Creating true innovation--new types of products or services that can generate entirely new streams of revenue-is arguably the best way to transcend economic cycles and achieve sustainable growth. More and more, large corporations are turning to design firms to provide this fundamental innovation. These firms have a reputation for excelling in innovation both incremental (such as a new type of packaging design) and radical (such as a new business model that can disrupt an entire industry). They also have a unique approach to R&D and innovation, one that Jim Utterback et al. (2006) call "design-inspired innovation." This approach involves the application of frameworks and processes for user research and solutions design that emphasize the overall user experience above specific features or pricing. The success of these firms--Continuum, IDEO, and frog design, for instance--has attracted much attention from corporations seeking to supplement their internal innovation processes.
However, not all corporations choose to hire design firms. In many cases, it is the R&D manager who must champion radical innovations throughout the organization, and it is the R&D manager who must foster bolder, more innovative thinking and approaches among R&D staff. This proves especially challenging when the organization's R&D approach has historically been focused on incremental innovation to improve existing products. For many, the difficult economic climate of the past several years has tightened innovation budgets, adding to the R&D manager's challenges. What the manager in this situation needs is an R&D catalyst to generate new ideas for products, services, and business models and foster excitement for these ideas. Whether a corporation partners with a design firm or not, design firm approaches to innovation can provide that catalyst.
The Design Firms
The traditional role of design firms is to assist large corporations to create, prototype, and engineer new products and services. Examples range from new product categories to service innovation. For instance, Proctor & Gamble approached Continuum to develop a new product for cleaning floors; the result was the Swiffer[R]--now a billion-dollar product category of floor cleaning products for consumer and industrial applications. The Mayo Clinic asked IDEO to help improve patient processing at one of its health care institutions. IDEO turned one of the institution's internal medicine floors into a laboratory to study patient-provider interactions. After closely observing the activity in waiting areas and exam rooms, IDEO designed a process to gather feedback that was incorporated into new process and facility designs to improve both the delivery of care and the patient experience.
These are but two examples of how design firms investigate the user context, learn about user needs, prototype ideas, and implement distinctive solutions. And neither was a one-time, isolated activity. The process of user-centered innovation at both Proctor & Gamble and the Mayo Clinic continue to spawn new developments. The approach of these organizations and their design firm partners to creating a continuous stream of innovation is an ongoing source of competitive advantage.
In order to understand how design firms approach innovation, we developed a partnership with the Industrial Designers Society of America (IDSA) to contact its members, design firms of varying sizes. IDSA's mission is to advance the quality and impact of design; it is the largest organization of its kind, linking industry and academia.
The firms we approached were highly cooperative. Forty-four companies--65% of those contacted--returned our survey, yielding a rich trove of data. Respondent firms ranged in size from just two employees to well over a hundred; the average participant had about a dozen employees. We then held on-site discussions with a subset of six of the responding firms. …