Marketing: the idea factory
The company IDEO popularized human-centered design thinking. Way to create a better product, way to sell more of a product or both? From The Globe and Mail’s Report on Business, April 25, 2008:
By CHRIS NUTTALL-SMITH
Take a moment and look down at your shoes. Gaze, if you can, past the last of winter’s salt stains and through the polish that seems to dull just seconds after you rub it in. Can you remember buying them? If so, you probably don’t reflect back on the experience fondly. That’s because the system by which customers buy shoes is flawed, broken, as unpleasant as visiting the dentist.
This is exactly what Minneapolis-based private equity investment firm Goldner Hawn realized in 2006, after it purchased Allen Edmonds, the venerable, if somewhat tired, maker of business shoes. Goldner Hawn wanted to expand Allen Edmonds’s customer base beyond the 50-plus and pinstripes set; it wanted somebody who could solve the company’s problems and discover the opportunities they couldn’t see themselves. So Goldner Hawn turned to IDEO, a California-based design firm that’s gained bona fide rock-star status on Wall Street in recent years.
The idea wasn’t to scrap 85 years of history. “The brand was good,” says IDEO’s Bryan Walker, the 30-year-old social anthropology (Oxford) and human factors (Cornell) specialist who was put in charge of the account. “But it wasn’t connecting enough with new consumers.” And where other shoe companies (and shoppers) saw only the status quo, both IDEO and Goldner Hawn saw an opportunity. “We knew that there had been no real innovation in the way men’s shoes are retailed for at least 100 years,” says Mike Sweeney, Goldner Hawn’s managing partner. “I can’t think of another business that hasn’t had meaningful innovation in 100 years and has survived.”
Touring through the cluster of low-rise stucco buildings that make up IDEO’s Palo Alto campus, it’s hard to shake the sense you’re moving through one giant trophy case. Just inside the glass-fronted lobby sits a display model of Steelcase’s Leap (see 1 below), the bestselling task chair that won a much coveted Red Dot design award when it was launched eight years ago. Not far from that, a showcase enshrines the design evolution of another company triumph, the supersvelte housing for the Palm V personal organizer (2). A coaster bike (3) rests in the centre of the campus’s verdant courtyard, and at the entrance to IDEO’s machine shop, there’s a poster featuring an early mock-up of the popular Swiffer CarpetFlick (4), an IDEO creation that’s affectionately called “the Shagolator.” Even in CEO Tim Brown’s office, cans of Pringles Prints potato chips (5) and Oral-B Gripper toothbrushes (6) line the bookshelves.
The point of all this is not that it’s merely IDEO’s hall of fame, but that it’s also a hall of fame for our own households. Whether you realize it or not, IDEO’s work-from the first production computer mouse and first notebook computer to the cockpit and cabin of the Eclipse 500 corporate jet-is already a part of your (or, in the case of the jet, your CEO’s) daily life.
The company’s been around in one form or another since the early 1970s, but IDEO only broke into prime time in 1997, when ABC’s Nightline asked the team to reinvent the shopping cart in just five days. “We’re not actually experts in any given area,” co-founder David Kelley told the show. “We’re experts in how you design stuff. So we don’t care if you bring us a toothbrush, a toothpaste tube, a tractor, a space shuttle, a chair. It’s all the same to us-we want to figure out how to innovate by using our process.”
Since then, IDEO has done rethinks for dozens of organizations. Missouri’s DePaul Health Center asked the company to help refine its patient experience. For HBO, IDEO took on a project to consider the future of television. And through a commission from the Bank of America, the company created the bank’s “Keep the Change” program, which rounds up everyday transactions on debit cards and transfers the difference to customers’ savings accounts. (That program attracted 2.5 million customers and 700,000 new chequing accounts in its first year.)
What IDEO has done is to popularize a movement toward “human-centred design thinking.” Along with this, it has introduced a slightly wacky, though much emulated, process for innovation that’s pure gold to organizations in need of a creative advantage. With offices around the globe and $100 million (U.S.) in revenue last year, IDEO has shown that you don’t need to count on luck or even genius for real breakthroughs. What you need is solid anthropology-human “empathy,” if you want to get picky about it-and process. The right process, the company is betting, can solve any problem, from inventing the next Shagolator to fixing pressing social issues to-in the case of Allen Edmonds-remaking the way Wall Street buys its shoes.
Henry Ford’s “If I had asked my customers what they wanted, they would have said a faster horse” line is gospel around IDEO. So, rather than sending out surveys to Allen Edmonds’s customers or holding the usual worthless focus groups, Walker and his colleagues spent time with 25 men, “digging through their closets.” Some of the men loved the Allen Edmonds brand; others owned a pair, but admitted they were a gift and had never been worn. Walker’s team interviewed a fashionisto in London whose favourite shoes were a pair of gold-coloured Paul Smiths that caused blisters every time he wore them. Then there was the building superintendent in San Francisco who wore nothing but shin-high snow boots year-round. “Sometimes you need to find out who your customer is not so you can understand who he is,” says Walker.
Looking to companies that had broadened markets for familiar products, the team visited a Manhattan rice-pudding business called Rice to Riches. They spent time at competing shoe retailers and at Allen Edmonds’s own stores, compiling “bug lists” of what wasn’t working. Soon, they began to see problems that were so endemic to the shoe-buying experience that most people took them for granted.
“Right now, you meet a shoe salesman, and you begin to establish a relationship, and then they’re off,” Walker explains. “You sit there for five minutes and you’re like, ‘What is taking this person so long?’ They come back and, sure enough, they don’t have your pair of shoes, but they have a more expensive pair, so you’re skeptical of them.” Most often, shoes are displayed on the shop’s walls, so a customer can’t look at both the product and the salesperson. Try-on areas are cluttered, and the seating-if any-is usually located in high-traffic areas. The list goes on. In the case of Allen Edmonds, IDEO found that the firm wasn’t capitalizing on its unique customer-care and lifetime-resoling program, which effectively means an Allen Edmonds shoe will last forever.
The team kicked off a series of brainstorming sessions that brought materials specialists, anthropologists, branding pros, architects and interactions designers into one hypercharged room. Corporate hierarchy doesn’t exist in IDEO “brainstormers,” as they’re called, and the sessions rarely last more than 60 minutes. They’re always focused on a single question, such as: “How can we forefront the equities of the Allen Edmonds brand?” The wilder the idea, the better (a few of the ideas that didn’t make it: a live video “portal” from each Allen Edmonds store into the company’s factory in Port Washington, Wisconsin; and an origami-like shoebox that, with a few simple folds, transforms into a pedestal where customers can display their choices). The unfettered tone of these sessions, the company believes, often leads to real breakthroughs.
After narrowing down the ideas, the team began prototyping promising options. Store models were built from plywood and Styrofoam blocks. Staff glued paper labels into Allen Edmonds’s shoes and acted out role-playing sequences to help refine possible new service interactions. The result was a template for the company’s new outlets-one that went way beyond the usual marketing-driven makeover. Some highlights: a brushed-metal, reflective, shoe-level facing on the company’s storefronts, so passersby can see their own (probably outdated) shoes as they walk by; recessed seating, complete with a ledge for laying out possible selections (an idea that sprang from the origami shoebox proposal) and a place to tuck boxes out of sight; inventory walls that save salespeople from having to run to a storage room; sample pant cuffs suspended from dowels, allowing customers to compare colour combinations; a dedicated space near the front of the store for recrafted shoes, so customers are reminded of Allen Edmonds’s unique service; and finally, a direct (albeit non-video) link to the shoe’s makers via a new labelling system inside each shoe that identifies the size, model, when it was made, and who in the factory was responsible for it.
“A lot of their ideas were kind of the obvious, ‘Why didn’t I think of that?’ ones,” says Sweeney. “That’s what they specialize in.” So far, Goldner Hawn has opened six new stores using IDEO’s template (with a few adjustments) and plans to open six to 10 more each year. And it has hired the company to revamp Wilsons Leather, a 400-store chain the fund invested in a year ago.
In spite of its Wall Street following, IDEO wasn’t the first company to incorporate anthropology and direct, in-depth user observation into its work. Xerox’s research centre, also in Palo Alto, brought an anthropologist on staff almost 30 years ago, and Doblin Inc., a design-focused innovation and strategy consultancy (clients include Microsoft, Citigroup, McDonald’s and Pfizer), hired a sociologist from the University of Chicago in the late ’80s. But IDEO has taken the promise of design thinking and written it large; the company’s multidisciplinary staff of 500 is three or four times bigger than those of most competing design consultancies, so it’s quickly become corporate America’s go-to firm. And one of the company’s emerging specialties-solving what CEO Tim Brown calls “social impact problems”-promises to make the IDEO juggernaut even stronger. The company recently took on five separate projects for the Rockefeller Foundation, mostly revolving around poverty issues in the developing world. For the American Red Cross, it’s trying to boost blood donations from young people; and an IDEO team has recently begun working with the Centers for Disease Control and Prevention to solve nothing less than America’s obesity crisis.
Along the way, says Brown, organizations that are known more for killing good ideas than for nurturing them have started to incorporate design thinking. “It’s an extremely difficult transition,” he says. “There is a fundamental challenge, which is that large organizations are set up for efficiency and effectiveness. Innovation is not about that. It’s about new ideas. And it’s about experimentation. It’s about optimism. It’s about exploration. And it’s absolutely about failure, though it’s about failure in a way that’s very different from the failure you see in efficiency-focused organizations.” Or, as Chris Waugh, one of the designers working on the obesity project, puts it: “We say all the time, ‘Fail early and fail often.’ And then we add, ‘Succeed sooner,’ so we can keep some clients.”
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