Out with product managers; in with design thinkers. Time for some corporate creativity. Think user journeys and empathy roadmaps.
A different corporate mantra is beginning to take hold at some large companies like IBM. It’s called design thinking, and while it’s not necessarily new, it holds promise for companies seeking to meet the needs of their customers at a fundamental level. Where design is often thought of in terms of defining and constructing cool-looking products, design thinking is used to capture a business problem at a broader level, shape business strategy and deliver a more holistic, deeper solution to customers. And, importantly, to do so more quickly than through a typical product development life-cycle.
Phil Gilbert is a tall man with a shaved head and wire-rimmed glasses. He typically wears cowboy boots and bluejeans to work — hardly unusual these days, except he’s an executive at IBM, a company that still has a button-down suit-and-tie reputation. And in case you don’t get the message from his wardrobe, there’s a huge black-and-white photograph hanging in his office of a young Bob Dylan, hunched over sheet music, making changes to songs in the “Highway 61 Revisited” album. It’s an image, Mr. Gilbert will tell you, that conveys both a rebel spirit and hard work.
Let’s not get carried away. Mr. Gilbert, who is 59 years old, is not trying to redefine an entire generation. On the other hand, he wants to change the habits of a huge company as it tries to adjust to a new era, and that is no small task.
IBM, like many established companies, is confronting the relentless advance of digital technology. For these companies, the question is: Can you grow in the new businesses faster than your older, lucrative businesses decline?
Mr. Gilbert answers that question with something called design thinking. (His title is general manager of design.) Among other things, design thinking flips traditional technology product development on its head. The old way is that you come up with a new product idea and then try to sell it to customers. In the design thinking way, the idea is to identify users’ needs as a starting point.
Mr. Gilbert and his team talk a lot about “iteration cycles,” “lateral thinking,” “user journeys” and “empathy maps.” To the uninitiated, the canons of design thinking can sound mushy and self-evident. But across corporate America, there is a rising enthusiasm for design thinking not only to develop products but also to guide strategy and shape decisions of all kinds. The September cover article of the Harvard Business Review was “The Evolution of Design Thinking.” Venture capital firms are hiring design experts, and so are companies in many industries.
Still, the IBM initiative stands out. The company is well on its way to hiring more than 1,000 professional designers, and much of its management work force is being trained in design thinking. “I’ve never seen any company implement it on the scale of IBM,” said William Burnett, executive director of the design program at Stanford University. “To try to change a culture in a company that size is a daunting task.”
Daunting seems an understatement. IBM has more than 370,000 employees. While its revenues are huge, the company’s quarterly reports have shown them steadily declining in the last two years. The falloff in revenue is partly intentional, as the company sold off less profitable operations, but the sometimes disappointing profits are not, and they reflect IBM’s struggle with its transition. Last month, the company shaved its profit target for 2015.
In recent years, the company has invested heavily in new fields, including data analytics, cloud computing, mobile technology, security, social media software for business and its Watson artificial intelligence technology. Those businesses are growing rapidly, generating revenue of $25 billion last year, and IBM forecasts that they will contribute $40 billion by 2018, through internal growth and acquisitions. Just recently, for example, IBM agreed to pay $2 billion for the Weather Company (not including its television channel), gaining its real-time and historical weather data to feed into Watson and analytics software.
But IBM’s biggest businesses are still the traditional ones — conventional hardware, software and services — which contribute 60 percent of its revenue and most of its profit. And these IBM mainstays are vulnerable, as customers increasingly prefer to buy software as a service, delivered over the Internet from remote data centers.
Recognizing the importance of design is not new, certainly not at IBM. In the 1950s, Thomas J. Watson Jr., then the company’s chief executive, brought on Eliot Noyes, a distinguished architect and industrial designer, to guide a design program at IBM. And Noyes, in turn, tapped others including Paul Rand, Charles Eames and Eero Saarinen in helping design everything from corporate buildings to the eight-bar corporate logo to the IBM Selectric typewriter with its golf-ball-shaped head.
At that time, and for many years, design meant creating eye-pleasing, functional products. Now design thinking has broader aims, as a faster, more productive way of organizing work: Look at problems first through the prism of users’ needs, research those needs with real people and then build prototype products quickly.
Defining problems more expansively is part of the design-thinking ethos. At a course in New York recently, a group of IBM managers were given pads and felt-tip pens and told to sketch designs for “the thing that holds flowers on a table” in two minutes. The results, predictably, were vases of different sizes and shapes.
Next, they were given two minutes to design “a better way for people to enjoy flowers in their home.” In Round 2, the ideas included wall placements, a rotating flower pot run by solar power and a software app for displaying images of flowers on a home TV screen.
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