The Power Of Design

IDEO redefined good design by creating experiences, not just products. It hired IDEO, the Palo Alto (Calif.) design firm, for help. For starters, Kaiser nurss, doctors, and facilities managers teamed up with IDEO's social scientists, designers, architects, and engineers and observed patients as they made their way through their medical facilities. IDEO and Kaiser concluded that the patient experience can be awful even when people leave treated and cured.What to do? Kaiser learned from IDEO that seeking medical care is much like shopping -- it is a social experience shared with others. "IDEO showed us that we are designing human experiences, not buildings," says Adam D. Nemer, medical operations services manager at Kaiser. By design industry standards, IDEO is huge, though its $62 million in revenues in 2003 are puny by most corporate measures. Both founders still manage IDEO, along with CEO Tim Brown.From its inception, IDEO has been a force in the world of design. Now, IDEO is transferring its ability to create consumer products into designing consumer experiences in services, from shopping and banking to health care and wireless communication.Yet by showing global corporations how to change their organizations to focus on the consumer, IDEO is becoming much more than a design company. By contrast, IDEO advises clients by teaching them about the consumer world through the eyes of anthropologists, graphic designers, engineers, and psychologists. Unlike traditional consultants, IDEO shares its innovative process with its customers through projects, workshops, and IDEO U, its customized teaching program. In IDEO-speak, this is "open-source innovation." "With IDEO, we partner up and work side-by-side. Witnessing IDEO's success, management consulting firms are expanding their offerings to corporate clients to include a greater focus on consumers. And other design firms are piling into IDEO's space. Design Continuum in West Newton, Mass., Ziba Design in Portland, Ore., and Insight Product Development in Chicago are all experienced in understanding the consumer experience. "IDEO has captured the imagination of the business world," says Craig M. Vogel, director of graduate studies at Carnegie Mellon University's School of Design, "but there are other firms doing similar work, translating user research into products and services."Even so, IDEO is far ahead of the competition. IDEO's clients don't just like the firm, they love it. Adds Sam Hall, vice-president for mMode at AT&T Wireless Services Inc. (AWE ), who turned to IDEO to redesign its mMode service: "Those guys really get it. Fun? How does IDEO do it? IDEO puts together an eclectic team composed of members from the client company and its own experts who go out to observe and document the consumer experience. Often, IDEO will have top executives play the roles of their own customers. IDEO uses inexpensive prototyping tools -- Apple-based iMovies to portray consumer experiences and cheap cardboard to mock up examination rooms or fitting rooms. "IDEO's passion is about making stuff work, not being artists," says design guru Tucker Viemeister, CEO of Dutch-based designer Springtime USA. Some corporations send their top people to IDEO just to open their minds. IDEO promptly sent them all out shopping. IDEO team members shopped alongside them to analyze each experience as it unfolded. Other P&G executives went shopping with poor people so they might better understand what it means for Third World consumers to buy the company's products.IDEO's strategic relationship with P&G runs deep. IDEO has even built an innovation center for P&G called "the Gym," where P&G staffers are inculcated in the IDEO innovation process. Like a law firm, IDEO specializes in different practices. IDEO's success with the Palm V led AT&T Wireless to call for help on its mMode consumer wireless platform. IDEO and AT&T Wireless teams also went to AT&T Wireless stores and videotaped people using mMode. IDEO knew it was about making the cell phone experience better."IDEO's largest practice is health care, accounting for 20% of its revenues. Patients, on the other hand, are concerned with service and information.Fred Dust, head of IDEO's Smart Spaces practice, spent hours in DePaul's emergency rooms. Warnaco's Wyatt went to IDEO when faced with severe competition from Victoria's Secret. Warnaco and IDEO teams did "shop-a-longs" with eight women. The experience was eerily like that of the dissatisfied patient in Kaiser's hospitals: bad.In 18 weeks, IDEO and Warnaco came up with a solution. Now, Warnaco is working with department stores to implement the design.During the '90s boom, some 35% of IDEO's revenues came from designing products and Web services for Internet and other startups. At its peak in 2002, IDEO generated some $72 million in revenues. Brown, then the head of IDEO Europe and its London office, was made CEO in 2000 by Kelley. In 2004, Brown reorganized IDEO into a professional consultancy around practices, or fields of expertise. IDEO may yet stumble. Sounds a lot like IDEO. If the D-school students are lucky, they might even have as much fun as IDEO's corporate clients.

By Bruce Nussbaum