideas that often clash – in an open-minded and loosely structured environment.
In short, IDEO maintains an entrepreneurial culture within its own large business structure. Based in Palo Alto, Calif., the company has branches in San Francisco, Chicago, New York, Boston, London, Munich, and Shanghai.
Those studying and researching today’s highly competitive global markets maintain that it’s entrepreneurial business models such as IDEOs that will keep companies profitable in their core business, as well as help them grow in new businesses.
In fact, looking back to Schumpeter’s definition of entrepreneurship developed in 1934(see box Schumpeter’s Definition of Entrepreneurship), entrepreneurship does not apply exclusively to start ups. Even 80 years ago, this economist didn’t differentiate among the types of businesses that produce entrepreneurial thinking. He realized that entrepreneurship refers to the innovative production of new products and services – or new resource combinations- which takes place in any environment.
So how do companies like IDEO innovate? And how can other companies learn from this company’s creative process?
“Deep Dive” is one IDEO strategy that other companies now employ. It’s a team approach toward innovation, involving an interdisciplinary group of individuals.
The company exemplified Deep Dive on ABC’s Nightline when employees demonstrated how they would work together to redesign a shopping cart. The team consisted of a psychologist, a marketing expert, a Harvard MBA, a linguist, an engineer, and a biology major who put off medical school to work at IDEO.
Over the course of five days, the team worked together to brainstorm ideas, prototype their designs, and from those ideas pick one superior idea. They split into groups and went out and talked to experts on the carts, or those who use, make, and repair the carts. One group spent hours in a store observing people interact with the carts. Through this type of fieldwork – actual, real-life observation - the team gathers more information, faster, than if they were to sit in an office trying to figure it out individually. They then return to the office, sharing what they learned about shopping carts.
As they work, the team has IDEO’s guidelines for brainstorming plastered in large, printed type across the wall:
- One conversation at a time
- Stay focused
- Encourage wild ideas
- Defer judgment
- Build on the ideas of others
They post their ideas on a wall, building on each other’s thoughts, pulling back when necessary, even getting a bit chaotic. It’s not overly organized for a reason – the company believes that chaos has a purpose. IDEO founder David Kelley calls the process “messy,” as well as chaotic. But that’s okay.
Creativity, as most experts confirm, does not happen in a linear, organized manner. The very nature of creative, divergent thought requires this period of uncomfortable uncertainty, a period that doesn’t seem as if a solution will arrive.
However, Kelley states that time constraints are imposed to impose a framework around the process, otherwise the brainstorming could go on forever.
Four of the best ideas are then made into prototypes, another key innovative strategy at IDEO. Whereas other consultants and design firms put pencil to paper, drawing out ideas and strategies, IDEO designers build 3-D prototypes.
The company believes that a picture simply doesn’t provide the customer with the “experience” of using the product.
From the four shopping cart prototypes, the team pulls out the best qualities of each, combining them into one final prototype. They take the final product to a grocery store to ask employees and customers what they think, gathering more information for final tweaks and finishing touches.
In the end, an amazing shopping cart results. And then the team moves on to its next, innovatively challenging project.
If you are interested in working for organizations that require creativity, innovative thinking, and knowledge of human behavior and cognition, you should consider a degree in psychology. Schools now offer classes, degrees, and certificates in the psychology of creativity (see Psychology of Creativity). For more information, contact schools offering degrees in creativity and psychology.