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Principles of Design Management

This book is a part of the course by Jaipur National University, Jaipur.This book contains the course content for Principles of Design Management.

JNU, JaipurFirst Edition 2013

The content in the book is copyright of JNU. All rights reserved.No part of the content may in any form or by any electronic, mechanical, photocopying, recording, or any other means be reproduced, stored in a retrieval system or be broadcast or transmitted without the prior permission of the publisher.

JNU makes reasonable endeavours to ensure content is current and accurate. JNU reserves the right to alter the content whenever the need arises, and to vary it at any time without prior notice.

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Index

ContentI. ...................................................................... II

List of FiguresII. ..........................................................VI

List of TablesIII. ......................................................... VII

AbbreviationsIV. ......................................................VIII

Case StudyV. .............................................................. 132

BibliographyVI. ......................................................... 153

Self Assessment AnswersVII. ................................... 156

Book at a Glance

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Contents

Chapter I ....................................................................................................................................................... 1Introduction to Design Management ......................................................................................................... 1Aim ................................................................................................................................................................ 1Objectives ...................................................................................................................................................... 1Learning outcome .......................................................................................................................................... 11.1 Introduction .............................................................................................................................................. 21.2 The Idea of Design ................................................................................................................................... 21.3 Definitions ............................................................................................................................................... 21.4 The Disciplines of Design ........................................................................................................................ 31.5 Design as a Process .................................................................................................................................. 5 1.5.1 Design as a Creative Process ................................................................................................... 5 1.5.2 Design as a Management Process ............................................................................................ 71.6 The Web Design Process .......................................................................................................................... 81.7 Design Since 1990 ................................................................................................................................... 8Summary ..................................................................................................................................................... 12Reference..................................................................................................................................................... 12Recommended Reading ............................................................................................................................. 12Self Assessment ........................................................................................................................................... 13

Chapter II ................................................................................................................................................... 15Design and Business Performance ............................................................................................................ 15Aim .............................................................................................................................................................. 15Objectives .................................................................................................................................................... 15Learning outcome ........................................................................................................................................ 152.1 Introduction ............................................................................................................................................ 162.2 The Link between Design and Better Business Performance ................................................................ 162.2.1 Contribution of Design in Business Performance ............................................................................... 162.2.2 Design and Competitiveness ............................................................................................................... 182.2.3 Design for Competitive Advantage ..................................................................................................... 182.3 Being Design Alert Helps Business Performance .................................................................................. 192.4 Adding Value through Design ................................................................................................................ 19Summary ..................................................................................................................................................... 26Reference..................................................................................................................................................... 26Recommended Reading ............................................................................................................................. 26Self Assessment ........................................................................................................................................... 27

Chapter III ............................................................................................................................................. 29Design Management ................................................................................................................................... 29Aim .............................................................................................................................................................. 29Objective ...................................................................................................................................................... 29Learning outcome ........................................................................................................................................ 293.1 Introduction ............................................................................................................................................ 303.2 Origin of Design Management ............................................................................................................... 313.3 Definition of Design Management ......................................................................................................... 313.4 Scope of Design Management ............................................................................................................... 323.5 Convergence of Design and Management ............................................................................................. 32 3.5.1 A Comparative Approach to Design and Management .......................................................... 32 3.5.2 The “Designence” Model of Design and Management ......................................................... 333.6. Design and Total Quality Management ................................................................................................ 34 3.6.1 Total Quality in the Service of Design ................................................................................... 34 3.6.2 Design as a Tool for Qualiticians ........................................................................................... 34Summary ..................................................................................................................................................... 35Reference..................................................................................................................................................... 35

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Recommended Reading ............................................................................................................................. 35Self Assessment ........................................................................................................................................... 36

Chapter IV ................................................................................................................................................. 38Design and Marketing ............................................................................................................................... 38Aim .............................................................................................................................................................. 38Objectives ................................................................................................................................................... 38Learning outcome ........................................................................................................................................ 384.1 Introduction ........................................................................................................................................... 394.2 Design’s Impact on Consumer Behaviour ............................................................................................ 39 4.2.1 Design as Cognition: Perception and Cognitive Psychology ................................................ 39 4.2.2 Design as Emotion: Perception and Emotional Psychology .................................................. 41 4.2.3 Design as Message: Semiotics ............................................................................................... 43 4.2.4 Design as Relation: The Sociology of Objects ...................................................................... 44 4.2.5 Design in Context: The Situational and Cultural Perception ................................................. 454.3 The Aesthetic Preferences of the Consumer .......................................................................................... 454.4 Aesthetic Preferences and Design Principles ......................................................................................... 46 4.4.1 Aesthetic Segmentation of the Consumer .............................................................................. 47 4.4.2 Aesthetic Preferences ............................................................................................................. 484.5 Design Differentiation through Branding .............................................................................................. 494.6 Design and Brand Promise ..................................................................................................................... 49 4.6.1 Brand Definition .................................................................................................................... 49 4.6.2 Brand as a Sign and Graphic Design ..................................................................................... 49 4.6.3 Brand as Added Value ............................................................................................................ 49 4.6.4 Positioning the Brand ............................................................................................................. 504.7 Design or Advertising: Which Comes First? ......................................................................................... 514.8 Brand or Product: Which Comes First? ................................................................................................. 514.9 Brand Equity .......................................................................................................................................... 524.10 Choosing a Brand Architecture ............................................................................................................ 54 4.10.1 Brand Dynamics .................................................................................................................. 55 4.10.2 Brand as a Person ................................................................................................................. 554.11 Design and Marketing Research .......................................................................................................... 56 4.11.1 Diffusion of the Fashion Marketing Model ......................................................................... 57 4.11.2 Design Research and Marketing Research........................................................................... 57 4.11.3 The Emergence of Tools for Measuring Perception ............................................................. 59Summary ..................................................................................................................................................... 61Reference..................................................................................................................................................... 62Recommended Reading ............................................................................................................................. 62Self Assessment ........................................................................................................................................... 63

Chapter V .................................................................................................................................................... 65Design and Innovation ............................................................................................................................... 65Aim .............................................................................................................................................................. 65Objectives .................................................................................................................................................... 65Learning outcome ........................................................................................................................................ 655.1 Introduction ............................................................................................................................................ 66 5.1.1 Design Innovation .................................................................................................................. 68 5.1.2 The Conceptual Dimension of Design Innovation................................................................. 70 5.1.3 Concept as Company Representation .................................................................................... 71 5.1.4 Concept Generation Methods and Testing ............................................................................. 725.2 Design as Integrator ............................................................................................................................... 735.3 Design and R & D Management: Radical Innovation ........................................................................... 74 5.4.1 Design and Technological Strategy ....................................................................................... 745.5 Design and Life Cycle Technology ........................................................................................................ 75

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5.6 Design and Technology Diffusion ......................................................................................................... 755.6.1 Designers as “Knowledge Brokers” .................................................................................................... 755.6.2 Designers as Technology Infusers ....................................................................................................... 765.6.3 Towards a “Dominant Design” ........................................................................................................... 765.7 Design and Modular Structure ............................................................................................................... 775.8 Radical Innovation ................................................................................................................................. 785.9 Improving the NPD Process through Design ......................................................................................... 795.9.1 Coordinating NPD through Design ..................................................................................................... 795.10 The Logics of Innovation and Design .................................................................................................. 805.10.1 Design and the NPD Stage/Gate Process .......................................................................................... 815.11 Innovation Design as a “Space” System .............................................................................................. 845.12 Design and the Learning Process of Innovation .................................................................................. 86Summary ..................................................................................................................................................... 87Reference..................................................................................................................................................... 87Recommended Reading ............................................................................................................................ 88Self Assessment ........................................................................................................................................... 89

Chapter VI ............................................................................................................................................. 91Design and Strategy ................................................................................................................................... 91Aim ............................................................................................................................................. 91Objectives ............................................................................................................................................. 91Learning outcome ........................................................................................................................................ 916.1 Introduction ............................................................................................................................................ 926.2 Two Models of Design Strategic Positioning ........................................................................... 92 6.2.1 The “Innate” Model ............................................................................................................... 92 6.2.2 The “Experience” Model ....................................................................................................... 926.3 A Framework for Strategic Management of Design .............................................................................. 93 6.3.1 How Businesses Formulates their Strategies? ....................................................................... 93 6.3.2 The “Competition” Porter Model of Strategy ........................................................................ 93 6.3.3 Other Models of Strategy Formulation .................................................................................. 946.4 Strategy Ideation .................................................................................................................................... 94 6.4.1 Design Vision as Strategy Ideation ........................................................................................ 94 6.4.2 Aesthetics and Company Vision ............................................................................................ 95 6.4.3 The Rhetoric of Strategic Design ........................................................................................... 956.5 The Cognitive Approach to Strategic Design ........................................................................... 966.6 Designing a Graphic Identity ................................................................................................................. 96 6.6.1 Verbal and Visual Identity Models ......................................................................................... 966.7 Design, Identity and Culture .................................................................................................................. 98 6.7.1 Creating and Implementing a Corporate Identity .................................................................. 986.8 The Design of a Company’s Spatial Identity ......................................................................................... 99 6.8.1 Retail Design Identity ......................................................................................................... 100 6.8.2 Design and Corporate Communications .............................................................................. 1006.9 The Economic Approach to Strategic Design ...................................................................................... 101 6.9.1 Design as a Competitive Advantage .................................................................................... 101 6.9.2 Design as Internal Competitive Advantage ......................................................................... 101 6.9.3 Design as a Resource ........................................................................................................... 102 6.9.4 Design as Knowledge .......................................................................................................... 102 6.9.5 Design as a Core Competency ............................................................................................. 1036.10 Design as a Source of Organisational Change ................................................................................... 1036.11 Design as Inter-organisational Cooperation ....................................................................................... 104Summary ................................................................................................................................................... 106Reference................................................................................................................................................... 107Recommended Reading ........................................................................................................................... 107Self Assessment ......................................................................................................................................... 108

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Chapter VII ...............................................................................................................................................110Functional Design Management ..............................................................................................................110Aim ............................................................................................................................................................110Objectives ...................................................................................................................................................110Learning outcome .......................................................................................................................................1107.1 Introduction ...........................................................................................................................................1117.2 Functional Design .................................................................................................................................1117.3 The Functional Re-design .....................................................................................................................1127.4 An Operational Model for Design Processes ........................................................................................112 7.4.1 Descriptive Models ...............................................................................................................113 7.4.2 Prescriptive Models ..............................................................................................................1137.5 An Operational Model for Design Processes ........................................................................................113Summary ....................................................................................................................................................114References ..................................................................................................................................................114Recommended Reading ............................................................................................................................115Self Assessment ..........................................................................................................................................116

Chapter VIII ..............................................................................................................................................118Core Elements for Strategic Design Management .................................................................................118Aim .............................................................................................................................................................118Objectives ...................................................................................................................................................118Learning outcome .......................................................................................................................................1188.1 Introduction ...........................................................................................................................................119 8.1.1 The Challenges of Contemporary Design Practice ...............................................................1198.2 Defining Architectural Quality in an Industrialised Context ............................................................... 1208.3 A Theoretical Model Defining Four Approaches for Action................................................................ 120 8.3.1 The Pragmatic Approach...................................................................................................... 121 8.3.2 The Academic Approach ...................................................................................................... 121 8.3.3 The Management Approach ................................................................................................. 122 8.3.4 The Conceptual Approach.................................................................................................... 1228.4 Axes of Dichotomies ............................................................................................................................ 123 8.4.1 Process/ Project .................................................................................................................... 123 8.4.2 Explicit Knowledge Accumulation/ Intuitive Non-explicit use of Knowledge ................... 123 8.4.3 Innovation/ Evolution .......................................................................................................... 123 8.4.4 Autonomous/ Conditional .................................................................................................... 1248.5 Cases from the Analysis ...................................................................................................................... 124 8.5.1 Exact (Concrete) Strategy .................................................................................................... 125 8.5.2 Abstract Strategy .................................................................................................................. 125 8.5.3 No Strategy .......................................................................................................................... 1268.6 Implementing and Further Project ....................................................................................................... 1268.7 Conclusion ........................................................................................................................................... 127Summary ................................................................................................................................................... 128Reference................................................................................................................................................... 129Recommended Reading ........................................................................................................................... 129Self Assessment ......................................................................................................................................... 130

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List of Figures

Fig. 1.1 Types of design ................................................................................................................................. 3Fig. 1.2 Characteristics of design as a process ............................................................................................... 5Fig. 1.3 Tests ............................................................................................................................................... 7Fig. 2.1 Contribution of design to business ................................................................................................. 17Fig. 2.2 Impact of added value on business performance ............................................................................ 19Fig. 3.1 Ways to introduce a design in an organisation ............................................................................... 30Fig. 4.1 Design and consumer behaviour ..................................................................................................... 43Fig. 4.2 What is a brand? ............................................................................................................................. 50Fig. 4.3 The framework of brand knowledge and customer based brand equity ......................................... 53Fig. 5.1 The early stages of NPD ................................................................................................................. 70Fig. 5.2 Improving the NPD process through design ................................................................................... 81Fig. 6.1 The strategy process ....................................................................................................................... 94Fig. 6.2 Verbal versus visual corporate identity models ( adapted from Rufaidah,2002) ............................ 97Fig. 8.1 The relation between reality and theory (Andersen, 1990) .......................................................... 121Fig. 8.2 The different approaches placed within the four dichotomies ...................................................... 122Fig. 8.3 Strategic nature (x) and consciousness (y) ................................................................................... 124Fig. 1.1 The Electrolux IPDP ..................................................................................................................... 136Fig. 1.2 Electrolux IPDP: continuous development of the project portfolio ............................................. 136Fig. 1.3 Electrolux IPDP: management focus ............................................................................................ 137Fig. 1.4 Electrolux IPDP: examples of primary development projects ..................................................... 138Fig. 1.5 Electrolux IPDP: primary development of features, structures and systems ............................... 138Fig. 1.6 Electrolux IPDP: project specification and industrialisation ........................................................ 140

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List of Tabls

Table 1.1 Types of design principles .............................................................................................................. 4Table 3.1 The designer’s career path ............................................................................................................ 32Table 3.2 Comparative approach to design and management concepts by Borja De Mozota ..................... 32Table 3.3 A convergent model for design and management: “Designence” ................................................ 33Table 4.1 Describing a brand: Coca-Cola (Enterprise IGTM) ..................................................................... 52Table 4.2 Design theories applied to marketing research ............................................................................ 57Table 4.3 Checklist of design properties (adapted from Veryzer, 2000) ...................................................... 58Table 5.1 Key factors for new product success: related to design input ...................................................... 66Table 5.2 Key factors for innovation process management ......................................................................... 67Table 5.3 Comparing incremental and radical innovation management (Leifer et al., 2000, p. 19) ........... 79Table 5.4 The Stage-GateT process (adapted from Cooper, 1998) .............................................................. 82Table 6.1 Design and inter-organisational cooperation .............................................................................. 104Table 7.1 Key aspects in refrigeration new product development and design at Electrolux .................... 135

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Abbreviations

AT - Arkitema ATBD - Artefact to be DesignedCAD - Computer Aided DesignCBV - Competence-Based View CIDC - Concern Industrial Design Centre CRM - Customer Relationship ManagementDMI - Design Management Institute DSS - Design Support SystemsICSID - International Council Society of Industrial Design ID - Industrial DesignIDSA - Industrial Designers Society of AmericaISO - International Organisation for StandardisationKAI - Kirton Adaptation InventionKBDS - Knowledge Based Design SystemKM - Knowledge Management LTA - Lundgaard & TranbergNPD - New Product DevelopmentOO - Object Orientation PAD - Pre-Authorised DebitsPAS - Personal Aesthetic Sensitiveness R&D - Research & DevelopmentRBV - Resource-Based View RODI - Return on Design Investment SDA - Space of Design Alternatives SDO - Space of Design Objectives SME - Small and Medium EnterprisesSTEP - Standard for the Exchange of Product Model (Data)SWOT - Strengths, Weaknesses/Limitations, Opportunities, and ThreatsTCT - Theory of Cost Transaction

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Chapter I

Introduction to Design Management

Aim

The aim of this chapter is to:

introduce the concept of design•

explain the disciplines of design•

definedesignprocess•

Objectives

The objectives of this chapter are to:

elucidating design as a creative process•

explain the emergence of design as a profession•

discuss about emergence of design ideas•

Learning outcome

At the end of this chapter, you will be able to:

understand the phases in design process•

recognise the creative process involved in designing•

identify designing as a management process•


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1.1 IntroductionIn order to render design comprehensible to non-designers, a number of interrelated issues and questions must be considered. It is necessary to describe the nature of design profession, the diverse areas in which design is practiced, and the various methods designers employ in their work. It is necessary to evaluate the impact of design on organisational performance in order to determine what managers can gain from it.

1.2 The Idea of DesignTherearemanydefinitionsofdesign.Itcanbedefinedasanactivitythatgivesformandordertolifearrangements.The word design derives from Latin word ‘designare’, which means a plan, project, intention, a sketch, model, motive,decor,visualcomposition,styleandsoonItsignifiestheachievementofaplanbymeansofasketch,pattern or visual composition.

Design=Intentions + drawing

Thisequationclarifiesthepointthatdesignalwayspresupposesanintention,plan,orobjective,particularlyintheanalytical and creative phases, as a drawing, model, or sketch in the execution phase to give form to an idea.

1.3 DefinitionsDesign can be referred to either an activity or the outcome of that activity or process. The media tends to add to the confusion by which the adjective ‘design’ for original forms, furniture, lamps, and fashion without mentioning the creative process behind them.

The International Council Society of Industrial Design (ICSID), an organisation that brings together professional associationsofdesigners’worldwide,offersthisdefinition:

Aim: Design seeks to discover and assess structural, organisational, functional, expressive and economic relationships with the task of

enhancing global sustainability and environmental protection (global ethics)•givingbenefitsandfreedomtotheentirehumancommunity(socialethics)•supporting cultural diversity despite the globalisation of the world•giving products, services and systems, those forms that are expressive of (semiotics) and coherent with •(aesthetics), their proper complexity

Design is an activity, which involves a wide spectrum of professions in which products, services, graphics, interiors andarchitecturealltakepart.Themainadvantageofthisdefinitionisthatitavoidsthetrapofseeingdesignonlyfrom the perspective of the output. It emphasises notions of creativity, consistency, industrial quality and shape. Designersarespecialistswhohaverefinedtheabilitytoconceiveformandwhohavemultidisciplinaryexpertise.Industrialdesign isaprofessional serviceofcreatinganddevelopingconceptsandspecifications thatoptimisethefunction,value,andappearanceofproductsandsystemsforthemutualbenefitofbothuserandmanufacturer.Designers working in design agencies that specialise in package design and graphics for organisations and brands tendtopreferadefinitionthatunderscoresthelinksbetweenbrandandstrategy.

Design and branding is done where design is a link in the chain of a brand, or a means of expressing brand values to its different publics. Design and corporate strategy is a design tool for making a strategy visible.

Thetechniqueofdesigncombinesthelogicalcharacterofscientificapproachandtheintuitiveandartisticdimensionsof creative effort. Design forms a bridge between art and science, and the designers regard the complementary nature of these two domains as fundamental. Design is a problem solving activity, a systemic activity and coordinating activity.Thedesignerconceivessigns,spaces,orartifactstofulfilspecificneedsaccordingtoalogicalprocess.Every problem posed to a designer demands that the constraints of echnology, ergonomics, production and the market place be factored in a balance be achieved.

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1.4 The Disciplines of DesignThe design profession is actually a family of professions that helped around the conception of different forms. There are four types of design that correspond to the key domains through which the profession is integrated into society, andwhichdescribeitspossibilitiesofentryandinterfacewiththedifferentfunctionsofthefirms.Thedifferenttypes of design are

Environmental Design

Product Design

PackageDesign

Graphic Design

Types of Designa

Fig. 1.1 Types of design

Environmental designEnvironmentaldesignencompassestheplanningofaspaceforafirm,andthecreationofallthespacesthatphysicallyrepresent thefirm-industrialsites,offices,workareas,areasofproduction,commonspacesandsoonCreatingworkenvironmentforafirmplaysafundamentalroleinthequalityofproduction,buildingupofaculture,andcommunication of its strategy. Environmental design can work for commercial access, chains of franchised boutiques, stores, shopping malls and supermarkets. Competition between stores entails an investment in brand differentiation and therefore a demand for design. Environmental designers also create new concepts for entertainment centres and restaurants.


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Product designThe general public knows of this type of design through the creations of designer ‘stars’ in furniture, fashion and automobiles. The image of product design is fashion and avant-garde oriented, which is often because the press privileges this star system of design. But product design is limited to furniture, lamps, carpets, fashion and cars.

Engineering design, particularly mechanical engineering.•Industrial design as concept design, which aims to elaborate on an original solution for a system for existing •function or a new function.Industrial design as adaptation design, which implies adapting a known system to a new task and requires •original designs for parts or components.Industrial design as variation design, which aims to vary the size or arrangement of certain aspects of a system •without modifying the function of its principle.

Package designAlthough less known than product design, package design constitutes most of the business for design profession. The conception of packaging for manufactured products is part of brand development in consumer goods, cosmetics and medicines. The designs serve to protect these products during handling, storage, transportation, and sale. Package designfacilitatestherecognitionoftheproductsinstoresandsimplifiestheiruseforthefinalconsumer.

Packageisthefirstvisualcontactwhichtheconsumerhaswiththeproduct.Amidstthemultiplicationofbrandsandmanufactured products using relatively similar package designs, this creates a competitive advantage. The package design is integrated into three different areas of design.

Graphicdesign,inwhichadesignermodifiesorcreatesthegraphicsofaprintedsurface,suchasaprinted•label.Product design, or volume-oriented packaging, in which the designer improves the functional qualities of the •packaging, improving or simplifying.Three dimensional design, which is a conceptual level of package design that can transform all aspects of the •product, such as modifying the shape, materials or interface system of a product.

Graphic designThegraphicdesignfieldworkswithgraphicsymbolsandtypographytorepresentthenameofafirm,itsbrandsorits products. The graphic designer is integrated into different areas of design.

The designer creates a graphic system or complete visual identity for an item and updates that system or identity •periodically.The designer releases the brochure for a product, stationery with a logotype, graphic symbols for a store or •shoppingmall,aposterforaneventorafinancialreportforafirm.Graphic creations for a complex product, such as the control panel of a car.•

2D design 3D design 4D designGraphic design Furniture Design Digital design

Information design Fashion design Interactive designIllustration Interior design Web design

Textile design Industrial design, Environmental design

Table 1.1 Types of design principles

Every personal branding is essential to professional success today. Because branding is everywhere, graphic designerhavetogobeyondthecreationofavisualidentitythatfitwiththecompany’sinternalsystemsofsignageandcommunications.Thecompanydifferentiatesitselfbyaspecificgraphicandverballanguageandappliesthesemessages according to its different publics. Computer software makes the development of graphic design more

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flexibleanddesigntemplatesmoreuserfriendly.Webdesign,ormultimediadigitaldesign,evolvedfromtheupsurgeofinformationtechnology.Nofirmintheneweconomycanoperatewithouttheinputofaprofessionalwebsitedesigner. These web designers tend to have either a product or graphic design background. Whether for e-commerce or for intranet communication, the designers work as partners with the company.

1.5 Design as a ProcessDesign is a process that has four essential characteristics which are as follows:

Creativity which requires the creation of something that has not existed before.

Complexity is that design which involves decisions on large numbers of parameters and variables.

Compromise is that design which requires balancing multipleandsometimesconflictingrequirements.

Choice is the design that requires making choices between many possible solutions to a problem at all levels, from the basic concept to the smallest detail of colour or form.

Fig. 1.2 Characteristics of design as a process

Designers have a prescriptive job. They suggest how the world might be; they are all futurists to some extent. The design process is essentially experimental; yet, it is not purely ideational, it produces sketches, drawings, specifications,andmodels.

The analytical design process is used when there is little uncertainty about the alternatives, and the outcome is •onlyamodificationofsomethingalreadyexisting.The iterative design process is one which is best suited to medium-risk projects such as radical improvements •and adopted innovations.Inthevisionarydesignprocesstheproblemcannotbedefinedpreciselyandisperhaps,vagueatbest.•

These three types of design process differ depending on the degree of freedom given to the designer in the design brief, often associated with the degree of risk taken by the organisation.

1.5.1 Design as a Creative ProcessWhether analytical, iterative, or visionary, the design process follows different phases. These creative phases are identical no matter what the design principle or design project is. These phases are also similar to the creative process existinginotherculturalfields.Butthedesignprocesshasauniquecharacter,becausethefinalgoalofeveryphaseis to create a visual output.


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Fordesignprofessionals,creatingmeansthereisaproblem,whichfirsthastobeidentifiedtosolve.Oncetheproblemisidentified,thedesignerfollowsalogicalprocessthatheappliestoeveryphaseoftheproject.Thisprocessisalearned skill that corresponds to techniques, not a creative talent mysteriously inherent in someone. The process is thesamewhetherthefirmchoosestoworkwithanexternalagencyordevelopsabuilt-indesignservice.

Therearethreemainphases:ananalyticstageofwideningtheobservationfield,asyntheticstageofideaandconceptgeneration,andafinalstageofselectingtheoptimalsolution.Thecreativeprocesscorrespondstofivephases,eachof which has a different objective and corresponds to the production of more and more elaborate visual outputs.

Preliminary phase: InvestigationThisphaseisalsocalledasphase0whichisaprospectivephaseinwhichanopportunityorpotentialneedisidentifiedandideasaregeneratedtoseeifthatneedcanbeturnedintoadesignconcept.Thisphaseaimstowidenthefieldofinvestigation in order to identify a problem that can be solved by design. This phase exists in a more or less developed mannerdependingonwhetherthebriefisfixedornotandthedegreeoffreedomofferedforcreation.

Phase 1: ResearchThedesignerlooksatabriefthatidentifiestheproblemandtheobjectiveofthedesignproject.Hetheninquiresabouttheopportunityandtheimportanceoftheprojectforthefirm,andasksthedifferentpeopleresponsibletobetterunderstandthedatathefirmusedtomakeitsdecisiontolaunchtheproject.Itisnecessarytoanalysethepositioning of the product or graphics in its competitive market and explore the technical and functional parameters of the project, which leads the designer to make complementary studies to accumulate documentation on the environment or context of the project.

Phase 2: ExplorationAfter understanding the problem in its totality, the designer employs all of his creative resources to concretise the concept by making pre-sketch drawings of different possible shapes the project can take. These drawings help to disclose the axes of creation and discover different product architectures, graphic signs, and style choices that might be of help to the design. Those creative directions that stand out will be presented to the client in drawings of different solutions and proposed perspectives. The exploration phase ends with the selection by a committee that includes the client of one or two creative directions. This selection is facilitated by a diagnosis of various solutions inrelationtothehierarchyofdesiredfunctionsdefinedinthedesignbrief.Thisphaseendswiththeselectionofone or two solutions to be developed in phase 3.

Phase 3: DevelopmentIt is now time to formally represent the chosen solutions in three dimensions. This 3-D version is indispensable because it allows for judgement for the shape’s quality in space. A life-size model is made, which can also be functional. The designer makes technical plans of the pre-test prototype. These drawings allow him to verify the technical constrains in assembling the product. This model can also be used to perform marketing tests. After various tests,thefinalmodelisadoptedandthecreativephaseoftheprocessends.

Phase 4: RealisationIn phase 4, the designer works on the realisation of a prototype for the project. He creates documents of execution andaplanthatdefinesmaterialsusedforsurfacetreatmentandcolourfordifferentelementsoftheproductorsign.This is a time consuming phase because it requires the collaboration of different departments like the manufacturers and external suppliers.

Phase 5: EvaluationTests are launched in three different directions:

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Tests of conformity to norms of use, security and durability

Preparation of production programs

Appropriateness of the design solution to brand values, target market and market share objectives

Technical control

Calcula-tion test

Marketing evaluation

Fig. 1.3 Tests In this last phase, the designer is generally only responsible for follow-up. However, he can also play the role of artistic director, in which case the client will ask him to release illustrations, product views, and communication documents and choose the photographers.

1.5.2 Design as a Management ProcessThedesignprocess is an identityprocess. It defines thecompany for itself, its customers, and its investors. Itdifferentiatesafirmfromitscompetitorsandisattheheartofafirm’ssuccess.Designprovidesakeyidentifierforthe company to the public, hence the great necessity for design managers to take proactive positions in design process management.Thedesignprocessbeginswithabriefthatdefinesthenatureoftheproblemtoevolve.Itendswitharesult-aproduct,packagingorserviceinanswertothebrief,whichisdistributedandevaluatedbythefirm.

Therefore, the creative process is much like the processes used by management in new product development and the innovation process. Often, design and innovation are interchangeable words to describe two creative activities. The creative design process, therefore, has a multidisciplinary and iterative character. The process goes further than a simple production of visual outputs because design is inserted into many areas of management decision making. Thus, designs is an internal management process that integrates market research, marketing strategy, branding, engineering, new product development, production planning, distribution and corporate communication policies.

The creative design process fits into a total design process, so that design isa creative internal process•an external process of production•a management process•a planning process•


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Finally the design process is a knowledge process, through which a design is acquired, combined, transformed, and embodied. Design knowledge has a tacit nature and instead of presenting the design process as a vertical, sequential model, it might be wiser to represent it as a wheel, which illustrates the cyclical nature of any organisation. The creative process must internally apply technologies. Concepts and production methods externally satisfy the needs of a large environment of users and stake holders. Design is a thermostat for innovation, a process that modulates controls and encourages creativity in the company. The designer’s profession is similar to that of the entrepreneur.

Thefirstdesignersdevelopedastreamlinedaerodynamicstyle,andappliedtootherindustrialsectorsthesymbolsofthefledgingcommercialaviationindustry.Thisstylewassynonymouswithdynamismandmodernism,asynthesisof aesthetics and technology, and fascinated all types of creators, who applied it to railroads as well as cars. The public at large appreciated this trend toward aerodynamic shapes and eventually the cult of speed was abused by the proliferation of rounded, friendly shapes. The streamliners had a process of conception completely inverse to that of functionalism. They worked on the external surface without questioning the function of the product. During this period, graphic design emerged with varied realisations. Graphic designers simultaneously developed typography and new alphabets.

1.6 The Web Design ProcessInternet transforms information into an interactive communication system. Today, our ideas are a part of the information age, but execution of these still takes place in the industrial age. The architecture of a website is just like that of any design object. Like a product, a website has different functions. This has given rise to an increasingly non-linearknowledgebase,creatingnewmodelsofconductandinteraction.Thecomplexityofreconfiguringuser’sexperiences has transformed the design process. The problem that must be solved in designing a website is that the site must be viewed as an object that has many semantic levels and wide interactions to consider over time.

Emergence of design professionDesign became a profession in the United States as an indirect consequence of 1929 stock market crash. In the context of an economic crisis, manufacturers quickly became aware of the role product design played in commercial success.Thisnewconsciousnessencouragedtheemergencyofindustrialdesigners.Thefirstindustrialdesigners,were consultants to industrial organisations on the conception of products, worked freelance for large companies and came from various backgrounds and graphics.

These men, were accustomed to team work and were conscious of the necessity of adapting their creativity to commercial constraints, realised the difference functionalism and pragmatism. Design became an independent professionandthefirstagenciesandaestheticconsultantsappeared.Becausetheseagenciesdidnotfundamentallyquestionthestructureoftheartifact,butlimitedtheirworktomakingchangestofitthetrendandstyleoftheday,their work was referred to as redesign or styling.

Thefirstbusinessesfelttheneedtotakeaestheticsintoconsiderationwhichwereproducedinlargequantities,suchas an automobile industry. In fact, the opening of the styling department took place at General Motors in 1928, whereHarleyT.Earlwasnamedasastylist.Thefirstdesignerdevelopedastreamlined,aerodynamicstyle,andappliedittootherindustrialsectorslikethesymbolsofthefledgingcommercialaviationindustry.Thisstylewassynonymous with dynamism and modernism, a synthesis of aesthetics and technology, and fascinated all types of sectors including railroads as well as cars.

Duringthisperiod,graphicdesignerssimultaneouslydevelopedtypographyandnewalphabets.Whenthefirstsystemofvisualidentificationappeared,thegraphicsofLondonoriginallycreatedin1916,wererevisedunderthedirectionofFrankPick.Aunifiedlookofvehicles,buildings,anddecorationshascontinuedandisstillineffecttoday.

1.7 Design Since 1990The most important evolution since 1990 has been the relationship between design and technology. The design can now play with the outside appearance of an object without being subjected to its internal structure. Constraints havebeensoftenedbyanewmaterialandprogressinelectronics.Newtechnologyhasallowedartificialobjectsto possess organic aspects. New materials can manage complexity, and the artifact is the product of its material

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qualities. Innovative fashion design has created laser impressions in cloth and on surfaces that vary according to light or temperature. The product designer must adapt her creative process to a general tendency toward abstraction, immateriality and complexity. Technical knowledge has become transversal. In order to know ‘what the consumer needs’, the designer must be able to guess with whom to make contact and communicate.

Mass production has shifted towards one to one customisation. The computerisation of the creative process CAD (Computer Aided Design) software and computer assisted manufacturing has facilitated the interaction of design into a company’s innovation process. Design now faces a cultural challenge of interactive hypermedia. The interaction andinformationdesigntreatsfunctionaldesignproblems,theveryfirst.Graphicdesignhashelpedtotransformthe internet from an academic data pipeline to an information highway. Interface design functions as a door giving access to information. Since new media is not a physical presence, it is necessary for design to be invisible; it creates the service, the experience. In this way, multimedia design has become a new branch of product design that aims to create architecture of virtual information environments.

Designing for sustainabilityDesigners now participate in the challenge of the new millennium, which is how to be sustainable both environmentally and economically. Mostly, those who strive to reduce environmental impact are induced by government legislation and public relations. Designing for sustainability is not about cleaning up after you have made a mess, but rather aboutdesigningwasteandmessoutofthesysteminthefirstplace.Oftencalled‘greendesign’sustainabledesigntakes a holistic approach. The issues are

making a complete assessment of site conditions•applyenergyefficiencyandconservationstrategies•using materials wisely•reducing, refusing and recycling at all levels•linking the project with larger community while creating a greater sense of community•

Design rulesUse recyclable and compatible materials only, avoid toxic materials, maximise use of all materials through recycling and reuse.Minimise the number of parts; minimise the disassembly surface; design for z- axis assembly and disassembly; improve disassembly access; maximise part symmetry; avoid separate fasteners whenever possible; drive towardmodular design; provide standardised, easy identificationof allmaterials; simplify, integrate andstandardisethefitandinterfaceofreusablecomponents;reducepartsize,productsizeandmaterialcount;minimisewaste production; use clean fastening and bonding techniques; use clean packaging.

Universal designAnother direction for sustainable design is the designer’s ability to design for all. Universal design is not about producing specialised “elderly” or adaptive products. It is about designing all products to accommodate the widest possible spectrum of users regardless of age. For example, transforming the myths of aging-senility, disability, homogeneity,poverty,lonelyisolation,dependencyintoanewdignified‘silvermarket’.


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The design market and its actorsDesigners are also entrepreneurs in an economic sense and are like economic thinkers. When a designer creates anew form, he or she aims to transforms its environment, to create new productive combinations and new markets. The designer also makes decisions in a context of uncertainty, in which routine methods and known processes are useless. Design, therefore, assumes a function of organisation and coordination by bringing new factors and past factors closer together. Design becomes a function transforming information in society. The designer challenges the staticmodelandfitsintoanevolutionistvisionofsocietyandbusiness.Designhistoryteachesustheunavoidableevolution of form and the existence of master who have inspired the designers of their generation and future generations. Every period in history generates its own style.

The supply for designIn school, designers choose a discipline while working on real projects, from traditional disciplines to new ones such as ‘sound design.’ They also choose the way they want at work as designers: on a freelance basis, in a design consultancy they create, in a design consultancy they create, in design agencies as junior employees or executive and senior staff, or a staff in the design department of the company.

The Co between organisationsWhen a designer is particularly at ease with marketing himself, he can choose to sign a contract with an agent, a situation much like that of a competitive athlete. Consultancies specialise in selecting the right designer, whether itisforadesigncentreinanationalorganisation,orforaprivatefirmrecruitingorauditingtheproject.Theyhelporganisationstofindthedesigncompetencytheprojectrequires.

The demand for designThe demand for diversity in design is not the result of the latest trend in marketing research. Manufacturers have always made distinctions between designs on the basis of different markets. The abundance of designed products and services gives us an image of our society, as well as a sense of the power of branding and differentiation by design.Thehighdemandfordesignistheresultofthreeforces:themanufacturer’squestfordiversification,thegeneration of new needs through innovation, and the desire of designers to express their creativity and artistic talent. Designers’ clients tend to be manufacturers and distributors.

ManufactureThere are different categories of manufacturers in relationship to design. These are:

Companies that could not exist without design, whether they are editing designers’ concepts or manufacturing •designers’ creations under their name,Companies that have integrated design at various levels of their strategy and employ in-house or outsource •design services.

DistributorsDistributors can be divided into similar categories, in terms of their involvement with design

Organisations created for distributing designer’s lines•Chains of distribution created by a designer•Distributors that encourage a total design concept strategy•Distributors or service industries with designed corporate identities•

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The foundation for good designDesign is about quality. The value of design is that is reconciles art with industry. “Good design’ can be ornamental or functional, according to the times since designers are both the heirs of craft and the Bauhaus. Good design is shared and nurtured through design press, exhibitions, museums, design competitions and design awards.

Good design worldwide shares common criteria based on a culling of criteria form design competitions around the world. The design excellence awards revealed four core criteria namely:

Functionality,efficiency•Aesthetics, attractiveness•Ease of use, user-friendliness•Setting new standards for the world to follow•

Design has an avant-garde spirit. While not getting major innovations, the designer anticipates new needs and creates new answers to meet constraints, while integrating progressive technologies. Design is a partner and initiator of change in society. Therefore, it is a partner in the management of change in organisations. Designers are willing to change their environment through their creations, even on a small scale. One can like or dislike the missionary or visionary aspect of the design profession. To think that it is possible to improve the world by simply designing an object can come across as naive. However, it is true that designers challenge us with their creations. Their ideas cross borders, travelling from the frame of reference of the elite to progressively become the property of all.


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SummaryDesignmanagementcanbedefinedasanactivitythatgivesformandordertolifearrangements.•Design is an activity involving a wide spectrum of professions in which products, services, graphics, interiors •and architecture all take part.Thetechniqueofdesigncombinesthelogicalcharacterofscientificapproachandintuitiveandartisticdimensions•of the creative effort. Environmentaldesignencompasstheplanningofaspaceforafirm,andthecreationofallspacesthatphysically•representthefirm-industrialsites,offices,workareas,areasofproduction,commonspacesandsoon.Thegraphicdesignfieldworkswithgraphicsymbolsandtypographytorepresentthenameofafirm,itsbrands•or its products. The internet transforms information into an interactive communication system. •Thefirstdesignersdevelopedastreamlinedaerodynamicstyle,andappliedittootherindustrialsectorslike•symbolsofthefledgingcommercialaviationindustry.Design became a profession in the United States as an indirect consequence of 1929 stock market crash. •The computerisation of the creative process CAD (Computer Aided Design) software and computer assisted •manufacturing has facilitated interaction of design into a company’s innovation process. Designers now participate in the challenge of the new millennium, which is how to be sustainable both •environmentally and economically.. The demand for diversity in design is not the result of the latest trend in marketing research. •

ReferenceBest K., 2006. • Design management, AVA publishing.Mozata, B.B., 2003. • The Field of Design [Online] Available at: <http://www.crito.uci.edu/noah/design/Reading1deMozota.pdf> [Accessed 16 January 2012].Farr, M., • 1966. Design management, Hodder & Stoughton.The Design and Construction Process. • [Online] Available at: <http://pmbook.ce.cmu.edu/03_The_Design_And_Construction_Process.html> [Accessed 16 January 2012].WesternLaCrosse., 2008. • Graphic Design. [Video Online] Available at: <http://www.youtube.com/watch?v=Yt_My5DkoAk> [Accessed 24 January 2012].Mlwebco., 2010. • The Web Design Process [Video Online] Available at: <http://www.youtube.com/watch?v=B6uPHUPoUGA> [Accessed 24 January 2012].

Recommended ReadingGranet, K., 2011. • The Business of Design. New York: Princeton Architectural Press. Rasmus, D. W., 2011. • Management by Design. New Jersey: John Wiley & Sons, Inc.Whitte• n, J. & Bentley, L., 2007. Introduction to Systems Analysis & Design. McGraw-Hill/Irwin.

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Self Assessment

_____________canbedefinedasanactivitythatgivesformandordertolifearrangements.1. Design managementa. Mall managementb. IT managementc. Terrorist managementd.

_____________ can be referred to either an activity or the outcome of that activity or process.2. Designa. Managementb. Tacticsc. Readability d.

Which activity involves a wide spectrum of professions in which products, services, graphics, interiors and 3. architecture all take part?

Computerisationa. Managementb. Designc. Professiond.

The technique of design combines the logical character of __________ and intuitive and artistic dimensions 4. of the creative effort.

logistic approacha. scientificapproachb. magical approachc. holistic approachd.

Which of the following statements is true?5. The design profession is actually a family of professionals that helped around the conception of different a. forms. The design profession is actually a family of management professionals that helped around the contraction b. of different forms.The design profession is actually a family of management professionals that helped around the destruction c. of different forms.The design profession is actually a family of management professionals that helped around the conservation d. of different forms.

___________encompasses theplanningofaspaceforafirm,andthecreationofallspaces thatphysically6. representthefirm-industrialsites,offices,workareas,areasofproduction,commonspacesandsoon.

Manufacturing designa. Environmental designb. Manipulating designc. Management designd.


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The____________fieldworkswithgraphicsymbolsandtypographytorepresentthenameofafirm,itsbrands7. or its products.

management designa. creative designb. graphic designc. industrial designd.

Which of the following statements is true?8. Thefirstdesignersneverdevelopedastreamlinedaerodynamicstyle,andappliedtootherindustrialsectorsa. thesymbolsofthefledgingcommercialaviationindustry.Thefirstdesignersdevelopedastreamlinedaerodynamicstyle,andappliedtootherindustrialsectorstheb. symbolsofthefledgingcommercialaviationindustry.Thefirstdesignersdevelopedastreamlinedaerodynamicstyle,andnotappliedtootherindustrialsectorsc. thesymbolsofthefledgingcommercialaviationindustry.In order to render design comprehensible to designers, a number of interrelated issues and questions must d. not be considered.

Design became a profession in ____________ as an indirect consequence of 1929 stock market crash. 9. Asia a. Africab. Australiac. U.S.d.

The computerisation of creative process ____________ software and computer assisted manufacturing has 10. facilitated the interaction of design into a company’s innovation process.

management aided designa. manufacture aided designb. innovation aided designc. computer aided designd.

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Chapter II

Design and Business Performance

Aim


defineorganisationdesign•

explain the contribution of design in business performance•

definethestepsundertakentoaddvaluethroughdesign•

Objectives


explain the importance of design •

enumeratethebenefitsthatbusinessacquiresbyaddingvalue•

compare design and competitiveness•

Learning outcome


establish the link between • design and better business performance

enlist the steps to add value through design•

identify the steps to measure RODI(Return on Design Investment)•


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2.1 IntroductionOrganisationdesignisthestylethroughwhichbusinessstrategyisshown.Itdefinestheenvironmentinwhichtheflairofaventureisreleased.Organisationdesignisasignificantbusinessactivityestablishingthestructurebywhichan enterprise serves its consumers and interfaces with the market.

The methodical approach to designing the organisation is the main responsibility of senior executives. It is a creative work which, when performed effectively, enables easiness in doing business, gives clearness to consumers and vendors, encourage innovation and releases the aptitude of the enterprise. On the other hand, a poorly performed organisationaldesigncanformhurdlesofentryforconsumers,upsetsvendor’sabilitytoefficientlypartner,reducethe release of talent by creating needless silos, and hamper value creation.

A clean but powerful approach to organisational design through working with global companies, which can be appliedbybusinessleadersateverylevelcanhelporganisationsinachievingthecompetitivebenefitstheywant.

2.2 The Link between Design and Better Business PerformanceTo determine the impact of design on business performance, we should segregate design from other business factors. We should create statistical models to determine relationships between design and business performance. Later on, wehavetoevaluateanumberofindicators,whichcharacterisebusinessgrowth.Theseindicatorsinvolveprofit,turnover and employment growth. Then we should evaluate the effect that design has on business growth.

What can a business do to raise turnover growth?Raise investment in design. Turnover growth more likely takes place in those businesses which have raised •their investment in design over the previous three years. On the other hand, those businesses, which reduced their investment, reduce their chances of growth.

What can a business do for rapid turnover growth?Invest in design and then evaluate the return on design investment in terms of the time it takes to get back •the invested amount. Businesses which take design seriously, generally evaluates its impact. Speedy turnover growth is four times more for businesses that did this. On an average, it takes 20 months for design projects to pay back the investment.New products and services should be developed. This results in almost doubled chances of speedy growth •which is raised by a factor of 1.9.

How can a business use design to increase turnover growth?Use design to direct and guide the procedure if you de• sign new products and services. The chances of design, which contributes to turnover growth, rise more than threefold after this.

What can a business do to increase design’s contribution to turnover growth and profit growth?Useofdesigninbusinessplanningraisesthechancesofdesignincontributingtoturnovergrowthandprofit•growth by 1.9 times.

2.2.1 Contribution of Design in Business PerformanceMostbusinessesthinkthatthegrowthofnewproductsandservicesgotbenefittedfromtheuseofdesign.Somebusinessesalsocreditedagreatrolefordesigninachievingraisedmarketshare,competencyandincreasedprofit.

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Extent of contribution of design to business performance over the past 12 months.Increased Market Shareto some extent 46%to a great extent 7%Increased turnoverto some extent 44%to a great extent 6%Development of new marketsto some extent 42%to a great extent 6%Increased profitto some extent 42%to a great extent 7%Competitivenessto some extent 38%to a great extent 7%New products/servicesto some extent 37%to a great extent 9%Increased employmentto some extent 26%to a great extent 3%

Fig. 2.1 Contribution of design to business

By how much can design raise market share?Businesses which are design alert get an increment almost of 6.3% in their market share through design. Those businesses which trade in the wholesale sector, retail sector, leisure services and manufacturing sectors get 6.9%. In other words, design helps them either entirely take over a market or construct a new one.

How many new products can design to help produce?The effect of design on new product development differs. There is a relation between the business size and the number of new products.

Businesses developing new products in the past 12 months as a result of design

Over 10 new products 26%6 to 10 new products 18%1 to 5 new products 28%No new products 29%


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How many people can design help you employ?When compared to other performance indicators, growing employment is the area where design has minimal impact.

2.2.2 Design and CompetitivenessFast growing businesses are two times more able to compete with others based on innovation. Bigger businesses also compete with smaller ones through innovation. Businesses identify that adding value to products and services is a more considerable factor in challenging than innovating in the abstract.

‘Innovationthroughdesigncanhelpfirmsavoidcompetingonpricealone.Whilesomeconsumerswillalwaysbuythe cheapest product or service in the market, non-price attributes such as quality can often be more important determinants of overall demand than price.’

DTI Economics Paper 15, Creativity, Design and Business Performance, November 2005

2.2.3 Design for Competitive AdvantageTo use organisation design to get competitive advantage, executives should seriously think about the fundamentals of business strategy and leadership, organisation and job design, and decision rights. They can begin by asking:

How is my organisation arrangement disturbing the value and results of my business?•Does my organisational design permit the success of strategic goals and objectives?•To what level are customer-centric drivers included into the• organisation design?Are roles and responsibilities clear and understood?•Are common capacities and processes grouped together to give a well-organised performance?•Are decision-making procedures clear, understood and are they followed?•What actions do I require to take in achieving the goals and objectives of the organisation?•What role should I play in making this to happen?•

These arising questions will provide the organisation the capacities it requires to gain competitive advantage in a global market place which is rapidly changing and is enormously challenging.

Is return on design investment measured?The most common way to evaluate return on design investment (RODI) is as a percentage return. Over one third of businesses do this.

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2.3 Being Design Alert Helps Business PerformanceThere are various aspects of designing that help your business performance in many ways. What makes a business design alert?A design alert business:

tends to have produced new products or services recently•is convinced that design has become necessary for competitiveness•tends to increased investment in design•is ready to apply design to developing new products•is ready to use design services•is ready to use:•

Communications design �Digital and multimedia design �Product and industrial design �

is ready to be a production business•is extremely positive about the role of design in business•is willing to hire external design agencies•is aware of R&D tax credits for SMEs•

2.4 Adding Value through DesignIf the business adds value to create products more attractive to consumers, it is likely to do better than businesses which depend entirely on their core product or service. The prospects can be best if added value is combined with the use of design.

Added Value through Design

Only Core Product orservice

Added Value without Design

Impact of Added Value on Business Performance

BUSINESS PERFORMANCE

Fig. 2.2 Impact of added value on business performance


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What is added value and how are businesses doing it?Businesses cannot depend entirely upon their core products and services for the competition in market. They have to use something extra, which is eventually called the added value, to make them different from the competition and to keep their old customers as well as making new ones. Some of the added values, businesses are using now a days, are:

The retail experience: the spot, the opening and closing times and the shopping atmosphere.•Online services: web-based ordering systems or information on products and services.•Physical services: installation, technical support.•Customer relationships: made through after-sales services or customer friendly and knowledgeable staff.•The design of products or services: enhanced quality or specially designed to meet personal requirements.•Finance or insurance options•Creating a worthy and trusted brand•Creating packages of product and services.•

The customer relationship is a general way to added value. Almost 90% of businesses pursue it. The design of products and services of businesses are also very popular in adding values, now a days.

92%84%78%59%57%56%56%50%22%

How do businesses added value to their core offer?

customer relationship 92%design of product or service 84%brand 78%physical services 59%online service 57%product/service bundling 56%retail experience 56%partnerships 50%financeoptions 22%

What benefits do businesses get from adding value?Thosebusinessesthataddalotofvaluegetsrapidturnovergrowth.Theprofitofaddingvalueisapparent.Themajorityofbusinessesthataddvaluerecordsomeeffectacrossarangeofmeasures.Asignificantquantityofbusinessessayadding value has had a big effect on performance of their business, competitiveness, turnover, market share and their ability to open up new markets.

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CompetitivenessSome impact 90%great impact 34%

Increased turnoverSome impact 83%

great impact 29%

Increased profitSome impact 83%great impact 18%

Increased Market ShareSome impact 76%great impact 24%

Development of new marketsSome impact 75%great impact 23%

Increased employmentSome impact 54%great impact 12%

What is the overall impact of added value on business performance?


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Those businesses which add the most value get the highest return.

Competitivenessa lot of added value 46%some added value 23% Increased turnovera lot of added value 39%some added value 20%

Increasedprofita lot of added value 28%some added value 9%

Increased Market Sharea lot of added value 38%some added value 12%

Development of new marketsa lot of added value 30%some added value 18%

Increased employmenta lot of added value 18%some added value 6%

What is the impact of adding a lot of value on business performance?

How does design boost the impact of adding value?Those businesses which add value through design feel this has a bigger effect on turnover. Businesses get more profitfromaddingvaluewhentheyusedesignoradesigner.Whenanorganisationworkswithadesignagency,itfeelssatisfiedasthevalueofdesignisbeingcommunicatedtoit.

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9% 13%

15%

20%

20%

26%

19%

27%

21%

34%

30%

36%

Increased employment

Keyadded value without appreciation of designadded value with appreciation of design

Impact of added value on business performance

Increased profit

Increased Market Share

Development of new markets

Increased turnover

Competitiveness

There is a relation between using design and being strategic about adding value. Almost half of businesses which use design are preparing to add more value in the future.

How does using a designer to add value affect business performance?Those businesses that use a designer to add value have a better impact on competitiveness, compared to those who did not use a designer. Businesses get most return when they use a designer to add values. Those that do have their chances doubled to see an impact on turnover and market share if compared to those who don’t.


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9% 13%

15%

20%

20%

26%

19%

27%

21%

34%

30%

36%


Keyadded value without appreciation of designadded value with appreciation of design

Impact of added value on business performance

Increased profit

Increased Market Share

Development of new markets

Increased turnover

Competitiveness

The businesses that use a designer put in a lot of value to their core product or service. Businesses that use a designer to add value are also more likely to be preparing more added value activity in the future. Businesses which use a designer are even better in performing well when it comes to adding value to their core product or service.

Why do businesses not add value beyond their core product or service?Those businesses which only produce their core product or service do not think that added value would do any good tothem.Thesebusinessesgiveavarietyofreasonsfornotaddingvaluelike,theydon’tthinkitwouldbebeneficialand relevant to what they do. Some businesses also state that they cannot add values due to lack of resources and some say that they simply haven’t thought about it.

Why do businesses not offer added value beyond their core product or service?

Don’tthinkitwouldbenefitthebusiness 38%Not relevant to what we do 27%Already offer the best or meet customer needs 15%Want to, but haven’t yet 9% Lack resources 8%Haven’t thought about it 6%

Those businesses which do not add value are smaller, with between 10 and 49 employees. They think their product or service meets consumer’s requirements by itself and so they don’t need to add anything extra. In contrast, bigger businesses seem much more enthusiastic about adding value.

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Adding Aalue and New Product development

How does added value affect new product or service development?The more a business adds value, the more likely it is to develop new products and services. The fact that businesses which do not add value are less likely to make new products and services is a cause for concern. Businesses that offer just their core product or service will obviously have to depend on them more heavily. This situation makes innovation more critical.

Have businesses that add value developed a new product or service in the past three years

A lot of added value 61%Some added value 54%Only core product or service 22%

The earlier you add value to your core product or service, the higher the impact

Increased competitivenessAdded value built in at product/service dev.stage 37%Added value considered prior to lunch 30%Added value considered post-lunch 25%

Added value built in at product/service dev.stage 31%Added value considered prior to lunch 26%Added value considered post-lunch 22%





Increased turnover

Increased profit

Increased development of new markets

Increased market share


Adding value through design has additional impact on overall business performance.


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SummaryOrganisationdesignisasignificantbusinessactivityestablishingthestructurebywhichanenterpriseservesits•consumers and interfaces with the market.Businesses which tend to raise their investment in design are more likely to raise their chances of turnover •growth.Businesses which consider design as an integral part has double chances to see rapid growth than others. •Businesses which are design alert get an increment almost of 6.3% in their market share through design.•Designhasapositiveimpactonallbusinessperformanceindicatorsfromprofitandturnovertocompetitiveness•and market share.Businesses using design run much better than their competitors, by a long way and for a long period.•There is a relation between design investment, business performance and long-term stock market value.•Demandofdesigninghasallowedmanufacturerstoincreaseturnover,profitandemployeelevels.•Businesses should balance their design activity with other factors as its importance increases when a business •grows rapidly, signifying a link between design and growth.The number of businesses which evaluate their return on design investment (RODI) are very few. •Whenanorganisationworkswithadesignagency,itfeelssatisfiedasthevalueofdesignisbeingcommunicated•to it.Those businesses, in which design directs and guides the new growth procedure for products or services, have •more chances of design contributing to turnover growth.

Referenceisaac2008.• Creativity, Design and Business performance [Online] Available at: <http://www.scribd.com/doc/2529704/7/The-impact-of-design-on-productivity-and-performance> [Accessed 9 January 2012].Value ofDesignFactfinder [Online]Available at: <http://www.designfactfinder.co.uk:8080/design-council/•showWhitePaperArticle.do?article=FactsInDetail,onDesignAndBusPerf,DesignAndCompetitiveness> [Accessed 9 January 2012].Paolo Taticchi, P., 2010. • Business Performance Measurement and Management. Springer–Verlag Berlin Heidelberg.Brunner, R., Emery, S. & Hall, R., 2009. • Doyoumatter?Howgreatdesignwillmakepeopleloveyourcompany.New Jersey: Pearson Education, Inc.akas773., 2008. • ArnoldKasemsarn-HowDesignandBusinessStrategyIntersect[Video Online] Available at: <http://www.youtube.com/watch?v=ZblW8mj0jmE> [Accessed 27 January 2012].fmdssg., 2008. • Design Management - Part 2 [Video Online] Available at: <http://www.youtube.com/watch?v=wjmSAGuabH4&feature=related> [Accessed 27 January 2012].

Recommended ReadingGupta, P.,2007. • Six Sigma: Business Scorecard, 2nd ed., New York: Tata McGraw-Hill Companies, Inc. Turban, E., Sharda, R. & Delen, D., 2011. • Decision Support and Business Intelligence Systems, 9th ed., Dorling Kindersley (India) Pvt.Ltd.Saaksvuori, A. & Immonen, A., 2008.• Product Lifecycle Management, 3rd ed., Berlin-Heidelberg: Springer-Verlag.

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Self Assessment

Which of the statements is false?1. Design is a creative work which, when performed enables ease in doing business.a. To determine the impact of design on business performance, it is necessary to segregate design from other b. business factors. Those businesses, which reduced their investment in design, always increase their chances of growth.c. The effect of design on new product development differs.d.

Businessgrowthindicatorsinvolveprofit,_________andemploymentgrowth.2. turnovera. designb. performancec. investmentd.

Which of the following statements is false?3. Those businesses that use a designer confer a very negligible value to their core product or service. a. Turnover growth is more likely in those businesses which have raised their investment in design over the b. previous three years.The most common way to evaluate RODI is as a percentage return.c. The more a business adds value, the more likely it is to develop new products and services.d.

Which of the following statements is false?4. Innovationthroughdesigncanhelpfirmsavoidcompetingonpricealone.a. A majority or almost all the businesses evaluate their RODI.b. Businesses using design run much better than their competitors, by a long way and for a long period.c. There is a relation between design investment, business performance and long-term stock market value.d.

What does RODI stand for?5. Rate of Designing In Indiaa. Rate of Operational Design Interfaceb. Return on Design Investmentc. Return on Design Indenture d.

__________designisasignificantbusinessactivityestablishingthestructurebywhichanenterpriseservesits6. consumers and interfaces with the market.

Functionala. Organisationb. Strategicc. Operationald.

Fast growing businesses are ________ times more able to compete with others based on innovation.7. foura. fiveb. twoc. threed.


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Bigger businesses also compete with smaller ones through ____________.8. innovationa. demandb. designc. RODId.

Businesses which are design alert get an increment almost of __________in their market share through 9. design.

5.4%a. 6.3%b. 6.9%c. 7.2%d.

When compared to other performance indicators, growing _________ is the area where design has minimal 10. impact.

market-sharea. competitivenessb. employmentc. profitd.

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Chapter III

Design Management

Aim


definedesignmanagement•

identify the scope of design management•

establish a comparative approach to design and management•

Objective

The objective of this chapter is to:

discuss the designence model of design and management•

evaluate design and quality management•

enumerate the steps to attain total quality in the service of design•

Learning outcome


understand the origin of design management•

differentiate between design and quality management•

interpret design as a tool for qualiticians •


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3.1 IntroductionEarlier you have learned about design from an economic perspective; now in this chapter, you’ll learn about it from a managerial point of view. Design management is based on the shift from a hierarchical, Taylor model of managementtoaflatandflexibleorganisationalmodel.Thisorganisationalmodelsupportsindependentindividualinitiative and risk-taking. Concepts like customer-driven management, total quality management and project-based management, which deals with design, are the basis of this model. The new model is more informal and designers feel at ease with it.

A demand for in-house management has been created due to this shift in the approach to management. Now it’s a matter of contributing to changing corporate behaviour and vision besides giving a visible form to a particular business or marketing strategy. Matters like creativity, initiative, attention to detail, concern for customers, which are weak points for a designer, have become strengths for a manager who can imply these to maintain the management of change. There are three simultaneous ways to introduce a design in an organisation to make it effective. These are:

Gradual Responsible

Deliberate

Fig. 3.1 Ways to introduce a design in an organisation

Gradual: To incorporate a design into an organisation step by step through a number of consecutive projects is the best way to make the organisation understand the advantages of design.

Responsible: To incorporate a design in the organisation, the help of senior managers will be required who will demonstrate the strategic character of design. For this someone within the company should be assigned to make the design decisions, someone who has the passion for design.

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Deliberate: It is necessary to manage design at each level. Designers should be informed about the corporate values. Top management and design group must be in contact all the time.

3.2 Origin of Design ManagementTheexpression“DesignManagement”wasfirstmentionedinliteraturein1964,thoughiteventuallyoriginatedinUnitedKingdominthe1960s.Thistermwasinitiallyreferredtomanagingrelationsbetweenadesignfirmanditsclients.In1966,thenecessityofanewfunctionalofficerwasobserved.Thatwasfor“DesignManager”,whosework was to make sure the smooth functioning of projects and to maintain the communication between the design agency and its clients. The manager could be either from the design agency or from the client’s side, as the main objective was to keep communication open.

Theawarenessofthecriticalrole,adesignercouldplayintheeconomy,wasfirstspreadthroughthejointeffortsof London’s Royal College of Art and the London Business School’s Department of Design Management.

In U.S.A, the Design Management Institute (DMI) was founded by Bill Hannon and Massachusetts College of Art in 1975 in Boston.

3.3 Definition of Design ManagementItisquitedifficulttogiveanoveralldefinitionofdesignmanagementasithasamultifacetednaturewhichleadsto varied opinion. Also, the design managers have a large range of roles and responsibilities. The company size, industry,marketsituationandtheorganisationalactivitiesaresomefactorswhichinfluencethedesignmanagementfor a particular company. Also, the design management is not limited to a single design practise but depends upon the perspective of its application within the organisation.Forasinglelinedefinition;designmanagementcanbedefinedas,“Theclassificationanddistributionofcreativeassets within an organisation to make strategic and sustainable advantages is said to be the design management for that particular organisation.”

Some definitions of design management stated by experts are as follows:

“Design management is the effective deployment by line managers of the design resources available to an organisation in the pursuance of its corporate objectives. It is therefore directly concerned with the organisational place of design, withtheidentificationwithspecific design disciplines which are relevant to the resolution of key management issues, and with the training of managers to use design effectively.” - Peter Gorb

“Design management is a complex and multi-faceted activity that goes right to the heart of what a company is. It is not something susceptible to pat formulas, a few bullet points or a manual. Every company’s structure and internal culture is different; design management is no exception.Butthefactthateveryfirmisdifferentdoesnotdiminishthe importance of managing design tightly and effectively.” - John Thackara


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3.4 Scope of Design ManagementThe scope of design management has been explained with the help of following table:

Job Title Responsibilities

DesignerAssociate designer•Assistant designer•Designer•

Developing creative solutions to design problems.

Design Project Manager

Senior designer•Project manager•Associate design director•

Coordinating resources in order to deliver a design within a predetermined schedule and budget.

Design Staff Manager

Creative director•Studio leader•

Managing design staff transferring design strategy into creative briefs and assembling design teams to meet project needs.

Design OrganisationManager

Director•Principal•

Making operational and general management decisions that drive the development of a design group or organisation.

Strategic Design Manager

Chiefdesignofficer•Chiefexecutiveofficer•

Developing the organisation’s strategic business objective. Along with the related design strategies that help meet goals.

Table 3.1 The designer’s career path

3.5 Convergence of Design and ManagementIt is believed that design and management belong to two different worlds due to the common doubts, managers and creative team have for each others. However, there is a possibility of a convergence between design and management as some organisations have successfully bridged the different cognitive spheres of design and management.

3.5.1 A Comparative Approach to Design and ManagementAccording to Borja De Mozota, who has developed a comparative approach of design and management concepts, managers should not only be able to decide among the alternatives presented to them by staff but the ability and the passiontocreateanddesignnewalternativesareequallyimportantinordertoleadefficientlyinaneconomybasedon selling experiences and emotions.

Design concepts Management conceptsDesign is a problem solving activity Process

Problem solvingDesign is a creative activity Management of ideas

InnovationDesign is a systemic activity Business system

InformationDesign is an activity of co-ordination. Communication

StructureDesign is a cultural and artistic activity Consumer preferences

Organisational cultureIdentity

Table 3.2 Comparative approach to design and management concepts by Borja De Mozota

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In table 3.2 the key concepts of design and management are compared. Almost all concepts are common in both thedisciplines.Theculturalandvisualextentsofdesignareequivalentinmanagementinthefieldofcustomer’spreferences,corporateidentityandculture.Designisgenerallyconflictedwithtraditionalmanagementstylesandconventional attitudes which prevent organisational change as it involves a search for novelty, creativity, originality and innovation.

3.5.2 The “Designence” Model of Design and ManagementThe conceptual schemas and paradigms of design and management can work as a starting point respectively in making a convergent model of the development of design management which is based on reactive (managerial) and proactive (strategic) perspectives.

The reactive (managerial) approach includes improving design by cooperating with administrative and management concept. To choose the ideas and methods which will make corporate design more effective, all management theories are examined. It is attained by connecting design with the key concepts of product, brand, identity and innovation management. In this perspective, applicationsof thedifferent theories ofmanagement (scientific, behavioural,situational, decisional and systematic) are required to be enquired for their conceptual and practical relevance for the improvement of design management methods.

Scientific: • Design management is seen as a completely logical process.Behavioural:• Design management works to get things done by people, centred on relationships, interpersonal group behaviour and co-operation.Decisional:• Design management works as a decision-making activity.Situational:• Design management depends upon circumstances.Systematic:• Design management works to organise systems with open communication with the environment and complicated communicative subsystems.

The proactive (strategic) approach involves observing design as a new concept to reach at the ideas and methods which can be used to improve the effectiveness of management (in general) and design management (in particular).

Design management approach

The objective of design man-agement

Its implication to quality management

The reactive approach to design management

Improve design with managerial methods

Design and organisational performance

Brand/ design, identity, strategy

General management and design management methods

Contribution of ‘qualiticians’ to designers and design managers

Data on design impact on ‘zero defect’

Test of quality perceived

The proactive approach to design management

Improve management with design management methods

Theories of forms; design principles

Creativity and idea management

Contribution of designers to ‘qualiticians’

Rethinking processes

Shared vision, continuous development

Table 3.3 A convergent model for design and management: “Designence”


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3.6. Design and Total Quality ManagementGenerally, designers are unfamiliar with the techniques and methodology of total quality management. Though quality is synonyms with design but it does not mean the same as total quality management for designers. Many companies, now a day, are likely to adopt the total quality approach by applying methods obtained from quality certificationprocess.Designmanagementwhile improving its approachcancontribute in thequest forqualitythrough its competencies.

3.6.1 Total Quality in the Service of DesignThe total quality movement has gone through various phases from the logic of a posteriori examination of quality, meetingspecificationsanddecreasingdefectstocustomerorientedtotalquality.Qualitymanagementisanactivetheory with the objective to make individuals aware of their responsibility towards developing a product or service the customer will consider as the best. The convergence model of design management given above can be illustrated by the concept of total quality management.

Management concepts improve design management

Total quality methods improve design and design management.

Design concepts are positioned in the service of management

Total quality is optimised by design processes and methods are developed to measure observed quality, which is included in total quality management methods.

The contribution of qualitymanagement techniques to designmanagement canbe analysed froma scientific,managerialandhumanresourceperspective.Someofthescientifictechniquesofqualitymanagementlikeergonomics,marketing and value analysis are already employed by design.

Design management tools and tools for measuring design effectiveness like collecting data on customer satisfaction can be developed by the help of design management by using the techniques of quality management. By using quality measurement criteria like effect of design on quality objectives (zero defect, zero inventory, zero delay), effectonreducingproductiondefectsandonthechoiceofpartnersandsuppliers,thesignificanceofdesigninvaluechain can be calculated.

New proactive methods focusing on shared information, cross disciplinary team, prevention and network management are totally consistent with the way in which designers work.

Quality, actually, has become the main factor in competitiveness. The same applies to the process as well as the finalproduct.

3.6.2 Design as a Tool for QualiticiansTo get quality, a regular checking of procedure, defects and errors is much needed. The routine is likely to be challenged by the design process as it is the nature of the design process. Designers need a logical reason for each and every method by which things are done. This attitude of designers can be used as a tool for change within the organisation.

The difference between the functional and creative sides of management is brought back due to the matter of quality. Theideaofqualityisrelatedtothefightagainstnegativequalitieslikethedefectsandflaws,specificationgapsanddeficiencywhichcomprisessignificantweaknessesinproductsorservices,whichcompaniestrytoreducebyusing rational tools. However, the positive qualities make it possible to surpass competitors and materialise the expectations of potential customers. Some positive qualities can be gained through constant improvement and others can be obtained through creative innovation and instinct.

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SummaryDesign management is the strategic implementation of design in an organisation helping it in achieving its •objectives.Theterm‘DesignManagement’wasfirstintroducedin1960.•In U.S.A, the Design Management Institute (DMI) was founded by Bill Hannon and Massachusetts College of •Art in 1975 in Boston.Designandmanagementarereciprocallybeneficialtoeachother.•Quality, actually, has become the main factor in competitiveness.•The reactive (managerial) approach includes improving design by cooperating with administrative and •management concept.The proactive (strategic) approach involves observing design as a new concept to reach at the ideas and •methods which can be used improve the effectiveness of management (in general) and design management (in particular).

ReferenceMozota B. B., 2006. • ThefourPowersofDesign:Avaluemodelindesignmanagement,Design Management Institute.Gray C. & Hughes W., 2001. • Building design management, Butterworth-Heinemann.Design Management. • [Online] at: <http://www0.hku.hk/bse/interdisciplinary/ICE-Design_Management.pdf> [Accessed 5 January 2012]. Newton, A.• What is effective Design Management? [Online] at: <http://www.adeptmanagement.com/pubs/adept_management_dmwhitepaper.pdf> [Accessed 5 January 2012].clarapvasquezg., 2010. • Design Management Tools [Video Online] Available at: <http://www.youtube.com/watch?v=KLeTqfLVyJQ> [Accessed 27 January 2012].87amarula., 2011. • Design Management [Video Online] Available at: <http://www.youtube.com/watch?v=4Mc-jgl7WqQ> [Accessed 27 January 2012].

Recommended ReadingBest, K., 2010. • The Fundamentals of Design Management. Lausanne-Switzerland: AVA Publishing SABest, K., 2006.• Design Management: Managing Design Strategy, Process and Implementation. Lausanne-Switzerland: AVA Publishing SAKeith Grane• t, K., 2011.The Business of Design. New York: Princeton Architectural Press,


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Self AssessmentTheexpression“DesignManagement”wasfirstmentionedinliteraturein_____________.1.

1966a. 1972b. 1964c. 1968d.

The Design Management Institute (DMI) was founded by____________ and Massachusetts College of Art in 2. 1975.

Bill Hannona. Brigitte Borja De Mozotab. Taylorc. Peter Gorbd.

Which of the following statements is false?3. The design manager is a person in charge of design.a. Designandmanagementarereciprocallybeneficialtoeachother.b. Theterm‘DesignManagement’wasfirstintroducedin1960.c. Design management is always limited to a single design practise but does not depend upon the perspective d. of its application within the organisation.

_____________ is an active theory with the objective to make individuals aware of their responsibility towards 4. developing a product or service the customer will consider as the best.

Design managementa. Design strategyb. Quality managementc. Quality productsd.

Which of the following statements is false?5. Designers are always familiar with the techniques and methodology of total quality management. a. Designers need a logical reason for each and every method by which things are done.b. Quality, actually, has become the main factor in competitiveness.c. To get quality, a regular checking of procedure, defects and errors is much needed.d.

The _________ approach includes improving design by cooperating with administrative and management 6. concept.

proactivea. reactiveb. strategicc. plannedd.

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In accordance with the ____________theory of management, design management is seen as a completely 7. logical process.

situational a. scientificb. behaviouralc. systematicd.

Design management works to organise systems with open communication with the environment and complicated 8. communicative subsystems, according to the ____________theory of management.

situational a. scientificb. behaviouralc. systematicd.

Which of the following statements is false?9. Designa. management is a complex and multi-faceted activity that goes right to the heart of what a company is.Designers should be informed about the corporate values.b. Designmanagementisbasedontheshiftfromaflatandflexibleorganisationalmodeltothehierarchical,c. Taylor model of management. The organisational model is more informal and designers feel at ease with it.d.

The _____________ model supports independent individual initiative and risk- taking.10. Organisationala. Taylorb. Convergentc. Creatived.


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Chapter IV

Design and Marketing

Aim


introduceanddefinemarketing•

explain design’s impact on consumer behaviour•

discuss the aesthetic preferences of the consumer•

Objectives


describe design as a message•

discuss the emergence of tools for measuring perception•

explain the aesthetic segmentation of the consumer•

Learning outcome


enumerate various types of brands •

distinguish between design and advertising•

compare brand and product•

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4.1 IntroductionMarketing is the process which maintains the relationship with consumers by creating, communicating and delivering value to the customer. This process can be seen in a few different ways:

Marketing (an exchange process): • Marketing, as an exchange process, is that process in which two or more parties exchange somethingof value likeproducts, services or ideaswith eachother to fulfil eachother’sneed. Design can help in this process by making designers works either to recognise these needs or transform consumers’ sensitivities of value.

Marketing (a liaison):• Exchanges close the gaps which generally exist between producers and customers. The designers work to develop perceptional gaps in the market place.

Marketing (a function):• Designers work on logistics and distribution operations with marketing.

Marketing (a creator of utility):• Production and marketing, jointly with design, are responsible for making and providing ‘form utility’. They play a crucial role in directing the exact shape, size, quality and characteristics of products as the core product, the extended product and the brand product.

Marketing is a business process which focuses on customer’s wants and needs. Theoretically, design and marketing havethesamemindsetofimprovinganunderstandingofconsumer’sneedsandthefactorsthatinfluencethoseneedsin order to establish healthy customer relationships. In practice, the relationship between design and marketing poses problems that spring from a reciprocal ignorance of the other profession: the designer working with the marketer onproductspecificationsignoresothermarketingresponsibilitiesandexpertise.

4.2 Design’s Impact on Consumer Behaviour A customer’s knowledge of a product is acquired through the perception of it. A customer’s behaviour, then, is determined by how she perceives the products and services around her. Design plays a fundamental role in marketing because:

thevisualdifferentiationintroducedbydesignisperceivedbythefinalconsumer.•theproductshapeinfluencestheconsumer’sbehaviour.•

In a 1973 article, Philip Kotler uses the term “atmospherics” to describe the conscious action of organising a retail environment to generate emotions that are likely to increase the probability of purchase. Environmental retail design-including the ambient conditions, the layout of the space, ad its signs and symbols-generates internal responses in both the employee and the customer in terms of cognition, emotion, and physiology and therefore, behaviour: what they approach, what they avoid, and how they interact (Baker, 1987; Bitner, 1992; Everett et al., 1994).

The experiential model of consumption developed by Holbrook & Hirschmann (Holbrook & Hirschmann, 1982) provides a general framework to represent a design’s impact on consumer behaviour. Within this model, the prevailing information processing model is contrasted with an experiential view, which focuses on the symbolic, hedonic, and aesthetic nature of consumption. This view regards consumption experiences as a phenomenon directed toward the pursuit of fantasies, feelings, and fun. This is an enlarged model of consumer behaviour, in which the consumer is not making a decision but is participating in an experience.

The “design-form” induces the consumer’s behaviour according to different approaches to perception and information processing: form translates into cognition, an emotion, a message, and a relationship.

4.2.1 Design as Cognition: Perception and Cognitive PsychologyThefundamentallawsofvisualperceptionapplyfirst:visionisinstantaneous,orders,andregroups.Takinganexampleof a document or computer screen, when one looks at these objects, the eye instantaneously orders the luminosity and associates the darkest zones with the most important information. It then regroups those elements closest to one another,accordingtothelawof“gestalt,”and,inparticular,thelawofproximity,and,finally,regroupselementsthat have common features of luminance, scale, or shape, according to the law of similarity.


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A consumer’s cognitive interpretation of the situation precedes and determines the emotional reaction (Lazarus, 1991; Markin, 1976):

A shape induces a mental picture•A shape is categorised•

Shape is cognition. When looking at an object, a mental picture is constructed which is the result of free association and projection. A shape can make us recall a memory, unconscious thought, or belief. Mental imagery might send us back to a personal, internal construction we made in the past in interaction with the environment. The design-form activates a process of mental imagery through its visual imagery. This is especially critical when competition makes itdifficulttodifferentiatetheproductfromothersinthemarket.Thiscognitiveperceptionofthedesign-form:

Affects consumers’ beliefs about products and brands (Morrow & McElroy, 1981; Zweigenhaft, 1976; McElroy et al., I990; Bellizi et al., 1983), retail spaces (Linquist, 1974; Zimmer & Golden, 1988), and businesses.

Affects consumers’ evaluation of quality, durability, and dollar value, and their propensity to buy at a higher price (Dodds et. al, 1991; Grewal & Baker, 1994; Grossbart et al., I981: Weners, 1985; Evans et al., 1980).

Affectsconsumers’interpretation-bothfunctionalandaestheticofinformation.Thedesign-formisthefirstcontactthrough which the consumer experiences and values the product or idea. (Parasuraman, I988; Spies et al., 1997; Nussbaum, 1993).

A shape activates cognitive as well as sensory stimulations (Grossbart et al., 1975).The consumer learns throughperception, andwhat he learns influences his future perceptions (Markin et al.,1976).

Consumer response to a design-form is determined by two different styles of information processing: the cognitive and the preferential. Research on the differences in individual consumer behaviour primarily incorporates measures of consumer verbal response. Further research expands the examination to include a holistic look at the consumer’s visual information processing. Visual processing particularly mental imagery-is a strong facilitator of information acquisition.

Mental imagery is an internal learning model, individualised by each consumer, who can attest to her particular mental imagery by an explicit verbal or graphic response (Childers et al., I985). Individuals tend to choose between visual-image and verbal-discursive information processing:

Individual with visual skills opts for a more holistic style of information processing (in support of holistic processing, gestalt psychologists argue that an object is perceived as a whole).

Individual with a verbal tendency uses a more analytical style of information processing (his reactions to the design-form are based on atomistic perceptions).

Individual imagery capabilities are measured by:Imagery vividness: the clarity of mental image an individual evokes.•Imagery control: the ability of an individual to self-generate a mental image or to perform certain manipulations •of it, such as a mental rotation.Imagery style: the willingness to habitually engage in imagery versus verbally oriented processing•

Another aspect of cognitive psychology is the process of categorisation. Every design -form is categorised. An individual’s mental imagery points to the fact that there exists a stock of shapes or objects which act as referents or “prototypes”foreachindividual.Cognitiveprocessingtypecastsashapetofitaproductcategoryandproceedsbymaking comparisons between the new shape and pre existing knowledge of that category. This visual routine outlines the cognitive path of information processing (Loken & Ward, 1990; Sujan & Dekleva, 1987; Bloch, 1995).

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Thismethodoftypecasting,or“typicality”isusuallydefinedasthedegreetowhichanitemisperceivedtorepresenta category. Family resemblance is an example of typicality. It is measured by the degree of similarity between the attributes of two or more objects. Typicality is linked to:

The consumer’s attitude in his assessment of an object: familiarity determines both typicality and attitude.

The consumer’s preferences: the most typical objects often have more value (Loken & Ward, 1990).

The importance of familiarity (the number of experiences a consumer has with a product) and expertise (the capacity to successfully accomplish the product functions) creates distinctions between the product categories that are perceived differently by consumers. As a designer, it is useful to know that:

Rather than leaving categorisation to chance, designers should adopt a proactive approach by using prototypes •with target consumers to determine whether the intended categorisation is successful.Iftheproductisradicallynew,categorisationcanbedifficultandfrustrating(Cox&Locander,1987).•Consumers prefer goods that are only moderately different from existing products (Meyers, Levy, & Tybout, •1989). The distinctiveness is clear enough to warrant further processing, yet the product can still be easily categorised.A brand is a mental image, structured knowledge, and a range of associations.•

A consumer usually prefers to choose products perceived as typical of the brand. In some cases, however, typical designs are preferred, either because of the appeal of variety or because these products are more salient. The best strategy for design is to move away from the stereotype in order to increase the impression of novelty while moving toward an ideal that increases the harmony, elegance, and symmetry of a design, which is to bring the stereotype closer to the ideal (Del Coates, 1997).

4.2.2 Design as Emotion: Perception and Emotional PsychologyProduct design is associated with positive effects and pleasurable experiences. Its goal is to elicit positive reactions in consumers who encounter its creations rather than negative reactions. These affective responses might be to the overall form (or “gestalt processing”), or they might relate to individual design elements. The intensity of the emotional reaction to a design is a function of the intrinsic elements of the perceived form (Levalsky, 1988; Veryzer, 1993;Groppel,1992).Itencompassesstrongattentionandinvolvement.Theschemesforemotionalclassificationare conceptualised by:

The Mehrabian- Russell model (1974) or the PAD paradigm: the three dimensions of pleasure, arousal, and dominance (control).Emotionsareclassifiedaroundthreeaxes:pleasure/displeasure,excitement/torporandascendancy/passivity.For example, the arousal stimulus potential suggests that factors such as novelty and complexity of visual patterns interact to evoke pleasure.

The eight basic emotional categories by Robert Plutchik (1980): fear, anger, joy, sadness, acceptance, disgust, expectancy, surprise.Research explaining these emotional classifications analyse the possible differences inconsumer experiences. For example, one can predict purchase behaviour by looking at the characteristics of the design environment. Researchers (Donovan & Rossiter, 1980) criticise studies that insist on the cognitive component of attitude (price, localisation, assortment, quality of products). They suggest that a consumer’s behaviour is, above all, an emotional response. A sense of pleasure for the customer increases the intensity of her interaction with the staff, as well as the likelihood of a purchase (Donovan et al., 1994; Dawson et al., 1990).

TheemotionsclassifiedundertheMehrabian-Russellmodelentailatypeofbehaviour:attractionorrepulsion.Positive/negative emotional responses to design can he considered along an approach/avoidance continuum. Consumers who have positive psychological responses engage in approach activities such as extended viewing, listening or touching.


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Avoidance behaviour is an outgrowth of negative feelings. The stronger the positive/ negative responses to a product’s form, greater is the propensity to approach/ avoid the form.

The attraction behaviour demonstrates a desire to stay in the retail environment or explore the product or packaging visually or tactilely. There is an interrelationship between the feeling of pleasure and attraction behaviour (Russel & Pratt, I98o; Csihzentmihalyi & Robinson, 1990). If the consumer is really attracted to the product, he will continue his approach behaviour after he gets the product home, displaying it prominently and maintaining it carefully.

The PAD consumption model defines new criterias to measure this emotional response:The introspection process of the qualitative experience: the consumer tells how the product is consumed and how he interprets his experience of consumption.

The consumer’s description of his negative or positive feelings when confronted with the design form (as one would do for a publicity campaign).

The pleasure which a product can give to a consumer can come from the aesthetics of an object without any relation to its function. It is not uncommon, however, for aesthetic and utilitarian value to occur together. The most successful productsofferbothbenefitstotheconsumer.

Other research has investigated the emotional impact of a design form variable, such as the visual, auditory, olfactory, or tactile sensations it invokes. Light and colour are more frequent themes of this type of applied research:

Light is an element of attraction and attention for the customer (Schewe, 1988) and can provoke impulsive purchasing (Birren,1969;Rook,1987).Retailerscaninfluencethetimepassedinastorebytheselectionoflightinglevels(Bitner et al., 1987; Markins et al., 1976).

Colour generates biological reactions (Evans et al., 1980), provokes emotional states (Danger, 1969; MacNeal, 1973), and attracts the attention of the individual (Margulies, 1970). Different colours are assigned differently according to product categories (Marquardt, I979). Hot and cold colours have different emotional effects in terms of perceived quality and positioning (Belizzi et al., 1983).

Emotions brought on visually are stored hierarchically in the consumer’s memory. The memory works like a chain reaction, beginning with a visual image of the product’s attributes, which leads to a sequence of links with the consumer’sconceptofselfandhisperceptionsoftheproduct’sbenefits.Putsimply,productsareboughtforwhatthey mean to the consumer (Peter & Olson, I987; Olson, 1988).

Products either imply a cognitive treatment of information (a thinking process) and/ or an emotional treatment of information (a feeling process). Motivations for purchasing a “thinking” product are utilitarian and cognitive (Clayes et al., 1995). Products that provoke a “feeling” are expressive of emotional value. The information processing is logical, rational, and sequential, or holistic and synthetic. On the one hand, the consumer is focused on performance, cost, and tangible attributes, whereas he is concerned with the valorisation of self, the subjective value, and the intangible attributes. Knowledge of the product is the most important aspect for a “thinking” product, while self-knowledge prevails m a feeling product.

Moreover, what makes a product perfect (“what is product rightness?”) Designers insist on design principles such as the unity of the shape. Adrian Forty suggests that systems of values and beliefs and designer creations have a constant impact on one another. Implicitly, designers determine the way to live (Forty, 1986). However, a good product is not always the winner of a design award or an archetype of its category. It can be a product that a certain populationlikes,aneverydayproduct.Therightproductsreflectpreviouschildhoodexperiencesandarecustomisedtofitconsumers’personalitiestheyare,motherwords,rightforthem(Durgeeetal.,1995).

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4.2.3 Design as Message: SemioticsAccording to the critic Baudrillard, post-modern society is characterised by “hyper reality” (I983). That is, our reality is created by publicity, design, and marketing, we live in a society of spectacle (Debord, I983). The distinction between the sign and its meaning no longer has bearing; both the product and its image play a role. When an object isnolongerspecifiedbyitsfunction,itisqualifiedbyits“subject”.Objects,then,becomesasystemforsignifyingsocial practices (Barthes, 1970).

Post-modernism viewed marketing as a cultural process that erases the distinction between art and commerce. Fashion is a metaphor for the culture of consumption. Products themselves remain the same, but their mental representations are periodically varied or renewed. The consumer becomes a consumer of culture, and culture becomes a marketable product(Firat&Venkatesh,1993).Marketinganddesignhavecontributedextensivelytothisglorificationofsigns,oridentities,asaprocessbywhichindividualsdefinethemselves.Designcreatesformsandconnectsthemtoexistingformsoraltersthoseformsthatalreadyexist.Indoingthis,itmodifiesthestructureofthesystemofsignificanceand links the new object to collective cultural habitus.”

The consumer is a producer, not just a receiver, of the end product. Postmodern consumerism is no longer dictated by needs, but exists within a system of objects. Consumerism, then, creates the consumer. The consumer no longer tries to satisfy his needs but seeks to produce symbols (Firat & Venkatesh, 1995). People have the power to freely combine significations, andmake their own associations andmetaphors.Design is the semiotics of seduction(Lebahar, 1994).

For Pierre Bourdieu (1984), distinction provides a framework for the symbolic processes in consumption. Consumption takes place through social structures. In this sense, social class is the key in the formation of taste. Bourdieu argues that what distinguishes people is the notion of difference-which resonates with the Derridean idea that distinction through symbolic differentiation is what underlies any cultural system. Semiotics appreciates the physical, or formal, aspects of artifacts as forms of communication without excluding their functionality (Eco 1988; Goodsell, 1977).

Objects tell us how to use them; they serve their symbolic representations and construct the symbolic environment in which we live (Langrish et al., 1996). Fashion is a part of design that is ripe for semiotic analysis because of the subtleties of unconscious mechanisms that are at work behind it (Mick, 1986). For Saussure, structural semiotics is basedonthenotionthatthereisonlysignificanceindifference.

Design Stimulus Form Product Environment Packaging

Culture and Social ContextSituational Context

Information Processing

Aesthetic Preferences, tastesInnate preferences/designsIndividual consumer characteristics/Design, design acumen, experience.Knowledge

Psychological ResponsesCognitive responsesMental imageryCategorisation

Emotional ResponsesPAD (Pleasure ArousalDominance) Attraction/repulsion Semiotics

Behavioural responsesInteraction Experience Co-conception

Fig. 4.1 Design and consumer behaviour(Source: Adapted from Peter Bloch, journal of Marketing, Vol. 59· July 1995)


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For Peirce, semiotics is the process of communication by any type of sign, being anything that stands for something (its object) to somebody (the interpreter) by some means (its context. Charles Morris’s work on the science of signs treats these three dimensions on the operational level.

The syntactic dimension or the sign itself: the dimensions of the object as it appears can be described by the •structure of its constitutive components (architecture, technology).The pragmatic dimension or the interpretation of the sign: the logic of the object adapted to action (its function, use).• The semantic dimension or the sign- object relationship: the dimension of the object viewed in terms of “sense •building”ormeaningontwolevels,thedenotativeorrationalsignificationoftheobject,andtheconnotativethat is the image (the symbol, brand image).

This representation of a form as a triangle, or triadic sign, is the most helpful conceptual tool for teaching the non-designer about the nature of design process. Designers conceive of signs that all have three dimensions: a structure, afunction,andasymbol .Thedesignprocessis,bydefinition, thelinkbetweenthedepartmentsofacompanythat represent these dimensions: technology (structure), marketing (function), and corporate communications (symbol).

Pierce’s semiotics develops a typology of the consumer’s interaction with a design using tools of lexical analysis.The intellectual implication: the measure of the degree of stimulation, curiosity or potential to develop knowledge •and expertise. The emotional implication: the measure of the degree by which the product reinforces the ego and the idea of self.•Thesocialimplication:themeasureofthedegreebywhichtheproductrepresentsanaffinityforaparticular•group-political, social, or religious (Paul, 2000).

Any sign or form satisfies a hierarchy of three logics:The logic of the object: the sense of the object in itself. Is it beautiful, accessible, and coherent?•The logic of the user: the sense of his or her relationship to the object. Why is the user buying it? What are his •or her needs?The logic of use: the sense of the user’s relationship to others: What is the object doing in its context?•

French semiotics (Hetzel & Marion, I995) has contributed operational tools such as:The narrative diagram • (schema narrati), used, for example, in the study of a logo.The semiotic square • (cami semiotique), used, for example, to provide a model of interpretation of user needs in hypermarkets (Floch, I989).

Studies have analysed in depth the impact of package design on consumer behaviour (Dano, I996) and established a “virtual” semiotic typology of consumers. Research reveals the correlation between the value systems of consumers and their attitudes toward and comprehension of packaging functions.

4.2.4 Design as Relation: The Sociology of ObjectsProducts are tools of communication that “put the consumer on stage” and help him exist as a social object (Solomon, I983). The design-form becomes a stimuli for behaviour. The social symbolism found in the form is the principal reason for buying the product. A design will be considered important if it projects an aspect of the consumer’s self-image that is important to him.

The picture is not that of an isolated consumer confronting a design, but of the consumer in interaction with other consumers in a socio-spatial environment (Everett et al., 1994). Some researchers propose a link between customer satisfaction and the quality of the customer’s interaction with the design in an environment (Goodwin et al., 1994: Harris et al., 1994).

The“senseofcommunity”isanintegralpartofwhatafirmhastoofferandhasadirectimpactonconsumers(Goodwin, 1994). There is a certain communal integration ritual when one encounters a service. These rituals of

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integration are social mechanisms that generate a common feeling or social implication for the customer (Siehl et al., 1990: Belk & Bryce, 1993).

Researcher Jo Bitner demonstrated the importance of the impact of physical environment on the nature of social interaction and proposed to add to the “7 P model” in marketing a new variable, the “physical evidences” that measures consumer satisfaction in the meeting of a service (1990).

The concept of” relational value” in Bernard Cova’ s sociological model hypothesises that, in the postmodern era, the global value of a service or product results as much from its social value as from its functional and symbolic values. The “tie,” in other words, is more important than the goods (1994).

The aestheticisation of everyday life became the mark of postmodern society, and transformed the “Homo economicus” into the “Homo aestheticus,” according to Luc Ferry (I990). Aesthetics is understood as shared emotion. The product becomes a “cult object”. Aesthetics transforms a new product into a societal innovation, which is the process by whichanewsignificationisintroducedintothesocialsystem.Itactsasasocialtiegroupingthepostmoderntribestogether. Consequently, there has been a re-emergence of the “artist-entrepreneur”: an entrepreneur who innovates by vocation rather than necessity and has a societal approach to marketing (Cova & Svanfeldt, 1993).

Consequently, “co-conception” a new way of developing the design process, emerged, making the design process more public so that everyone who is affected by design decisions can foresee what decisions can be made and, therefore, influence thosedecisions (Mitchell, 1993). It is necessary to externalise thedesignprocess in orderto brainstorm and fully explore the complexity of the conception process (Jones, I992). Also called “experience building”, it implies a more collaborative approach to the design process (Jones).

Designisredefinedintermsoftheuser’sexperienceandnotbythegeometriccriteriaofform.Atthecentreofthedesign process is the experience of the design. Intangible design is the design of experience itself.

Examples:Sharp uses the expression “human ware design” rather than “hardware” or “software”.Apple studies the psychological principles that sustain people’s interactions with design: The criterion for success is “zero learning” (Mitchell, 1996).4.2.5 Design in Context: The Situational and Cultural PerceptionThe laws of gestalt explains that perception of a shape depends on the differentiation between the form and its background. Perception evolves, for example, according to the form’s brightness. Any research in aesthetics should takeintoaccounttheselaws.Consumers’aestheticpreferencesareinfluencedbysituationalfactors.Asituationcandefineitselfasasetofdescriptiveandobjectiveelements(Belk,1974,1975)orasthepsychologicalfeelingsoftheconsumer (Lutz & Kakkar, 1975).

The consumer’s mood also has an impact on his or her evaluation of a product. A consumer in a good mood will value the shopping experience more positively (Bos 1987: Groppel). Aesthetic preferences vary according to the consumer’s socio-demographic and cultural context, as well (Holbrook, 1986). Decisions relative to product positioning, aesthetics, and packaging are highly cultural (Dubois, 1987). Cultural differences exist in design: a certain colour, shape, or material will be valued more by one culture and less by another. The culture provides a consensus on visual styles, and also affects tastes concerning design on the basis of semiotic considerations: designers expect consumers to prefer products that are desirable in a certain culture (Solomon, I983: McCracken, 1986).

4.3 The Aesthetic Preferences of the ConsumerClassic marketing studies consider aesthetics a product attribute and introduce it in consumer preference scales and multi-criteria models. For example, the consumer is asked to appreciate and rate successively the attributes of a car-price, fuel consumption, durability, aesthetics, comfort, performance, and customer service. However, design-form or aesthetics is not an added, separate attribute. We know aesthetics is a result of the design and it is correlated with other attributes. For example, fuel consumption is linked to the aerodynamics of the design; the external appearance of the vehicle is linked to the internal architecture of the motor and so on.


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Studying aesthetic preferences is an emerging trend in marketing research. In postmodern society aesthetic sensitivity exists for all products. Specialists in consumer research analyse how the aesthetic variable is perceived globally. In 1981, Holbrook spoke of the “aesthetic imperative” and challenged researchers to change the focus of their studies to encompass the aesthetic attributes rather than only functional ones.

Although, techniques exist to measure aesthetic attributes, there is little research on the aesthetic aspects of consumption (Eckmann,1994)· It is necessary to develop this domain of investigation in the lineage of Holbrooks work, and thus creates a bridge between researchers and designers (Simonson, 1997).

The form or aesthetics of a product can contribute to its success in different ways (Bloch, I995)· In saturated markets, an unusual product shape can be a means of winning the attention of the consumer (Garber, 1995). A distinctive design can render competition immediately obsolete (Goodrich, 1994: Hollins & Pugh, 1990).The quality of a design drawing is also important: if badly manufactured, the shape imagined by the designer can be undermined. Finally,certaindesignsareeternalandgivepleasuretoconsumersfordecadesaftertheyarefirstintroduced(Pye,1978: Jones, 1991).

Consumerresearchoffersscientificmethodsthatpermitthejudgmentofgooddesign(theonethatisbought)anda context in which to observe the customer’s behaviour that isn’t biased by subtleties of artistic appreciation. The progress of this research depends on the willingness of researchers to adopt a more practical and pragmatic view of aesthetics. To limit aesthetics to artistic objects is far too restrictive. An aesthetic response is produced from the interaction between the appearance of an object and the person who perceives it. It offers the possibility of appreciating all products in an aesthetic sense. In the same way, the distinction between the functional product and aestheticproductisdifficulttodetermine,sinceallobjectshaveanaestheticside.Thepersonwhoperceivestheobject gives the object aesthetic sense (Veryzer, 1995).

4.4 Aesthetic Preferences and Design PrinciplesThe perception of the aesthetic function depends on various factors like, emotional (subjective sensations), cognitive (aesthetic sensations linked to what one knows, to a personal interpretation of knowledge), and physiological (the aesthetic perception depends on the quality of our sensations, the physiological steps of perception, and personal psychic conditions) (Solomon, 1988: Quarante, 1994). Aesthetic preferences are linked to personality variables. We see product forms every day that affect the quality of our lives (Lawson, 1983). The perception and usage of beautiful products can provide sensory pleasure and stimulation.

Aesthetic preferences result from the principle of the perfect form. The aesthetic message is induced by the harmony of various factors: proportion, consistency, rhythm, modularity, order, and disorder. Often, the natural or organic shape will be preferred (Berkowitz, 1987).

Designprincipleshaveaninfluenceonconsumerpreferencesandactasaconceptualisationoftheaestheticresponse.The form of an object is based in design principles, such as the principle of “unity”. Aesthetic response is more favourable to objects that are consistent with this design principle. An experiment conducted on three types of products (microwave ovens, sun lotion, or radios) validates this hypothesis. Thirty percent of the interviewees used words in relation to design principles to justify their preferences, for example, “balance” or “symmetry.” Design principles offerabasisbywhichtounderstandhowtheaestheticresponseoperates.Aestheticpreferencesareinfluencedbythe ways in which the form is consistent with principles of proportion and unity (Veryzer & Hutchinson, 1998). This suggests that in the future, the impact of other design principles like symmetry and contrast will be validated (Veryzer, 1993).

A product form represents a certain number of chosen elements united as a whole by a design team to produce a particular sensory effect (Lewaski, I988: Hollins & Pugh, I990). Designers make choices about the size, scale, rhythm, proportion, materials, colour, surface, ornamentation, and texture, mixing these elements to achieve a certain level of unity (Davis, 1987). For example, miniaturisation is an ideal form that is well anchored in the Japanese tradition. (DesignPolicy,1982).Formscanbeclassifiedaccordingtodesignprinciplesfirstaccordingtothreecharacteristicsof the form (based on research conducted on logos):

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Its elaborate character (the depth and complexity of the design)•Its natural character (organic, round, close to daily life)•Its symmetrical character (Simonson, 1997)•

Another model in fashion describes forms according to two variables (preference and the variable of the garment itself, or the form) and draws a typology of clothes and the interaction between different types of clothes (Holbrook, 1986).Hence,theaestheticresponsealsohassocialsignificanceexample,acolleaguewhodemonstratesharmonyin his or her clothes will he judged as more competent.

4.4.1 Aesthetic Segmentation of the ConsumerThe idea of consumer segmentation according to aesthetic preference has been developed but is complicated by the question of whether there is a special class of aesthetic objects, as those found in art or nature. This position encouragestheideathatgooddesignisarbitraryandlimitedtospecificsectors,andthataestheticobjectscanonlybe present in fashion or consumer goods, and not in the industrial context.

Most business-to- business marketing literature ignores the importance of appearance as a competitive factor, as if the industrial buyer had no aesthetic sense. However, product appearance plays a limited but vital role in the selection of industrial products. Appealing aesthetics will have a positive impact on the evaluation of the product and will be added to considerations of price and performance. Industrial design can act as a weapon in industrial competition (Yamamoto et al., 1994).

Research, therefore, tends to classify forms and segment consumers according to aesthetic criteria. For example, bottles of perfume employ the descriptive language of the user: round, square, triangular bottles drawn from the basicfamilyofforms-thesphere,cube,andpyramidandtheirsubdivisions.Thisdescriptiveclassificationisusefulfor the designer in describing the object in comparison with its possible competitors (Llorente (DR), 1993).

Consumers prefer products that are representative of their category: products that are more familiar, therefore, will be better loved and valued. Forms can be segmented according to their impact on visual recognition and emotion, or one can search for a positive emotional impact without thinking about the quality of the visual recognition (based on research conducted on logos, Henderson & Cote,1998) modifying the unity of a form affects the categorisation process (Veryzer & Hutchinson, 1998). Aesthetics helps market segmentation and the discovery of market niches and minority consumer targets, such as:

Consumers whose preferences are for the originality of a design (Sewall, 1978).•High-techproductshaveanintimidatingcharacter,whichhasanimpactontheconsumer’sself-confidence.•Hence,asegmentationandmarketpriceofconsumerswhopreferproductswithsimplifiedfunctionalitiesincontrast to the performance-oriented positioning of the high-tech market (Feldmann, 1995).

In her thesis, Leila Damak confronts the bodily parameters of the consumer (the real body perceived and lived) to the “corporal” component of package design, examining whether consumers prefer products that have shapes similar to thewaytheyperceivetheirownbodies.Thetendencytochoosesimilarshapesistrueforwomenwhoaresatisfiedwiththeirphysicalappearance.Onthecontrary,womenwhoarelesssatisfiedwiththeirbodilyappearancetendtochoose shapes that are different from their own. Women tend to project their physical image onto their responses to product forms more than men. Damak concludes with the concept of the “corporality” of product design (Damak, 1996). In his thesis, Stephane Magne measures the consumer’s aesthetic attitude toward the design form with a variablehecallsthePersonalAestheticSensitiveness(PAS),basedonaJungianinterpretativeframe.First,hedefinesthe elements of a design-form: the morphological, the verbal, iconic elements, and the rhetorical process, and the interactions between these elements. Interactions between the components must be integrated in any explanatory model of the aesthetic order.


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Magne then develops a typology of how consumers react to the design-form, using book covers as examples for experimentation. The quantitative results reveal four aesthetic types:

The formal, colour type: those who prefer abstract, colourful forms.•The skeptical sensory type: those who perceive aesthetics in a contextual and indecisive way.•The expressive type (either sober or exuberant): those who prefer to express themselves to the exterior •environment with provocative forms.The aesthetic type: those who search for meaningful forms, prefer good design, and reject ugliness.•

The PAS concept can be applied to market segmentation, as well as marketing research on consumer behaviour.

4.4.2 Aesthetic PreferencesDesign knowledge requires education, motivation, and frequent encounters with beautiful artifacts and environments. Consequently, it is important to know the level of design knowledge in your consumer targets and to educate the consumers by highlighting the shape through publicity and point-of-sale exposure (Osborne, 1986). Some aesthetic preferences are either innate or acquired early in life (for example, the human preference for order and symmetry in forms). Research has been trying to comprehend these innate preferences, such as those for organic forms in design. A number of researchers believe that the aesthetic sense is something some individuals are born with. These people make sensory connections faster, prefer more sophisticated design, and favour visual over verbal information (Childers et al., 1985; Bamossy et al., 1983). Aesthetic judgments differ according to:The intrinsic/ extrinsic motivation of the consumer. More aesthetic experience is associated with intrinsic motivation. A consumer, who sees a product as a means of doing something, which is an extrinsic judgment, will have more appreciation for utilitarian aesthetics (Holbrook, I986).

Personalcharacteristics likeageorsex influenceproduct interestandthewayvisual information is treated•(Eckman & Wagner, 1994).The visual versus the verbal personality. The beliefs by which visual and verbal consumers judge the aesthetics •of objects differ (Holbrook, 1986). “Visualisers” have a holistic sensitivity and a preference for organic models. “Verbalisers” have an atomistic sensitivity and are attentive to isolated details. Visualisers are more attentive to the interaction of components of the form than verbalisers.Thedurationofthedesignobservationtime.Informationprocessingisholisticatfirst.Alongerobservationtime•is needed for consumers to give utilitarian reasons for their preferences (Creusen & Schoormans, 1998).Subjectiveattributes,suchascolourorshape,influencetheperceptionoftheweight,volume,andefficiency•of certain products (Pmson (DR), 1986). (Gestalt psychologists perceive products as a whole rather than atomistically [Ellis, 1950; Katz, 1950]).

Too much formal similarity generates boredom; novelty and some complexity are necessary to provoke attention. Therefore, preferences were toward product forms that have a small degree of irregularity and disorder. The pleasure is somewhere between boredom and confusion (Berlyne, 1974; Gombrich, 1979). In conclusion one can measure the impact of design on a consumer’s behavior, which is in opposition to how many marketers view design’s role in a company as a result of:

Arrogance (“I know what good design is”)•Contempt (“Considering the position of design in the company, what is the use of design tools?”)•Fear (of the beautiful and/or the diversity of opinions on design)•Ignorance (designers are not educated in the importance of evaluating design) (Paul, 2000).•

Aesthetic research helps marketers understand the relationship between aesthetics and their products in designing their marketing policy.

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4.5 Design Differentiation through BrandingThelaunchofabrandisoneofthemostefficientwaystosuffusedesigninacompany.Ifthebrandiswelldevelopedand persuasive, it instils loyalty and commands a premium among consumers. Design is crucial to achieving coherence; it brings together the diverse elements of performance, product and service messages, marketing and support communications, employee behaviour and appearance, and the spaces that represent a company and its activities-both digital and physical. Differentiation through brand development and positioning goes beyond graphic identity.Thelaunchofabrandisthefirstreasongivenbymanagersfordesignintegrationinacompany(BorjadeMozota,2000).Thedesignprofessionhasgrownsidebysidewithbranddevelopment,particularlywithinthefieldof package design.

4.6 Design and Brand PromiseThe functions of a brand are:

To create value for consumers by informing them about the product’s attributes.•To create value for the company by differentiating the product and making tangible the intangible.•

4.6.1 Brand DefinitionWith all due respect to the American Marketing Association, a brand is more than “a name, term, sign, symbol, or design or combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from the competition”. A brand is the sum of all the characteristics-tangible and intangible that makes the offer unique. A brand is a set of perceptions that are driven both by communications and experiences. It is a distinctive sign, a symbol, and a source of added value.

4.6.2 Brand as a Sign and Graphic DesignAsignaddedtoaproductidentifiestheproduct’soriginandprotectstheconsumerandtheproduceragainstproductsthat are identical. A brand is therefore an intangible semiotic reality that exists only when embodied in a product or service. A product has physical components. A brand represents the products and services it guarantees, as well as the functional and emotional associations that are built within a period of time in the minds of the consumers through the diverse channels of product appearance, packaging, and advertising slogans. The brand gives a product a network of meaning, a story, and an imaginative universe- an identity that is continuous in time and space. Identity is:

the sum of all of characteristics, tangible and intangible, that make the offer unique•theelementsofbrandidentification(example,.,name,symbol,andcolor)bywhichanoffercanbeidentified•

Example: Helena Rubinstein created a new name, “Aromatherapy” for her spa products. Brand identity is the outward manifestation of the essence of a corporate, product, service brand, or brand environment. Concepts like brand personality and brand–customer relationships are essential elements in a brand identity system.

4.6.3 Brand as Added ValueA brand is a means of injecting value into products in order to differentiate them from the competition. Therefore, in a relational perspective, brand status is determined by the way in which the company and its customer base appropriate the brand. Saying a brand has value means three things:

Brand value is the result of interaction: a brand has positioning, promise, and network functions.•A brand is a source of value that differs according to those who interact with it: consumers, producers, and •distributors. Brand value is a building over time, a sedimentation process, which evolves and changes: the brand has a mission •tobuildcustomerfidelityandevokeafavourableresponsefromthepublic.


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A product brand is:The gestalt of the brand, including its emotional and cultural associations, as well as its physical features.•Thegraphic systemof identification,asapplied toa singleproductor serviceora familyofproductsand•services.

Brand Identities are Brand Impacts upon

Visual CulturePhysical BusinessVerbal CustomersSensory Community

Fig. 4.2 What is a brand?

The links between design and brand are not limited to graphic design, logo, and sign. Design penetrates all of the assets that makes a brand value which are mission, promise, positioning, expression, notoriety, and quality. There is graphic design in the brand name and symbol, product design, in product performance, package design in promotion display, and environmental design in the retail setting. Logos such as Nike, Ralph Lauren, and Starbucks offer a brand essence or vision. In the global marketplace, visual symbols have greater potential than words. All the non-verbalelementsofabrandnamely,appearance,colour,odour,finish,andsoundcanbe“designed”.Abrandhasmultisensory design identities.

Example: The Microsoft Museum, a brand environment used as a means of storytelling about the history of the company, its culture, and products. The design team established a tactile and visual lexicon with which to address the materials, finishes,colourpalette,textures,andtypography.TheconsultingfirmEnterpriseIGdefinesfourattributessharedby thirty great corporate brands (Allen, 2000). These are:

A clear understanding of its purpose and what it stands for, which remains over time.•Aclearvisionabouthowthefirmwantstobeperceivedbytheoutsideworld.Theymanagetheirbrandattributes•and shape their corporate personalities to support their core ideas. The values of the brand have been internalised. Employees understand what behaviour and action is needed to deliver the brand promise.A strong brand theme that underpins everything it does.•A clear visual identity, strong and well-managed.•

Example: The British Petroleum slogan, “The brand is your people”.

4.6.4 Positioning the BrandBrandpositioningisthespecificnichewhichthebranddefinesitselfasoccupyinginthecompetitiveenvironment.Positioningdifferentiatesbrandattributes,userbenefits,andtargetsegments.Apositioningstatementshouldaddressthree basic questions:

Definition:Howdoesthecompanydefineitsbusiness?•Differentiation: What makes the brand special?•Deliverable:Whatbenefitdoesthebranddelivertoitscustomers?•

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According to the brand positioning brief, the designer adopts a graphic sign and colour, which become the central elements of the brand: either a symbol (such as Nike), a logotype (a unique typographical name treatment, like FedEx), or a combination of both (such as AT&T). Coca-Cola, IBM, and Mercedes-Benz are good examples of successfulidentityprogramsthathavewithstoodthetestoftime.Graphicdesignisthefirstassetinbrandnotoriety.The modern brand does not belong to the universe of commerce anymore, rather, to the realm of communication. Logosaredesignedspecifically tobridge thegapbetweencorporationsandpeople,andtheseconnectedbranddesignshelptodefineandcommunicatethedesiredpersonaofthecompany.

Examples: Ralph Lauren’s perception of the American look broke opened the doors of exclusivity by giving permission to buy the private lifestyle of the upper-middle class. Nike, Gap, the Body Shop, and Virgin Atlantic broke the rules by creating a counterculture that focused on people. Theircorporatesymbolsreflectthecompanies’innovativecultures.The digital generation of Amazon.com and Yahoo! mirrors the quirky spirit of the Internet generation: speed and a willingness to change are their essence. Marc Gobe of the Desgrippes Gobe group developed the concept of “emotional branding” There are unemotional brands such as Compaq, and emotional brands, such as Apple. Corporate identity programs evolved from an approach purely based on visibility and impact to one based on emotional contact with consumers, founded on interaction and dialogue (a people-driven economy) in other words, from impact to contact. Any graphic identity can be positioned in a matrix of two axes: graphic expression and emotional meaning (Gobe, 2001). The symbol creates an emotional tie with the consumer because it is easier to memorise pictures (symbols) than words (names).Example: The Le Coq Pathe identity rested on its logo, which featured a stylised rooster on a yellow background with the company name. Landor contributed to a revitalised award-winning Pathe identity.

4.7 Design or Advertising: Which Comes First?Advertising and Corporate Communications are both used by companies to build and sustain brand image. In marketing, brand management is often synonymous with communication strategy. Interest has grown recently in the integration of communications due to budget pressures. Most companies prefer one or two agencies to provide adviceinsteadoffourorfive.Theywantasinglestrategythatworksacrosstheboard,andmanycompaniesalreadynaturally integrate communications and successfully communicate from the inside out.Example: The essence of BMW permeates everything the company does.

4.8 Brand or Product: Which Comes First?Productmultiplication,marketsaturation,andmediapollutionweakenstheefficiencyofbrandmessagesandbrandsthat do not have strong or differentiated product attributes. Timing is crucial for brands, and, therefore, the importance ofproductdesignisalsocritical.Jean-NoelKapfererexhortsfirmstorediscover“thephysicaldimension”(“le sens du materiel”), without which the brand is nothing, and to give product managers strong responsibility or designate a brand concept champion: (Kapferer et al.,1989).


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Core purpose

Brand attributes

Brand theme

Living thebrandinternally

Living the brand externally

Visual identity

Productidentity

The spirit of refreshment

RefreshingExcitingSocial

“AlwaysCoca-Cola”

Brand inductionfor all newemployees

Universal awareness and availability

LogoCoca-Cola

Glass bottle

Only the •original will doBringing •people togethe

Red• Statements of Commitm-ents to distributors

Strong defense of •trademarkSponsorship •only of exciting venturesAds always show •people enjoying themselves

Table 4.1 Describing a brand: Coca-Cola (Enterprise IGTM)

Product innovation is more lucrative than image innovation. Unfortunately, marketers are not trained to appreciate the value of technological innovations. The brand that does not maintain its added value is sure to become fragile. When a brand is nothing more than publicity, it is a false brand. Branding is creating difference. It is, therefore, necessary to continually communicate on the nature of this difference and maintain it when innovating to heighten product performance, quality, and user satisfaction. The hidden face of the brand is the production, research and development, innovation, and risk taking. The brand pulls the market upward by consistently trying to exceed its performance and create a more effective product (Keller, 1999).

4.9 Brand EquityBrand equity is the value of the brand to its owners, in a holistic sense, as a corporate asset. It consists of the marketing effects that are uniquely attributable to the brand. Brand equity is made of the brand assets (or liabilities) linked to a brand’s name and symbol, which add to (or subtract from) a product or service (Aaker & Joachimstahler, 2001). Brandequityisstudiedinmarketresearchforfinanciallybasedmotivation,assetvaluationofthebalancesheetformerger, or acquisition, or from a strategy-based standpoint in order to improve marketing productivity. Customer-based equity occurs when consumers are familiar with the brand and hold favourable, strong, or unique brand associations in their memory (Keller, 1993). Customer brand equity is based on customers’ knowledge of the brand.The importance of knowledge and memory to consumer decision making has been well documented. Most widely accepted conceptualisations of memory structure involves some type of associative model formulation. The associative network memory model views semantic memory or knowledge as consisting of a set of nodes and links. Nodes are stored information connected by links that vary in strength. A spreading activation system process from node to node determines the extent of retrieval in memory. The relevant dimensions that distinguish brand knowledge and affect consumer response are:

Brand awareness: in terms of brand recall and recognition•Brand image: the favorability, strength. and uniqueness of brand associations in the consumer’s memory•

These assets provide a conceptual framework for marketers and designers to develop brand strategy and research (Fig. 4.3):

Brand awareness:• people like what is familiar, and are prepared to ascribe all sorts of good attitudes to items that are familiar to them.

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Brand associations:• anything that connects the customer to the brand like user imagery product attributes, use situations, brand personality, and symbols. Much of brand management involves determining what associations to develop, then creating programs that link the associations to the brand.Brand loyalty• : the heart of brand value. The goal is to strengthen the size and intensity of each loyalty segment. Core brand values are the values customers and other people outside the company associate with the brand.

Brand associations are:Attributes• : The descriptive features that describe a product or service.Benefits• : The personal value consumers attach to the product or service; what consumers think the product can doforthemintermsofitsfunctional,experiential,andsymbolicbenefits.Attitudes:• Consumers’ overall evaluation of a brand, the basis for consumer behaviour.

Marketing models view attitude as a multiplicative function of:The salient beliefs a consumer has about the product or service; the extent to which consumers think the brand •hascertainattributesorbenefits.Theevaluativejudgmentsofthesebeliefs:Isitgoodorbadthatthebrandhastheseattributesorbenefits?•

Preferred brand values are the values that customers say are the most important attributes in a given category. For a brand to be most preferred in a category, its associations or attributes must equal or closely resemble the attributes determined by the marketplace to be the most preferred. Brand management equates core brand values with preferred brand values. Building brand equity can be one through the initial choice of brand identities and the leverage of brand associations.

Brand awareness

Brand image Brand associationsDefining Attributes

Benefits

Attitudes

FavorabilityLeveraging

Brand equity Brand lovaity

StrengthUniquenessCongruence

Non-product related PricePackagingUser imageryUsage imagery

Product related

FunctionalExperientialSymbolic

Brand recallBrand recognition

Note, Adapted from K. L. Keller. Journal u(Marketing. 1993

Fig. 4.3 The framework of brand knowledge and customer based brand equity


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Hence, the importance for design research to measure brand knowledge depends upon:Recall:thecorrectidentificationofthebrandgiventotheproductcategory.•Recognition: the correct discrimination of the brand.•Types of brand associations: free association tasks. Projective techniques, and depth interviews.•Favourability: ratings of evaluations of associations.•Strength: ratings of the beliefs in associations.•

It is also important to examine the relationship among brand associations, in terms of:Uniqueness:• Compare the characteristics of associations with competitors; ask consumers what they consider to be the unique aspects of the brand.Congruence:• Compare patterns of associations across consumers (indirect measure); ask consumers what their conditional expectations of the associations are (direct measure). Leverage: • Compare characteristics of secondary associations with those of a primary brand association (indirect measure); ask consumers directly what inferences they would make about the brand based on the primary brand association (direct measure).

4.10 Choosing a Brand ArchitectureFrom a semiotic point of view, a brand is a sign, a product named, and an entire universe of meaning. Branding an offer introduces two questions: What is the relationship between the product and the name, and, is the relationship exclusive or not? What is the visibility of the company behind its brands? Some companies, such as IBM, play with thattransparency.Brandarchitecturedefinesthecommunicationsrelationshipsbetweenthecompany,theoperatingunits, and their brands, products, and services. Ultimately, the architecture creates a system much like a road map, which helps consumers and key constituents navigate easily among brands and make the right choices.

As branding systems evolve to address more complex corporate needs, it is important for companies not to lose sight of the fundamental aim of branding to guide customer choice and build lasting relationships with consumers.

Traditionally, brand architecture is comprised of two major tiers:The parent brand: Companies that develop the corporate brand as an umbrella for their overall products and •services. (AT&T and American Express are examples of strong parent brands.)The product brand: Companies that primarily support their product and service brands. This is the route taken •most consistently by consumer goods companies, such as Procter & Gamble.

However, there is no difference between what you sell and who you are. A brand is a promise and you have to keep promises. So, the frontier between corporate and product branding is now unclear. Some companies are setting their architecture between the parent and the product/ service brands. They focus on fewer brands and provide a platform for a new brand, which allows the parent brand to expand through endorsement.

Example: IBM created “e-business” as a global brand. It serves as an umbrella for all of IBM’s business lines with the online economy. Recent studies by IBM have shown that the new brand has already begun to give the company conceptual ownership of “e-business” worldwide.

In the near future, we will see more brands that are less rooted in product and more conceptual in nature, and we will see a more synergistic relationship between the tiers of brands.

Example: Lippincott & Marguilies, a New York design agency, uses three basic models in its brand architecture.In order to build brand architecture and initiate a “brand stewardship process” engage the executive leadership in

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articulating a vision and perspective on key marketplace relationships (Speak, 1998). The relationships are:One brand/multiple brands: family brand.•Regional/global brand: Think globally, act locally.•Manufacturer brand/distributor brand•Brand extension/brand concentration•

The visibility of manufacturer brands decreases because of the trivialisation introduced by distributor brands that use graphic codes similar to those of market brand leaders. Distributor brands (for example, chains such as K-mart and Wal-Mart) are brands. The competition they introduce tends to eliminate manufacturer brands that do not have specificbrandpositioninganddisturbconsumerswhowonderabouttherealprofitofabrand.Designparticipatesinthedefinitionofbrandterritoryasknowledgerepresentation.Categorisationhelpstounderstandthephenomenonof information transfer for brand extension.

4.10.1 Brand DynamicsBranding is dynamic. There is no room for motionless brands. A brand manages itself in the long run with imagination andcreativity.Forexample,Theluxurymarket,wherebrandsarenowshrewdlytailoringtheirofferstoreflectaspectsof“whatmightbecalled“thenewsobriety.”suchasBMWpromotingits“certifiedpre-ownedvehicleprograms, which recondition used cars and offer the same aspirattan appeal: or the Louis Vuitton luxury design brand promoting “junior” items at Netman Marcus department stores.

Successful brands are those that possess the talent to continually reproduce while conjugating the hereditary phenomenon (the brand know-how) and validating the necessity of innovation (new ideas that come from outside the brand universe) in order to avoid inbred impoverishment (Caron, 1996). Design is used to create brand identity, extend the brand’s range of impact, and to optimise brand value while communicating to the consumer the nature andprofitsofthebranddynamics(Meyers,1994).Designbenefitswhenlessforeseeableconsumptionpatternsareanticipated and brand consistency is reinforced (Semprini, 1992).Example: Target developed a compelling value proposition and viewed designers like Michael Graves’ collection and Philippe Starck’sretaildesignasbrandsthatsignificantlyenhancetheimageoftheirbrandthroughpartnership.

Design participates in brand valorisation by making it live on different supports: packaging, product, advertisement, and, in the long run, different markets. Brand resources include credibility, legitimacy and affectivity. For design management, this means consistency in aesthetics and shape, permanence of graphic and symbolic codes, and the creation of new emotions. Companies that take advantage of the promise delivery equation realise the crucial role that design plays in the integration of product and brand experiences.

4.10.2 Brand as a PersonPeople relate to brands in exactly the same way they relate to people. In people’s minds, a brand is a person just as surely as a person is a brand. People have names, and so do brands. People belong to families, and so do brands. People project certain styles and images, and so do brands. People experience life cycles, and so do brands. This is a fruitful metaphor. People are born, Brands are created. Typography is about personality. Form is content. Many enduring corporate identities have been built solely on typography.

Example: Microsoft used the services of famous designer and typesetter David Carson.

Corporatebrandingpromotesinteraction,connection,andsynergyinordertodefineapersonality.Ithaschangedfrom algebra to geometry, from 2-D to 3-D (Gobe, 2001). Conceptualising a brand through personalisation has becomeaverypowerfulwaytobuildbrandidentity.Iftheidentityofyourbrandisnotwelldefined,youwillhavevisibility but no personality (Gobe, 2001). Good brands manage customer “touch points” in the hope that they will be appropriated.


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4.11 Design and Marketing ResearchFacing the changes from mass marketing to a marketing of niches, research in marketing adopts a diversity of approaches and research topics. Market research is also asking fundamental questions about the role of marketing research in society; rational marketing models, for instance, are in crisis in modern-day society (Bergadaa & Nyeck, 1999; Marion, 1999).

Design follows marketing evolution from classic marketing based on existing products and markets toward a strategic and relational vision of marketing that encompasses new products, potential new markets, and new customer relationships. Design contributes to a strategic marketing decision process because it insists on the uncertainty of theproblemorthepertinenceoftheneed:Istheproblemtocreateanewneedortofindwaysforthefirmtodefendits competitive position?

Critics of present marketing research methods call for setting up methods oriented toward society at large and not towardspecificmarketsegments.Marketingpracticesarechangingtoward:

Arelationaldefinitionofneedsandmoreimportancegiventodifferentparticipantsintheexchange.•A consumer constructed by marketing, which invents the relationship.•Variouscriticsoftheconceptofmarketsegments,orascientificstatuteofmarketing•

Designers often criticise the methods of market research and probably, with good reason. These methods are often extrapolations of the past, but can one foresee the future in a postmodern economy? The methods are centered on the “conscious need,” but our consumers have become beings of unconscious desires rather than needs. This might lead us to conclude that market research is pointless, because people consume unconscious desires, and market research can only track rational, conscious statements of need. A conceptual idea is always the consequence of thorough research on environmental trends and individual behaviours. What is changing is the need to investigate thefieldofconsumers’needsintwodirections:

Macro-design research on societal and cultural mutations. For an object to become a sign of recognition or a •social code, it has to attain a maximum competitive advantage over its competitor substitutes on the market.Micro-design research or sociological study aimed at the consumer “body,” or” ethno-design.•

Design theories can be used as a framework for further marketing research (see Table 4.2). The rise of individual needs encourages the emergence of a “demand for design that is varied: demand for products designedbystardesigners;forproductsorretailspacessignedbydesignfirms;forindividuallydesignedidentitydifferences;for“no-design”asacriticismofhyper-consumption.Humanneedsarelimited,whereasthefieldofdesires is without limit. Urban life is a powerful means of creating needs and signs. Needs increase vertically not by appetite but by competition. Design methods used in the creative process become useful to the optimisation of marketing research in three directions: the diffusion of the fashion marketing model, common research methods, and the emergence of tools that measure perception.

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Design Theory Key “Form” Concepts Research IssuesAesthetics Form as a resultant

Form as unityProduct differentiationCoherence

Perception Design = to link seeing with making Experiential model of consumption Perceived value of the product

Gestalt theory The form cannot be dissociated from its spaceA good form is a form with maximum unityA form is a wholeA form is more than the sum of its parts

Afirm’sefficiencyismorethanthesum of its departments (Chandler)

Systems theory A form is a coherent, complex, and open systemA form is interfacing its environment

Afirmisasystemofforms

Semiotics A form is a sign at three dimensions, syntactic (structure), pragmatic (junction), symbolic (sense)Reality is created

The interpretative dimension of marketing Brand value

Sociologyof objects

An object is a coordination systemSymmetric importance of the object and the userThe object as social mediator

Societal value of the company offer.Interaction between object and subject in creating the offer.

Table 4.2 Design theories applied to marketing research

4.11.1 Diffusion of the Fashion Marketing ModelThespecificitiesoffashionmarketing,therarityoftheproductionandtheintimacyofdestinationhavedevelopedanintuitive marketing, in which success is generated by a target segment recognising the designer’s genius, entailing the cult of her name and the culture of her “house”. For luxury goods, marketing, as fashion, develops a homogeneous concept (product, presentation, and price) whose objective is its coherence with the new market targets (Alleres, 1990). This marketing rests on a rational analysis of each of the emergent criteria of the new concept, and on the aggregationofeachofthesecriteria,whiletakingintoaccounttheirhierarchyinthefinalconcept.Dependingonthe brand, the place given to creativity will vary.The fashion designer-entrepreneur ignores market research, tests, and marketing techniques if faced with erratic consumer behaviour. The designer imposes herself through the originality and strength of her style and creates a need.Somefashioncompaniesbecomevirtual,theycentrethemselvesonthenecessityofflexibilityandcreativityto develop a short circuit, keep inside design, branding, and marketing, and externalise production. Fashion tends to become the postmodern consumption model with the emergence of the artist-entrepreneur, or “design director,” enabling the company in its new role as a vector of culture.

4.11.2 Design Research and Marketing ResearchDesignenrichesthefieldofmarketingresearchby:

Giving a new way to segment a market according to consumer perceptive and aesthetic preferences (Sewall, •1978).Enriching consumer behaviour research (see section I): A design form is perceived as a marketing input that •can be measured in its different dimensions-cognitive, emotional and behavioural and can play a role as a segmentation tool (Hansen and Deutscher, 1978; Lindquist. 1974).Providing models for analysing product attributes according to design attributes.•


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Bob Veryzer developed a complete checklist of selected references for these design properties that can help in definingnewproductpolicy(Veryzer,2000).Customerexperiencebaseddescriptionsaregroupedaccordingtomore general dimensions like operative, comprehensive, constructive, and decidable (Table 4.3). Classic marketing methods can be enriched by certain design issues, such as:

the relation between sociology and the aesthetic•the mechanisms of appropriation of the object in the consumer’s life•the value-signs in new social groups•studies of consumer tastes and design experience•

Sinceallfirmsinaneconomicsectorapplythesamemarketingmethodstosucceed,theenterprisemusttransgressthe rules and introduce creative design thinking at all levels of marketing decision making. Marketers become “marketing stylists,” renewing the tie between industry and culture. There is no separation between material culture and culture itself. Neo-marketing research methods look like the design process. It is the marketing of trends with a macro-sociological character (“trendology”) that valorises the role of the experts and social strivers, and requires a perceptual immersion m the environment.

For Andrea Branzi, researcher for the Domus Academy, the new industrial strategy is based on immediate cultural identity of a product that selects its user, promoting itself to a given social group by becoming a known point of reference. The Domus Academy developed market analysis that combines trend scanning, real-time corrective test systems, and the launch of beta-products. Design scanning is a sociological analysis of the connections between fashion and social or ideological phenomena by studying the expression of personality in the participators.

Designers bring to marketing research their talent of observation. Ethnographic analysis is the observation of the user without his or her knowing. This technique gives a more individualised knowledge of the consumer’s behaviour. Micromarketing targets the individual. Design develops tools for consumer behaviour research that are based on observation (assisted by video, particularly in interface design) with the help of specialists in ergonomics, ethnology, and psycho-sociology.

Neo-marketing research encourages dialogue between the different poles of creativity, R&D, marketing, and new product development. There is a double process of integration between marketing and design: upstream in the conceptphase,downstreamintheactionphase.Researchtendstofinanceitselfwiththebusinessmadefromthefirststreamofcustomers.Thesenewprofessionalpracticesprivilegemarketlaunchfeedbackthatisinphasewiththe creative design process.

Operative Comprehensive Constructive DecidablePerformance•Utility•Innovativeness•Quality•Durability•Conformity•Proficiency•Suitability•Universality•Safety•

Understandability•Identity•Discovery•

Parsimony•Adaptability(flexibility,•modularity)Maintainability•Recyclability•Manufacturability•Economy•

Attractiveness•Appropriateness•Value•

Table 4.3 Checklist of design properties (adapted from Veryzer, 2000)

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4.11.3 The Emergence of Tools for Measuring Perception“Good design” implies having the user in mind (Buchanan, in Morello, 1995). In a project team, the designer is the guarantor of the consumer-user and the idea passing from a material to a conceptual space. Perception measures are, therefore, useful to the designer in the creative process and help to write a qualitative design brief. Perception can be measured on two different levels: psychometric and sensory. Perceptive judgment can be evaluated from a perceptual mapping or from a cultural and situational context (Bassereau (DR), 1994). Tools like the “semantic differential”helpdeterminethesensoryprofile.

Theobjectiveofallsensoryevaluationistomeasuretheresponsetothestimulusidentifiedbypsycho-sociologicalmeasures.Theperceptiveresponsetakesintoaccountseveralstimuliidentifiedinalistofvariablesusedtodescribea phenomenon. The semantic space permits an approach to the sensory space by the determination of the describers. Thesensoryprofileoftheproductisthussuitabletoamathematicalapproach.Onecandevelopamethodologytoquantify perception. From sampling of component shapes, an evaluation matrix of each attribute is constructed by consumers, who manipulate choices of attributes and express their preferences on a scale model (Swift, 1997).

“Sensorymetrology”isthescientificfutureofthesemanticdifferentialandawayofmeasuringdesignqualityandcraftsmanship (Bassereau et al., 1997). The apprehension of an object must be global, and touch is important in the influxofcompetition.Therefore,itisimportanttocreateatactilepaletteincommunicationsanddesign(Cheneetal. (DR), 1994).

New methods are developed that allow for a verbal and quantitative description of the immaterial aspects of an object assensedbytheuser.Aquantifieddescriptionofvariousattributesofanobjectisdrawnfromtheuser’sdescriptionof her wants in her own words and her own point of view, from which a graphic representation is produced. One way to represent a user’s description of the various attributes of an object is to draw it with a cluster of dots, each dot representing a word in the user’s description. This model can be used for design and become a tool for facilitating thedialoguebetweenthedesignerandthemanufacturer.Thelexicalanalysisclarifiestheperceptiontheconsumerhas of a product or problem and establishes a comprehensive picture as a reference (Credoc, 1992).

This method of market research is useful for developing new concepts in “experiential marketing”: an evolution of concepts of aesthetics seen as the consumer’s multisensory experience or “marketing aesthetics’’ (for instance, creating the scent along with the shape) the marketing of the complete experience within the creative design process (Schmitt, 1997). One last type of research aims to identify the users’ different acceptances of shape, function, and value of an innovation and the implications this has for the design. Solving recurrent problems such as the nature of the relationship between form and function can be done using a semantic analysis of the three approaches of design:

Industrial and commercial design in which the form supports the readability and use of the product.•Cultural or anthropological design, in which the form represents a way of seeing things as an ideological choice, •or a vision of society. The function is aesthetic and communicational and the value is plural or prospective.Methodological design, which tries to articulate two previous approaches. The form materialises the underlying •cultural value of the product, a differentiating value.


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Design as an objective is a mixture of these different approaches, and new product development can serve as a foundation for new managerial methods (Floch, 1993). In summary the future of design in marketing research is vast, as marketing develops more toward a customer relationship model (CRM), in which design plays an important role in various macro and nano-relationships. such as:

the service encounter•relationship to the customer•close versus the distant relationship•relationshiptothedissatisfiedcustomer•the e-relationship•non-commercial or green relationship•knowledge alliance relationship•internal customer and internal marketing relationships•relationship to external providers of marketing services•ownerorfinancialrelationship•

Design brings new methods to marketing research that combines design theories and attributes, fashion marketing models, observation techniques, and sensory.

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SummaryMarketing is the process, which maintains the relationship with consumers by creating, communicating and •delivering the value to the customer. Marketing is a business process, which focuses on customer’s wants and needs.•Design creates a differentiation of the form, which has an impact on consumer behaviour. •The design-form encompasses cognition, emotion, message, and the social relationship with the consumer •Consumer response to a design form is determined by two different styles of information processing: the •cognitive and the preferential.An individual’s mental imagery points to the fact that there exists a stock of shapes or objects that act as referents •or “prototypes” for each individual.Familiarity is the number of experiences a consumer has with a product .•Expertise is the capacity to successfully accomplish the product functions.•Products either imply a cognitive treatment of information (a thinking process) and/ or an emotional treatment •of information (a feeling process).Designers conceive of signs that all have three dimensions: a structure, a function and a symbol .•Thedesignprocessis,bydefinition,alinkbetweenthedepartmentsofacompanythatrepresentthesedimensions:•technology (structure), marketing(function) and corporate communications(symbol).Products are tools of communication that “put the consumer on stage” and help him exist as a social object •(Solomon, 1983).Aestheticstransformsanewproductintoasocietalinnovation,whichistheprocessbywhichanewsignification•is introduced into the social system.Visualisers” have a holistic sensitivity and a preference for organic models. •“Verbalisers” have an atomistic sensitivity and are attentive to isolated details.•The brand gives a product a network of meaning, a story, and an imaginative universe an identity that is •continuous in time and space. A brand is a means of injecting value into products in order to differentiate them from the competition.•Positioningdifferentiatesbrandattributes,userbenefits,andtargetsegments.•Any graphic identity can be positioned in a matrix of two axes: graphic expression and emotional meaning •(Gobe, 2001)A symbol creates an emotional tie with the consumer because it is easier to memorise pictures (symbols) than •words (names).Ethnographic analysis is the observation, of the user without his or her knowing.•Perception can be measured on two different levels: psychometric and sensory.•The consumer has aesthetic preferences that come from design principles but vary according to the context and •his or her experience with design Design creates differentiation through brand identity development, building brand equity and brand •architecture.


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ReferenceUrban, G.L. & Hauser, J.R., 1993. • Designandmarketingofnewproducts, 2nd ed., Prentice-Hall.Cravens, D.W. & Piercy, N.F., • Strategic Marketing, 8th ed., Delhi: Tata McGraw-Hill Education.Anand, A. & Joshi, V. • Marketing Design: Marketing of Products [Online] Available at: <http://www.idc.iitb.ac.in/~chakku/dm/02_marketting%20design.pdf> [Accessed 12 January 2012].What is a Brand?: A Chapter from Brands and Branding: An Economist Book • [Online] Available at: <http://www.brandchannel.com/images/Papers/What_is_a_Brand.pdf> [Accessed 12 January 2012].Heine, C. M. • A Design Management Story [Video Online] Available at: <http://vimeo.com/21039489> [Accessed 27 January 2012].case., 2010. • The Convergence of Management and Design” by Richard Buchanan, Ph.D. [Video Online] Available at: <http://www.youtube.com/watch?v=xpKJSvKrk7o&feature=related> [Accessed 27 January 2012].

Recommended ReadingBenun,I. & Top, P., 2008.• The Designer’s Guide To Marketing And Pricing. Ohio: HOW Books.Wheeler, A., 2009. • Designing Brand Identity, 3rd ed., New Jersey: John Wiley & Sons, Inc.Tybout, A.M. & Calkins, T., 2005.• Kellogg on Branding: The Marketing Faculty of Management. New Jersey: John Wiley & Sons, Inc.

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Self Assessment

_____________ is the process, which maintains the relationship with consumers by creating, communicating 1. and delivering the value to the customer.

Designinga. Marketingb. Positioningc. Consumptiond.

_____________differentiatesbrandattributes,userbenefits,andtargetsegments.2. Designinga. Marketingb. Positioningc. Consumptiond.

_____________ are tools of communication that “put the consumer on stage” and help him exist as a social 3. object.

Productsa. Designsb. Advertisementsc. Brandsd.

What is a means of injecting value into products in order to differentiate them from the competition?4. productsa. designsb. advertisementsc. brandsd.

Which analysis is the observation, of the user without his or her knowing?5. Ethnographica. Brandb. Conceptualc. Marketingd.

____________ transform a new product into a societal innovation, which is the process by which a new 6. significationisintroducedintothesocialsystem.

Productsa. Aesthetics b. Designsc. Brandsd.


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Whatisusuallydefinedasthedegreetowhichanitemisperceivedtorepresentacategory?7. Prototypesa. Perceptionb. Verbalisers c. Typicalityd.

______________have a holistic sensitivity and a preference for organic models. 8. Visualisersa. Verbalisers b. Designersc. Marketersd.

Which of the following statements is false?9. Consumption takes place through social structures.a. Only when a brand is all about publicity, it is a true brand.b. Shape is cognition.c. Marketing is a business process which focuses on customer’s wants and needs.d.

Which of the following statements is false?10. The brand gives a product a network of meaning, a story, and an imaginative universe- an identity that is a. continuous in time and space.The functions of a brand include creating value for consumers by informing them about the product’s b. attributes.All the non-verbal elements of a brand-appearance, colour, odour, finish, and sound- can be neverc. “designed”.Corporatebrandingpromotesinteraction,connection,andsynergyinordertodefineapersonality.d.

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Chapter V

Design and Innovation

Aim


explain the conceptual dimension of design innovation•

explicate design and idea management•

describe design as an integrator•

Objectives

The objectives of this chapter are:

discuss radical innovation•

identify the technological positioning of a company•

enlist various types of designers•

Learning outcome


understand design and the modular structure associated with it•

enlist the steps to improve the NPD process through design•

identify the logics of innovation and design•


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5.1 IntroductionDesign is a management tool that creates differentiation in the internal capabilities of the company. Design is no longer seen as the output of design-form, but as a creative and management process that can be integrated into other organisation processes, such as idea management, innovation management, and research and development management,andthatmodifiesthetraditionalstructureofprocessmanagementinacompany.

Design relates to key innovation management issues and new product development (NPD) success, in phase with important factors that a re critical to innovation success: competitive advantage, the understanding of user needs, and the synergy between innovation and the company’s technological strengths (Table 1.1)

But a good product is not enough for innovation success: further studies emphasise the importance of innovation management in innovation performance. Here, design creates value because it participates in the improvement of theNPDprocessquality,thedefinitionofproductstrategy,andthequalityofnewproductteams(Table1.2)

A product differential advantage. A unique, superior product in the eyes of the customer, a high 1. performance-cost ratio, and economic advantages to the customer.

An understanding of user needs wants, and preferences and a strong market orientation, with marketing 2. inputs playing an important role in shaping the concept and design of the product.

A strong launch effort selling promotion and distribution.3.

Technologicalstrengthsandsynergy.Agoodfitbetweentheproducttechnologyandthetechnical4. resources and skills of the company.Marketing synergy.Agoodfit between themarketing, sales force, anddistributionneedsof the5. products and the company’s marketing resources and skills.

An attractive market for the new product.6.

Top management support and commitment.7.

Table 5.1 Key factors for new product success: related to design input (adapted from Cooper & Kleinschmidt, 1986)

Successful innovation requires improvement of products and organisational processes. Design is value-creating in both areas. Innovation is a collective and interactive process that is close to the reality of the design process, since it mixes internal and external factors. Design is valued both for its superior product quality and its superior NPD process. This chapter develops successively these two critical paths for design in terms of innovation value:

Creating a better product: the conceptual dimension of design innovation, radical innovation, and design.•Improving the innovation process-coordinating through design on three levels: marketing time, project team •innovation, and innovation as a learning process.

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The major cornerstones of NPD performance Other important factors

1. High-quality NPD processEmphasis on up-front homework•Tough “Go” or “Kill” decision points•Focus on quality of execution in project •activitiesA complete and thorough process without hasty •corner-cuttmgAflexibleprocess•

1. High -quality new product teamsUse of a cross-functional team•Teamleaderdedicatedtoaspecificproject•Team communicates and interacts well with frequent •update meetingsDecisions made by outsiders handled quickly and •efficiently

2. Defined new product strategy for thebusiness unit

Objectives for the new product effort (sales, •profits)NPD role for achieving business goals •communicated to allClearly defined strategic product/market •arenasA long-term thrust and focus for NPD•

2. Senior management commitment Commitment to risk taking•Clear messages about the importance of NPD•

3. Adequate resources of people and moneyR&D budgets to achieve the stated objectives•Necessary people in place and release time given •forspecificnewproductprojects

3. Innovative climate and cultureEncouraging entrepreneurship•Providing support (rewards, autonomy, acceptance of •failures)Fostering submission of new product ideas•

4· Senior management accountabilityNPD performance part of personal performance •objectivesSenior management compensation and bonus scheme •tied to NPD performancePerformance results of NPD program actually measured •commitment

Table 5.2 Key factors for innovation process management(adapted from Cooper & Kleinschmidt, 1996)


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5.1.1 Design Innovation“Innovate To Survive” Is Our World’s Motto. Designisinnovationthatcanaddvalue,givingacompanyaprofitableedgeinthequesttoinfluenceconsumerpreferences.(Carpenter & Nakamoto, 1990). An innovative design process can help create a superior product through:Its conscious and prospective research of environment opportunities. The designer is an innovator who goes out, watches,inquires,andlistenstotheworldthatsurroundshim,whichmeansthefirstvalueofdesignisthedevelopmentof ideas that then become concepts.

The sociocultural sources of design ideas are highly original and valued in terms of innovation. A thorough environment scan combines visual stimuli, directional keywords, colors and fabrics, and a preview of the main design trends in prints and patterns with the evolution of transversal sociocultural trends. From this dual sociocultural and designprospectiveinformationgathering,across-fertilisationofideasflows.

Example: , The publication by the international styling agency, Peelers Paris, of their new prospective tool-book, Future(s), a visionary trend publication that aims to better understand today’s consumer attitudes and respond to upcoming trends. Its user-oriented philosophy: High-performance products and services need technological sophistication and innovation of use. This means a market-oriented NPD process and internalised customer information.

Tom KelleyIdeo, 1999“Designers are experts in using the power of observation. Observation has the power to inspire and inform. In my experience the best source of expertise for innovation-oriented observations is the design community. Design innovationisdynamic.Designmanagementhastoprogramacontinuedflowofnewproducts,bothradicalandincremental (Landry, 1987). Design innovation is just like any other innovation-either autonomous or strategy-oriented, conceptual or perceptual, analytic or holistic.

Design and idea managementImagination is the new fuel of the company. ldeas are the basis of innovation. An idea becomes an innovation when it is integrated with success strategies. In a context where the role of science in innovation tends to decrease, a new powerisgiventoindividualswithunconventionalprofiles(Steiner.I995),suchasdesigners.Designcangenerateideas at every stage of the innovation process. Design fosters this generative approach of ideas and imagination.

Design means accepting chaos. The deviance generated by new ideas protects against conservatism, while the process of exploring new design ideas is protected from its own excess by sound design management.

Gerard VergneauDesign director, Thomson Multimedia, 2001“ThedesignstrategyatThomsonisaglobalbusinessstrategy.Severaloptionsareopenedthatfindtheircommonessence in a prospective commission. First materialised as ‘dream products, the designs are destined to enrich the collection line. Design management requires a capacity to manage the autonomy and imagination of the collaborators. Each individual can be placed under the traits of creative individuals according to Kirton Adaptation Invention (KAI):

An adaptable individual who produces a quantity of ideas, but in a formalised environmentAn inventive individual who deconstructs and reconstructs his environment

Bothcreativeprofilesarenecessaryforasuccessfuldesignideapath,becauseimaginationisbothcreativeandintegrative. An idea is not a fact, like “Eureka!” It is a process that begins with the existence of either a problem or a resource to be exploited.

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Tom KelleyIdeo, 2001“A good idea is a lot of ideas

The idea process is both:Anidea-buildingprocess:aconvergenceofaproblemandaresource,establishingafocalpointthatidentifies1. the sources and forges the wayAn idea-formalising process: the formalisation of the Idea m order to make it understandable to others and set 2. up an idea processing system

When a designer explains her idea, she describes precisely the result of a long lasting convergence and formalisation process.

Creativity is an individual approach that works in a discontinuous and instantaneous process whereas innovation is a collective and continuous process. The design process uses various design methods to develop creativity, from traditional brainstorming to creative outings and rapid prototyping.

Prototype doesn’t solve straightforward problems. When you start drawing or making things you open up new possibilities of discovery. Jeff Bezos’s Amazon.com story would make a great movie about how rapid prototyping” can give you a business edge.

“Models often surprisingly make it easier to change your mind and accept new ideas. Give your management team a report and it is likely they won’t be able to make a crisp decision. But a prototype is a spokesperson for a particular point of view, crystallising the group’s feedback. At IDEO a good prototype is worth a thousand pictures. Good prototypes don’t just communicate, they persuade, Take the example of Apple Duo Dock in the, 90S and its VCR metaphor. Prototype with energy and enthusiasm and you has a good chance of hitting upon the very feature or product that resonates with the customer

In order to foster design ideas, design management decisions are issued from idea management methods:Theimplicationoftheindividualsintheprofitderivedbytheircreativity.Flexibleinformationsystemsadaptabletooutsideinformationflows.Managersbonuseslinkedtothecreativityoftheirteamsorganisingnewproductideabanks Setting idea scenario systems

Astructurefavourabletoideaflowsisflexible,organicis,decentralized,andnetwork-oriented.Generatingideasisparticularly critical for radical innovations. Recommendations for stimulating idea generation are to:

Create and sustain strategic momentum for radical innovation.•Proactively implement organisational mechanisms for getting radical innovation out of the laboratory and into •commercialisation projects.Develop a “receiving” capacity for radical ideas so creative people have a place to go with their ideas (Leifer •et al., 2000).

Idea screening is best managed collectively by an idea screening group. This is a gentle screen and amounts to submitting the project to a handful of must-meet and should-meet criteria. These criteria often deal with strategic alignment, project feasibility, the magnitude of opportunity and market attractiveness, competitive advantage, and synergy with business resources.

Innovation intervenes in a social context and is produced by the interaction between a creative company and its creative people (Henry, 1991). The “ideal” company of the future is one in which people are at ease with both systems of creativity and respect for strategic norms.


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5.1.2 The Conceptual Dimension of Design InnovationA Design NPD Policy selects segments or niches with high potential, develops new product concepts adapted to changingneeds,diversifiesproductportfolios,anddefines the lastingcompetitiveadvantagesofeachbusinessunit.

Design has a conceptual dimension that has the advantage of uniting all the innovators around a common objective focusedontheclient.Innovationdefinedbyitsphysicalattributesandperformancesisnotneededinfuturemarkets.What is needed are ideas transformed into concepts or unique user experiences. This conceptual dimension does not only show visions of the future, such as concept cars.” It includes the wide range of possible NPD scenarios.

Example: The story of the car model Twingo at Renault. In 1986-87, this advanced design department worked on aprojectforanattractivecarthatwouldnotcompetewithanotherRenaultandwouldhaveastrong.Specificstylewith a transformable interior (known as the “W60 Project”). The project was re-launched in the fall of 1988 under anewCEO,whenmarketingresearchconfirmedthatthenewconceptwasauniqueautomotiveoffer.Butbytheend of1988, debates about the exterior style of the car were far from closed.The results of marketing tests were conflicting:Thedesignwaseitherdislikedoradored.

PatrickLeQuement,designdirector,remembersthislongandsolitarytime.Afteraweekofreflection,hesentanow famous note to his president asking the president to help him in the launch decision and declaring: “I prefer instinctive style to extinctive marketing.” (Midler, ‘993).

Design innovation leans on user-oriented strategic marketing. What designers look for is “market-in,” or the introduction of user satisfaction into all areas of innovation. Design changes in nature. It is a process that is at the same time a source of ideas and a source of organisational change, shifting the value chain by infusing it with a certain market orientation.

Concept-oriented innovationA product concept is the intellectual representation of an artifact created by the mind. The mind imagines a metaphor thatrepresentscustomerbenefitsandhelpsmakethecollaborativeworkoftheinnovatorscohesive.Thedesignprocess integrates the concept:

Upstreamwithprospectivemarketing,whichdefinestheconcept(theabstractpromise)•Downstream with operational marketing which makes this concept live in the mind of the consumer (the product •or brand image)

New product strategy

Idea generation

Idea screening

Concept development

Concept testing

Fig 5.1 The early stages of NPD

Example: Thomson Multimedia’s “Seeing is believing “. The product design team saw itself as responsible for experiences and interactions between the customer and the product, whether visual, tactile, or interactive.

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This conceptual approach to innovation which the creation of a product concept, is not limited to the world of fashion or entertainment sectors, like leisure, sports, and food. It is valid for the identity- building of all products andorganisations.“Totaldesign”inacreativeprocessinsistonproductsspecificationsaccordingtothemarketandthe importance of the upstream and conceptual phases of the process, as well as information coming from different sources (Jenkins et al.1997).

They key to success of innovation management results from the fact that all of the spokespersons- for marketing, design, commercial, and quality- must agree. All of these partners are interpreting the customer’s latent needs. Thus, information on these needs and uses must be integrated into all areas of production, processes, equipment, andemployeeprocedures.Productionmanagementismodifiedtoaccommodatea“market-in”businesssetting.

Example: The innovation model in the automobile industry is an integrated process-product innovation in which the artefact is a combination of diverse inputs from engineers and designers to suppliers and buyers.

Design establishes an innovative way for a company to view the consumer. It generates an interaction between the subject and object. If a concept is a palpable vision of the product experience, it will, consequently reorganise the innovation launch into a simulation of the experience of product consumption. Innovation leads to continued information sharing between consumer and company. Fashioned from and nurtured by this information, design can become a living experience.

5.1.3 Concept as Company RepresentationCompanies that succeed differentiate themselves through the integrity of their products.

Everyproductreflectsthecompanyandtheprocessofdevelopmentthatcreatedit.Enterprisesthatdevelopproductswith integrity are themselves coherent and integrated. They differentiate themselves by a “seamless” model of organisation and management. The manner in which the staff works, the way decisions are made, and the way suppliers are integrated into the company’s efforts are all coherent and relate to its strategy.

Innovation should generate processes that infuse a strong product concept into all design details. This entails designating certain product managers with high responsibilities, or naming a “concept champion” or project coordinatorwhohastopdecisionpower.Thekeytoproductintegrityliesinleadership,inthenecessityoffinding“heavy-duty” product managers who act as guardians of the product concept.

A company cannot change everyone on its staff, but it can train new leaders and give power to people who are in harmony with these new directions, such as the designers (Clark & Fujimoto, 1991). An integrity-oriented innovation implies that:

Innovation management is based on the matrix of project and function management and team project management •in order to generate the coherence of product and process.Innovationmanagementisbasedonamatrixofbothphysicalandinformationalfluxinordertosolvetheproblem•of coherence between internal and external integrity.

TheNPDprocessdependsasmuchontheinformationfluxasonthematerial,physicalflux.Frombeginningtoend-when the product is in the consumer’s hand-a product is nothing more than information. The client consumes the product experience, not the physical product.

This internal-external process is the most important task in launching a new product. It requires imaginative tools. Design managers organise tools in order to ensure this integrity.

There must be a process in place that will ensure that current market information is passed on to those who are •in charge of innovation projects.There is consistency between formal and informal information.•


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The process of concept generation entails a reorganisation of innovation processes where the informational and physical production systems are intertwined. It requires a high level of integration between the internal and external and between the customer, concept, product, and suppliers.

Takahiro Fujimoto, 1991“Another feature evident in corporations that exploit the ‘designer-as-integrator’ strategy is an orientation to customer satisfaction in the form of total product integrity.”

Internal integrity refers to the consistency between the structures and functions of the product itself. External integrity refers to the match between the product and user. A company must address this dual focus: product integrity and organisational structure. The complement to internal and external product integrity is internal and external organisational integrity. For design managers, this means both the design of a competitive object and the design of a competitive process for developing objects. Concept creation is proactive and grows out of an intuitive and imaginative market vision. NPD implies a continuous development of innovations through early and intensive communication between the different units of concept generation, product planning, engineering, production, and suppliers. Cycles of problem solving overlap and problems are solved quickly at every stage to respond to continuously changing data. Critical assets such as tools and prototypes are generated rapidly(Clark & Fujimoto, 1990).

Theproductbecomesanextractofthecompany.Thewayitisdesignedreflectsupontheideathecompanyhasofitself. The product is, then, the image of the way the company represents itself to the market. To structure the offer is to structure the company.

Example:Kanebo,aJapanesetextilefirm,dividesitsmarketingdepartmentintwo:onethathandlesthe“pull”ordemand marketing, directed by an executive with a marketing background, and one that handles the “push” marketing, directed by an engineer in research and development. Each department has multidisciplinary teams that include designers, illustrating how a company can integrate the contradictory logics of technology and marketing.

Outside of the classic company models of “technology driven” or “market driven” is another company type that is“interactiondriven.”Thistypeofcompanyquestionssociety,definesauniversalwant,andproposesanofferthat “revolutionises” the market. Design is used to inject intelligence into the company offer. It is centered on the interaction between the subject and object. From the earliest phase of the design process on, the role innovation will play in the social imagination is envisioned. In sum, the offer is seen as training through making: by making products, the company learns how to learn (Hetzel, 1994).

5.1.4 Concept Generation Methods and TestingTheconceptgenerationmethod isafive-stepbase fromwhichdesignerscandevelopand refine theirproblem-solving strategies (Ulrich & Eppinger, 2000).

Clarify the problem.•Understand the problem �Deconstruct the problem �Focus on critical sub-problems �

Search externally•Find leading potential users of proposed product �Search for experts on the problem �Research patents already dealing with the problem �Read literature on the problem �Benchmark on similar problems �

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Search internally•Individual �Group �

Explore systematically•Classificationtree � Combination table �

Reflectonthesolutionsandtheprocess.•Constructive feedback �

Finally, the concept should be selected and tested. Concept selection is the process of evaluating concepts with respect to customer needs and other criteria, comparing the relative strengths and weaknesses of the concepts, and selecting one or more concepts for further investigation.

Successful design is facilitated by structured concept selection, often performed using two methods. Both methods follow a six-step process: prepare the list of concepts, rate them, combine and improve them, select one or more, andreflectontheresultsandtheprocess.

“Concept screening” uses a reference concept to evaluate concept variants against selection and a comparison •system to narrow the range of concepts under consideration.“Concept scoring” uses different reference points for each criterion.•

5.2 Design as IntegratorIt is necessary to make a deliberate effort in order to integrate consumers in new product development, and to better follow the market it is necessary to anticipate it. During the design cycle, the designer integrates customer requirement information gathered by management, the design principles requirements, and the customer requirement information gathered locally by designers into a new design model (Bailetti & Litva, 1995).

The key factor in superior innovation is to take into account customer requirements in all company functions. This entailsthediffusionofmarketinformationtoallareasandefficientinterfunctionalcoordination(Hayes,1990).Design is valued because, through its outputs (sketches, roughs, mock-ups, and prototypes), it concretises customer information and facilitates the participation of all company levels in the creation of a market-oriented culture.

The adaptation of the product to its environment also remains a dominant key factor in innovation success. This adaptation determines how the product will do in the market, which points to the fact that there is an “ecological theory” of innovation. The innovation must provoke the customer’s enthusiasm, so the mentality of the design manager must shift from a farmer’s to a hunter’s mentality.

The user-centered design innovation process develops a process-oriented management.The logic of the quality moves from product quality toward the quality of the company. A healthy design innovation policy will do its best to:

Implement a clear market-oriented strategy•Intertwine competencies and processes in order to improve customer knowledge•Focalisethecustomer-supplierchainontheaddedvaluebroughttothefinalcustomer•Establish the customer-supplier relationship•Focus on causes and prevention of risks in management decisions•Develop the continuous improvement of transversal processes such as user satisfaction•Considerthefinalcustomerasthejudge•


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Process-orientedmanagementgivesthecustomerthepowertobetheuniquejudgeofthebenefitsheorshereceivesand the level of perceived quality. Indifferent to the technical sophistication of the product, users often discern its value through design features (Moody [DP], 1982). One reinvents the marketing function around two types of positions:

Experts on marketing methods•Integrators who are responsible for piloting company activities and identifying new potential segments.•

Designers then, are either specialists or integrators. Innovation success especially incremental innovation stems from the integration of all tools and routines. Design managers should develop a design process that:

Builds on routines that act as “integrator tools”-that is, decision making routines that help keep everyone and •everything integrated-constantly improving upon them, since these routines are a recognisable competitive advantage (Bessant & Caff)’n, 1997).Enriches innovation tools in order to transform them into a dynamic, continuous, iterative, and informative •process(Hughes&Chafin.1996).

5.3 Design and R & D Management: Radical InnovationNo one can evade technology. The new substantive theory contends that technology has become not only necessary, but has also become inconspicuous, if not Invisible. Technology management now has a more systemic and holistic orientation (Badawy, I996). It applies to all activities and technical processes, administrative and interpersonal. Its systemic and holistic nature calls for a designer’s expertise.

Design management is part of R&D management because any design project involves technological diagnoses and decision making (Cooper et al., 1995). The management of technology looks at technological resources and their applications from all sides. Design develops new applications for existing technologies. There are four types of technology that will be predominant in society by 2025 namely, information technology, genetics, material technology, and environmental and energy technology (Coates, 1997). Obviously, design has no relation to the emergence of these technologies but has a lot to do with the societal acceptance of them . Too often, technological innovations are launched because they are available rather than needed .

5.4 Design and the Technological Positioning of the CompanyDesign Innovation Varies according to the company’s technological positioning in its sector and its technological strategy.

5.4.1 Design and Technological StrategyThe relationship between technology and strategy explains the nature of design innovation:

If strategy capitalises on technology with no direct interaction between the two, design strategy is directed •toward the social acceptance of technology.If strategy cultivates technology, the implemented strategy nourishes the future capacities of the company with •R&D investment and design is devoted to R&D return on investment.If strategy emerges from technology, technology is the source of design strategy.•According to the company’s technological strategy, the focus of design innovation will differ in:•Technological leadership: design strategy will focus on creativity•Follower policy: design strategy will focus on the user needs•“Me-too” manufacturing: design will focus on the capacity to produce (Holt, I99I).•

A company approaches R&D management in two different ways:The defence of its technological advancement (retention)•The sharing of its technological knowledge (diffusion), while hoping to impose a standard•

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The diffusion policy implies permanent capability of creative destruction and calls for design expertise.

5.5 Design and Life Cycle TechnologyDesign innovation depends on the life cycle of the technology in the industry (Walsh, 1995) and the company’s balanced portfolio of technologies. Design ideas for differentiating technology will be different if the focus is on incremental or radical innovation.

AccordingtoArthurD.Little,awell-knownstrategyconsultingfirm,therearefourtechnologiesinanindustry:The basic technology necessary for a company to exist in the industry•Key technology that has a competitive impact and stems from differentiation possibilities.•Emerging technology in the experimental phase that has a strong differentiation potential.•“Embryo” technology in the research phase that has uncertain but promising differentiation potential.•

A company can choose continuity in R&D policy or look for radical change. Technology in an industry follows a dynamic of alternative phases of radical and incremental innovation and phases in the evolution of products versus processes.

Phase one: Product innovations are frequent and process innovations less frequent.•Phase two: Innovation rhythm diminishes. Products evolve toward a dominant design, but process innovation •accelerates.Phasethree:Productandprocessarestronglyinterdependent.Increasingprocessefficiencyrigidifiesproduct•innovation.

5.6 Design and Technology DiffusionManagement recognises the importance of design for the technological evolution of the transfer of technology from one industry to another and the diffusion of technology (Hargado, 1997, 1998)

5.6.1 Designers as “Knowledge Brokers”ResearchconductedatIDEOaleadingdesignagency,revealedthatdesigncanplayasignificantroleinthetransferof technology and that the designer often plays the role of “technology broker”. A technology broker depends on his/her network and the company memory in the process of cross-pollinator. Past technology is useful information for future designs. Research from thirty projects with technical solutions incorporated from other industries developed a model for design industries.

As technological access: • ThedeficitininformationexchangebetweenindustriesmadeIDEOdesignersdiscovertechnical solutions that were potentially valid but had been “invisible” because they had been developed in other industries.Industriestendtolookonlywithintheirownfieldsforinnovations.As a learning process: • The designers bring these technical solutions to the company memory for potential use in future projects.As idea storage:• These potential technical solutions remain in memory until other design projects come along andcanbenefitfromthem.As idea extraction• : Designers working on new products extract technical solutions from the company memory andappropriateformstofitnewcombinationstheycreate.As results:• Designers create design solutions that are new combinations of existing solutions.

This has implications in IDEO strategic management of the design agency. IDEO recommends, in its methodological guide, that its designers create opportunities in order to expand the IDEO network and their knowledge of the industry. The recruiting of new designers also takes into account the role of technology broker.


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5.6.2 Designers as Technology InfusersIn our postmodern world, social strengths determine technological and organisational change (Sweeney, 1996). Designers can help in avoiding the determinisms of the past where technical and organisational innovations were the only issue. The most widely distributed technological knowledge, and, therefore, the most accessible to consumers, is contained in the object itself (Boisot et al., 1995). The product is a system, a matrix of components that combines functions and technologies used into one unit; it puts all the agents of the company together (Maisseu, 1995). The implementation of new technology is a training process. For Schumpeter, technology is a knowledge set contained in objects, documents, or the minds of certain individuals.

John Maeda, 2002“The Aesthetics and Computation Group was founded at the MIT Media Laboratory in 1996 as an experimental research studio dedicated to synthesising a closer dialogue between design and technology. It performs research in developing paradigms for deconstructing digital tools and environments. The Design By Numbers project demonstrates a system for teaching basic computer science concepts to a primarily visual audience. Only by regaining control of technology can design and art establish a safe and relevant future for humanity.”

Designers are valuable because they can help train others in technological strategies.And by helping to implement new technology, they favour organisational change (Levin, 1997). According to Rogers (1995) and the innovation diffusion model, consumers adopt different strategies when faced with a new technology, as either early adopters or rejecters. Innovation in design makes it less likely people will assume that newtechnologyisalwaysbeneficial.

5.6.3 Towards a “Dominant Design”Any innovation has a dual economic and managerial impact on the company. It improves the competitiveness of the company’s products and transforms its capacities (Afuah, 1998). Innovation transforms capacities, and this change can be either conservative (by reinforcing existing capacities or happening incrementally) or destabilising (radically transforming the comp any, and even destroying its capacities). The importance of innovation in the competitive gamedependsonits“transilience”,i.e.,itscapacitytomodifyandredefinetheresources,competencies,andknow-how of the company ( Abernathy & Clark, 1988).

Authors Abernathy and Clark classify innovation according to its effect on competition.

Structural innovation creates new market relations but requires new knowledge. Often the consequence of a technological rupture, it is the best barner against imitation. Revolutionary innovation reinforces the links between the company and its market by technologically offering new solutions to satisfy existing needs. Niche-oriented innovation relies on existing technologies but creates new market relations. Routine innovation is the most frequent form and improves the performance of existing products. One can classify design innovation according to the new knowledge it generates:

Knowledge about product components•Structural knowledge about the links between product components•

The more radical an innovation is, the more the company will want to turn to outside experts and technology facilitators, such as designers, in order to manage innovation. The integration of a new technology into an industry is a dynamic process of constructing a “dominant design”. A dominant design is one which the major components and underlying concepts do not vary substantially from one model to another. This process follows two phases:

Technological and market uncertainty, during which various designs are tested and competition is based on •product attributes Dominant design emergence,” during which emphasis is placed on process innovation•

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The more complex the innovation, the more important the role nontechnical factors (Such as commercial ones ) play in the innovation success and the higher the risk of seeing the new design fail. Hence, is it important for the designer to instill customer-oriented technology management. Rather than understanding design, design the understanding.

Andrew Hargadon, 2002“An innovation’s design is robust when its arrangement of concrete details are immediately effective in locating the novel product or process within the familiar world. Prospective innovators must carefully choose designs that couch some features in the familiar, present others as new, and keep others hidden from view.”

Designers work toward the acceptance of technology by the customers, but customers are likely to have paradoxical responsestoinnovationsintechnology.Theseresponsesarelikelytoprovokeconflictandambivalence,andstimulateanxiety and stress. They arouse strong negative emotions that trigger an assortment of coping strategies for customers: avoidance or confrontation (Mick, 1998).

5.7 Design and Modular StructureThe Toyota production model, or “lean production” model, for example, constitutes the reference model for the automobileindustry,inwhichdesignhasacquiredaspecificrole.Inordertomaintaincostreduction,companieshave discovered that volume is not the only potential source of economising. There exist other ways to economise in the design of the non-visible parts of the vehicle.

Theemergingmodelofflexibleproductionwasatfirstananswertochangesinconsumerdemand,buttheflexibilityof production ismore andmore amodification of inter-relational structures between companies and productarchitecture. A new organisational structure has emerged: the “modular” production structure. Numerous industries have shifted the modularity of the production process toward the design phase (Baldwin & Clark, 1997). A few examples include:

In the automobile industry, different parts are manufactured in different places, then collected on an assembly •line.In the computer industry, a company like Dell has shifted its base to a modular structure.•

A modular structure is one in which each functional element of the product is implemented by exactly one physical elementandinwhichtherearewell-definedinteractionsbetweentheelements.Suchastructureallowsadesignchange to be made in terms of one element without requiring a change to other elements for the product to function correctly (Ulrich & Eppinger, 2000). The adoption of this new modular design model increases the rate of innovation in a market by developing new market segmentation. Modularity develops innovation, but also increases the degree of uncertainty in the design process, which is a challenge for design. It diminishes design, production, and distribution costs, generates a wide variety of products, develops “technologically rich” products, and puts products more quickly on the market (Sanchez, 2000).

Intheclassicsystem,creationrevolvesaroundproductattributesdefinedbymarketresearch.Inthemodularsystem,the product structure is conceived as a means of leveraging product and process variations. These changes modify the types of knowledge from a “know-how” (practical understanding of how the system works) to a “know-why” (theoretical understanding of why the system works). The tie between these two types of knowledge permits the innovation of a “know-what”.

Amodularstructurerequiresanothertypeofdesignmanagement:Ifinterfacespecificationsareacomponent,therewill be less need for teams or experts, since designers can take care of interface. The role of the design manager will be to encourage the articulation of new knowledge and to codify its architecture For marketing, modularity permits the management of change by allowing common elements to be used within a certain range of products. The coordination of market segmentation with modular product structures and processes increases the potential for market segmentation. Modularity changes the objective of creation. Rather than conceiving products, desing conceives platforms. (Sanchez, 1999).


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5.8 Radical InnovationA new model for design managementIt isdifficultforawell-EstablishedCompanytogenerateradical innovation,whichoftenmakesthesuccessofnew entrants in an industry. The routine inertia tends to limit manger’s visions of what is technologically possible. (Ehrenberg & Jacobsson, 1996). Design plays a different role according to the type of innovation. For a new concept or radical innovation, design gives higher priority the training of the consumer and the staff. For a static product or incremental innovation, design focuses on brand reputation and after sales service ( Hollins & Stuart, 1990).

Radical innovations change the criteria consumers use in evaluating a product and may generate resistance to the new product. Aesthetics can either reduce or increase the acceptance of a product (Veryzer, 1998) and its purchase potential (Loos-childer et al., 1995)

The involvement of industrial design (ID) expertise in new development suggests a very different picture of ID’s role. An IDSA report in 1999 indicates that many industrial groups enter the NPD process very early and play an important role in the initial product planning. Most research and development managers, however, underestimate the importance of ID in the success of these new products. For them, ID plays a limited role in the early stages of the design process.

One of the most important aspects of the development process for these discontinuous projects is the role of the prototype plays. Most often in new product development, design activities precede the development of a prototype. For discontinuous products, prototypes that demonstrate technical feasibility play a key role in gaining formal recognition and support. This early emphasis on prototype building and focus on technical challenges results in delaying ID activities until later in the process. ID comes in basically when one is starting to talk about “embodiments.”

The prototype sent to ID is sent as a “proof of concept,” but has zero” ease of use.” ID, therefore, ends up designing a brand new system. In contrast to R&D managers, design managers point out the importance of the role played by ID in valid customer research for radical innovation. Given the challenges of discontinuous NPD and the reality that many critical user interfaces may be determined during the development phase when the product is in the hands of R&D managers, there is a need to better integrate ID considerations into the process earlier on. One way to accomplish thisinahigh-uncertaintyenvironmentistofocusearlyinthedesignprocessonbenefit-andconsumption-patterndiscontinuities (Veryzer, 2000a).

Radical or discontinuous products involve new management models because of the uncertainty throughout the course of their development. Radical Innovation (Leifer et al., 2000) relates research conducted on discontinuous products launched by a wide range of different companies (Air Products, Analog Devices, DuPont, General Electric, General Motors, IBM, Nortel Networks, Otis Elevator, Polaroid, and Texas Instruments). The book describes the differences between the two management models and gives design management a new path for future improvement (Table 5.3). In order to enhance their capacity for radical innovation, these companies use methods that are appropriate for design managers:

For reducing organisational and resource uncertainty by establishing a radical innovation hub, benchmarking, •and radical innovation project advisory boardsFor developing radical innovation competency: radical innovation transition teams, and internal venture capital •companies (Leifer et al.,2000)

The experience of design managers can be useful for managers facing increasing uncertainty. The role of design is not so much the problem resolution as the interpretation of the new situation (Lester et al., 1998). The interpretative manager, or design manager, considers ambiguity and improvisation to be part of innovation(Wheelwright, 1992).

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5.9 Improving the NPD Process through DesignThe Success Of Competitive Companies resides in the close links they have been able to establish between marketing andR&Dinbothapermanentandflexibleway.Theintegrationoffunctionsduringtheinnovationprocessand,in particular, the R&D/marketing interface is fundamental to solving complex projects (Johne & Snelson, 1998). Itis,therefore,importanttodevelopaclimateinthecompanythatfostersinterfunctionalcooperation(Griffing&Hauser, 1996).

INCREMENTAL RADICALProject timeline Short term: months to two years Long term: ten years or more

Trajectory Linear and continuous path Path with multiple discontinuities and gaps to bridge

Idea generation Front end Sporadically throughout the Life cycle

Process Formal approved Formal for funding but treated with disdain by participants

Business model Complete and detailed at the beginning

Business model evolves through discovery-based techniques as uncertainty is reduced

Players Cross -functional team Cross-functional individuals who come and go in a network that grows around the project

Organisational structure

Cross -functional team in a

business unit

Starts in R&D in an incubating organisation, then changes into a goal-driven project organisation

Resources and competencies

All the competencies required - and subject to standard resource allocation

Creativity and skill in resource and competency acquisition

Operating unit

Involvement

Involved from the beginning Informal

Table 5.3 Comparing incremental and radical innovation management (Leifer et al., 2000, p. 19)

5.9.1 Coordinating NPD through DesignCooperationandcommunicationbetweenR&Dandmarketingfunctionsincreasechancesofsuccess(Griffin&Hauser, 1996). As we explained earlier, the design process is, in essence, a cross-functional process, integrating constraints from -both R&D and marketing. In innovation management, it has the consequence of developing a cross-functional team management of innovation. This coordinating value of design has been well documented. A recent study demonstrates design increasing cross-functional integration in high-tech companies (Rioche, 2002). The research conducted on 185 French high-tech companies shows:

A direct correlation between the existence of a design function in a given company and the importance given •to design in the companyIn companies where design is given high importance, it is perceived as a factor favouring transfunctional •collaborationsAdirectcorrelationbetweentheimportancegiventodesignmanagementandbeingqualitycertified•


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Obstacles to communication and cooperation are numerous:Personality and cultural barriers, in terms of intolerance of ambiguity, problems of language, organisational •barriers, and physical barriers.Looselydefinedroles,lackofcommunication,lackofmultidisciplinaryteams.•Adeficitindesignmanagement,leadingtoslowresponsesfromdesigners,marketingmisunderstandingthe•design process, low mutual respect between marketing and design, and production not being well integrated with design (Cooper et al., 1994).

Design helps to overcome integration barriers by creating transversal teams, increasing communications, encouraging learning from other disciplines, and fostering a common culture. Design is interdependent on both R&D and marketing. Therearefewerconflictsifintegrationentailsmoregroupinteraction.Interactionisinfluencedbytheperceptionof dependence in order to achieve the tasks. The more a function believes it depends on another function, the more importantinteractionis,causingresourcestoflowacrossfunctionalborders.

Dorothy Leonard Barton, Li)’)IPhysical representation of the product under development spans the language boundaries between disciplines. First, such models represent the emerging product in a relatively neutral language. Second, such models serve as integrating mechanisms communicating a consistent message of product/process meaning to the team and unifying it to succeed, design management needs to:

Promoteintegrationasitsobjective,keepcreativityflowing,andencouragenetworking•Use the communicated information and transactions through functions and process coordination to solve •conflicts

To this end, visualisation and rapid prototyping are the most valued tools, but other decisions are also important: relocation, staff changes, the casualness of the social system, the organisational structure, rewards, a formalised integrative decision making process, etc.

5.10 The Logics of Innovation and DesignDesign Input on improving the NPD Process is measured by three variables: reducing time to market, networking innovation, and improving the learning process (Fig 5.5).

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The impact of design process on innovation

IN TERMS OF TIME

DESIGN

Reduces Market Time•byimprovingsources

•bycommunicationsskills(visualization, prototypes)

Changes the Relationships•internallybuildstrustinteam and concept sharing•externallychangesthe

relationships with Outside actors (suppliers, society)

Is a Continuous Learning Process

Develops cross-functional Innovation

Manages simultaneously the product and customer

informationflows

Develops a core competency

DESIGN DESIGN

IN TERMS OF SPACE IN TERMS OF KNOWLEDGE

Fig. 5.2 Improving the NPD process through design

Robert Hayes, 1988“Four themes shape the behavior of the truly superior manufacturing company:

Management makes the difference•A holistic perspective is essential•Customer value and competitive advantage should be relentlessly pursued•Continual learning and improvement is the objective•

The impact of the design process on the logics of innovation can be organised under three headings: time, space, and learning.

5.10.1 Design and the NPD Stage/Gate ProcessThe design process is a stage process similar to the classic NPD process model: the Stage-Gate process, with which itmixeseasily(Table5.6).Thismodelbreaksthenewproductprojectintodiscreteandidentifiablestages.Eachstage:

Consists of a set of parallel activities undertaken by people from different functional areas•Is designed to gather information needed to advance the project to the new gate, or decision point•Is cross-functional: no stage is owned by a functional area or department•

The process is, at the same time, a dual managerial and consumer process, a subprocess of managerial decisions, and consumer response measurement.


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Phases/ Gates Stage Gatetm

(Cooper)

Team Key Activities Design In Npd (Ulrich & Eppinger)

BEGIN STEP 1STOPORGO ON TO:

Ideation Initial screening

Ideation Initial screening

ExplorationConsider product platform and •architectureAssess new technologies and needs•

STEP 2STOPORGO ON TO:

Preliminaryinvestigation

Market assessmentTechnical assessmentBusiness assessment

Concept developmentInvestigate feasibility of product concepts•Develop industrial design concepts•Build and test experimental prototypes•

STEP 3STOPORGO ONTO:

Detailedinvestigation(ends with business case)

Market researchUser needs and •wants studiesValue in use studies•

Competitive analysisConcept testing

Detailed technicalassessment

Manufacturing appraisals

Detailedfinancialanalysis

System level designGenerate alternative architectures•Definemajorsubsystemsandinterfaces•Refineindustrialdesign•

STEP4STOPORGO ON TO:

Development(money gate)

Product development Detail designDefinepartgeometry•Choose materials•Assign tolerances•Complete ID documentation•

STEPSSTOPORGO ONTO:

Testing and validation

In-house product testing

Customer test of productsMarket test

TestingReliability test•Life testing•Performance testing•Regulatory approvals•Implement design changes•

STEP6 Market launch Trial productionPrecornrnercialisationBusinesa analysisProduction start-upMarket launch

Production ramp-up •Evaluate early production output•

Table 5.4 The Stage-GateT process (adapted from Cooper, 1998)

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Thedesignprocess can shorten the lengthof theNPDprocess through its source-finding and communicationactivities, which include:

Seekingoutexternalsources,andfindingandnetworkingwithnewspecialisedsuppliers•Organising peer reviewgroups to assess prototypes or visual outputsm in order to better define product•strategy

Reducingdesigntimemustbeapriorityforthedesignfunction.Processspeedisanewformofcompanyefficiency:Since demand is not foreseeable, it is a waste of time and resources to spend the company s creative efforts on abstract market research. What is necessary to proceed as in a poker game: to put the product on the market and “pay to see.”

Designinfluenceshalfthetotaldevelopmenttime.Theleverageeffectcanbehighifthedesigngroupchangesitsways of operating. For example, at BMW, though the company has always prided itself in its handcraftsmanship, this question was asked: To what extent should new design technology drive design? The result was of the development process using digital design expertise. Different designs tasks could now be carried out simultaneously, so “virtual cars” could be tested at the same time as ongoing activities. Pruning was now necessary, since physical prototyping could be done digitally and any remaining design changes could be completed more quickly.

The sequential innovation model is completed by simultaneous engineering and design activities developed in parallel to improve the holistic approach and overlap tasks. In order to make concept building more feasible, designers work alongside production engineers, and alongside communications and advertising. This keeps the engineers from appropriating the concept of concurrent engineering and dissociating NPD from strategy. The success of simultaneous engineering stems from methodologies in Japan (Barkan 1991). This holistic approach is a direct result of the design process and consistent with the instability of any creative process. In this approach, teams organise themselves to work alone, and at different points, they intersect with other teams to transfer knowledge (Takeuchi & Nonaka. 1986).

The process looks like a rugby match in which the ball passes from one to the other in the middle of the scrum while it moves in block on the land. This “rugby” approach between engineering, sales, marketing, and design functions is used in companies like Fuji, Xerox, and Honda, where design management principles aim at the coordination and promotion of innovation. This raises the status of design and gives it a human-centred design philosophy as in Sony, Ricoh, and Sharp (Cooper & Press, 1997). The difference between “total design” and simultaneous engineering is based in interfunctional communication. In this new approach, the design process becomes a circle in which the designer or design manager remains the champion of the product(Hollins, 1995). Design should reinforce innovation, viewing it in a problem-solving perspective, which can be achieved by:

Effective project-to-project knowledge transfer: using “post-mortem records of past projects as a resource•Rapid problem solving; using advanced technologies and computer simulation to allow for faster problem-•solving cycles

Example: AtToyota,asystematicefforttofront-loadthedevelopmentprocesshasshiftedproblemidentificationto earlier stages of product development (Thomke & Fujimoto, 2000).

Stephan Thomke And Takahiro Fujimoto, 2000“We started our discussion by describing product development as a bundle of problem solving cycles. We introduce theconceptoffront-loadingproblemsolving,whichwedefineasastrategythatseekstoincreasedevelopmentperformancebyshiftingtheidentificationandsolvingofdesignproblemstoearlierphasesofaproductdevelopmentprocess.”


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5.11 Innovation Design as a “Space” SystemThelinkbetweenenhancedinnovationperformanceandmoreefficientgroupcoherencesignalstheneedfordesignmanagers with a high level of responsibility (Holland, 1995) in creating both an internal and external innovation “space”. In this way, innovation is viewed as a social scheme. Design creates an internal space or team for innovation. It helps management decompartmentalise functions and implement project management.

Example: TheRenaultTwingo isagoodexampleofdesign’s role in themodificationof theorganisationalstructure (LeQuement, 1994). The Twingo project closed the gap separating two generations of project organisation: that used before 1988 and the newer organisation consisting of project managers in senior management. In the spring of 1990, a new organisation was implemented that consisted of a Junctional group” with the objective of forcing interprofessional communication and improving the mastering of the program, according to the three criteria that constitute “the golden triangle of project control: quality, costs deadlines.”Thecarwasdividedintoapproximatelythirtysubsystemsandprojectgroups.Theprojectdirectorformalisedcontractswiththedifferentprofessionsinordertosealengagementsandconsolidatethem:“Wewantinvolvedactors,notconsultants”(Midler,1993).

Around the project director, a team is constituted of project chiefs that represent all the specialists who will be working on the project, including those in design. The project director, however, is independent of functions or professions. He or she coordinates the efforts of all participants. Instead of being built upon a power hierarchy, the team is built upon a network structure. Cooperation and mutual power delegation replaces relationships based on rivalry and authority.

Inthemodernapproachtoprojectmanagement,theprojectleaderisapersonofinfluencewhoisunconnectedtooperational hierarchy. The project director must understand the “big picture,” the multiple project risks, and create a team spirit between the visible team and the invisible “virtual” team of project partners. A good project director is a catalyst who must:

Explore new combinations and information acquisition that reduces uncertainty•Makedecisionsthathelptheinnovationaffirmitselfprogressively,byreducingalternativeoptions•

The design manager organises working methods in the design department in order to set up an integrated model of innovation management in the company as a whole. This model means managing together, in design management, the process of communication and the process of production. The objective is to develop concept sharing and mutualconfidenceateverystageor loopintheprojectcycle.Thisintegrativeconceptual involvementrequiresmultidisciplinary competencies. Education predestines both designers and architects to this role (Lebahar, I994).

There is an evolution from a very controlled, linear model of innovation, with tasks that require little expertise, toward a new model, where the major tasks are teamwork, competency-building, interchangeability of tasks, and the capacity to self-govern. Finally, the most important issue is to build trust (Rhodes et al., 1995).

The common space grows out of the combined expertise of the various people involved in the NPD process, and their search for consensus and compromise when the process encounters incompatible constraints. Design teams and centers develop organic structures that share information and center around the customer rather than the function (Olson et al., 1995). One way to enhance the interdependence and sharing of diverse project participants is to have them all work together in the same physical space and on” intermediary objects.”

For example, at IDEO, building teams and trust is essential. The company collocates people who will need to interact, creating “hot studio” passion by recruiting crazy characters, budgeting in t-shirts as “metaphors in motion,” and building communities to foster innovation. Intermediate objects, such as models provided by computer assisted design (CAD), help in the development of a cooperative dynamic. This means that interface is now less and less a question of understanding the other expertise and more and more a question of confrontation about a common “work in progress.” Integral NPD development is rooted in both an intertwined physical/informational system and in high internal/external integration, like integrated supplier linkage. Intensive, early, and ongoing communication with a number offirst-tierpartssupplierseffectivelyspeedstheprocurementofprototypepartsandimprovesproductintegration.

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Dr. Robin Roy, 1996“The trend toward organising design, development, and manufacture via supply chains and buyer-supplier relationships poses major challenges for design management. For companies such as service operators or equipment end-users (like airline companies) the supplier designs fully devolved designs, which can be an effective option. This approach is not suited to manufacturing organisations further down the supply chain whose main function is the design and development of product components; for these a mix of in-house design and partnerships with key suppliers is the best combination.”

The question is the extended “space” given to the innovation project: spreading the group outside the company to supplier design teams, or the extent to which the company outputs its design work to outside designers. External design allows external arbitrations between different functions, reduces the power of technology in decision making, and reinforces creativity in the innovation process. Optimising the “space” of innovation becomes a managerial issue concerningtheefficiencyofinnovation.Itmeansapplyingtheconceptsdevelopedbythe“transactioncosttheory”(Williamson, 1999) to design outsourcing practices, with outside designers seen as long-term partners, not short-terminterimsubcontractors.Forexample,anissuelikethespecificityofassetsgeneratedbydesignprojectsentailsmaking explicit contract terms with external design partners. The extemalisation of design in product innovation is a new fundamental direction for design management. It is certainly one of the most interesting topics in building a competitive advantage through design management.

Michael Pjore Anu Richard LesterMassachusetts Institute or Technology, 2001. “It may be that innovative activity is becoming increasingly dependent uponthese‘public’conversationalcommunitiesandlessuponthe‘private’spaceswithlargefirms”.

Finally, design acts as an interface between the consumer, the society at large, and the company, and its value is to widen the external space of innovation. Design is integrated into this system by which agents coming from different departments of the company and outside persons actively collaborate toward a common objective.Innovation space is less and less limited to the company and more and more open to interactions between the “form” and society. These interactions transform the innovation all through the NPD process. The idea transforms itself progressively through a series of experimentations that confront it with society at large.

This new model, the “sociological model of innovation” (Ackrich, Calion, & Latour, I988), insists on the various changes and discontinuities in the innovation development through the interactions between the NPD team, its outputs (roughs, ideas, prototypes), and the various social communities. Though in the literature both models (linear andsociological)rejecteachother,infact,theiroppositionisartificial.The“whirl,”orsociological,modelismoreadaptable to radical innovation, and the linear model is more appropriate for incremental innovation.

The view points are complementary: The manager will be interested in setting up an NPD process that serves the customer and works with the structure of the company. The sociological model is interested in looking into the mechanisms that make the market and society accept the innovation. But this sociological model of “conversational communities” has the great advantage of insisting on the necessity of integrating external professionals into the NPD process in order to simultaneously build the market and innovation. The value of designers for the managers is that they frequently and intuitively ask for external expertise in design decisions, such testing design options with expert consumers.

Innovation process improvement might encourage developing strong relationships with MBA programs and design schools(thoughthatmightbedifficultbecausethereareveryfewuniversitycampusesthatprovideboth;intheUnited States, there are only two: Carnegie Mellon and Michigan State) and spreading the pioneering programs at MIT and Rhode Island School of Design in cross –functional product development into business schools.


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5.12 Design and the Learning Process of InnovationInnovation is a competitive advantage if innovations are introduced at a steady rhythm. In such a context, the ability to rapidly transformscientificdevelopment into innovation is a fundamentalnecessity.Thedynamicofcore-competency building in the company is that of building new knowledge capacities both of individuals and the company. It is obvious that designers build new knowledge. It is their everyday “bread and butter.” Design is a continuous process; it is, therefore, reasonable to keep design teams together in one place long after the product launch (Whitney 1988) and to develop methods to infuse design knowledge into the company. In order to operate successfully, one has to internalise knowledge. In a competition driven by innovation, a company must be able to assimilate the new information produced by the professionals on its development team (Nonaka & Konno, 1998).

What is important is the notion of continuous cultural change (Ingram & Heppenstall, 1996). Although managers routinely review their product development processes to ensure that each is achieving its objectives, they seldom review the development process itself to improve upon its shortcomings. Any design project that only produces an excellentproductontimeandwithinbudgethasonlyobtainedhalfofthetotalpossiblebenefit.Processreviewsarebeneficialtoproducedatathatsupportprocesschange.Theobjectiveistocontinuouslylearnhowtodothejobbetter, faster, or more effectively. Companies that do well view learning and improving their development processes as an integral part of business activity (Smith, 1996). The key design management issues are:

The organisation of project reporting methods; the selection of a-professional whose mission is to spread learning: •and the organisation of the collective dimension of knowledge through design.Theredefinitionofthehierarchyofcompetencecenteredaroundthefunctionoflearningandproductionof•knowledge.The linking of projects to an overall objective of design competency, so that the knowledge gained in any one •process can be used in future design development.

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SummaryDesign is a management tool that creates differentiation in the internal capabilities of the company.•Innovation is a collective and interactive process that is close to the reality of the design process, since it mixes •internal and external factors.The designer is an innovator who goes out, watches, inquires, and listens to the world that surrounds him.•The process of exploring new design ideas is protected from its own excess by sound design management•Concept selection is the process of evaluating concepts with respect to customer needs and other criteria, •comparing the relative strengths and weaknesses of the concepts, and selecting one or more concepts for further investigation."Concept screening” uses a reference concept to evaluate concept variants against selection and a comparison •system to narrow the range of concepts under consideration.“Concept scoring” uses different reference points for each criterion.•The product is a system, a matrix of components that combines functions and technologies used into one unit; •it puts all the agents of the company together.A dominant design is one which the major components and underlying concepts do not vary substantially from •one model to another.A modular structure is one in which each functional element of the product is implemented by exactly one •physicalelementandinwhichtherearewell-definedinteractionsbetweentheelements.Modularity develops innovation, but also increases the degree of uncertainty in the design process, which is a •challenge for design.Design is interdependent on both R&D and marketing.•The design process is a stage process similar to the classic NPD process model: the Stage-Gate process, with •which it mixes easily.Innovation’s key factors can be attained through design innovation design innovation, creating a better product, •and improving the quality of the NPD process. Design develops a conceptual dimension of idea generation, concept development and the concept as •integrator.Design management is an NPD development process centered on the consumer. •Design plays a role in the management of the technology, the designer is a “knowledge broker”, and design •becomes “modular”.Design management develops coordination through design process.•Astrongprojectteamleaderispreferredtocreatetrustandconfidencesharing.•Innovation space is created through internal and external professional networks like suppliers and practitioner •communities.\

ReferenceDe Mozota, B.B., 2003. • Design Management. Brooklyn-New York: Allworth Communications. Inc.Stamm, B.V., 2008. • Managing Innovation, Design and Creativity, 2nd ed., West Sussex: John Wiley & Sons Inc. Murray, R., Mulgan, G. & Caulier-Grice, J. • HowtoInnovate:Thetoolsforsocialinnovation.[Online] Available at:<http://www.youngfoundation.org/files/images/publications/Generating_Social_Innovation_0.pdf>[Accessed5 January 2012].


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Kim, S. & Chesbrough, H. & Berkeley, U.C. • Enhancing the Design Process through Open Innovation [Online] (Updated 26 October 2009) Available at: <http://openinnovation.berkeley.edu/speaker_series/Kim_10_26_09_OISS.pdf> [Accessed 5 January 2012].DanskDesignCenter., 2011. • What is design-driven innovation? [Video Online] Available at: <http://www.youtube.com/watch?v=LJx_uep_CFg&feature=related> [Accessed 27 January 2012]. wburnett1957., 2007. • What is Design [Video Online] Available at: <http://www.youtube.com/watch?v=n7ULeWyBN8w&feature=related> [Accessed 27 January 2012].

Recommended Reading Blaszczyk, R.L., 2000. • ImaginingConsumers:DesignandInnovationfromWedgwoodtoCorning. Baltimore-Maryland: Johns Hopkins University Press.Harvard Business Press., 2009. • Design-Driven Innovation. Boston-Massachusetts: Harvard Business School Publishing Corporation. Lockwood, T., 2009. • Design Thinking: Integrating innovation, customer service and brand value. New York: Allworth Communications,Inc.

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Self Assessment

_____________ is a management tool that creates differentiation in the internal capabilities of the company.1. Designa. Innovationb. Modularityc. Communicationd.

____________ is a collective and interactive process that is close to the reality of the design process, since it 2. mixes internal and external factors.

Innovationa. Modularityb. Communicationc. Managementd.

_____________uses different reference points for each criterion.3. Concept screeninga. Concept selectionb. Concept scoringc. Matrix of componentsd.

_____________develops innovation, but also increases the degree of uncertainty in the design process, which 4. is a challenge for design.

Design managementa. Radical innovationb. Modularityc. Innovation spaced.

____________is an NPD development process centered on the consumer. 5. Design managementa. Radical innovationb. Design innovationc. Innovation spaced.

A ____________ is one in which each functional element of the product is implemented by exactly one physical 6. elementandinwhichtherearewell-definedinteractionsbetweentheelements.

design managementa. radical innovationb. modular structurec. innovation spaced.

______________ requires a different NPD process:7. Design managementa. Radical innovationb. Modular structurec. Innovation spaced.


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______________ leads to continued information sharing between consumer and company.8. Designa. Innovationb. Modularityc. Communicationd.

Which of the following statements is false?9. The process of exploring new design ideas is protected from its own excess by sound design managementa. A dominant design is one which the major components and underlying concepts do not vary substantially b. from one model to another.The designer is an innovator who goes out, watches, inquires, and listens to the world that surrounds himc. Design is interdependent either on R&D or marketing.d.

Which of the following statements is false?10. Design management develops coordination through design process.a. Design innovation is a continual learning process.b. Innovationisdesignisthatcanaddvalue,givingacompanyaprofitableedgeinthequesttoinfluencec. consumer preferences.Design plays a role in the management of the technology, the designer is a “knowledge broker”, and design d. becomes “modular”..

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Chapter VI

Design and Strategy

Aim


introduce two models of design strategic positioning•

establish a framework for a strategic management of design•

explain strategy ideation•

Objectives


discuss design, identity and culture•

explain the design of a company’s spatial identity•

enumerate the steps involved in designing a graphic identity•

Learning outcome


know a cognitive approach to strategic design•

identify the economic approach to strategic design •

understand design as an inter-organisational cooperation•


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6.1 IntroductionTo manage design at a strategic level is to manage the contribution of design to the strategy formulation process; to definetheresponsibilityandleadershipassignedtodesignanditscontributiontotheorganisationalculture,searchfor opportunities for design innovations, and multiply demonstrations of identity through design. This third level of design management establishes links between design corporate communications and top management.

6.2 Two Models of Design Strategic PositioningThere are two models of design strategic positioning namely, the “innate” and the “acquired.”

6.2.1 The “Innate” ModelThis model grows out of organisations that consider design a core competency from the start of the company. Design is part of the founder’s entrepreneurial scheme. Examples of this “innate” strategic role of design include all companies that have been founded by a designer entrepreneur in fashion, textiles, distribution, or furniture, such as Marimekko, Habitat, Ikea, Herman Miller, Cassina, and Castelli, as well as Alessi, Braun, Olivetti, and Apple in other selectors. All of these companies have in common a global design strategy with a design spirit that penetrates all organisation processes like the entire value chain, from product to communications.

6.2.2 The “Experience” ModelThe model of “acquired” design or of design learned by experience, as in Sony or Philips, shows a progressive valorisation of design in the company. For Sony, this valorisation is linked to the personality of one of the founders, Akio Morita, and followed the launch of Walkman in the 1980s, created by a project team called the PP Design Centre (Product, Presentation, Proposal, Promotion), which regrouped more than 130 designers. Since 1984, this design centre has been organised according to consumer logic and not by product categories.

Strategic design at PhilipsAlthough Philips cannot be considered a design leader, design is part of its strategic policy. In the post-war period, thechangingpatternofthecompanywasreflectedintheorganisationofthedesignfunctionheadedbyLouisKalff,director of the product division. Little evidence exists regarding the early internal structure, but the product group had draftsmen and used outside consultants, including Raymond Loewy, who collaborated on the Philips electric razor.

In 1953, the Artistic Propaganda department (at Philips, the precursor of the design department) was split into two product sections. Its head was Rein Veersema, an architect trained at Delft University. He set out to develop design competency in such areas as ergonomics and pricing, so that designers could reinforce their case. In 1961, hedevelopedhisideaofindustrialdesignasthe“unificationofbothaestheticandscientificrefinement”.Oneofthe most important aspects of his work was “the creation of a Philips family feature”.

Knut Yran from Norway was appointed director of design in 1966. A man of powerful convictions who believed completely in the value of design, he introduced many initiatives that profoundly changed the role and nature of design at Philips. By 1969, he had completed an organisational structure for the Concern Industrial Design Centre (CIDC) with established control over the designers and a method of systematic planning: the “design track.” He definedanewhousestyleforPhilipsbasedonamanuallaunchedin1973,andsupervisedthedisseminationofinformation on design theory and practice through the journal Design Signals.

In the late 1980s, Robert Blaich was appointed as the managing director of CIDC. In order to make design a permanent factor in Philips’s future competitive advantage, he proposed a strategy with four major elements: design policy, design management, improved professional design standards, and equal partnership of design in NPD. He was emphatic that the design function be a structure and policy consonant with the structure and policy of the company. He addressed fundamental problems such as the unwritten imperative that different products must be designed for different countries and the lack of communication between product sections. By 1982 a new organisational structure wasimplemented.Itsimplifiedthefunctionofsupportservicesandadministrationandcreatednewdesignmanagerposts for each major product sector, with a brief to achieve tighter cooperation within their product division.

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InI985,CIDCchangedtoCID,CorporateIndustrialDesign,reflectingadesiretocomeupwithworldwidedesignsolutions.ByI984,thedesignpolicycommitteehadpreparedadefinitivestatementofdesignpolicyemphasisingtheequality of design in the interdisciplinary teams of product development process. An ongoing program of professional development embracing all staff and activities within CID as set up. Its intent was to stimulate fresh thinking and invite visitors to inject new Ideas from outside the company, using workshops as concept generators. Other initiatives included recruiting the best talents from design schools, developing expertise in new CAD techniques, applying ergonomics, and organising a communications department in order to sell the necessity of design to the company. These examples show how the design community views strategic value of design. Some authors explain, in detail, strategic design management decisions that are used to implement a design strategy, but do not explain the links between design and the company strategy formulation process. They tend to let us think a design strategy which can be built as a satellite disconnected from the company’s overall strategic thinking, which is an error.

Inordertobetterqualifythestrategic, transformingvalueofdesign,wefirstneedtounderstandwhatmakesadecision strategic, and what strategy is. As a result, understanding various models of strategic thinking and developing the models that are pertinent to strategic design: the political and cognitive approaches to strategy, as well as the economic and competitive approaches is very important. Various aspects related to strategy formulation and ideations are discussed below in brief.

6.3 A Framework for Strategic Management of DesignTheFrameworkforstrategicmanagementofdesigncanbeclassifiedasfollows:

6.3.1 How Businesses Formulates their Strategies?Henry Mintzberg investigated the origin of strategy, paying particular attention to exploring the relationship between plans and intentions, and how companies actualised their plans. Comparing intended strategy with realised strategy allowed him to distinguish “deliberate strategies” realised as intended-from “emergent strategies” patterns or consistencies realised despite or in the absence of intentions.

Thefirstquestionforstrategicdesigniswhetherthereisorisnotanintentionalcharacterorstrategicintent.Strategyformulation comes from the will of managers, cultural or political processes, or external pressures. Designers are used to a deliberate strategy process, which results in a manager issuing a design brief for a new logo or space. They are less familiar with the emergent strategy process, though it is probably the most interesting aspect of strategic design management: It inserts design opinions and ideas into the collective process of strategy consensus-.building through the company’s different social and power coalition. This social and progressive pattern of strategy formulation is the most useful for long-term design infusion in the company. Rather than relying on the rational model of strategic planning, design management should explore the “fuzzy” model of emerging strategy as a social consensus process.

What is strategy?Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.

6.3.2 The “Competition” Porter Model of StrategyStrategy comes from an analysis of a company’s competitive context. A company chooses a unique position in its industry according to the balance of forces in its market: the rivalry among the competitors, the external threats of new entrants and potential substitute products, and the market power of its suppliers and customers. According to the competitive context, alternative strategic formulation emerges from strategic analysis methods and planning, such as:

Volume strategy: cost leadership•Specialisation strategy: niche strategy differentiation, such as variety-based, needs-based (serving most of the •needs of a particular set of customers), and access-based positioning(Customer geography or scale)•


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Simply identifying the sources of competitive advantage is not enough. The company must build its position and organise the value chain in order to develop a real advantage over competitors. Competitive advantage grows out of theentirevaluechain.Fitisimportantbecausediscreteactivitiesaffectoneanother.Therearethreetypesoffit:

Thefirst-orderfitisthesimpleconsistencybetweeneachactivity(function)andtheoverallstrategy.•Thesecond-orderfitoccurswhenactivitiesarereinforced.•Thethird-orderfitgoesbeyondtooptimisationofeffortsuchasthecoordinationandinformationexchange•across activities to eliminate redundancy.

Strategy Formulation Strategy Ideation Strategy Implementation

Fig. 6.1 The strategy process

“Strategy”createsafitamongacompany’sactivities.Thesuccessofstrategyandstrategicdesigndependsondoingmanythingswellandintegratingthem.Thewholemattersmorethananyindividualpart.Strategicfitisfundamentalnot only for competitive advantage but also for sustainability of that advantage.

6.3.3 Other Models of Strategy FormulationBeyond the Porter integrator paradigm, the domain of strategy has been amended by theories developed from social science like economy, sociology, and politics. Theoretical models for strategy formulation based on competitive advantage apply to design management. However, other models based on the company’s capacity to construct its outside environment (Resource-Based View and Knowledge Management) or on the cognitive approach of representation of the company environment are also pertinent for design management and go beyond the Porter competitive advantage. These different approaches to strategy provide a balanced structural framework or strategic design management.

6.4 Strategy IdeationStrategy Ideation articulates both the logic of analysis (positivist) and the logic of design (constructivist):

Constructivist logic• : conception, invention, pattern creation, staging, and sense-making. Which strategic and organisational dynamics can be used to invent and create?Positivist logic:• analysis and calculation, designation of possible/ impossible futures, and action and implementation. How can we explain and predict evolutions?

Strategycannotbebasedstrictlyonthelogicofanalysis.Strategyisalsoaglobalconception,ahomogeneousfigure,asignificancethatconcentratesontheflowofactionsandrepresentations.Analysisdiscriminatesanddescribesthecharacteristicsofstrategicdynamics.Strategiccreationanddesigninstitutesthespecificityofacompanyandaimsat challenging contingent futures.

6.4.1 Design Vision as Strategy IdeationStrategy can create radically new competitive conditions. Deviance is at the heart of this process, and explains how the mechanisms of reference framework in the industry changes. Deviance is at the origin of vision. The manager’s vision breaks away from routine and proposes a radically different way of contemplating future reality, and questions the conditions that are considered normal in the industry. Vision deconstructs what is “normal” in order to propose a typical design. Strategic vision is close to the divergent design process. Vision induces a dissonance, a gap between traditional thinking and the constraints imposed.

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The design process is a combination of analysis (like strategic planning) and synthesis. It creates a virtual world of mental experiments. Analysis discovers the law that governs today’s reality, and the designer invents a different future. The design process is adductive; it uses the logic of conjecture. “Adduction” suggests that something might be. Example: The Guggenheim Museum at Bilbao by Frank Gehry was an unfolding process of creating new forms of architecture that, nonetheless, speaks to the man in the street and revitalise an entire geographical region.

Designisconcernedwithfit,andsoisstrategy.Themetaphorofdesignoffersa window into a deeper understanding of the strategy-making process for design managers (Liedtk). Mintzberg’s “design school” criticises this design metaphorbecauseitbelievesthedesignprocessisprimarilyoneofreflectionof cognition rather than action-that devalues the role of organisational members other than the CEO or architect (Mintzberg, 1990).

6.4.2 Aesthetics and Company VisionDesign is at ease when confronted with a strategy formulation process that aims towards a future to create rather than an environment to serve, and favours improvisation (Berton, et al., I999: Crossan, 1998). Patrick Hetzel developed a model of an interaction driven company that is pertinent for design strategic management. The interaction driven enterprise is oriented simultaneously around the object and the subject, and its offer is built by the interaction between thesubjectandtheobject.Thecompanyaskssocietyandproposesanofferthatsatisfiesuniversalneeds:designinnovates by injecting interaction intelligence, as well as an element of surprise, into the offer.

Aesthetics can become a dimension of valorisation for the company with the mission to disseminate beauty in society. Aesthetics governs the complexity produced by the company and consumer (Hetzel, 1993). The ability to produce beauty can be seen as a sign of power used by the strategic nexus. Aesthetics is a sort of “donation” that authenticates the interaction between the company and the customer. Aesthetics goes back to the cultural project. To bring beauty into the world through art and design is to pull the individual out of nature, making him a cultural being. In this context, design management can be a source of competitive advantage by helping the strategic nexus in three complementary directions:

The product creation and rhetoric•The creation of a strategic intent and its logic of change•The creation of an “ethics of aesthetics” (Hetzel, 1993)•

New company models have appeared, like Benetton, which focus on aesthetics and creation. For example, Nike is a virtual and international company made up of a coordinated network of multiple interdependent companies. In terms of its design process, the 4,000 products are designed at the same time by an internal team of about twenty designers-whoarehiredonlyforfourorfiveseasons,inordertoensuretherenewalofideas-andzooindependentfreelance designers. This allows for maximal creativity, relying on ultra-rapid reactivity and prototyping (Frery).

One can also transform the company vision by federating it around a universal value, such as ecological and environmental concern (Reinhardt, 1998). The designer must contribute to develop a world in which humans not onlylivebutdeveloptheirculturalandspiritualpossibilities-anecologyoftheartificial(Manzini,1995).Heappliestotheartificialenvironmentthemodelsofinterpretationthatecologydevelopedforthenaturalenvironment.Anecologicalanalysisoftheartificialenvironmentdevelopsnewethicsintheprocessof“making”.Onepassesfromthe idea of “making for producing” to the idea of “making for reproducing.” The quality of our existence is directly connected to the quality of our care for the reality of our world. Knowledge of craftsmanship is essential for the future:wewillneedtorediscoverthepersonalcareacraftsmantakesincreatingaspecificobject.Itisare-creation(Fry,1995).Ecologyintegratestheenvironmentalfactorintoproductdesign,parallelsthefluxofmaterialandenergynecessary for the complete life cycle of the product in NPD, and advocates for an eco-design (Mueller, 1995).

6.4.3 The Rhetoric of Strategic DesignThe strategy process implies findingwords for describing and explaining the vision. Strategy as languagesimultaneously provokes the formation of mental images of the reality, of what is possible or not possible, and of what is potential and desirable. Progressively, the opinions of strategic nexus will be crystallised into a few words. Is graphic design just a change of logo? Or is it the design of change? Graphic signs serve as projections of the future for


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a company. They are associated with the future of society. They also tend to assert the power of company leadership bygivingitasignitcanmaster.Graphicdesignisdirectlylinkedtothepowerofinfluencemanorganisation.Thedesigner’s work superimposes itself on top management’s interpretive work.

Interpretive managers constantly question the boundaries of their company’s core competency sometimes, deliberately stray across those boundaries. They bring together individuals within and outside the company who might have something to say to one another. They arrange who should talk to whom. Managers have a very developed analytical apparatus but lack a way of keeping things moving forward without closure. Visionary managers will see that the ambiguity in this lack of closure need not lead to paralysis, but could, instead, provide the opportunity for continuing conversation.

6.5 The Cognitive Approach to Strategic DesignFor Porter, the environment is transparent and easy to analyse. On the contrary, the cognitive approach of strategy develops the idea that a company has access to its environment through a selection of representations or mental images of its environment, and that the environment is itself constituted of entities carrying representations of the company. The relationship between a company and its environment means:

Enactment: • The concept of “blindness”. There is a gap between the image and the reality of a company’s relationship to its environment. Lack of awareness of reality can lead to errors in decision making.Identity: • The process of “sense making” has its roots in social identity. There is no representation independent ofanidentity,nolookontheenvironmentthatisnotalsoalookatwhoislookingareflexivelook.Inter-creation: • The reciprocal construction of the company by its environment and of the environment by the company; the existence of collective cognitive representations in the industry, and strategy groups in the sector.

This cognitive approach to strategy explains the importance of identity for strategic design. The company identity rests on a set of representations. These representations are mental images associated internally and externally with a company. The images are received communication that balances the present identity (the reality of the company), the dreamed identity (the strategic intent), and the acceptable identity (the interaction with the environment). Symbolic identity can bring a company together. It expresses itself through the visual identity (logotypes, shapes, and colour) and the organisational visual identity (signage and environmental design). Corporate identity appears as the set of visual elements through which the public recognises the company and differentiates it from others.

6.6 Designing a Graphic IdentityThedesignofavisualidentityprogramrequiresthedefinitionofstrategicobjectivesandexplicitcompanyvalues,or a mission statement.

6.6.1 Verbal and Visual Identity ModelsCorporateidentityisdefineddifferentlybyvisualconceptualisers(thatisdesignschools)andverbalconceptualisers(that is business schools). There is a lack of managerial content in most corporate identity management literature from visualschools.Consequently,authorsfromtheverbalschoolsdominatethefieldofcorporateidentitymanagement(Balmer, 2001). The variables of corporate identity management are as follows (Fig. 6.2):

Corporate personality: The company philosophy, values, and mission.•Corporate strategy: Top management’s vision, the products and services produced, organisational structure, and •the corporate identity structure.Corporate identity: The behaviour of management and employees, style of communications, and use of •symbols.Corporate image•Corporate reputation•

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Corporate personality

Analysis of company h1story and philosophy

Analysis of company organizational structure

Corporate strategy

Corporate identity

Corporate image

Corporate reputation

The Verbal Model of Corporate Identity Management

The Visual Model of Corporate Identity Program

AuthorsKeendey1977Dowling1984Abratt 1989Balmer 1997Stuart 1999

AuthorsCarter 1982Napoles 1988Olins 1989

Strategy formulationand implementation

Planning

Implementation

Design

Launch

Evaluationand quality control

Fig. 6.2 Verbal versus visual corporate identity models ( adapted from Rufaidah,2002)

Different distribution of these variables is explained in the texts of thirty-eight authors who come from both visual and verbal environments. Both models agree on the importance of variables of symbolism and communication. Other common variables are products and services, behaviour, and corporate image. But variables such as philosophy, values, mission, top management vision, organisational structure and corporate identity structure, which always appear in verbal models, are rare in visual models. Authors from the design world have a limited view of identity as either corporate personality or corporate strategy. Identity in management is analysed through three questions, which are:

Istherearealspecificityofthecompanythatmakesitdifferentfromitscompetitors?i. If this specificityexists,howcandifferent individualscontribute to thecreationofacollectiveii. identity?What is the relationship between individual personality and collective Identity?iii.

Identity is a set of features that shows the unique character of a company and allows its members to identify themselves withinitandoutsidepeopletorecogniseit.Thefactorsthatdeterminethespecificityofacompanyare:

The political factors or characteristics of power and strategy formulation.•The structural factors or organisational structure, systems, and procedures of management (performance, •incentives, human resource management, system of control, organisational symbolism, organisational speech, office-spacedesign).The symbolic production, or induced symbolism (myths, history, rituals, taboos, organisational culture) and •systems of action or strategic games of coalitions, the informal social structure, the ideology and symbols instituted, and time and space planning The organisational imagery or psychic representations the individual has of the company (the corporate image, •professional image and qualities, and the mapping of power).


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Foracompanytoday,thepossibilityofpossessingacoherentandspecificidentityisgreaterthaninthepast,butwhat remains complex is the problem of integrating individual behaviours. Design management must participate in the management of both graphic and architectural identity in the building of a collective identity, an organisational identity that is either focused on an activity, on a style or behaviour, or on the leader. Time gives a global coherence to a company’s symbolism and helps facilitate the sense like making process of a symbol. It is history that makes asymbolcredibleincrementallyovertime.Anemployeecanreadthehistoryofacompanyandfindthecommonthread that links the present to the past, and points to the company’s potential futures.

6.7 Design, Identity and CultureCompany culture is the visible demonstration of its identity. Culture is a set of representations, symbols, values, and beliefs shared by the human group that constitutes the institution. Culture allows different members to recognise themselves in the institution through tangible elements, such as day-to-day management practices, behaviours and symbols. So, the links between design, identity, and culture are to be found in the visual symbols (graphic and spatial), but also in the psychological climate that is developed by the way these signs are perceived. Symbols are subjective proofs of an organisational climate to be added to objective proofs. Under certain conditions, visual symbols incompaniescan serveasefficientmanagement tools.Symbolismexpressesacompany’sunderlyingcharacter, ideology and value system (Dandridge, 1983). This underlying character is revealed by:

Histories and myths that a company concocts deliberately or invents unconsciously.•Different types of ceremonies or rituals a company uses such as training programs, parties, marketing seminars, •and coffee breaks.The company logo which is an externalised, concrete sign a company chooses to communicate its distinctive •character to an external environment and itself.The emotional and political daily life, as revealed by anecdotes and jokes that inevitably circulate in a •company.

Thislistexpressestheprofoundsignificanceinherentinallhumanorganisationsandculturessymbolscanbe:Verbal: Myths, legends, histories, names, rumours, or jokes.•Action: Parties, rituals of passage, meals, breaks, or starts to the day.•Materialsymbols:Statussymbols,companyproductsbadgesflagsorlogos•

Symbols are physical artefacts that exist in an organisational context and connote an organisational sense that will be different from the same signs seen in another context (Ornstein, I986). The work environment is composed of three elements: the physical structure, the physical stimuli, and the symbolic artefacts. The physical structure of a workspaceorenvironmentinfluencesinteractions,relationships,andbehaviours.Thelayoutofthespace,furniture,and chairs all affect the character of this interaction. The symbolic artefacts are aspects of physical environment that individually or collectively guide the interpretation of social space. Environmental design gives indications of the typeofwork,aperson’sstatus,efficiency,andaestheticpreferences.Theseaestheticimpressionscanbeimportantin their impact on staff recruitment and behaviour (Davis, 1984).

6.7.1 Creating and Implementing a Corporate IdentityA company chooses a graphic visual style and identity architecture according to its:

monolithic identity, when the company uses one name and visual style throughout•endorsed identity, when a company has a group of activities or companies it endorses with the group name and •identitybranded identity, when the company operates through a series of brands that may be unrelated either to each •other or to the company

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Design (graphic and environmental) is situated between identity and image. Identity or personality is “what one is”, design is “what one wants to be”, and image is “what one appears to be”. Design creates signs and symbols that reflectthepersonalityorcompanyidentity.Designdoesnotcreatethecompanyimage.Animageisperceived.

A graphic sign is a typographical character (a logotype) and/or a symbol and colour. It is not always necessary to choose between typography and symbol. Some letters have a symbolic architectural language. Logotypes with symbols aremoreeasilymemorised.Symbolsareeitherabstractorfigurative.Abstractsymbolsareshapessuchasacircle,square, rectangle, triangle, or other shapes less easily perceived such as a lozenge, oval, hexagon, or parallelogram. The choice of an abstract sign is often preferred and most often, a circle or a square is preferred. But, at the same time,theyarelessdifferentiatinganddonotconveythespecificrootsandcultureofthecompany.

Afigurativesymboliseither“associative”whichdescribestheproductoractivityor“allusive”whichdescribestheproduct and the activity indirectly. There are several types of descriptive symbols: the pilot product of the company; a tool from the activity; graphics of an animal (Ferrari); graphics of a vegetable (Apple); graphics of earth elements such as a shell, stars, or snow crystals; and graphics with objects (Diligence Hermes). The quality of a logotype is measured according to two criteria:

The intrinsic quality of the visual shape-its balance and accent •The relationship between the form and its background, and) the extrinsic quality, or its functional quality-how •well it makes visible the company identity, history, profession, and distinctive character to its markets, as well asitspotentialforadiversificationofuses.

Ina“goodlogo”,abalancemustbestruckbetweendifferentiation,forspecificityandnecessityofcategorisationwithin a given industry. A visual identity system regroups the visual components of a business in a distinctive, coherent, and economic way. The difference between a visual identity system and a graphic resides in the number and complexity of supports the graphic uses, and in the decision to create a coherent and unique message and impose graphic norms on a unifying corporate identity.

6.8 The Design of a Company’s Spatial IdentityAnother component of identity is the design of a company’s spaces and buildings. Any company needs two types of spaces:

Workspaceslikeoffices,headquarters,andfactories•Commercial spaces like exhibition stands, boutiques, and retail agencies•

Architecture is the permanent media of the company. An original architecture has an impact in terms of corporate imageandprofitability.Example,theDanishfirmNovo,specialisingindiabetescare,considersworkspacedesigntobestrategicandaconcernofhumanresources.Ifthestafffindsitsworkspaceattractive,thespacewillhopefullystimulate its creativity. Interior design has an impact on company performance. Business structures are witnessing majorchangesintermsoftheflexibilityofwork:spacesandteams.Allbusinessesneedaworkspace.Inseekingout a workspace, businesses often try to minimise costs. Environmental design means going beyond only taking into considerationeconomicefficiency.Interiordesignhelpsrationaliseacompany’sproductionandtechnicalsystems,and communicate a better image. Bringing together a team in the same space encourages casual communication, socialisation,andproceduralfluidity.Example,TechnocentreatGuyancourt(France).Renaultusesthesamelocationor its design and R&D departments.


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The exterior and interior architecture are permanent messages of corporate communications and the coherence of its communication to both external and internal constituencies. They become the visible demonstration of a company culture and its management systems. The quality of architecture is measured by:

The quality of the form itself. The exterior shape stages technology and plays a managerial role in terms of •energy savings and communications space. Buildings developed now are intelligent; they control themselves and haveflexible,integratedinformationsystems.Officefurnitureismoreergonomicandsystemic(forstocking,lighting, and computing).The quality of its integration into its environment. Numerous recent architectural creations are the result of an •original dialogue between the building’s shape and its environment.Thequalityofitsrelationshipwiththecompany’sactivityandpersonality,suchasofficespacesthatarefunctional•and modular.

Acompanyselectstheconfigurationofitsinteriorspaceinordertoexpressacertainmanagementstyle,identityandinnovationculture.Aspacenowdoesnothavetochoosebetweenbeingopenorpartitioned.Theoffice“landscape”has evolved towards an open space with improved acoustic insulation. The two approaches become complementary. Thechoiceofthebestspaceconfigurationismadeaccordingtotheactivitysuchasdesigninganopen-planofficewhenthe activity requires a good deal of interaction. The designer’s role is to transcribe the philosophy of the company, tomakeitsorganisationalstructurevisiblethroughthepartitionofspaceanddifferentiationofofficefurniture.

6.8.1 Retail Design Identity Retaildesignisnotverydifferent,butitsgrowingimportanceinserviceindustriesjustifiesdevelopingsomeofitsspecificities.Theobjectiveisacompromisebetweenstandardisationofcommercialspaceforcost-effectivereasonsand building a strong and unique identity. The store sign is, therefore, at once global, integrative, and sense-building. Retail design must convey the marketing policy to the target audiences and attract these consumers so that they want to enter the store or commercial centre. Consequently, the development of the following elements must be taken into consideration:

An original outside architecture and the relationship between the exterior (the shop window) and interior design.The shop is an essential element of visualisation that usually works within strict urban constraints, like periphery (totems visible from far away. The door or porch is the element that has certainly inspired designers the most. Foremost, it illustrates the need for a total customer experience. The boutique entrance must be an invitation to the pleasure of shopping. The imperative of visibility makes a sign a real work of art that is seen all over the town.

The quality of a retail space is measured by coherence between the outside envelope and the interior decoration. We have already discussed how much of an impact the quality of store design has on a consumer’s behaviour. To build a retail-space identity, the designer looks for different levels of coherence like between space planning and market positioning, the graphic systems and interior design, and between the outside envelope and the interior display.Design is managed differently according to different retailers:

Externalised and coordinated by top management for specialised distributors. •Integrated or mixed and decentralised in marketing for general distributers.•

Decisions are made on size criteria, different design decisions, and the nature of the store offer. If the offer is specialised,theconceptiseasilydefinedandcanbeexternalisedwhereasageneraldistributerneedscontinuouscontrolandredefiningofitspositioninganddifferentiation.Thedesignfunctionhasaninstrumentalvalueintheexpressionof positioning, consistency of signage, differentiation factors and store identity. Recent concept stores occupy a niche, and design makes tangible their conceptual positioning so it represents the entrepreneur’s sensibility.

6.8.2 Design and Corporate CommunicationsCorporate communications relates to corporate culture and strategy in terms of such tools as the mission statement which helps creativity and includes:

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a history of the company to create a feeling of membership•values that guide the company’s actions•a collective challenge that gives meaning to the activity of each individual employee•game rules of everyday management as a basis for common “law”•

The mission statement symbolises an expression of what the company’s collectivity hopes for its future through value sharing, not the will of top management. Corporate communications consider design to be one of the professional techniques it can use in sponsorship, press relations and public relations. It supports design input in order to change a packaging or product presentation, and speaks of “global communication” encompassing communication design, fieldcommunication,directcommunicationandcommunicationmedia.

Communication design includes all the design disciplines. The necessity of global communication stems from the risk of dispersion of communication efforts. The company must make sure its messages are understood and memorised, and the crucial task lies in supervising the messages. However, if design communicates, it is also a process and not just a form. The interface between corporate communications and design is systematic, which means it is verbal, formal and visual. Graphic or architectural signs, whether for a product brochure, an annual report, an exhibition stand or an event, and between external and internal communication policies.

6.9 The Economic Approach to Strategic DesignDesign can build a company’s competitive advantage externally by developing a unique offer and position in a market, and internally by developing its strong core competency.

6.9.1 Design as a Competitive AdvantageDesign participates in strategy formulation and ideation because strategy is produced by a creative tension between theavailableresourcesinthecompanyanditslong-termaspirations.Strategyisaboutfindingresourcesforthebusiness units. Business units within industries differ more from one another than industries differ from each other. Competition directs resources toward those uses that offer the highest returns, and design input and differentiation are important to strategising where the highest returns might be.

Can strategic design be helped by strategic planning, and is strategic planning still in use? Mintzberg predicted the fall of strategic planning; however, it is still in use, though in a changed form. Design managers can implement strategic planning because it is more decentralised and involves less sophisticated methods, so it is not reserved for experts anymore. In order to suggest the strategic direction for competitive advantage, design managers can use various strategic planning tools that have been developed, such as:

The competition analysis matrix (BCG, McKinsey, and ADL• )The SWOT analysis of strengths and weaknesses, scenarios, and benchmarking•

Thesetoolssupporttheproceduretopropose,argue,andnegotiateresourceallocation,positioning,andfit.Strategicplanning is compelling for strategic design management because of its systemic reconstruction of mental patterns of the company, its focus on “sense making” and strategic intent, and its generation of scenarios and assumptions. Today, the keywords of strategic design management are knowledge, conversation, interaction and network.

6.9.2 Design as Internal Competitive AdvantageThereareothertheoriesbasedoncompetitiveadvantage,buttheydifferindefinitionofthisadvantage.Porter’straditional approach has been changed from:

Strategyasfittostrategyasstretch•Resource allocation to resource leverage• A portfolio of business to a portfolio of competencies•Competition as confrontation to competition as collaboration•


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Thesetheoriesandtheirrelationtostrategicdesignwillbebrieflypresented:theresource-basedview(RBV)andknowledge management (KM), the management of change, and the Transaction Cost Theory (TCT) (Table 6.2).

6.9.3 Design as a ResourceThe resource-based view (RBV) of a company studies the phenomena of resource accumulation and various degrees of resource duplication that result (Amit & Shoemaker, 1993; Wernerfelt, I984). It considers a resource as everything a company can mobilise to generate a competitive advantage.

6.9.4 Design as KnowledgeThe knowledge management view (KM) concentrates on knowledge as a resource for the company’s success. It studies learning processes such as sharing and transfer of knowledge. The capacity to “produce” knowledge is seen as what differentiates the company in the market. A company becomes a means to create a social identity and a collective learning process (Kogut & Zander, 1996). Nonaka distinguishes explicit or declarative knowledge from tacitorproceduralknowledge.Designknowledgeistacitwhichcannotbecodified.ltistransmittedbyimitationandexperience. Design brings knowledge to different stages of NPD in terms of process change, creativity and teamwork dynamics. Strategic design knowledge is often “hidden” because it is infused into the norms and the company culture. Design is in the domain of tacit, intuitive and continuous process of change (Kristensen, 1995).

For the company, it is essential to pass from tacit to explicit knowledge in order to diffuse knowledge in the company (Nonaka&Takeuchi,1995).Non-imitativeresourcesarenotcodified,butinordertocreatevalue,theyhavetobecodifiedandtherefore,becomesimitative.Designdoesnotconsiderknowledgeatransferofinformation(knowledgeas substance): it has a new vision of knowledge as a building process of collaborative “sense making” (knowledge as a tool). The objective is then, to learn while doing (cognitive learning), to provide a context for conversations and for the social construction of knowledge.

Design management oversees a learning process that regenerates the settings for action, regenerating both the products and the company, if done well (Urban & Hauser, 1980). If knowledge is not considered as information but, as conception, it is managed in a proactive way so that it is used and reused, not stored away. Learning organisations believe in learning and individual creativity. They are, therefore, hospitable to design. The structure of these learning organisations is decentralised and adaptable through networks of alliances (Xerox, 1990). Leaders favour actions that generate learning and mobilise multiple knowledge sources as well as a coherent vision (Leonard & Barton, 1995).Designmanagementhasto learntoseetheunderlyingvariables that influencelong-termbehaviourandactions and apply them to product ideas, technology, and management know-how (Jonas, 1997).Design is in itself new knowledge for the company, as well as a builder of knowledge.

By increasing the knowledge value of other assets such as marketing and production and catalysing imagination •and motivation (Leonard & Sensiper, 1998).By constructing relationships with the customers to form a competitive advantage as an act of cognition and •creation (Von Krogh,1998).

Design knowledge is strategic if:Itisdifficulttoreplicate,whichimpliesthatdesignprotectsitsinputinproductcreation(Teece,.1998)and•quantifiesitsintangibleassets(Bukowitz&Petrash,1997).It helps the circulation of knowledge in the company by having a leveraging effect on other knowledge or by •transforming tacit knowledge into social capital (Zack 1999:Madhavan & Grover,1998).It makes the company’s knowledge visible; this could happen by systematically using graphic design in •every management decision (different data presentation highlights differences in problem solving processes) (Tabachneck & Simon, I997) or by developing prototypes (Oxman, 1998).

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6.9.5 Design as a Core CompetencyThe competence-based view (CBV) introduces a dynamic perspective. It considers dependent resources imitative andtheefficiencyofacompanyonitscompetencies.Inthelongrun,theefficiencyofacompanystemsfromitscapacity to build strategic competencies that will generate tomorrow’s products (Hamel & Pralahad,1990,1993).This approach is similar to design because it insists on innovation, learning and research. The strategic intent induces systematic and constant research of new competitive advantages and generates a dynamic of encircling rather than competitive confrontation.

In future, competition will be different. Companies must develop tools to change the industry and develop new visions. The transformation of an industry is unavoidable, and design management has to anticipate this transformation. Resources become capacities when they are combined, integrated, and coordinated in the context of an activity. Resources are not intrinsically strategic, they become strategic when they are embedded in strategic processes, such as those that modify the integration of the company into its environment and give lasting competitive advantage (Tarondeau, 1998). Design has several characteristics of core competency, such as:

it gives access to a wide variety of markets•itcontributessignificantlytothebenefitsperceivedbythefinalconsumer•itisdifficultforcompetitorstoimitate•

The capacity to resort design, manage and integrate design expertise and combine the resource with other functions becomes a core competency for the company (Jevnaker, 1998). Design can become a core competency if its imagination is not developed in an ivory tower. Ideas arrive when thoughts meet. Just as the designer must encroach on other’s work, in the same way others must stimulate the designers in a disciplined form of anarchy.

6.10 Design as a Source of Organisational ChangeThe study of change and development is a great theme in the social sciences. A longitudinal comparative case study, like the “procedural analysis” conducted by Andrew Pettigrew at Warwick University is needed to explain the “what", “why” and “how” of the links between context, processes and outcomes in design management for example, why a design pilot project creates networks and how design creates change in organisational frames (Senge, I999).

Cultural change articulates itself around three fundamental elements: those causing the change •the action of the change •the context of the action •

The introduction of a cultural change in a company concerns the political and structural factors of identity, but the psychological dimension of the change is also essential. Even if all the elements-strategy, structure, and systems such as the graphic system-change, the participators can retain their habits and attachments. For the collaborators, all change is felt like a loss. So, the company has to make sure the change is perceived as necessary and not imposed, to encourage training while ensuring continuity, and to treat the problem of resistance to change in order to make sure that the new reality is accepted.

Leadership plays a central role in all cultural change and in the creation of a positive culture. Leader’s actions and their new visions, entail a new cultural model of appropriation of their ideas. Graphic symbols are in direct contactwithprocessesofinfluence,negotiationandthepowergame.Example:The1992graphicsignforRATP(the Paris Metro) under a new CEO symbolises a more .human -oriented philosophy, represented graphically by a humanprofilefollowingtheSemesgeographicalcurves.Graphicdesignstrikesasubtlebalancebetweentwopolesof conformity and originality and innovation. The logic of change articulates itself around two fundamental axes: continuity and rupture.


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Design introduces an applied vision to this paradoxical relationship. Graphic innovation is the visual output of change and its success depends on the phenomenon of synergy between the project and its context. Designers are accepted as innovators, they make something new that is not “frightening”. Graphic design is a paradox: a guarantee of continuity and a vector of change, it must reconcile pertinence and impertinence.

Graphic signs are the visual tokens of the relationship a company has with change. Change has no concrete effect without thecapacity todirect, influenceorachieve.Graphicsignsareobjectsandsubjectsofchange.Graphiccommunication contributes to negotiating change (Quinton, 1997). Design managers object to change imposed by top management and recommend a process of appropriation by the social group. According to the sociology of organisations,changeisfirst,thetransformationofasystemofaction.Inordertohavechange,threeelementsmustbemodified:thenatureofthesocialrelations,themodelofregulation,andthenatureofsocialcontrol.

Change is the discovery and acquisition of new capacities, but social constructions can be obstacles to this training process. Change is a rupture from past constructs. The only means to solve this paradox is to consider change at both the system and employee level. The involvement of employees in the creative process is fundamental for appropriation, project coherence, and cultural continuity (Dormer, 1990). In order to implement change, a company must provide an environment that links people with processes (Herbruck & Umbach, 1997). The emotional dimension of change isalsotobetakenintoaccountinthedefinitionofanewvisualidentity.

6.11 Design as Inter-organisational CooperationThe intense debate about boundaries of the company and arrival of hybrid crosses between the logic of market (or externalisation) and the logic of hierarchy (or internalisation) places the problem of design externalisation in a new perspective, that of cooperation. Most often, when design is externalised, except in the automobile industry, where code sign exists, it is subcontracted between the company and the external designer, which creates a relationship of domination.

Problem Design made without inter-organisational cooperation

Design made with inter-organisational cooperation

Making design together

Design made alone

Theory TCT TCTSolution Subcontract Strategic extemalisation R&D

consortium Network strategy

Internalisation

Table 6.1 Design and inter-organisational cooperation

Example: The textile industry in Northern France. The design initiative in the textile sector is shifting from manufacturers to distributors, specialised chains and brand-name designers. The new division of labour takes advantage of both vertical integration (low costs and lean retailing management) and disintegration (the ability to innovate by subcontractors and outsourcing of risks) (Vervaeke, 2002).

But the issue of “outsourcing” design is now more about building competitive advantage through inter-organisational cooperation. Inter-organisational cooperation is a formal or informal agreement established for duration of time, implying an interaction between two or more independent companies that combine or put in common assets and resourceswithanobjectiveofefficiency.Inter-organisationalcooperationhastwoaspects:resourceallocationandthe production of knowledge and know-how.

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The Theory of Cost Transaction (TCT) explains that, in conditions of bounded rationality, asymmetry of information, and opportunism of external players, a hierarchy integrating design is superior to reaching a balance through the market. Hierarchies economise on transaction costs when there is uncertainty, frequent or sequential transactions, or transaction-specificinvestments(Williamson,1975).Also,ifthetransactionisexternalised,thetransferiscostly.

The difference between a subcontract and externalisation is in the transfer of assets to the provider-the transfer of personnel and equipment. Generally, externalisation implies the dismantling of internal services, so the reintegration is often considered impossible.Thecontractbetweenthecompanyandthedesignfirmoutlinesacessionofassetsandtheexpectancyoffuturerealisations. Because of transfer costs, the uncertainty of results, and the risk of opportunism in the transaction, long-term relationships must be researched.

Inter-organisational cooperation is also about producing knowledge. Cost issues and “opportunism” do not account for all of the problems. Strategic design must decide the way the company wants “to make design”: alone, or in collaboration with others.Externalisation or “outsourcing” entrusts to an external provider an activity previously realised internally. Already widely used in value chain support activities such as maintenance and information systems, it is now developing in more critical activities like “strategic externalisation”. Reducing costs is not always the principal criterion. Outsourcing ismotivatedbytheobjectivetoincreasetheperformanceofthedesignfunctionandtoavoidthedifficultiesofaccumulation of resources and competencies. This objective can be defeated by an increase in transaction costs.

Long-term relationships with outside partners are not always a source of opportunism, they can also build trust. The relationship between a company and a design provider over the long run has many merits:

Itcutsresearchcosts,negotiation,control,insurance,andconflictsettlement.•It favours the mutual exchange of information and increases the “predictability” of mutual behaviour.•

Design managers within the company will nevertheless need analytical instruments in order to control the opportunism of the design provider, such as instruments that analyse the provider’s performance, quality and implementation. The strategic externalisation builds knowledge, trust, and networking, of design as in an R&D consortium. It is characterisedbyreciprocity,mutualsupportandpooledresources,andisbestsuitedtothereliableandefficienttransferof information. Cooperation in “how to make” design can build a unique competitive advantage for a company.


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SummaryA design strategy is either innate or experience-based.•Strategy formulation is either deliberate or emergent. •Three stages of strategy are formulation, ideation, and implementation. •Rhetoric and interpretive management are essential for strategy design. •Design competition is a resource, a source of knowledge, and a generator of core competency.•Competitive strategy means deliberately choosing a different set of activities to deliver a unique mix of •value.Strategic fit is fundamental not only for competitive advantage but also for the sustainability of that •advantage.Vision induces a dissonance, a gap between traditional thinking and the constraints imposed.•The design process is a combination of analysis (like strategic planning) and synthesis.•The cognitive approach to strategy explains the importance of identity for strategic design.•Corporate identity appears as the set of visual elements through which the public recognises a company and •differentiates it from others.Identity is a set of features that shows the unique character of a company and allows its members to identify •themselves within it and outside people to recognise it.Culture is a set of representations, symbols, values, and beliefs shared by the human group that constitutes the •institution.Symbols are physical artefacts that exist in an organisational context and connote an organisational sense that •will be different from the same signs seen in another context.The work environment is composed of three elements namely, the physical structure, the physical stimuli and •the symbolic artefacts.Identity or personality, is “what one is,” design is “what one wants to be,” and image is “what one appears to •be.”Designcreatessignsandsymbolsthatreflectthepersonalityorcompanyidentity.•Afigurativesymboliseither“associative”,whichdescribestheproductoractivity,or“allusive”,whichdescribes•the product and the activity indirectly.Ina“goodlogo”abalancemustbestruckbetweendifferentiationforspecificityandthenecessityofcategorisation•within a given industry.A visual identity system regroups the visual components of a business in a distinctive, coherent and economic •way.The quality of a retail space is measured by the coherence between the outside envelope and the interior •decoration. The resource-based view (RBV) of a company studies the phenomena of resource accumulation and various •degrees of resource duplication that result.The knowledge management view (KM) concentrates on knowledge as a resource for the company’s success.•Cultural change articulates itself around three fundamental elements: those causing the change, the action of •the change and the context of the action.Graphic innovation is the visual output of change and its success depends on the phenomenon of synergy •between the project and its context.The logic of change articulates itself around two fundamental axes namely, continuity and rupture.•Inorder tohavechange, threeelementsmustbemodified: thenatureof the social relations, themodelof•regulation and the nature of social control.

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ReferenceRafaeli, A. & Worline, M., 1999. • Symbols in Organizational Culture. [Online] Available at: <http://iew3.technion.ac.il/Home/Users/anatr/symbol.html> [Accessed 5 January 2012].Harvard Business School• ., 2005. Strategy: Create and implement the best strategy for your business.Boston-Masschuseets: Harvard Business School Publishing.Differentviewsofstrategy.• [Online] Available at: <http://www.uk.sagepub.com/upm-data/9497_019389ch1.pdf> [Accessed 5 January 2012].De Mozota, B.B., 2003. • Design Management. Brooklyn-New York: Allworth Communications. Inc.Harvard Business School• ., 2006. The Essentials of Strategy. Boston-Masschuseets: Harvard Business School Publishing.hereishowweCit., 2010. • WHAT IS STRATEGIC DESIGN? [Video Online] Available at: <http://www.youtube.com/watch?v=YxBM5DEwFEA&feature=related> [Accessed 27 January 2012].gillianmmcc., 2011. • What is Strategic Design? [Video Online] Available at: <http://www.youtube.com/watch?v=YvnXxj7CVS0&feature=related> [Accessed 27 January 2012].

Recommended ReadingRegan, C.L., 2007. • Apparel Product Design and Merchandising Strategies. Prentice-HallDaft, R.L., Murphy, J. & Willmott, H., 2010. • Organization Theory and Design. Hampshire: Cengage Learning. Inc.Lockwood, T. & Walton, T., 2008. • Building Design Strategy. New York: Allworth Communications, Inc.


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Self Assessment

A design strategy is either innate or ___________based.1. experiencea. marketb. resourcec. strategyd.

Which of the following statements is true?2. Competitive advantage is either deliberate or emergent. a. Strategy formulation is either market or resource based.b. The three stages of strategy are formulation, ideation, and implementation. c. Competitive strategy is about being identical and unchanged.d.

_________ is a rupture from past constructs.3. Design strategya. Cultureb. Identityc. Changed.

_____________ is the permanent media of the company.4. Designa. Identityb. Architecturec. Strategyd.

What is a set of representations, symbols, values, and beliefs shared by the human group that constitutes the 5. institution?

Culturea. Identityb. Imagec. Strategyd.

___________ is a set of features that shows the unique character of a company and allows its members to 6. identify themselves within it and outside people to recognise it.

Culturea. Identityb. Representationc. Imaged.

What means deliberately choosing a different set of activities to deliver a unique mix of value?7. Competitive strategy a. Strategicfitb. Graphic innovationc. Design visiond.

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____________ is the visual output of change and its success depends on the phenomenon of synergy between 8. the project and its context.

Competitive strategy a. Strategicfitb. Graphic innovationc. Design visiond.

Which of the following statements is false?9. Ina“goodlogo,”abalancemustbestruckbetweendifferentiation,forspecificity,andthenecessityofa. categorisation within a given industryTacitknowledgecannotbecodified,butitistransmittedbyimitationandexperience.b. The physical structure of a workspace or environment influences interactions, relationships, and c. behaviours.Identity or personality, is “what one appears to be”, design is “what one showcases to be” and image is d. “what one is “.

________ are physical artefacts that exist in an organisational context and connote an organisational sense that 10. will be different from the same signs seen in another context.

Designsa. Imagesb. Symbolsc. Visualsd.


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Chapter VII

Functional Design Management

Aim


introduce functional design management•

definefunctionaldesign•

discuss functional re-design•

Objectives


explain descriptive models•

describe prescriptive models•

identify the operational model for design processes•

Learning outcome


distinguish between descriptive and prescriptive models•

understand the operation model for design processes•

defineanddifferentiatetermslikeSTEP,KBDS,ATBDandSDA•

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7.1 IntroductionConcurrent engineering consists of fast development time by parallel execution of design, analysis and industrial tasks while they were executed sequentially in traditional development methods. This results in a shortened time to market. Automotive industry has successfully applied concurrent engineering to the most recent range of cars. However, concurrent engineering has not taken into account the dramatic evolution in information systems technology as the new WEB based tools allow to distribute and share technical information through all partners involved in a project. This will lead to new distributed organisations in design teams, to more innovative designs as design hypothesis can be more quickly tested and validated by all actors at Project Wide level.

For any design problem, the best specialists from extended enterprises and partners can be appealed with full access to authorised design data with adequate viewpoint. Those new organisations, namely “shared engineering” or “collaborativeengineering”,willbesupportedbynew“ProductInformationSystems”thatdirectlytakesbenefitsfrom the information technology and the power of semantic support to information. Information technology must take into account all legacy systems to ensure continuous data and service access to users. Further, many efforts have been provided in knowledge engineering for design activities. Design, like other very creative tasks, makes extensive use of many pieces of knowledge. Those pieces of knowledge must be maintained, as knowledge in design is very evolutive.

Knowledge is expressed either in the product model or in the tasks of engineering. This knowledge must be accessible to all actors involved in the design process, must be executable in the available design software, and must be maintained by accredited staff.

While studying functional design management, provision of concepts for knowledge and information product sharing during the redesign is very important. This further involves describing what functional design and redesign are. It also includes presentation of the knowledge management approach employed and the corresponding model. The web based tool and the resultant application case that are used to support the concerned methodology also needs to be looked after.

7.2 Functional DesignIn practice, the product designer needs to know all the principle functions that the product has to accomplish. Consequently, he has to think about either the technical functions and solutions associated to its principle functions. These activities are called conceptual or functional design. They consist to design those technical solutions or to choose ones, which already exist, with the correct dimensioning. As a consequence, it should be executed by the best specialists of the product life cycle inside and outside the company.

The functional design is mainly based on the functional representation of the product. Linked to the fact that a function is often deployed on several parts of the product which are designed by different actors, it is a co-operative activity.Infact,afunctionisdefinedbyasetofparametersdefinedbydifferentactors.Thedefinitionoftheseparameters could be conditioned by a lot of constraints, which come from other actors. These actors work on other physical parts of the product or on different product development phases (example, manufacturing, assembly, purchasing, suppliers, ecological researchers, and fuel consumption researchers).

The functional design must be supported by the design process model and an explicit model of the product life cycle. Thefirstmodelsupportstheco-ordinationbetweenactorsinvolvedinthefunctionaldesign.Thesecondmodelensuresthat all product life cycle constraints are taken into account during the design phase. For instance, the different life cycle situations of a car may be: motorways, leaving or entering a car park, rainy, muddy and snowy roads, emergency braking, and crash tests. Cars also have to be simulated in production environment, in maintenance situations, even in recycling phases of their life. This complex set of combined situations must be embedded in a functional model handled by different actors. This model can be developed by the different constraints, issued from different life cycle situations. Hence, the product functions are virtually simulated in all their potential life cycle situations.


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7.3 The Functional Re-designThe functional re-design consists of choice of the principle solutions among those that are already designed and studied.Afterthat,thegoalofadesigneristofindthecorrectdimensioningoftheproductparametersallowingtheproductfunctionstoberealisedwiththeperformancestargetsdefinedintheprojectrequirementsandaccordingtothe integration constraints. This “new product” also has to be integrated in its new environment taking into account the new physical and functional environment constraints. The main aim of the present study is to formalise the functional design to assist the design team in its functional redesign tasks also called repetitive tasks. The designer need tools that assist in repetitive tasks in order to obtain time for more innovative and creative tasks.

7.4 An Operational Model for Design ProcessesA design process can be viewed as a sequence of actions, which comprises the transformation from an initial state,comprisingthedesigngoals,toafinalstatedetailinganewproductorserviceandhowitshouldbecreated.Commonly, a design process is seen as knowledge based exploratory and evolutionary process. Many models of a design process recognise phases of analysis and conceptual design. There is a variety of sub-activities in a design process.

The conceptual construction of an architecture of the artefact to be designed (ATBD) forms a substantial part of these sub-activities. The architecture forms the skeleton for all subsequent design stages; design support systems thereforerequirearepresentationofthisarchitecture.Thefactthatdesignproblemsareunder-definedandopen-ended complicates architectural design. Even at the end of the architecture phase many alternatives are left open. It is often necessary to consider several of these alternatives and then to compare their suitability. The problem we want to study is how the designer can be assisted in maintaining a representation of the ATBD during the early design phases, where he1 has to generate alternatives and to make conceptual architectural decisions.

Nowadays, design support systems (DSS) are used in this phase. DSSs aim to help designers to maintain complex structures of requirements, context, alternatives of an ATBD architecture, and so on According to, DSSs have to provide support for exploration, evolution, cooperation, integration, and automation throughout the design process. Inordertoperformthesetasks,manyDSSscontaindomain-specificmodelsfordesignknowledgerepresentationand administration during a design process. These models, however, may cause a bias towards certain design styles. This may sometimes interfere with the intentions of the designer, or restrict his creative freedom.

In this paper, we will therefore consider a model for design knowledge representation that aims to be as empty as possible, whereas it should still be useful in taking the administrative burden off of the designer’s shoulders. Also, our model tries to help designers integrate context, requirements, and alternatives for the ATBD architecture at hand.Furthermore,asourmodelinvitesthedesignertothinkintermsofwell-definedrelationsbetweenthevariousconcepts he uses, we think that our model also stimulates cleaner thinking about the design problem. Using the model, it is easy to express ideas, but also questions, doubts and alternatives. The model allows documentation in auniformwaybymeansofwell-definedsemantics.

ThepropertiesoftheATDBareexpressedinpredicates;transitionsaredefinedbytheireffectontheseproperties.The underlying modal logic in is based on the work of Brazier et. al. Several authors explain the role of hierarchies in designing: according to Simon, hierarchies increase evolution speed and allow the decomposition of the ATBD. Douglas describes how a design problem can be reduced to a hierarchy of decisions or alternatives. Therefore the machinery behind the illustrative model uses hierarchical relations from Object Orientation (OO), extended with some operators to express intentional relations, together with notions from spreadsheets and symbolic manipulation. Numerous models of design knowledge representation are based on hierarchical approaches. Such models can be divided into descriptive and prescriptive models.

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7.4.1 Descriptive ModelsDescriptive models of design process are used for describing different kinds of products, design problems, specifications,andsolutions.AnexampleistheSTEPlibrary.STEPisasetofISOstandards,whichprovidestheexchange of engineering product data between databases and CAD systems. STEP is built on an information modelling language that can formally describe the structure and correctness conditions of any engineering information. The library consists of several parts, each consisting of a hierarchy of instances of entities in a data model. Examples of parts are classes of physical objects, classes of aspects of physical objects, etc. Classes of objects have a textual definitionbutalsoanintentionaldefinitionviaaclassofproperties.Eachclasshastobeassociatedtoanotherclassby types of associations (is-a, used-in, part-of, connected-with etc.). STEP does not support the design process of the ATBD. Alternatives to an ATBD architecture can only be partially expressed using optional associations with other classes. There is no computational engine to propagate decisions throughout an ATBD description.

7.4.2 Prescriptive ModelsPrescriptive models concentrate on the development and application of strategies, methods, techniques and tools that are used for designing. An example is the KBDS system. KBDS is a Knowledge Based Design System, which allows a team of designers to maintain a representation of the design process not only as a historical record of the development of a design artefact, but as an “active” repository of information. Alternatives are represented in the form of space of design alternatives (SDA). There is also the space of design objectives (SDO) related to SDA. The SDO is used for both generation and evaluation of alternatives in SDA. The model allows a designer to keep track of several design alternatives at a time; evaluating an alternative design against a set of design objectives; and transparently accessing external applications.

However, the corresponding ideas are in no way as mature as either of the above models: for instance, a computer implementation is still under development. Still, it can be worthwhile to explore a model that has both descriptive and prescriptive sides.

7.5 An Operational Model for Design ProcessesThe proposed model for design processes should allow denoting design processes for the sake of exercising, researching and teaching cross-disciplinary design skills. Here, ‘cross disciplinary’ refers to design situations where several designers with substantially different backgrounds have to co-operate. With this it is assumed that therefore no single discipline-related design methodology is available, and both technological and non-technological issues should be taken into account. The model typically relates to early design stages, when major architectural decisions are taken without the ability to rely on the detailed knowledge that is only available in later stages. The same model is expected to govern requirements, context and architectural issues. The model should cope with administrating (the consequences of) alternatives for design decisions, and it must be possible to postpone decisions or revoke earlier decisions. If our model proves to be adequate (which is still to be assessed), it should be possible to give automated support, e.g. to ensure, as far as possible, consistency among various decisions. It should, to a large extent, take the administrational burden from the designers without enforcing a strict format upon the creative design process.


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SummaryDesign, like other very creative tasks, makes extensive use of many pieces of knowledge.•Knowledge is expressed either in the product model or in the tasks of engineering.•The functional design don’t require any geometric or C.A.D. (Computer Assisted Design) model.•The functional design must be supported by the design process model and an explicit model of the product life •cycle.The design process model supports the co-ordination between actors involved in the functional design.•The explicit model ensures that all product life cycle constraints are taken into account during the design •phase.The main aim of the present study is to formalise the functional design to assist the design team in its functional •redesign tasks (also called repetitive tasks).A design process is seen as knowledge based exploratory and evolutionary process.•The functional design is mainly based on the functional representation of the product.•STEP is a set of ISO standards, which provides the exchange of engineering product data between databases •and CAD systems.Descriptive models of design process are used for describing different kinds of products, design problems, •specifications,andsolutions.KBDS is a Knowledge Based Design System, which allows a team of designers to maintain a representation •of the design process not only as a historical record of the development of a design artefact, but as an “active” repository of information.Prescriptive models concentrate on the development and application of strategies, methods, techniques, and •tools that are used for designing.Alternatives are represented in the form of space of design alternatives (SDA).•The SDO is used for both generation and evaluation of alternatives in SDA.•STEP does not support the design process of ATBD.•

ReferencesSteve Culley, S., 2001 • Design Management: Process and Information Issues. Suffolk: Professional Engineering Publishing Limited.W.C.Regli,W.C.&Hu,X.&Atwood,M.&Sun,W.ASurveyofDesignRationaleSystems:Approaches,•Representation, Capture and Retrieval [Online]Available at: <http://www1.in.tum.de/static/lehrstuhl/files/teaching/ws0607/Wissensbasiertes%20SE/regli_hu_atwood_sun_97.pdf> [Accessed 9 January 2012].MaximIvashkov,M.&Overveld,K.V.AnOperationalModelforDesignProcesses(2001)• [Online] Available at: <http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.24.2227> [Accessed 9 January 2012].Jae K. Shim, J. & Siegel, J.G., 1999. • Operations Management. New York: Barron’s Educational Series, Inc.gillianmmcc., 2011. • What is Strategic Design? [Video Online] Available at: <http://www.youtube.com/watch?v=YvnXxj7CVS0&feature=related> [Accessed 27 January 2012]. case., 2010. • The Convergence of Management and Design” by Richard Buchanan, Ph.D. [Video Online] Available at: <http://www.youtube.com/watch?v=xpKJSvKrk7o&feature=related> [Accessed 27 January 2012].

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Recommended ReadingRusell, R.S. & Taylor, B.W., 2009. • Operations Management, 6th ed., Hoboken: John Wiley & Sons, Inc.Dawson, P.E., 2007. • Functional Occlusion: From TMJ to Smile Design. Philadelphia: Mosby Inc. Hellriegel, D. & Slocum, J.W., 2009.• Organizational Behavior. Canada: Southwest Cengage Learning


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Self Assessment

_____________ is a set of ISO standards, which provides the exchange of engineering product data between 1. databases and CAD systems.

STEPa. SDOb. ATBDc. SDAd.

____________ is expressed either in the product model or in the tasks of engineering.2. Designa. Knowledgeb. Alternativesc. Architectured.

Which models concentrate on the development and application of strategies, methods, techniques, and tools 3. that are used for designing?

Prescriptivea. Descriptiveb. Processc. Explicitd.

__________ models of design process are used for describing different kinds of products, design problems, 4. specifications,andsolutions.

Prescriptivea. Descriptiveb. Processc. Explicitd.

What allows a team of designers to maintain a representation of the design process as an “active” repository 5. of information?

STEPa. KBDS b. ATBDc. SDAd.

Which of the following statements is false?6. KBDS allows a team of designers to maintain a representation of the design process not only as a historical a. record of the development of a design artefact.The functional design must be supported by the design process model and an explicit model of the product b. life cycle.The explicit model supports the co-ordination between actors involved in the functional design.c. The second model ensures that all product life cycle constraints are taken into account during the design d. phase.

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Which of the following statement is false?7. The functional designs always require some geometric or C.A.D. (Computer Assisted Design) model.a. A design process is seen as knowledge based exploratory and evolutionary process.b. STEP does not support the design process of the ATBD.c. The functional design is mainly based on the functional representation of the product.d.

The SDO is used for both generation and evaluation of alternatives in ___________8. STEPa. KBDS b. ATBDc. SDAd.

What are the functional redesign tasks also referred to as?9. Repetitive tasksa. Conceptual tasksb. Active tasksc. Alternative tasksd.

________________ are represented in the form of SDA.10. Designa. Knowledgeb. Alternativesc. Architectured.


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Chapter VIII

Core Elements for Strategic Design Management

Aim


introduce the core elements for strategic design management•

discuss the challenges of contemporary design practice•

definearchitecturalqualityinanindustrialisedcontext•

Objectives


explainthetheoreticalmodeldefiningfourapproachesforaction•

elucidate the four approaches contained in the theoretical model•

compare the different strategies along the four sets of dichotomies•

Learning outcome

At the end of this chapter, you will be able to

distinguish between exact(concrete),abstract and no strategy•

understand the architectural quality in an industrialised context•

differentiate between the four approaches and axes of dichotomies•

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8.1 IntroductionComplication arising from growing globalisation of the marketplace and computer-based communication and information technology seems to create a growing need for simplicity, control and reliability. At the same time, contemporary consumer culture calls for customised and personalised goods. This evolution also leads to a demand forprecisedefinitionsofthevaluesandqualitiesthatcanbeusedasmanagingtoolsincommonbuildingpracticeandit puts the traditional architectural design process under pressure. This paper outlines an approach to architectural quality as dealt with in the design process in an industrialised context. It also presents a way to analyse how and to whatdegreedesignprocessesareformedstrategicallyaccordingtospecificarchitecturalintentions(values).Throughdetailed interviews with professional architects, the way in which they manage the design process and how the architectural potentials are realised when dealing with modern industrial processes are examined.

To analyse and structure the empirical data, a model was developed consisting of four approaches for action. The approachesarecategorisedalongdifferentdichotomiesinordertopointoutdifferentwaysinwhichtheofficescandirect their design process (strategies) and reach particular end-results (goals). Two examples from the analysis are discussedaccordingtothedichotomiesandsubsequentlydevelopedintoageneralclassificationfocusingonstrategy.A description is given of how the model was tested in the architectural education at the Royal Danish Academy of Fine Arts–SchoolofArchitecture.Theoverallresearchprojecthastwoaims–tohelpofficesidentifythecharacteristicsandspecificmethodsofworkingwitharchitecturalqualityinanindustrialisedcontext,andtogenerateacommondebate about quality in industrialised architecture. It is hoped that by presenting a way to talk about strategy and architecturalvalue,itwillinspirefurtherelaborationofthefieldofstrategicdesignmanagement.

8.1.1 The Challenges of Contemporary Design PracticePresent challenges such as increasing global complexity, the international marketplace and the continuing acceleration of industrialisation, as well as computer-based communication and information technology, seem to create a growing need for simplicity, clarity, control and reliability at all levels of society and human life. Similarly, we are facing anewconsumerculturethatcallsformultipleandmorecustomisedgoods,whichleadstomorespecifiedqualitydemands (Baudrillard, 2003).

These tendencies are also traceable in the production of contemporary architecture. They can be found in the •generalaspirationforexactdefinitionsofvaluesandqualities,whichcanbeusedasstandardisedgoverningtools in common building practice.Howtodefineandmanagearchitecturalqualityseems tobedeterminedbyaseriesofconditions (product•demands,value-chaindefinitions,technologiesandrequirementsoftheend-users)thataredetachedfromthespecificarchitecturalcontext.

Consequently, architecture and the design process are ruled by a mixture of quality standards and managing tools that do not relate to the architectural project as a holistic entity or, it could be argued, to architecture at all.

As a result of this evolution, the traditional architectural design process is being put under pressure as it is an ‘open process’comprisingartisticandinnovativeactivities.Eachstepisdifficulttofullyplanandpredictandwhenitcomes to the end-result, it is impossible to control. At the same time, various research has shown that during the earlystagesofaprojectdesign(conceptionandprogramming),90%ofthefinalcostsandqualitiesaredefined(ATV, 1999).

In our opinion, these two points highlight the need for a more conscious approach among practising architects as to how and to what degree strategic design management should be a part of the architectural design process. This is in order to better translate visions into built (real) form and realise as many of the embedded values as possible in a building project when confronted with the conditions of an industrialised reality.


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Theresearchprojectdiscussedinthisarticleisanempiricalinvestigationintohowprofessionalarchitectsdefineandmanage architectural qualities and values in the design process. It focuses especially on the architectural potential (freedom and constraints), which lies in the use of contemporary industrial manufacturing processes. Questions toucheduponare:Howisarchitecturalqualitydefinedinspecificarchitecturalsolutions?Whichstrategiesandmethodologiesarebeingusedinordertoreachspecificgoals(architecturalqualities)intheproductionofarchitecturetoday?

8.2 Defining Architectural Quality in an Industrialised ContextInarchitecture,qualitycanbedefinedasarelativematterthatrelatestospecificarchitecturalquestionsandsolutions.Architectural quality includes a number of dimensions that are not easily recognisable within a traditional industrial context. The industrial concept of quality primarily concerns functional and technical matters whereas architecture and its qualities reach much further as a culturally dependent product (Frampton, 1983). Besides functional and technical issues, architectural quality also embraces aesthetic and ethical aspects example, forming answers to questions such as ‘How shall one live to live in a right way?’(Lundequist, 1992).

As such, the concept of architectural quality concerns human existence, our needs and aspirations, and its core values can be said to have existed unchanged as long as the history of mankind. In summary, the industrial concept of quality has developed into a narrow rational/technical concept, whereas the concept of architectural quality can be characterised as an overall human premise (Beim, 2004).

Furthermore, architectural quality depends on how ‘the creator’ (here, the architect), as well as ‘the spectator’ (the user), perceive and interpret the ideas behind an architectural project as well as what sort of meaning (or lack of meaning) they transfer into the physical solutions. It then becomes a matter of perception and association that is giving meaning to what we see (perception), based on our previous knowledge and experience. According to Pallasmaa, it is important to be aware of the observed qualities and the generative concepts in relation to architectural perception as two different, but intertwining, levels of perception. They are described as, ‘analogous to the tension between the empirical and the rational, where the logic of pre-existing concepts meets the contingency and particularity of experience’ (Pallasmaa, 1994). In our opinion, this means that architectural quality can never be expressed as a single formula and neither is it possible to make direct comparisons between different levels of quality and different architectural solutions.

This means that not only the architectural design process (as described above) but also the very concept of architectural quality seems to be challenged by the processes linked to industrialised manufacturing and computer technology which both require strict planning and a predictable output.

8.3 A Theoretical Model Defining Four Approaches for ActionThrough detailed interviews with practising architects, the investigation tries to reveal how they work in order to reachtheirfinalresults.Theseresultsarenotnecessarilysinglebuildingconstructions,butalsobuildingconceptsandbuildingsystems,aswellas (industrial)designprincipleswhichwedefineas ‘industrialisedarchitecture’.Thearchitectsthathavebeeninterviewedallworkinthefieldofindustrialisedarchitectureandpresentinterestingattitudes.

As part of the project, we have formulated a model consisting of four approaches for action (ideal types) which helps tocategoriseandstructurethedifferentwaysinwhichthearchitecturalofficestrytomanagethedesignprocessandthe end-results. The approaches are not exact representations of any empirical reality, but try to collect a series of related motives for action, arranged as clear-cut strategies.

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empiricalobservation

reality models theory

data level model level theoretical level

Fig. 8.1 The relation between reality and theory (Andersen, 1990)

Themodelwas conceived through a brainstorm exercise based on general (intuitive) experience and specificimpressionsfromtheinterviews,buthassubsequentlyandcontinuallybeencorrectedandrefinedduringtheanalysisof the interviews, while used as a way to structure the analysis. In this way, the model works more as a dynamic tool than as a rigid theoretical framework. Furthermore, it has been the intention to make the model useful outside thisspecificresearchprojecti.e.togenerateconsciousnessanddebateamongpractitionersandstudentsabouthowthey work. This approach – partly borrowed from the social sciences – seems appropriate in the present setting, as it does not try to ‘classify or bring order into a chaotic reality but rather aims at caricaturing essential characteristics in this reality’ (Andersen, 1990 – author’s translation). According to Andersen’s interpretation, ideal types work as ‘entrance keys’ to a deeper understanding of the inner nature of empirical phenomena.The four approaches contained in the model are:

The pragmatic approach•The academic approach•The management approach•The conceptual approach•

Each represents different strategies along four sets of dichotomies. These are:Project vs. process orientation•Architecture as an autonomous vs. Conditional discipline•Innovative vs. evolutionary working method•Intuitive vs. explicit accumulation of knowledge•

Thedichotomies–aswellastheapproaches–havebeenadjustedandrefinedthroughouttheworkwiththeempiricalresults.

8.3.1 The Pragmatic ApproachThis approach starts from the belief that ‘good architecture’ is ordinary buildings that work satisfactorily and are made for ordinary people. The brief, the given conditions and the context sets up a basic framework as a starting point.Theroleofthearchitectisnottorevolutionisetheworldorarchitecture,buttopresentqualifiedproposalsandimprove the general standards. Knowledge is accumulated through a kind of apprenticeship based on routines and traditionanditismaturedthroughworkingonspecificprojects.Knowledgeisprimarilyproducedandheldbytheinvolved employees in each project and there is no systematic cross-project evaluation and transmission. Architects dealwithwhatispossiblewithinthegivensituation.Objectivesconcerningarchitecturalqualityaredefinedbytheprogrammeandduringthespecificsketchingprocess.Apersonificationofthisapproachcouldbethecraftsman.Insummary,thepragmaticapproachdefinesarchitectureasadisciplinedependingonotherdisciplines.Theapproachis primarily project-oriented, based on tradition (evolution) with an intuitive non-explicit use of knowledge.

8.3.2 The Academic ApproachBehind this approach, there is an understanding of architecture stressing a holistic perspective. Only the architect is capable of fully understanding this complexity, which nevertheless is created through interaction between various individuals/firms,eachonecontributingwithspecificknowledge.Theroleofthearchitectistointerpretandsynthesise


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the many different inputs. Knowledge is systematically gained and critically held up against present knowledge. This meansthatknowledgeisaccumulateddirectlywithinthecompany.Theworkingmethodsarefixedandtransparent,andwell-knownsolutions(typologies)arerepeatedwhilecontinuallyadjustedandrefined.

Everytaskisspecifiedsothatresponsibilitycanbedistributedeasily.Objectivesconcerningarchitecturalqualitytranscend the project level, for example sustainability, low-cost building or exploitation of the potential of daylight. Throughafixedmethod,architectstrytoreachsomedefinedgoalsofquality.

Thepersonificationwouldbe the scientist.Summingup– theacademicapproachclaimsarchitecture tobeanautonomous discipline. It is primarily process oriented, based on tradition (evolution) and has a high level of explicit knowledge accumulation.

8.3.3 The Management ApproachThis approach is based on the belief that architecture is created by the interaction between different agents both insideandoutsidethebuildingindustry,andthearchitecthasnouniquestatusinthiscontext.Efficientcoaching/management, rational thinking and good business are musts to attain good results.

Knowledge is based on theoretical models and experience collected for internal use. The business administration is in charge of the total amount of knowledge as a platform for decision-making.

Keywordsareprofessionalbusinessadministration,specialisationandmanagementofeachemployee’squalifications.This assures an optimal use of all the know-how and skills held within the company by its employees. In this way, roomismadefornewideastoemergebypossessingsufficienteconomicalresourcesineachproject,aswellasinthecompanyasawhole.Apersonificationcouldbethemanager.

To sum up, the management approach claims architecture’s dependency on other disciplines. It is primarily process-oriented, innovative and has a high degree of explicit knowledge accumulation.

8.3.4 The Conceptual ApproachArchitecture is conceived as an art in this approach.Every building must – regardless of technological limitations and restrictions – form a unique statement, which means being more than just a ‘physical shelter’ for human activity. Toworkasanarchitectisavocation.Everywork(ofart)hasitsownsignificantpremises,whichmeansthatyoucannot transfer the same knowledge from one project to another. Reusing former ideas or solutions can even restrain the work. Every project must start as a tabula rasa where a particular concept sets up the framework for possible action.

This concept may originate or be inspired by part of reality, but generates its own logic. The quality is embedded inthevalueoftheconcept,thedegreeofinnovationorthespecialcharacteristicsandtheclarityofthefinalresult.However,thisqualitydefinitiondoesnotexcludetechnicalandfunctionaldimensions,buttheyarenotregardedasmainparameters.Theapproachcanbepersonifiedastheartist.Summingup–theconceptualapproachclaimsarchitecture to be an autonomous discipline. It is primarily project-oriented and innovative and has an intuitive non-explicit use of knowledge.

pragmatic pragmatic pragmatic pragmatic

project autonomous evolution intuitiveprocess conditional innovation explicit

conceptual conceptual conceptual conceptual

academic academic academic academicmanagement management management management

Fig. 8.2 The different approaches placed within the four dichotomies

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The four approaches are to be understood as impartial and we have tried to not favour one approach over another. We have assumed that all approaches can result in high levels of architectural quality and great value for the end-users and society. The approaches are an expression of a cultivation and grouping of related characteristics. In reality, architectural practice will always be more ambivalent and often point towards different approaches simultaneously. As such, general architectural practice most likely forms a complex combination of different strategies. 8.4 Axes of DichotomiesTo further illustrate the model, Figure 8.2 sets up the four different concept axes or dichotomies used in the summary ofeachapproach.Thefigureanddichotomiesshouldhelptodistinguishtheapproachesfromeachotherandfacilitatetheir comparison.

8.4.1 Process/ ProjectThefirstdichotomyisaprocess/projectaxisthatdescribesthefocusofthearchitectswhenworkingintheoffice.A process focus starts from the assumption that structuring and managing the process is the best way to control the result.Thewaywedothingshasagreatinfluenceonthefinaloutcome.Thismeansthattheworkingmethodsoftenhave a general character directed towards ‘how to do’ and this is not necessarily linked to any special characteristics in the actual project. The project focus starts the other way around with the aim of ‘what to do’. This makes the processmorearbitraryorimprovisedinthewaythat‘anythinggoes’inordertoreachthegoalssetupinaspecificproject. A unique result can be an outcome of many different processes. The working method is thus postponed in relation to the product/ project.

8.4.2 Explicit Knowledge Accumulation/ Intuitive Non-explicit use of KnowledgeThe second dichotomy deals with the nature of the knowledge used or could also be illustrated as the ‘media and code’ used for information storage and exchange. Explicit knowledge accumulation mainly uses external media and universal codes e.g. paper/ pen (media) and letters/English (code). This type of knowledge accumulation facilitates communication and exchange by making it more independent of the actors involved. Intuitive non-explicit use of knowledge is stored in the actors themselves and codes are personal, or at least limited by personal access. This knowledge can be conscious but is more likely to be part of the subconscious. The actual knowledge accumulation will always be a combination of the two extremes. This has to do with the interpretative act, which will always be involved in the translation of any form of information independent of media and code into usable real-time knowledge. ‘Who’ is reading the text or looking at the drawing is just as important.

8.4.3 Innovation/ EvolutionThe third dichotomy spanning from innovation to evolution is related to the ‘use’ of knowledge when generating new ideas and projects. Innovation has to do with the ability or the intention to throw away what you already know and take in completely new information without prejudice. This knowledge can be both reliable knowledge generated in external environments and more ad-hoc knowledge generated by a particular combination of conditions that are presentinthespecificcaseorsituation.

Evolution means that the main part of the knowledge or information employed in a project is already possessed by the actor (the architect) before the beginning of the project. Compared to nature itself, evolution is based on mutation whereminorcorrectionsandrefinementsmakeanorganism(objectorprocess)moreaptinacertainenvironment,context or situation. Yet again, reality will always be somewhere in between. It is not possible to start completely from scratch even if you wanted to. There will always be reuse of some basic knowledge e.g. how to use a pen or the dimensions of the human body (in architecture). At the opposite end of the spectrum, total reuse will not generate newideasandcannotevenbedefinedasevolution.


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8.4.4 Autonomous/ ConditionalThe fourth dichotomy describes architecture’s autonomy or dependency. An autonomous architecture is an architecture that isexclusivelydefinedwithinitselfandthearchitectdominateswhenitcomestodecidingwhat isrelevanttoincludeinthisdefinition.Thishastodowithaconceptionofarchitectureasatrueprofessionratherthananoccupation (demarcation/action). On the other hand, architecture as dependant discipline, places the architect as one actor among many others in the production of architecture. This is not necessarily constraining for the development of architecture; the vague borders can be seen as possibilities and inspiration rather than limitations.

Thedichotomiesrepresentasimplifiedwaytoclassifythedifferenttheoreticalapproaches.Thisshouldhelptomakethemodelausefultoolforanalysisanddiscussionofspecificempiricalrealityinarchitecturaloffices.Inthisresearch project, it has been tested on a collection of interviews with professionals from different Danish and foreign architecturaloffices.Aninterestinganalysiswouldnottrytomakeanexactmatchbetweenrealityandtheory,butratherdiscusstheclashesbetweentherigidclassificationsandtheever-complexreality.

8.5 Cases from the Analysis Using themodelasa languageoramatrixenablesus to locateanddiscuss thespecificstatementsconcerningarchitectural quality (goals) and the way to attain it (strategies). The overall scope of the analysis and the research projectisto‘locateanddiscuss’–ratherthantointerpret–thedifferentstrategiesandspecificgoals(intheprocessofarchitecturaldesign)asreflectedamongaselectionofpractitioners(cases).

Exact

Low

Abstract

Hig

h

Stra

tegi

c co

nsci

ousn

ess

Strategic nature

Fig. 8.3 Strategic nature (x) and consciousness (y)

Design strategies seem to work on several levels and some of them are only indirectly related to the actual design process. A strategy can be directed strictly towards the formal design – the process of giving physical shape to a project, but it can also have broader technical scope introducing industrial building techniques or deal with more legislative themes such as building standards and codes. The strategy can also focus on external factors such as environmental issues or politics, which may be considered to have decisive impacts on the actual design. As a general guideline, one can look at the ‘level’ and the ‘nature’ of the strategy employed (Fig. 8.3). ‘Level’ refers to the level of consciousness – high or low strategic consciousness – and ‘nature’ points to a distinction between the concrete (exact)andabstractnatureofthespecificgoalsimpliedinthestrategy.Here,wewillbrieflypresenttwoexamplesfrom the analysis that both present high strategic consciousness but comprise very different natures spanning from the concrete (exact) to the abstract.

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8.5.1 Exact (Concrete) StrategyOneofthecasestudiesistheworkofthearchitecturalofficeLundgaard&Tranberg(LTA),amedium-sizedDanishcompanywith35employeesfoundedin1974.Inthemid-1990s,theofficedevelopedabuildingconceptorsystemcalled Comfort House, which is based on a business consortium that joins contractor NCC and engineers Carl Bro with LTA as the architects. The concept or system is partly an organisational framework and partly a constructive systemforhousingcomplexesofvaryingsize.Themanagingdirectoratthetimewasinterviewed.(Theofficeisnow owned by a partnership of leading employees.)

Most of the statements from the interviews place LTA closest to the pragmatic approach, although many features are alsorelatedtotheconceptualapproach.Themanagementandacademicapproachessharenosignificantresemblanceswith the way LTA seems to work. In very general terms, the approach can be characterised as clearly project oriented mainly using intuitive non-explicit knowledge. Furthermore, LTA does not state architecture as an autonomous discipline while both innovative and evolutionary features can be found.

Comfort House is a standardised building system, although the starting point in LTA is the actual project rather thanageneralstrategy.Thereisnofixedprocedureoracompletetabula rasa. The organised framework and the building system give some common directions for the different actors involved in the process but leave a great deal ofopennessforthearchitectinsomespecificpartse.g.designingthefacadeandorganisingtheplan.Acommonset of rules make it possible for the involved actors to work more simultaneously e.g. the engineer does not have to waitforthefinalsolutionfromthearchitectbeforecalculatingthestructure.

LTA’s design strategies run in two directions: on the one hand, they accept the building system and focus on the inherent possibilities and, on the other hand, they always try to challenge the lure of repetition, which also characterises the system.

The project-oriented focus characterised by the pragmatic approach, and which also can be found in the LTA interview, leadstoquitespecificstrategicstatementse.g.improvementofbuildingcomponentsanddetailing,andhowthesearerelatedtothewhole.ExamplescouldbeLTA’sworkwithagreaterdealofflexibilitywherethefoundationmeetsthe ground, various placements of the plane of the facade or the use of alternative materials. The analysis points to a moderate to high level of strategic consciousness directed towards exact (concrete) goals (Fig. 8.3).

8.5.2 Abstract StrategyThesecondcaseisaninterviewwiththemanagingdirectorofArkitema(AT).ATisthelargestarchitecturalofficeinDenmarkandwasfoundedin1970.Thefirmshowsanexplicitinterestinindustrialisedprocessesand,amongother reasons, was selected because of its biannually published Videnregnskab – a written and illustrated summary of its business and where it wants to focus in the future. The interview places AT close to the management approach. AT’s approach can, in general terms, be characterised as mainly process oriented. Explicit knowledge accumulation is the aim and to some degree a fact. AT does not state architecture as an autonomous discipline but claims extreme dependencyonrelatedfieldswhilemanyinnovativefeaturesarepresentwiththeaimtoempowerthearchitect.

The process orientation is found in the focus on organisation within the company and the organisation of the building process as a whole. However, it must be stated that the interviewee works at the organisational level, which is not necessarily representative of all employees. One of the initiatives is a pronounced specialisation of the staff, which aregroupedintoexpertdepartmentswithdifferentprofiles.Aparticulartaskforceisspecialisedinresearchandaccumulation of knowledge. This part of the company does not deal with external costumers, but rather generates value indirectly by supporting and inspiring the other departments. The role of the architect is not to decide what is wrong or right in terms of architecture, but instead to enable the involved actors to make the best decisions. The architect thus becomes a process manager more than a decision maker. By opening up and giving other actors influenceintraditionalworkingfieldsofthearchitect,thepossibilityofgainingaccesstootherdecisiveareasseemsto be maximised. This turns the way the architect works upside down and points to distinct innovative features.Mostofthestrategicchoicespresentedintheinterviewpointtowardsamoregenerallevel(nonprojectspecific)withfocusontheprocessinsteadofonthefinalproduct.Strategiesarelessdirectedagainstinternalfactorsexample,specificformaldesign,andmoreagainstexternalfactorsexample,coordinationwithotherpartiesinvolvedand


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questions about the organisational setup of the construction process. One of the major problems in the building industry, according to the interviewee, is precisely the improvised character of this organisational setup. The analysis points to a high level of strategic consciousness directed towards abstract goals (Figure 8.3).

8.5.3 No StrategyBoth examples analysed present a high degree of strategic consciousness, but of a very different nature. To complete theschema,theotherinterviewedofficesrevealconsiderablylowerstrategicconsciousnessmainlyofanexactnature,which in many ways corresponds to the pragmatic approach. A low strategic consciousness of a more abstract nature wouldcorrespondtoanextremeversionoftheconceptualapproachalthoughfig.8.3cannotbeunderstoodjustbylocating each of the four approaches in a quadrant. All the cases present interesting attitudes towards industrialised architecture and are consequently located in the ‘upper conscious end’. An allegation could be that many traditional officeswouldbelocatedinthe‘lowerconsciousend’showinglowornostrategicconsciousnessatall.Theaimofthisprojectisnottoconfirmthis,butinsteadtocontributetomakethesecompaniesmoreresponsivetothewaytheywork.

8.6 Implementing and Further ProjectThe model of action has been presented in various contexts thus trying to initiate a more conscious strategic approach among architects. Preliminary attempts to test the model were made in March and November 2005 with two different groups of architectural students. In March, the students attended a half-day workshop on project design and group processes. They were presented with the model of action and a couple of examples from the analysis, and were given time to think about and write down their personal approach using the model and the four theoretical approaches as a point of departure. Each student was then asked to present their approach. The idea was to discuss howthepersonalapproachesrelatedtothetheoreticalonesand,onamorespecificlevel,toseeiftheresultscouldpoint towards different roles among the students in their current group project.

The presentations and the subsequent discussion showed that the students placed themselves in similar ways. Most identifiedthemselvesmainlywiththeconceptualapproachwithsomeresemblancestothepragmaticapproach.Thisimplied that even though they as students were in a process of learning, they did not claim to use any systematic or explicit form of knowledge accumulation, but rather improvised (intuition) or did ‘as they used to do’ when they had to start up a project. However, many of the students also claimed that more systematic knowledge accumulation – as characterised by both the management and the academic approach – would be desirable, but that they had no tools to reach such an end.

Thesecondworkshopwasplannedtorunforaweek.Thistime,groupsoffourorfivestudentsworkedwiththemodel,designingabuildingsystemforafacade.Asanintroductiontothewholeschemethestudentsfirsthadtodefinetheirownapproachonthebasisofthemodel.Eachgroupwasthengivenaspecificapproachthattheyhadto follow strictly. The assignment consisted of two parts – a planning phase and an executing/building phase. The studentsfounditdifficultnottofallbackontheirtraditionalworkingmethods,butafterawhiletheybegantofinditeasierwhentheydroppedtheirindividualneedtoinfluencetheprojectandinsteadworkedasagroup.Whenexecuting their schemes, they fully carried out their roles and the various project results of the groups turned out very differently – very much in accordance with the different approaches.

In general, the students seemed enthusiastic about trying these new working methods and some of them said they were surprised how effectively they had worked with the project. The approaches had provided a neutral ground for their cooperation. As for the results, it was quite astonishing how much they differed and hence provided interesting material for academic discussion. The model appeared to work; however, as part of an architectural education exercise it was more important in helping students to understand the core elements of the profession, rather than providing students with operational tools. Through publication in architectural magazines (Arkitekten 06/05, Nordic Journal of Architectural Research and so on), by means of workshops and future courses arranged at the School of Architecture in Copenhagen and through presentations at relevant design conferences (CIB W096, Joining Forces, EAAE,andsoon),wearetryingtomaketheprojectmorethanafinalreporttobeplacedonthebookshelvesofotherresearchers.Itisourhopethatthemodelcanandwillbeusedbyarchitecturalofficesindiscussionsaboutstrategy and that it can contribute to make architects more conscious about the ways they manage the design process and try to reach goals concerning architectural quality.

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Two other projects have been formulated to follow up this project. One project delves further into the action-perspective. Through observation studies carried out in studios selected among the present cases we intend to studytheactual‘processes’takingplacewhenarchitectsworkonaspecificproject.Wehavelearnedthatwhatpeople ‘talk’ about doing and what they actually ‘do’ when they work, are two different things. The thesis is that the correspondence between these two levels can vary considerably and it thus becomes interesting to analyse both sides – especially with a focus on the strategic consciousness described in the previous section.

The second project focuses on the ‘product’ that comes out of the building process. When dealing with design, itisafactthatyoucanneverclaimthataspecificprocesswillleadtospecificpreviouslydefinedqualities.Itistherefore equally relevant to analyse the actual ‘works’ or results. The aim is to develop the terminology and concept formation on architectural quality in an industrialised context claiming that this will, to some extent, differ from its more traditional equivalent. We need new or supplementary concepts to be able to talk about and hence better understandthe(industrialised)architecturewefindtoday.Theresultfromthetwoprojectswillbeusedtodescribecharacteristics of the relationship between process and product. The division in two main concepts is thus meant as purely analytical; it helps to clarify certain aspects about a reality that will always be a complex web of ‘interaction’ between the two.

8.7 ConclusionOnecouldaskifindustrialisedarchitecturereallyneedsitsownterminologyandspecificstrategicdesignmanagementin order to direct the architectural value. There is no doubt that there is a difference between not being conscious and ‘choosing’ not to be so. Our argument is that given the new and industrialised context as described above thereisdefinitelyaneedforthisconsciouschoice.Thisisnotonlyseenasameanstoempowerthearchitectasaprofessional person and the profession, but rather to emphasise what is more important – the ‘architectural quality’. The traditional design process is under pressure and in this context it is our opinion that new measures must be taken to ensure that design is not reduced merely to cost control, industrial just-in-time production or building codes. These are important issues, but they should be submitted and measured against a more general approach including all the other important aspects of a ‘holistic’ architectural design process. We believe the proposed model, including the dichotomies, represents a way to form a language by which we can work more consciously with the complexity of architecture in an industrialised context.

By using the model on our empirical data as well as in an educational context, we have been able to point out and discussdifferentstrategiesandhowtheyareusedinordertoaimatspecificgoals.Itisourhopethatitwillinspirefurtheruseandelaborationofthefieldofstrategicdesignmanagement.


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SummaryInarchitecture,qualitycanbedefinedasarelativematterthatrelatestospecificarchitecturalquestionsand•solutionsArchitectural quality can never be expressed as a single formula and neither is it possible to make direct •comparisons between different levels of quality and different architectural solutions.According to Andersen’s interpretation, ideal types work as ‘entrance keys’ to a deeper understanding of the •inner nature of empirical phenomena.The four approaches contained in the model are the pragmatic approach, the academic approach, the management •approach and the conceptual approach.Each represents different strategies along four sets of dichotomies, namely, Project vs. process orientation, •Architecture as an autonomous vs. Conditional discipline, Innovative vs. evolutionary working method, and Intuitive vs. explicit accumulation of knowledge.Thepragmaticapproachdefinesarchitectureasadisciplinedependingonotherdisciplines.•The Pragmatic approach is primarily project-oriented, based on tradition (evolution) with an intuitive non-•explicit use of knowledge.Behind The Academic Approach, there is an understanding of architecture stressing a holistic perspective•The academic approach claims architecture to be an autonomous discipline.•The academic approach is primarily process oriented, based on tradition (evolution) and has a high level of •explicit knowledge accumulation.The Management Approach• is based on the belief that architecture is created by the interaction between different agents both inside and outside the building industry, and the architect has no unique status in this context.The management approach claims architecture’s dependency on other disciplines.•The management approach is primarily process-oriented, innovative and has a high degree of explicit knowledge •accumulation.Architecture is conceived as an art in the Conceptual Approach.•The Conceptual approach claims architecture to be an autonomous discipline.•Conceptual approach is primarily project-oriented and innovative and has an intuitive non-explicit use of •knowledge.Explicit Knowledge Accumulation/ Intuitive Non-explicit Use of Knowledge dichotomy• deals with the nature of the knowledge used or could also be illustrated as the ‘media and code’ used for information storage and exchange.Intuitive non-explicit use of knowledge is stored in the actors themselves and codes are personal, or at least •limited by personal access.Innovation/ Evolution• dichotomy spanning from innovation to evolution is related to the ‘use’ of knowledge when generating new ideas and projects.Evolution means that the main part of the knowledge or information employed in a project is already possessed •by the actor (the architect) before the beginning of the project.Autonomous/ Conditional• dichotomy describes architecture’s autonomy or dependency.Anautonomousarchitectureisanarchitecturethatisexclusivelydefinedwithinitself.•The overall scope of the analysis and the research project is to ‘locate and discuss’.•Thearchitecturaloffice-Lundgaard&Tranberg(LTA),amedium-sizedDanishcompanywith35employees,•was founded in 1974.Arkitema(AT),thelargestarchitecturalofficeinDenmarkwasfoundedin1970.•

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ReferenceBeim, A. and Jensen, K. V., 2005. • Making Conscious The process of Industrialised Architectural Design.[pdf] Available at: <http://www.uiah.fi/joiningforces/papers/Beim_VibaekJensen.pdf>[Accessed12January2012].Emmitt, S., 2007.• Architectural engineering and design management : Aspects Of Building Design Management.Zins, C., 2007. • ConceptualApproaches forDefiningData, Information,andKnowledge.[pdf] Available at: <http://www.success.co.il/is/zins_definitions_dik.pdf>[Accessed12January2012].Brocke, J. M. & Rosemann, M., 2010. • HandbookonBusinessProcessManagement,Volume1.New York: Springer-Verlag Berlin Heidelberg.Kane, T., 2007. • PromotionforStrategicDesignManagement-Dec‘07 [Video Online] Available at: <http://vimeo.com/3938300> [Accessed 27 January 2012].LearncastNSW., 2010. • Inspiration for Strategic Design: Digital Eskimo [Video Online] Available at: <http://www.youtube.com/watch?v=vhkaN5ZQhM0> [Accessed 27 January 2012].

Recommended ReadingOstroff, F., 1999. • Horizontal Organization. Oxford University Press.Suzuk• i, H., Dastur, A.,Moffatt, S., Yabuki, N. and Maruyama, H., 2010. Eco2 cities: ecological cities as economic cities. The World BankCulley, S., Duffy, A., McMahon, C. and Wallace, K. • Design Management-Process and Information Issues. Professional Engineering Publishing.


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Self Assessment

Architecture is conceived as an art in the ____________ approach.1. pragmatic a. academic b. managementc. conceptual d.

In the ___________ approach, there is an understanding of architecture stressing a holistic perspective.2. pragmatic a. academic b. managementc. conceptual d.

_________ approach starts from the belief that ‘good architecture’ is ordinary buildings that work satisfactorily 3. and are made for ordinary people.

Pragmatic a. Academic b. Managementc. Conceptuald.

The ____________approach is based on the belief that architecture is created by the interaction between different 4. agents both inside and outside the building industry, and the architect has no unique status in this context.

pragmatic a. academic b. managementc. conceptual d.

The ____________ approach is primarily process oriented, based on tradition (evolution) and has a high level 5. of explicit knowledge accumulation.


The __________ approach is primarily project-oriented, based on tradition (evolution) with an intuitive non-6. explicit use of knowledge


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The ____________approach is primarily project-oriented and innovative and has an intuitive non-explicit use 7. of knowledge.


The _______________approach is primarily process-oriented, innovative and has a high degree of explicit 8. knowledge accumulation.


Match the following9.

Process/project axis1. Media and code’ used for information storage and A. exchange.

Explicit Knowledge Accumulation/ Intuitive 2. Non-explicit Use of Knowledge dichotomy

Architecture’s autonomy or dependencyB.

Autonomous/ Conditional dichotomy3. Describes the focus of the architects when working in C. theoffice.

Innovation/ Evolution dichotomy4. Related to the ‘use’ of knowledge when generating new D. ideas and projects.

1-B, 2-C, 3-D, 4-Aa. 1-C, 2- A, 3-B, 4-Db. 1-A, 2-D, 3-B, 4-Cc. 1-D,2-C,3-A,4-Bd.

Which of the following statements is true?10. Arkitema(AT),thelargestarchitecturalofficeinDenmarkwasfoundedin1974.a. Thearchitecturaloffice-LundgaardandTranberg(LTA),amedium-sizedDanishcompanywith35employees,b. was founded in 1970.Evolution has to do with the ability or the intention to throw away what you already know and take in c. completely new information without prejudice.Architectural quality can never be expressed as a single formula.d.


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Case Study I

ElectroluxThe management of complexity in a large organisationBob Jerrard, David Hands and Jack Ingram

This policy audit features design management processes of The Electrolux Group and is presented to complement the other studies. Electrolux is as mature in matters of design management as it is as a business entity. The design managementissuesinElectroluxreflectthecompany’ssizeandcomplexity:designmanagementpoliciesareexplicit,and are integrated with the company business strategy. Company policies and management procedures such as the Integrated

Product Development Process (IPDP) reported in this study are published internally contributing to the coherence of corporate effort through a shared understanding of strategic issues.

The Electrolux Group, with sales of 124 billion SEK in 2000, is the world’s largest producer of appliances for kitchen, cleaning and outdoor use, such as refrigerators, cookers, washing machines, chainsaws, lawn-mowers and garden tractors. Each year, the Group sells more than 55 million products to consumers in more than 150 countries. Products are sold under famous brand names such as AEG, Zanussi, Frigidaire, Eureka, and Husqvarna. A brief history of the company’s development shows how the size and complexity of the company today have developed over a one hundred-year period from being a manufacturer of a single product.

The early years: realising opportunities in the electrification of the homeAB Lux, Stockholm, was established in 1901, launching the Lux kerosene lamp for outdoor use, which proved to be a huge success; it was also used in lighthouses around the world. In 1910, having felt the competition from electric lighting, the company moved to new premises and looked for new products. The company Elektromekaniskawasformed,producingthefirstvacuumcleaner,Lux1atLillaEssingenin1912.Saleswereestablished in Germany, the United Kingdom, France and Sweden, and in 1917, all theshares of Elektromekaniska were purchased by the sales company Svenska Elektron. In 1919, the company name AB Elektrolux was adopted by Elektromekaniska - a combination of Elektromekaniska and Lux. A ten- year agreement was reached, under which Elektron had sole sale rights to AB Lux vacuum cleaners, with Lux as its sole suppliers. Four years later, in 1923, a newly formed company, AB Arctic, started producing refrigerators based on a newly patentedapplicationoftheabsorptionprocess.In1925,ElektroluxpurchasedArcticandlaunchedthefirstabsorptionrefrigerator, the ‘D-fridge’ for the domestic market.

Company expansion: developing international marketsFrom 1926 until 1940, the company expanded its operations worldwide. In 1928, share capital increased tenfold from6millionSEKto60millionSEK.Turnoveroffiveplants,some20subsidiariesand250officesthroughoutthe world was 70 million SEK. The Group was consolidated and introduced on the London Stock Exchange (1930 on the Stockholm Stock Exchange). Throughout the 1930s, there was continued expansion of business based on vacuum cleaners and refrigerators.

In 1940, production was reorganised when many plants and subsidiaries were closed due to World War II. New productsincludedairfiltersforSwedishdefenceforcesandadomesticfoodprocessor.

Diversification, new product development and further expansion in the post-war yearsIn 1944, Elektrolux purchased Bohus Mekaniska Verstads in Goteborg, giving a new product area - industrial washing machines.Penta,manufacturerofoutboardengines,alsowaspurchased;and1951sawtheintroductionofthefirstElektroluxdomesticwashingmachine.ProductionofsteelshelvingmovedfromMotalatoSäffle,thefoundationsofwhatwouldlaterbecomeElektroluxConstructor.Fiveyearslater,thefirstchestfreezerwaslaunched,andinthesame year, 1956, group sales passed the half billion kroner mark.

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Within the next ten years, in which turnover doubled, there were changes which established many new products for which the company has become known in its second half-century. In 1957, the spelling of the Group’s name was changedthroughouttheworldfromElektroluxtoElectrolux.Newproductsincludeditsfirstdishwasher,abenchtopmodel,andthefirstcombinedfridge/freezerin1959.In1962cametheacquisitionofElektrohelios,providingnewproduction facilities and a new product group - cookers. Sterilisation equipment was added to the product portfolio in 1964 through the acquisition of Getinge Mekanista Verkstands AB.

International expansion through acquisition of established brandsGroup turnover passed the 1 billion kroner mark in 1965, and in just over 25 years would increase to one hundred times thatfigure,due innosmallpart toasustainedprogrammeofacquisitionsonan internationalscale.Thecompany purchased Norwegian Elektra (cookers), Danish Atlas (refrigerators), and Finnish Slev (cookers, sauna units) in 1967, then lawn-mower manufacturer Flymo and 50 per cent of cleaning company ASAB in 1968, when theGroupheadofficewasmovedfromStockholmtothefactorypremisesatLillaEssingen.

The year 1969 brought the establishment of subsidiaries in the USA (Domestic Sales Corp), and Hong Kong. A large-scale face lift for the Electrolux range took place, and the environment began to take a central position in public debates.Then,1973sawtheacquisitionofofficemachinery,theproductionofkitchenandbathroomcabinets,andmanufacturing facilities in Luxembourg and Germany to meet demand in European markets.

In moves to gain a strong foothold in the US household appliance market, the acquisition, in 1974, of what is now the Eureka Company made Electrolux the world’s number one producer of vacuum cleaners, and boosted the Group’s air conditioning technology research and knowledge resources. White goods were marketed under new brand names, and commitment to nature conservation products continued.

In thefiveyears from1975 to 1979, acquisitionofmanynewcompanies, in sectors such as laundry service,materials handling, agricultural machinery, in addition to French, Belgian, Dutch, US and Swiss manufacturers of white goods and vacuum cleaners, strengthened the Group’s position in household appliances. The acquisition of Husqvarna also brought the addition of chainsaws to the product range, which in turn initiated new purchases in the same industry.

The year 1980 saw the important acquisition of metals conglomerate Gränges (mines, steel works, aluminium and copper, vehicle safety belts). The Group’s turnover was almost 23 billion SEK, an increase of 51 per cent over the preceding year. In 1984, the Italian company Zanussi was acquired, including its subsidiaries in Spain, making Electrolux the unquestioned leader in Europe for household appliances, and number one in food service equipment. Inthefollowingfiveyears,acquisitionsincludedwhitegoodsmanufacturersZankerinGermanyandDuo-Thermin the

USA. White Consolidated Inc. (USA) brought brands such as Frigidaire, Gibson, Kelvinator and White-Westinghouse, while the outdoor products business area expanded with new acquisitions which included Poulan/Weed Eater (USA). The white goods division of Thorn-EMI (Britain) brought brands Tricity, Scott Benham and Parkinson Cowan, and white goods were further strengthened by the purchase of Corbéro and Domar, Spain’s leading companies in this sector. American Yard Products (USA), Unidad Hermética (Spain) and Buderas Group’s manufacturing operations (Germany) were added, and an agreement was reached with Sharp Corporation for the sale of white goods in Japan. Groupsalesfirstexceededthe100billionSEKmilestonein1993,inwhichyearElectroluxexerciseditsoptiontobuya second 10 per cent of AEG, having purchased 10 per cent in the previous year, and began negotiations to take over the remaining shares.


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Consolidation and restructuring: the reduction of complexityIn1997,theGroupbeganatwo-yearrestructuringprogrammewiththeaimofimprovingprofitability.Streamliningled to the divestment of the industrial products sector and the production of sewing machines, agricultural implements and interior decoration equipment, followed in 1998 by operations in recycling, kitchen and bathroom cabinets, professional cleaning equipment and heavy-duty laundry equipment. A new brand policy was adopted to focus resourcesona smallernumberof largeandwell-definedbrands.Thecorebusinessnowcomprisedhouseholdappliances, professional appliances and outdoor products.

Design management at ElectroluxIn2000, the threecorebusinessareaswerefurtherredefinedas just twoareas:consumerdurables(indoorandoutdoor) and professional products (indoor and outdoor). Consumer durables account for approximately 75 per cent ofGroup turnover, and includewhite goods, floor-care products, garden equipment and light- dutychainsaws. Professional products include food-service and laundry equipment, leisure appliances, chainsaws, trimmers, etc., landscape maintenance equipment and power cutters. The size and complexity of the business affect the design management processes. In this study we shall concentrate on just one aspect of the consumer durables product area - refrigeration - illustrating some key features of Electrolux’s project management mechanisms. Consumer durable products are mainly white goods such as refrigerators, freezers, cookers, washing machines and room air conditioners. In 2000, they accounted for 79.1 per cent of Group sales.

Electrolux Group is the world’s largest producer of appliances, the market leader in Europe, the third largest producer in the USA, and second largest in Brazil (AB Electrolux, 2000).

Of the white goods produced, refrigeration products provide a good example of design management practice. Refrigeration products are designed, engineered and manufactured in several European countries for world market; brands include AEG, Electrolux, Frigidaire, Kelvinator, White-Westinghouse and Zanussi. New product development buildsonexcellence inproductdesignandengineering tobring thebenefitsofstandardisationof technologicalfeatures across the range of brands, while maintaining brand differentiation.

Research for this case study centred on detailed discussion with key company employees within the Electrolux Home Products Division: the Director for Product Management and the Design Director. Semi-structured interviews, questionnaires and reviews of company literature and publications were conducted over a twelve-month period. The study of refrigeration products came at the end of a six-year development period and at the start of a new product launch. Research centred on key themes in the overlap between industrial design and product category management in the UK, Belgium and Spain. In order to provide a clear perspective of the research process, Table 1.1 shows the central themes, together with the key company procedures for addressing them.

At the centre of the discussions at Electrolux was the ‘Integrated Product Development Process’ (IPDP), which provides the link between the long-term perspectives of company strategy and the immediacy of project management for the launch of new products. Fig. 1.1 gives an overview of its role, and shows how company business strategy isinfluencedbythreekeyareas:ElectroluxGroupstatedpolicies,customerneeds,andthebusinessenvironment.The Group has published policies on the environment and on quality, together with statements about its vision and values.

In assessing customer needs, customers include both trade customers and end users. Evaluation of the business environment takes in consideration of trends, legislation, suppliers and competitors. Business strategy comprises strategies for products, markets and technology, and the IPDP includes the development of both complete products and technology applications for future use in products.

In order to establish and update the portfolio of projects being undertaken at any given time, plans for generations of bothtechnologicalfeaturesandwholeproductsaredevisedwithreferencetotherelevantinfluences.Forexample,theevolution of product technology can be seen as the successive adoption of features made possible by technological trends, whereas the evolution of products may be described in terms of product families in particular market segments. To be included in the project portfolio, proposals for the development of new technological features and product

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familiesaresubjectedtoafinancialevaluationandaredependentonresourceavailability(seeFig.1.2).Once included in the portfolio, a project may proceed as either ‘primary development’ or ‘product development’. In each case the project is structured with checkpoints, of which ‘Checkpoint Zero’ (CP0) marks the point of decision whetherornottocommittoinvestmentinhardwareorindustrialisation.Atthispoint,allproductspecificationsare frozen, and a project timescale is set. The importance of CP0 as a critical decision point extends beyond the financialcommitment.

Industrial design Product category managementNew product development Baseline procedures involving

designers, practical use of products and retailers within design centre Product generation plan Technology generation plan

Team approaches across the division “Ideas’ internal market Product generation plan Technology generation plan

International management communication

Role of software Role of software, staged electronic signing off

Product development communication

Project meetings Sign-offprocedures

International policy-resource allocation and relocation Internal market

Strategic policy Brand derived Integratedproduct development process

Internal market-based policies centring on brands and competitors Financial evaluation Competition cost manufacturing Integrated product development process

Manufacturing technology Balance between life style based experimental design and timed release of technologies

Longer-term technology development and ‘shelving’ policy

Project management Role of software International sourcing team Large- scale divisional conference

Competitor andmarket awareness

Internally derived, trends,features, tech. and features

Regular detailed analysis

Table 7.1 Key aspects in refrigeration new product development and design at Electrolux

UncertaintyreductionmanagementabilitytoinfluencetheoutcomeofprojectsisgreatlyreducedonceCP0hasbeen passed and the industrialisation phase is underway, which can be contrasted with an increase in management time spent on the project. Management time expended before CP0 is limited to approximately 5 per cent of total managementinputintotheprojectfromspecificationthroughtomarketlaunch(seeFig.1.3).Whathasbeendescribedso far follows conventional new product development practice, linked to broader business strategy perspectives. However, contained within the IPDP model there is also the concept of primary development, which is employed for more than just products.


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Integrated Product Development Process

Primary Development

ElectroluxGroup StatementVision and Values ��Environmental PolicyQuality Policy

Cusotmerneeds�trade ��end users

Businessenviornment trends�� legislation suppliers competitors

- Business Strategy

- Product Strategy

- Market Strategy

- Technological Strategy

Technology Generation Plan

Project Portfolio

Market

MarketLaunch

Project Generation Plan

ProjectSpecificationand pre-engineering

Project IndustrializationCPO

Fig. 1.1 The Electrolux IPDP(Source: Adapted from Electrolux IPDP Manual (1994 and 1997))

Feature X

Technology generation plan Product generation plan

Feature Y

Feature P

Feature Z

Trends

A

B

C

96 97 98 99

Financial evaluationResource availability

ProductFamily A

ProductFamily D

ProductFamily B

Segments

1

2

3

96 97 98 99

Project Porfolio

96 97 98 99Project AProject BProject CProject D

Fig. 1.2 Electrolux IPDP: continuous development of the project portfolio

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(Source: Adapted from Electrolux IPDP Manual (1994))

Management ability toinfluence the outcome

Management time spent

Time

35%

60%

MarketingProductionIndustrializationSpecificationPrimaryLow

High

5%

Fig. 1.3 Electrolux IPDP: management focus(Source: Adapted from Electrolux IPDP Manual (1994))

To quote the IPDP ManualPrimary development is the systematic testing of new technologies, marketing concepts or production methods for the eventual creation of new or next generation products, production processes and marketing. The purpose of primary development is to reduce uncertainties concerning technology, customer demands, feasibility, time and cost before product development projects are started.

Primary development projects are extremely varied: they may be large or small, theoretical or concrete, technical or market-oriented, but they all share the characteristic of a high degree of uncertainty (see Figure 1.4). Because of thisuncertainty,theycannotbeasequentialpartofproductdevelopmentsthatworktowardsafixedlaunchdate.Theresultsofprimarydevelopmentprojectsareclassifiedaseither‘verifiedideas’oras‘hardwaresolutions’.Verifiedideas are solutions to core problems that have been evaluated and tested. Hardware solutions have been realised as functional prototypes. All outcomes of the primary development process are stored for later use in a ‘primary development bank’ (see Fig. 1.5).

The policy of investing effort in the accumulation of tested ideas allows Electrolux to be prepared for both changes in legislation and market expectations.While the project portfolio at any one time will contain both primary and product development projects being pursued in parallel, this practice is not to be confused with conventional concurrent engineering.Thecon-currencydescribedinfig.1.1 is that of separate projects run in parallel: they appear in the same diagram to show how Electrolux manage what in some companies might be separately described as ‘Research & Development’, ‘market research’ and ‘new product concepts’ as part of the same process as new product development. A major advantage of this approach is that so many interdependent processes can be placed in a context which includes strategic business issues. By taking primary development projects out of the time constraints of product development projects, they are able to concentrate on addressing core issues.


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Developmentof new

components

Developmentof new

technologyMaterialresearch

Newproductionprocesses

Modulari-zation

Standards

NewproductconceptStudies of

new sales ordistributionconcept

Designconcepts

Generalcustomerresearch

Marketscenario

Fig. 1.4 Electrolux IPDP: examples of primary development projects(Source: Adapted from Electrolux IPDP Manual (1997))

The IPDP Manual states that Primary development projects should:Support business strategy: The idea must be an appropriate and logical extension of the Electrolux business •strategy. It must complement the Electrolux statement of vision and values.Be innovative: Innovation is any characteristic, feature, or function of a product that surprises the target customer •in a positive way.Add value: Added value need not be a product feature. It may also be a new marketing strategy, a method for •reducing production costs, or anything else that makes people choose to actively do business with Electrolux.Have a market message: If a message about a new product or feature cannot be communicated, the result will •not be noticed, and energy invested in the project will be wasted.

Primary development

Interactive process

Creationof ideas

Solution andverification

Hardwareand solution

Pre-study

Primarydevelopmentbank

Verifiedideas

Hardwaresolutions

PP1 PCP00 PCP0 PCP1

Fig. 1.5 Electrolux IPDP: primary development of features, structures and systems(Source: Adapted from Electrolux IPDP Manual (1997))

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Product development projects are also responsive to the core, strategic company concerns, partly because of explicit stages in the IPDP, and partly because they incorporate ideas and hardware solutions from the primary development bank. The process has checkpoints that require ‘signing off’ by the owner/steering team of the project. The checkpoints are shown in Fig.1.6,groupedintothreephases:projectspecification,projectindustrialisation,andproduction.Anoutline of the contents of each phase shows how a typical project might progress.

Theprojectspecificationandpre-engineeringphasehastwostages,projectinitiationandconceptanalysis.Intherun-up to the initial checkpoint at the start of the project, project initiation (PI), the product development pre-study considers the desired market message, and includes target formulation, a proposal for project organisation, and an outline time plan and budget. Following checkpoint PI, the development of a business plan and initial concept definitionleadstoCP‘00’.Inthisstage,themarketmessageisrefinedandthetargetformulatedisupdated.Analysisofmarketdataandcompetitoranalysisleadstoaproductconceptdefinition.Inadditiontogeneratingatestplanandaprojectplan,projectorganisationisfirmedup,togetherwithdesignverification.Apatentsearchismadeatthis stage.

The second stage of the project specification phase, concept analysis, concentrates on concept solutions andverification.Themarketmessageandtargetformulationarefinalised,inlinewithresultsofananalysisofmarketdata.Afinalproductconceptisgenerated,providingthebasisforanindustrialisationplan.Anumberofdesignfactors are taken into account at this stage, including an environmental analysis, manufacturability issues, design for variation, FMEA (failure mode effect analysis) and safety analysis. A functional prototype is made, and key suppliersareselected;internally,aprojectplanisfinalisedandaninvestmentrequestmade.TheseeffortsleadtoCP ‘0’, Checkpoint Zero, the critical point at which investment approval is either given or withheld.

The project industrialisation phase comprises three stages: product and process engineering (CP ‘1’), process verificationandinvestmentrelease(CP‘2’),andprocessset-upandmarketlaunch(CP‘3’).Thefirstofthesethreestages, product and process engineering, in addition to planning the industrial system in detail and testing and design verification,includingtheproductionofafullyrepresentativefunctionalprototype,alsoseesafirstpreliminarymarket launch plan, an instruction book draft, an authority approval plan and agreement with key suppliers.

Keycomponentsoftheprocessverificationstageareamarketlaunchplanandsalesmaterial,theinstallationofproduction equipment, initial training of the production team, development of the instruction book, status and test resultsfromprototypestested,andthepreparationandinitiationoffieldtesting.


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esahP noitazilairtsudnI tcejorPesahP noitacificepS tcejorP

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ase

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CP

‘00’

Proj

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Proj

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Fig. 1.6 Electrolux IPDP: project specification and industrialisation(Source: Adapted from Electrolux IPDP Manual (1994 and 1997))

Processset-upandmarketlaunch(CP‘3’)isthefinalpre-productionstage.Inadditiontofinalisingpreparationsfor production, and the market launch details, the instruction book is printed, together with service instructions. A spare parts plan is devised, and authority approvals are obtained.

The IPDP extends beyond market launch into the production phase, in the form of project evaluation, informed by feedback from the market, follow-up of organisation and production targets. The information gathered in this evaluation phase aids preparation for the ramp-up to full production rates.

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ConclusionElectrolux,likeanysuccessful,largemanufacturer,hasawell-definednewproductdevelopmentprocess.However,some features of the Electrolux process are less common, and mark out the company as one of considerable maturity and sophistication in matters of design management. Within a single model of design process, the company explicitly links company vision and values to business strategies and thence into products that embody them.

The same model shows how generations of technologies and products are created, and how many of these developments are outside the time constraints of normal NPD process, being held in a primary development bank to await incorporation into products when the market is deemed to be ready for them. Such sophisticated practices are more typical of the motor car industry than domestic consumer products, and their publication and use for developing aspects of the company culture are as worthy of note as the processes themselves.(Source: Jerrard, R., Hands, D. & Ingram, J. Design Management Case Studies [Online] Available at: <http://www.scribd.com/doc/6690527/Design-Management-Case-Studies> [Accessed 27 January 2012].)

Questions

Explain the International expansion through acquisition of established brands.1. Answer:The International expansion through acquisition of established brands transpired as follows:In 1965, the Group turnover passed the 1 billion kroner mark and in just over 25 years would increase to one hundredtimesthatfigure,dueinnosmallparttoasustainedprogrammeofacquisitionsonaninternationalscale.The company purchased Norwegian Elektra (cookers), Danish Atlas (refrigerators), and Finnish Slev (cookers, sauna units) in 1967, then lawn-mower manufacturer Flymo and 50 per cent of cleaning company ASAB in 1968,whentheGroupheadofficewasmovedfromStockholmtothefactorypremisesatLillaEssingen.

The year 1969 brought the establishment of subsidiaries in the USA (Domestic Sales Corp), and Hong Kong.

A large-scale face lift for the Electrolux range took place, and the environment began to take a central position in publicdebates.Then,1973sawtheacquisitionofofficemachinery,theproductionofkitchenandbathroomcabinets,and manufacturing facilities in Luxembourg and Germany to meet demand in European markets.

In moves to gain a strong foothold in the US household appliance market, the acquisition, in 1974, of what is now the Eureka Company made Electrolux the world’s number one producer of vacuum cleaners, and boosted the Group’s air conditioning technology research and knowledge resources. White goods were marketed under new brand names, and commitment to nature conservation products continued.

Inthefiveyearsfrom1975to1979,acquisitionofmanynewcompanies,insectorssuchaslaundryservice,materialshandling, agricultural machinery, in addition to French, Belgian, Dutch, US and Swiss manufacturers of white goods and vacuum cleaners, strengthened the Group’s position in household appliances. The acquisition of Husqvarna also brought the addition of chainsaws to the product range, which in turn initiated new purchases in the same industry. The year 1980 saw the important acquisition of metals conglomerate Gränges (mines, steel works, aluminium and copper, vehicle safety belts). The Group’s turnover was almost 23 billion SEK, an increase of 51 per cent over the preceding year.


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In 1984, the Italian company Zanussi was acquired, including its subsidiaries in Spain, making Electrolux the unquestioned leader in Europe for household appliances, and number one in food service equipment. In the following fiveyears,acquisitionsincludedwhitegoodsmanufacturersZankerinGermanyandDuo-ThermintheUSA.WhiteConsolidated Inc. (USA) brought brands such as Frigidaire, Gibson, Kelvinator and White-Westinghouse, while the outdoor products business area expanded with new acquisitions which included Poulan/Weed Eater (USA). The white goods division of Thorn-EMI (Britain) brought brands Tricity, Scott Benham and Parkinson Cowan, and white goods were further strengthened by the purchase of Corbéro and Domar, Spain’s leading companies in this sector. American Yard Products (USA), Unidad Hermética (Spain) and Buderas Group’s manufacturing operations (Germany) were added, and an agreement was reached with Sharp Corporation for the sale of white goods in Japan. Group sales firstexceededthe100billionSEKmilestonein1993,inwhichyearElectroluxexerciseditsoptiontobuyasecond10 per cent of AEG, having purchased 10 per cent in the previous year, and began negotiations to take over the remaining shares.

Describetheearlyyearsofrealisingopportunitiesintheelectrificationofthehomewithsuitableexamples.2. Answer:Let us consider the example of “Lux” and “Electrolux” in order to describe the early years of realising opportunities intheelectrificationofthehome.ABLux,Stockholm,wasestablishedin1901,launchingtheLuxkerosenelamp for outdoor use, which proved to be a huge success; it was also used in lighthouses around the world. In 1910, having felt the competition from electric lighting, the company moved to new premises and looked for newproducts.ThecompanyElektromekaniskawasformed,producingthefirstvacuumcleaner,Lux1atLillaEssingen in 1912. Sales were established in Germany, the United Kingdom, France and Sweden, and in 1917, all theshares of Elektromekaniska were purchased by the sales company Svenska Elektron. In 1919, the company name AB Elektrolux was adopted by Elektromekaniska - a combination of Elektromekaniska and Lux.

A ten- year agreement was reached, under which Elektron had sole sale rights to AB Lux vacuum cleaners, with Lux as its sole suppliers. Four years later, in 1923, a newly formed company, AB Arctic, started producing refrigerators based on a newly patented application of the absorption process. In 1925, Elektrolux purchased Arctic and launched thefirstabsorptionrefrigerator,the‘D-fridge’forthedomesticmarket.

Post,1925 came the transition phase of company expansion and the emergence of developing international markets. From 1926 until 1940, the company expanded its operations worldwide. In 1928, share capital increased tenfold from6millionSEKto60millionSEK.Turnoveroffiveplants,some20subsidiariesand250officesthroughoutthe world was 70 million SEK. The Group was consolidated and introduced on the London Stock Exchange (1930 on the Stockholm Stock Exchange). Throughout the 1930s, there was continued expansion of business based on vacuum cleaners and refrigerators.

In 1940, production was reorganised when many plants and subsidiaries were closed due to World War II. New productsincludedairfiltersforSwedishdefenceforcesandadomesticfoodprocessor.Thediversification,newproduct development and further expansion in the post-war years took place post 1944.

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Enlist the conclusions drawn from the design management analysis at Electrolux.3. Answer:The conclusions drawn from the Design management analysis at Electrolux are as follows:Electrolux, like any successful, largemanufacturer, has awell-definednewproduct development process.•However, some features of the Electrolux process are less common, and mark out the company as one of considerable maturity and sophistication in matters of design management. Within a single model of design process, the company explicitly links company vision and values to business •strategies and thence into products that embody them. The same model shows how generations of technologies and products are created, and how many of these developments are outside the time constraints of normal NPD process, being held in a primary development bank to await incorporation into products when the market is deemed to be ready for them. Such sophisticated practices are more typical of the motor car industry than domestic consumer products, and •their publication and use for developing aspects of the company culture are as worthy of note as the processes themselves.


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Case Study II

HP customer case study: HP Technology ServicesIndustry: Data center Management

Ultra-green data center rises on site of a former steel mill.

Steel ORCA LLC intends to revolutionise the enterprise-class data center through clean technology design and power solutions.

ObjectiveDevelop an innovative business model and supporting data centre framework that offers companies data centre collocation,hosting,andcloudserviceswithunprecedentedenergyefficiency,agility,andeconomy.

ApproachEngage HP Critical Facilities Services consultants as trusted advisors to guide the design, development and startup ofadatacentreco-locationbusinessthattransformsitsbrownfieldsiteandothersourcestorunongreener,lower-cost power.

Data centre innovationsMultidisciplinary design expertise reduces risks and capitalises on site advantages.•Engineers create, test and implement state-of-the art designs that optimise energy consumption.•Designconceptscapitaliseonbrownfieldsiteresourcesforsustainableenergysources•

Business benefits Consultantsevaluateandrefinebusinessconcept,businessmodelandexecution.•Integrated consulting translates ambitious business vision into concrete design. •Design builds in potential for solar, hydro and methane power options to meet sustainability objectives. •Expertise ensures sound foundation for planning, design, construction and startup within aggressive 12-month •timeframe.

Customer solution at a glanceHP Data Center Trusted Advisor Services provides consulting expertise for strategy, roadmap and operations •of data centers Engagement develops basis of design, applies HP •Energy and Sustainability •Management best practices•Facility size: 700, 000 sq.ft. with 300,000 sq. ft. of white space•Project duration: Two years from conceptual design through construction sign-off•

The logo of Steel ORCA LLC features an orca whale, a symbol of environmental sustainability. The company’s nameandlogounderscoreitsgoal:tocreateanultra-greendatacenteroperationonthebrownfieldsiteofaformerU.S. Steel plant.

Earlyin2012,thecompanyplanstoopenthefirstphaseofadatacenterframework.Withintwoyears,thesitewillexpand into a 700,000 sq. ft. facility housing a 300,000 sq. ft. data center with Tier IIequivalent reliability.

DavidCrocker,SteelORCA’sfounder,CEOandchairman,intendstosetanewstandardforeconomyandefficiencyin sustainable data center design, construction and operations.“Wedon’twanttojustbuildanotherdatacenter,”saysCrocker,aBucksCounty,Pennsylvanianativewhobringsto

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his endeavor more than 20 years as an IT entrepreneur and business leader in the region. “Increasingly, companies are facing mandates and incentives to reduce their carbon footprint. We are developing an ultra-green, ultra-high performancefacilitythatredefinesenergyefficiencyinthedatacenter.”

Established in July 2009, Steel ORCA negotiated with the Bucks County Economic Development Corporation forbrownfieldacreagewithintheKeystoneIndustrialPortComplexinNewtown,Pa.Underthestate’sKeystoneOpportunity Zone program, the company received a tax abatement lease until 2019 for 33 acres along the Delaware River, property formerly occupied by a U.S. Steel plant.

Crocker regards his company as a long-term economic asset to the Delaware Valley as well as a transformative business. “Our region has been hit hard by layoffs,” says Crocker. “Our business will provide construction and technology jobs and education in green design and construction.”

Steering the project are Crocker and his management team and their Steel ORCA Consortium, a group of collaborators that include the facility’s architect, Crabtree Rohrbaugh & Associates Architects, and its construction company, Gilbane, Inc. They turned to HP Critical Facilities Services consultants to translate their ambitious plans, including an aggressive timetable, from concept into concrete.

“Our HP consultants are helping us to realise our vision through innovations in data centre design and best practices” says Crocker. “They bring us their passion to solve challenging problems along with their breadth and depth of experience in establishing trusted partnerships.”

Translating compelling vision into reality“Whatwe’reundertakingcan’tbedonewithvendors,”saysCrocker.“Ittakespartners.We’reworkingwithsomeofworld’sleadingcompanies.OurcornerstoneisHP,whichisprovidingstrategicadvisoryservicesthatweembeddedintoourbusinessplantoensureourapproachwouldberealised.ThroughthatHPisalsodrivingthetechnical,mechanical, electrical and plumbing design.”

HP’s Data Centre Trusted Advisor Service provides Steel ORCA with expertise up front and throughout the development lifecycle to ensure the program’s successful outcome: a data centre with operational continuity, technology, and facilities requirements that are completely integrated and aligned with the business. The Trusted Advisor role places the wealth of HP’s IT and data centre knowledge base at the disposal of Steel ORCA throughout the program.

“We state our endpoint, and our HP Trusted Advisor consultants tell us how to get there,” says Crocker. “Their experience and resources are shaping the very foundation of our business.

“We can’t build our business without a budget,” Crocker continues. “We’d have no budget without investors, and we wouldn’t have investors without a compelling vision. Our HP consultants help articulate our vision.”

BeforechoosingHP,saysCrocker,“Ihadmetpersonallywithalltheothertopdatacentredesignfirms.Fromourfirstmeeting, I felt that our project was as important to the HP consultants as it is to us. Everyone in our Consortium feeds off the positive energy and passion HP brings to our project along with their breadth and depth of experience.

“The HP team includes world-renowned experts in each discipline of data center design,” Crocker continues, “and they draw from a deep pool of resources to provide us with every kind of expertise we need.”

HP consultants “think like owners”SteelORCAintendstoredefinedatacentersustainabilityanddosoquicklyandataprofit.“We’reunderasignificanttimecrunchtodeliverourplanontimeandwithinbudget,”saysCrocker.“Ourfirst50,000 sq. ft. will be billable by the end of 2011. We’ll be earning revenue on another 100,000 sq. ft. in June 2012, with all 300,000 sq. ft. of white space in operation by the following December.” The company began working with HP consultants in October 2010 with a two-year, renewable contract for HP


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Trusted Advisor Services; and a three-month engagement to develop a basis of design.“Our HP consultants think like owners,” saysCrocker. “Theywouldn’t commit to going forwardwith uswithoutfirst understanding ourbusiness model, who our clients are and what we’ll offer that will draw customers our way. They are well known in the industry for driving data center innovation. And they have lots of experience on the marketing and operational side as well as in engineering.”

The HP Data Centre Trusted Advisor Services are critical to enabling the company to rapidly reach its challenging goals. Drawing on their knowledge and methodologies, HP consultants are guiding Steel ORCA through complex, pivotal decisions associated with data centre development and management. And as the project progresses, they can connect the new company with specialised expertise to meet its evolving requirements.

“This service is helping us devise our core business model,” says Crocker, “and allows us to partner with HP throughoutourcriticalfirstyears.OurHPconsultantscanvalidatetheintegrityofourdatacentreandensurethatwhat’s built is what’s designed. They can advise us at any crossroads in the design, build and management stages of our data centres so that we achieve our goal of operational excellence.”

Turning brown into green“Wewantourpartnerstothinkoutsidetheboxanddeviseeconomical,efficientandenvironmentallyconscientiousapproaches,” says Crocker. “The HP team’s design is the foundation of our project. They consider every proposal and decision for its potential to achieve our goals.”

As the HP consultants assess and recommend alternative power, security, and redundancy strategies, they work to reduce risks, time to deployment, costs and above all, to lower energy usage and costs. The company plans to develop a modular facility that can expand in phases with business growth and adapt to customers’ varied needs. Its portfolio of services will vary from collocation and outsourcing to cloud services.

“We will have the ability to offer 100% green options,” says Crocker, “and a variety of tier and density levels to suit our customers’ budgets and IT requirements, whether they have supercomputer systems or high density blade servers.”

Location, location, locationAmong the assets the HP team is helping Steel ORCA to fully exploit is its location. “Customers will be drawn to our proximity and power,” says Crocker. “We’re 80 miles from New York City and 170 miles from Washington, D.C. We’re outside nuclear blast zones but close enough to offer enterprises very low latency for business critical applications.”

Anotheradvantageofthesiteisitswealthofpotentialenergysources.Itsslagdumpandwastemanagementlandfillcould yield methane. The acreage has ample capacity for solar panels. And the HP consultants have assessed another prospective power source, the Delaware River.

Crocker and his management team had planned to make seasonal use of cool outside air to reduce dependence on energy guzzling air chillers. “The HP design team listened to us,” said Crocker, “and a week later, their mechanical engineer proposed a spectacular design using river water. As a result the power of the river is being harnessed into the design for the chiller plant, which may greatly reduce our energy and operating costs. Our HP consultants are affectingourfinancialmodel.”

In the vanguard of a greener economyWhiledevisinginnovativegreeninfrastructuresthatdeliverbothsustainabilityandbottom-linebenefits,theHPdesign team is capitalising on another advantage: timing. As technologies and best practices in data centre design, construction and operation rapidly evolve, the HP consultants will keep Steel ORCA in the vanguard of a progressively greenerindustry.TheSteelORCAdatacentrewillbeamongthefirsttoadopttheU.S.GreenBuildingCouncil’s2012 Leadership in Energy and Environmental Design (LEED) standards.

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TheHPteamhelpsSteelORCAfulfilandcommunicateitsindustry-leadingvision.“Whileevaluatingandrefiningour business concept, business model and execution,” says Crocker, “our HP Trusted Advisor consultants are also helping us in many unexpected ways. For example, they contribute to the success of our meetings with potential customers with their depth of knowledge about our operation and the industry as a whole.

“They also guide us in hiring the specialised, highlevel staff we need to operate the facility,” adds Crocker. “Who wouldbebetterthantheseHPexpertstohelpusselectourchieftechnologyofficer?”

The HP team also shares Steel ORCA’s vision of the data center as a catalyst of regional economic growth. Steel ORCA has promised 5,000 square feet of data center space to the University of Pennsylvania Engineering Department for R&D projects. The HP consultants took part in a recent event for local high school students aspiring to engineering careers. “They could not have been kinder,” says Crocker. “The HP team spent a lot of time with the students, who wanted to know what goes into the work they do. To the students, the HP engineers were rock stars.”

AsCrockerandhiscompanyproceedtoredefineenergyefficiencyinthedatacentre, theyfindthat theirgoalgalvanises the support of the community—from university faculty and schools to local power companies eager to be part of a greener economy.

“Our HP team is critical to the success of our project and its long-term impact on our region,” says Crocker. “With their zeal and immense knowledge, our HP consultants are guiding us in developing technology and processes that advance the sustainability of data centre design and management.”

(Source: Ultra-green data center rises on site of a former steel mill [PDF] Available at: <http://h20195.www2.hp.com/V2/GetPDF.aspx/4AA3-4467ENW.pdf> [Accessed 27 January 2012].)

Questions

Clarify the theory behind the statement, “HP consultants, think like owners”.1. List the efforts and the method implemented by the Stell Orca team in translating compelling vision into 2. reality.EnlistthebusinessbenefitsoftheStellOrcaUltra-Greendatacentreinitiative.3.


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Case StudyIII

2GC Case Study - Al KhamsaStrategic Planning at a Middle East Engineering Company: a Balanced Scorecard approach

“The Balanced Scorecard work accelerated our achievement of the 04/07 strategic plan. We now have clear management accountability and a focus on delivery. The Scorecard review meetings and reporting in particular providedaveryeffectiveforumforstrategyexecution.Theygiveusaclearagendaforthequarterlyreviewofstrategicperformance,leadingtodefinitemanagementfocusonourhighpriorityobjectives.Levelsofdeliveryaremuch higher as a result. We learned a lot from 2GC, and not just about Balanced Scorecard.” Managing Director, Al Khamsa. IntroductionThe Al Khamsa Engineering Company (name disguised) is a mid-sized engineering and architectural consultancy basedintheMiddleEast.Highlysuccessfulinthepast,thefirmhadbeensufferingfromthepoliticalandeconomicinstability in the region. The young and ambitious Managing Director of Al Khamsa believed in the potential of theregionalmarketandwasdeterminedtoharnessthefirm’stechnicalprowessandstrongreputationinordertodelivergreatlyimprovedfinancialresults.

Previouseffortswithstrategicplanninghadproducedmixedresults.he2001-2004strategicplanwassensibleatthetime of its writing, but of the initiatives making up the plan, few had been successfully implemented. For the future, besides a new strategic plan, there would also need to be: commitment to the plan form Al Khamsa’s executives; a mechanism for controlling delivery of the plan, and; greater clarity about actions and accountability to ensure realisation of the strategic goals. Moreover, it was essential to produce this quickly.

Al Khamsa was six months into the 2004-2007 planning period, without a formal plan to guide tactical decision-making. The Al Khamsa MD and Organisational Development Director investigated means of achieving these objectives and selected an approach to strategic planning based on the 3rd Generation Balanced Scorecard.

The Approach

Start-UpThe selected approach would involve a series of three workshops over a two-month period.

Priortothefirstworkshopthe2GCconsultantreviewedthecompany’sstrategicdocumentationtobetterunderstandthestateofthefirmanditsstrategicobjectivesfromthepreviousplanningperiods.Followingthedocumentreviewthe consultant discussed with the

MDthescaleofhisambition.ThisconversationclarifiedtheMD’sexpectations:overthenextthreeyearsadoublingofrevenueswithnoerosionofprofitability.Shortlythereafter,theconsultantinterviewedallBoardMembers(thefirm’sPartners)andallmembersofthe

Executive Committee, as well as a dozen middle managers. The primary purpose of these structured interviews was to determine interviewees’ opinions of what Al Khamsa was doing right, what was not going well, and what the future Al Khamsa needed to “look like”. In other words, we sought to identify the range of strategic goals that thefirmmightsetforitself.Opinionsherevaried,particularlyaroundthescaleofgrowththatwaspossible.

Workshop 1 – Strategic Goals (Destination Statement)ThisinitialworkshopwiththeBoardandExecutiveCommitteewasdesignedtoachievetwoobjectives.Thefirstwas to agree the likely sources of revenue in 2007, by geography and architectural speciality. (E.g. the type of building/structureinwhichthefirmwouldspecialise:conferencecentres;bridges;etc.)thesecondobjectivewastogenerateagreementaroundnon-financialaspectsofthefirm,thatwouldneedtobeinplaceby2007ifthisgrowthwas to be realised.

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Thefirstobjectivewasachievedthroughanovelapproachtosyndicateworking.The2GCconsultantwantedtogenerate brisk but robust and open debate, and then quickly achieve consensus on revenue targets for each region and specialisation. Two carefully constructed syndicate groups, each containing half the membership of the Executive Committee, were given a large grid of paper. The grid axes listed respectively: the geographical regions served byAlKhamsa;andthearchitecturalspecialitiesofferedbythefirm.Asappropriate,inthegridcellswereplacedbackgammon chips - each chip representing $100,000 - to represent current sales of a given service into a region. Next, syndicates were given the same number of chips, representing the MD’s target of doubling revenues by 2007. The challenge was therefore for each syndicate to decide where additional revenues would come from; by geography andservice.Aftermuchdiscussionandshuffingofchipsaroundthegrid,thesyndicategroupsseparatelyreachedconsensus on the most likely sources of growth. Next, the two grids were compared and the larger group debated andagreedafinalallocationoffuturerevenues.Perhapsnotsurprisingly,thetwosyndicategroupscameupwithverysimilarallocations,makingthefinal,combinedviewrelativelyeasytoagree.Theparallelemergenceofsimilarconclusionsonrevenuesourcesprovidedasolidaffrmationforthefinalresult.

The remainder of thefirstworkshopwas spent onbrainstorming andprocessing attendees’ viewsofwhat theorganisation would need to look like to obtain the revenue goals. Descriptions of the future organisation were clusteredunderthethreenon-financialperspectivesofthe3rdGenerationBalancedScorecard:CustomerandPartner(External) Relationships, Internal Activities and Processes, and People, Organisation and Culture. Approximately eighty descriptive sentences were agreed across the three perspectives. These included for example descriptions of:anewincentivesystemneededtoretaintopstaff;newtechnologytoallowelectronicexchangeofdocumentsand new partners in target regions.

Aftertheworkshop,theseagreeddescriptionsofthefuture,bothfinancialandnon-financialwereconsolidatedanddocumented to produce what was known as the ‘Al Khamsa Destination Statement 2007’. The Destination Statement was distributed to all attendees, with instructions for them to review and recommend revisions thereto.

Workshop 2 – Strategic ObjectivesTwo weeks later, and based on the feedback from workshop 1 attendees, the consultant produced a revised Destination Statement.Thefirsthalfofworkshop2wasspentdiscussingandagreeingthepotential revisions toproduceafinalDestinationStatement.Next,highprioritystatementsfromtheDestinationStatementwereidentifiedthrougha carefully controlled voting process. These statements were used to generate a list of actions needed to make the priority statements a reality. Participants clustered the actions into related themes and in so doing derived ten strategicobjectivesthatwouldneedtobeactivelyprogressedbymanagement.Thereafter,thegroupidentifiedthestrategic outcomes that were being sought through these activity-type strategic objectives. The causal relationships amongstobjectiveswerethendiscussedandagreed,producingafirstdraftStrategicLinkageModel.ThisModelsummarised the Al Khamsa strategy to achieve the agreed Destination, and contained objectives related to: Knowledge Management, Project & Quality Management, Client Relationship Management, Skills Building and Acquisition, and New Services Creation.

Finally, objective owners were nominated from amongst the Executive Committee. These individuals were tasked with describing in detail their strategic objectives so that tacit group understanding of the objectives, and the decisions that led to their creation would be captured accurately for future action and reference. For the outcome-type strategic objectives, the owners we asked also to identify what measures (indicators) could be used to track progress in achieving these objectives.

Two days after the workshop the Destination Statement and Strategic Linkage model were presented to approximately fifteenmiddlemanagers,departmentheadsandsupervisors. Thisgroupbegan to identifymorepreciselyhowthe activity objectives could be implemented, so that the strategic outcome objectives could be achieved. The implementationplansweredocumented for thebenefit of theobjectiveowners atExecutiveCommittee level.Finally, the middle managers were invited to join one or more “objective teams”; groups that would support the ownersindefiningeachobjectiveinmoredetail.Inthiswaythecompanyachievedbroadermanagement“buyin”to its strategic plans.


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Workshop 3 – Objective PlanningAslightlydifferentsetofAlKhamsamanagersattendedathirdworkshop,conductedfourweeksafterthesecond.Members of the Board did not participate – these senior individuals had contributed to the discussions and agreements around strategic goals. he more detailed planning for ‘how to get there’ was let to the executives and those who reportedtothemdirectly;theaforementionedmiddlemanagers,thepeoplewhohadsupportedtheinitialdefinitionof each objective.

The workshop began with a presentation and review by the relevant objective owner of each activity-type strategic objective.Objectivedefinitionwasdiscussedanddebated,andchoicesweremadeaboutwhateachobjectiveshouldactuallyinvolve.Discussionofthiskindistypicallyverydiffcult,ifnotimpossible,toachieve“inavacuum”.Becausethe3rdGenerationBalancedScorecarddesignprocessprovideddocumented,draft-formdefinitionsofeachobjective,itwasrelativelyeasytofocusonwhichelementsofthedefinitionswere“correct”,incorrectormissing.This approach therefore allowed executives to agree, after only two and a half days of workshop time the broad change activities required of them over the next 12 to 18 months.

The afternoon was devoted to planning for each objective. In syndicate groups, and led by each objective owner, the groups created high-level plans for completing their activity-type objective. The syndicates were required to identify:actionsrequiredoverthenext12months;specificdeliverablesnecessitatedbytheseactions(Toanswerthequestion; “how will we know when this action is completed?”), timings for the actions, and the person or persons responsible for delivery.

Withtheplanningworkcompleted,AlKhamsamanagershadclarityforthefirsttime,aboutwhattheyneededtodotorealisetheirstrategicambition.InthisrespecttheprojectdifferedfromatypicalBalancedScorecardProject.

Generally, Balanced Scorecard Consultants spend their time helping leadership teams clarify the outcomes – with associated measures- being sought by the organisation. Rarely are Balanced Scorecard consultants involved with the detailed planning for actions required to achieve these outcomes. In the case of Al Khamsa, it was fairly clear that, unlesstherequiredactivitiesweredefinedandagreedinsomedetail,thelikelihoodofachievingtheoutcome-typestrategic objectives was low. For this reason, the consultant argued, and the client agreed, to devote project time to the development of detailed strategic plans.

Workshop 4 – Plan Validation, Measurement and ImplementationTo save on “set-up” time, workshop 4 followed immediately after workshop 3. The day began with a review of each “activity objective” plan, again presented by the objective owner. The plans were tested for realism, and were often found to be lacking; Al Khamsa managers aspired to do too much in too short a timeframe. As is often the case, managersfounditdiffculttodistinguishbetweenwhatoughttobedone,andwhatwasfeasibletoactuallydo.Theplantimingswerethereforemodifieduntilmanagerswereabletosize-uptheirplansandcommittotheirdelivery.

Next, the outcome-type strategic objectives were reviewed by the group, including the measures proposed in the firstdraft-definitionsoftheseobjectives.Afterfurtherdiscussion,asetoftwotofourmeasureswereselectedforeach outcome objective. The measures would allow management to track whether completion of their activity-type objectiveswashavingtheintendedeffectonoutcomessought.Itwasalsoagreedthattheactivity-typeobjectiveswould be tracked against the plans recently developed. Managers had committed to deliver certain milestones, and theplanswouldberegularlyreviewedtoconfirmthatthesemilestoneswerebeingmet.

Finally,afterdiscussionthegroupdeterminedhowthenewlydefinedstrategicplanwouldbecontrolled.Theyagreedto meet quarterly, for a full-day review session. This would examine progress against plans overall, and progress - as indicatedbythemeasuresselectedearlier-inachievingtheirspecificoutcomeobjectives.

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ConclusionStrategic Planning is potentially a painful and time-consuming process for organisations.

Despiteconsiderabletimeinvestmentintheplanningprocess,theresultingplansareoftenill-defined,unrealisticand not fully bought into by managers tasked with implementation. The likelihood of task, and so plan achievement is therefore reduced. These problem areas do however, present considerable opportunity; they provide a list of specificrequirementsforaneffcient strategic planning process:

Strategic planning requires tightly structured, choreographed and robust processes if it is to be time-effcient.•While not democracies, commercial organisations must include an element of the democratic if ownership of •plans and processes is to be achieved. Strategic planning processes therefore should include carefully designed voting mechanisms to support achievement of consensus and allow time-effcient prioritisation.Anydesignprocesshas to include, indeedenforce reviewand thoroughdefinitionof ideas,objectivesand•plans.Frequent reality checks must also be built-in, else strategic planning becomes the stuff of •dreams rather than that which is actionable.•Finally, buy-in is also critically dependent upon engagement and deep involvement in decision-making, and •this implies a design process that ensures participation by all relevant managers.

The approach described in this case study would appear to address all these issues and the requirements they generate. Overtwomonths,andusingonlysomefivedaysofmanagementtime,AlKhamsamanagerswereabletodevelopa clear strategic logic, a sensible set of plans, and a mechanism for controlling the implementation of strategy. The MDandhismanagersbelievedthattheseinstrumentswouldenablethefirmtomeetitsambitiousstrategicgoalofdoubling revenues over the next three years.

AlKhamsa’sstatedreasonforundertakingthisprojectwasthedesignofaBalancedScorecardforthefirm.Howevergreatest short-term value, according to the managers themselves, came from the process of agreeing how each of them would actually contribute to the achievement of the new strategy. In the longer term, using the Balanced Scorecard to formally track theachievementof soughtoutcomeswouldbeanadditionalbenefitof theprojectprocess. Additionally, Al Khamsa managers would know what they needed to do, collectively and individually, to drive the necessary changes in the organisation.

Epilogue - three years laterExceeding its aspirations, after three years Al Khamsa has successfully doubled revenues while simultaneously raising margins three-fold. Al Khamsa’s managing director described the Balanced Scorecard as being highly instrumental in driving the achievement of these growth targets.

Having more than achieved its objectives, Al Khamsa decided to re-engage 2GC to facilitate the reset of the firm’sBalancedScorecardandonceagainreflectambitiousgrowthobjectivesinarobust,realistic,actionableandmeasurable strategic plan. For 2GC this continued use of the Balanced Scorecard, and in-particular the re-set, is the best affrmation we could possibly have of the power and utility of 3rd Generation Balanced Scorecard.

The latest version of Al Khamsa’s Balanced Scorecard does not have owners for Activity Objectives, instead the underlyinginitiativesareownedbymanagersofthefirm.Customisationofthiskindisacleardemonstrationofthe high degree of “ownership” of the tool in the hands of this energetic and progressive company. Al Khamsa is a project-focused organisation; in fact all they do is manage large architectural and engineering projects. With strong projectmanagementcapabilitiesinplace,itwasnotsurprisingthattherewasadesiretousethefirm’smatureandeffcient project management processes to handle Balanced Scorecard Activities and associated initiatives.


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About 2GC2GC is a research-led consultancy expert in addressing the strategic and performance management issues faced by organisations in today’s era of rapid change and intense competition. Founded in 1999, UK-based 2GC has worked with organisations in over 30 countries, helping senior management teams to implement their strategic goals. Central to much of 2GC’s work is the application of its 3rd Generation Balanced Scorecard, an approach to strategic implementation, strategy management and performance measurement.

(Source: 2GC Case Study - Al Khamsa: Strategic Planning at a Middle East Engineering Company: a Balanced Scorecard approach [PDF] Available at: <http://www.2gc.co.uk/pdf/2GC-C081101.pdf> [Accessed 27 January 2012].)

Questions

State the start-up initiated by the Al-Khamsa team in order to acheive the 3rd Generation Balanced Scorecard 1. Approach.Describe Al-Khamsa’s achievements three years post the implenetation of the Approach.2. State the various workshops and their objectives that the Al-Khamsa group implemented in order to achieve 3. the Approach.

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Recommended ReadingBenun,I. & Top, P., 2008.• The Designer’s Guide To Marketing And Pricing. Ohio: HOW Books.Best, K., 2006.• Design Management: Managing Design Strategy, Process and Implementation. Lausanne-Switzerland: AVA Publishing SA

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Best, K., 2010. • The Fundamentals of Design Management. Lausanne-Switzerland: AVA Publishing SABlaszczyk, R.L., 2000. • ImaginingConsumers:DesignandInnovationfromWedgwoodtoCorning. Baltimore-Maryland: Johns Hopkins University Press.Culley, S., Duffy, A., McMahon, C.& Wallace, K. • Design Management-Process and Information Issues. Professional Engineering Publishing.Daft, R.L. & Murphy, J. & Willmott, H., 2010.• Organization Theory and Design. Hampshire: Cengage Learning.Inc.Dawson, P.E., 2007. • Functional Occlusion: From TMJ to Smile Design. Philadelphia: Mosby Inc. • Granet, K., 2011. The Business of Design. New York: Princeton Architectural Press. Gupta, P.,2007. • Six Sigma: Business Scorecard. 2nd ed., New York: Tata McGraw-Hill Companies, Inc. Harvard Business Press., 2009.• Design-Driven Innovation. Boston-Massachusetts: Harvard Business School Publishing Corporation. Hellriegel, D. & Slocum, J.W., 2009.• Organizational Behavior. Canada: Southwest Cengage LearningKeith Grane• t, K., 2011.The Business of Design. New York: Princeton Architectural Press,Lockwood, T. & Walton, T., 2008. • Building Design Strategy. New York: Allworth Communications, Inc.Lockwood, T., 2009. • Design Thinking: Integrating innovation, customer service and brand value. New York: Allworth Communications,Inc.Ostroff, F., 1999. • Horizontal Organization. Oxford University Press.Rasmus, D. W., 2011. • Management by Design. New Jersey: John Wiley & Sons, Inc.Regan, C.L., 2007. • Apparel Product Design and Merchandising Strategies. Prentice-HallRusell, R.S. & Taylor, B.W., 2009. • Operations Management. 6th ed., Hoboken: John Wiley & Sons, Inc.Saaksvuori, A. & Immonen, A., 2008.• Product Lifecycle Management. 3rd ed., Berlin- Heidelberg: Springer-Verlag Suzuk• i, H., Dastur, A., Moffatt, S., Yabuki, N. & Maruyama, H., 2010. Eco2 cities: ecological cities as economic cities. The World BankTurban, E. & Sharda, R. & Delen, D., 2011. • Decision Support and Business Intelligence Systems. 9th ed., Dorling Kindersley (India) Pvt.Ltd.Tybout, A.M. & Calkins, T., 2005. • Kellogg on Branding: The Marketing Faculty of Management. New Jersey: John Wiley & Sons,Inc.Wheeler, A., 2009. • Designing Brand Identity, 3rd ed., New Jersey: John Wiley & Sons,Inc.Whitte• n, J. & Bentley, L., 2007. Introduction to Systems Analysis & Design. McGraw-Hill/Irwin.


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Self Assessment Answers

Chapter Ia1. a2. c3. b4. a5. b6. c7. b8. d9. d10.

Chapter IIc1. a2. a3. b4. c5. b6. c7. a8. b9. c10.

Chapter IIIc1. a2. d3. c4. a5. b6. b7. d8. c9. a 10.

Chapter IVb1. c2. a3. d4. a5. b6. d7. a8. b9. c10.

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Chapter V

a1. a2. c3. c4. a5. c6. b7. b8. d9. c10.

Chapter VIa1. c2. d3. c4. a5. b6. a7. c8. d 9. c10.

Chapter VIIa1. b2. a3. b4. b5. c6. a7. b8. a9. c10.

Chapter VIIId1. b2. a3. c4. b5. a6. a7. d8. b9. d10.

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