I’ve been to enough of these events to know that MIT leans toward the quantitative and analytical side of discussions. And in this case, with speakers like David Berry of Flagship, Alex Pentland, PhD MIT, and Iqbal Quadir of Legatum Center MIT, all indications were pointing to a deep, fact-based, analytical discussion. What happened, however, was entirely different. Our own Devorah Klein and IDEO’s designer Beto Lopez, who were also on the panel, captured the full interest of the audience when they pointed out—in the context of sustainable design—that human interactions can be purposefully designed. When connected to consumer values, human-centered design can inspire and promote behavior change, which, in turn, can encourage early and mass adoption of products and services—consumer, medical, industrial and otherwise.

All the panelists began to build on the point, with David Berry leading the charge. “When it comes to developing Joule, our company that is focused on creating a process to convert solar energy into a liquid fuel,” says Berry, “leveraging design so that we create a user experience that’s readily adopted by consumers is core to our success.” So, while Joule has plenty on its docket—raw science and technology development to name a few big ones—design is deeply embedded in its language and goals.  

The momentum continued, and by mid-way through the panel discussion the conversation was fully focused on the value of design in the innovation process and in creating and building businesses. Along with understanding the economics, technology and market of their business, entrepreneurs are increasingly assigning high value to understanding the functional, social and emotional connections their products make with consumers. The bottom line: Design, in its broadest sense, is becoming a well-accepted strategic tool for business, even in the most technical-based environments and companies.

What’s the secret to success in business? What if there was a new formula—a new way of thinking—that resulted in long-term gains? According to designer, educator and writer Roger Martin, author of the new book The Design of Business, it’s all about innovation. “It’s the key to long-term business success,” he explains, “but companies think in ways that inadvertently squelch it time and again.”

At Continuum last night for a book signing and discussion led by Continuum CEO Harry West, Martin told a group of approximately 100 designers and business leaders about his theories and strategies from the recently published book. “In the modern business world,” says Martin, “analytical thinking is dominant.” Ever more scientific thinking is being applied to business. In corporations today, it’s not considered a rigorous idea if you can’t bring in data. The problem with this logic: You can’t prove anything new. “It drives out advances,” he says, “companies are lobbing off innovation with this thinking.”

When corporations begin to incorporate design thinking into their practices, they’ll see innovation take hold. How does it work? Design thinking, according to Martin, represents the advancement of knowledge. Martin’s theory posits that knowledge moves through a set of steps, from “mystery” (an unexplainable problem) to “heuristic” (a rule of thumb that guides us toward a solution) to “algorithm” (a replicable success formula). As knowledge advances through this “knowledge funnel,” productivity grows and costs drop. “The companies that will be successful in the next century are those that use this system,” he says, “and then reinvest in the next idea.”

One of the keys to making it work: Encourage abductive logic—acting on what’s probable, not certain; pushing yourself to live in the land of “what if.” “That’s where breakthroughs happen,” he says. Martin’s advice for all those folks working to make their business successful: Remain curious. “If you do this, innovation will happen,” he says. “And how hard—or expensive—is that?”

Swine Flew with panel at the conference.

For those of you who were never a Boy Scout, the Pinewood Derby is a competition in which contestants build a small wooden car to race on a 40 foot track against other cars of the same approximate size and weight. The goal is to work within the parameters of the rules to build the fastest car.

Several years ago, the IDSA (Industrial Designers Society of America) decided to sponsor a derby car race for designers at their annual IDSA National Conference in Pasadena. The response was overwhelming as designers and engineers entered dozens of impressive cars that would lie, cheat and creatively steal their way to the finish line.

Since that first race in 2004, the competition has raged on, with designers from all over the country fielding extraordinary cars. For this years IBM Unlimited Derby held at the IDSA conference in Miami, Continuum approached their participation in the race in a new way. Rather than trying to create the fastest car, the team decided to create the most memorable car. To accomplish this, we started by brainstorming themes that would be relevant to what’s going on in the world.

The planet is currently going through a financial crisis that hasn’t been experienced in eighty years. We’re all being forced to pinch pennies and find creative ways to save money. At the same time, worldwide concern is high around health threats like the swine flu. Continuum took these themes and turned them into a statement of hope, a piggy bank car called Swine Flew.

The generous contribution of the IDSA audience.

Throughout the four-day conference, the attendees were encouraged to add their spare change to the piggy bank. This served two purposes. First, each coin made the car slightly heavier, and consequently, faster. Second, Continuum offered to multiply every contribution by 10 and donate the final amount to design education.

The Swine Flew pit crew members, Jung Tak, Damien Vizcarra, and Kevin Young (many thanks to the non-traveling crew of Jake Childs, Rich Ciccarelli and Bruce MacRae) have returned from the IDSA National Conference and are proud to bring home the award for Fastest Car in the Gravity Weight Class as well as the award for Most Fun.

We’re also proud to say that the generous contributions of the IDSA audience helped Swine Flew raise a total of $1,274.40 for design education.

The crew members are proud to bring back two IBM Derby awards.

Observations in a Year of Recession from Continuum on Vimeo.

I found this collection of illustrated factoids pinned to a piece of foam core in the back corner of our studio the other day. I was drawn to their simple and effective communication style, as well as the diversity of the observations. Upon tracking down the illustrator (Rose Manning), I asked if I could use them. I wasn’t quite sure what for, but in the end, I took them and set them to a bit of music. Titled “Observations in a Year of Recession”, the three minute video seems to capture aspects of what the last year has felt like for many of us. Beyond the headlines of government bailouts, Wall Street failures, and falling home prices, the factoids focus on how this transition has affected the people who make up our economy, not just the businesses. I shared the video with a few friends and a simple question kept coming back – Is there a bigger picture to be drawn from these observations?
I suspect there are many implications one could read into this collection of tidbits. Here are two of mine:

1) TIME FOR DISRUPTIVE INNOVATION
I believe people will be more receptive than ever to disruptive innovations. In a recession, we are more actively making value-based purchase decisions. We are more conscious than ever about how we spend our money. This is not simply about finding the lowest price; people are seeking out the strongest value proposition. We are re-prioritizing purchase decisions based on what’s most valuable, rationally and emotionally. In today’s economy, people are willing to trade off some level of quality for a better value. This is one of the classic market dynamics in which disruptive innovations can flourish. The market is primed for new, better-value solutions.

Now is the time to explore opportunities to recalibrate a category, or create a new one, through the introduction of disruptive innovations. By offering a better-value product or service, in a way that the market does not expect, new market leaders can be established. On example that comes to mind is the netbook. I don’t think there could be a better time for a full court press of netbooks into the mainstream. Consumers will be more receptive than ever to a lower cost option, even if that cost comes with a decrease in performance.

2) MANAGE YOUR VALUE PROPOSITION
As people seek out the strongest value proposition – the brands that have diligently focused on value are being rewarded. McDonald’s, who has had a relentless focus on value, is being rewarded with strong growth during this economic downturn. Similarly, WalMart has benefited, as its value proposition is more in tune with today’s economy. And I don’t think this is just about low prices; each of these brands has worked diligently to improve their offering. As a result, I fully suspect at least some portion of the added market share they pick up today will likely stay with them as our economy rebounds.

In today’s market, the focus has to be on optimizing your value proposition. More than simply reducing your price, every brand needs to find the right combination of price and quality. And if you’re going to demand a price premium in the market, much as Apple does, you must be sure your offer is appreciably differentiated in a manner consumers can relate to and in a way that they value. This seems obvious, but as we see the onslaught of store brands winning market share from traditional brand leaders, it is a stark reminder of how an open market works.

I hope to hear about insights and implications others can tease out of these observations, or from your own experience through the last year.

Walk through your friendly neighborhood Target and you’re sure to experience a veritable street fight in the aisle between brands on top of their game. Cool brands, hip brands, brands for moms, brands with a heart, big brands, brands that are good for the earth, brands you’ve grown up with – all battling it out for your attention and your dollars.

And one of the best brands you’ll encounter at Target is, in fact, Target.

It’s never labeled as such, obviously, because Target has realized that it can gain more strategic value by creating house brands targeted (forgive the pun) towards specific shopping categories, not the entire store. Rather than populate every aisle with same looking generic packages featuring the store brand, Target has cultivated a rich assortment of brands that go straight after what users need, want and desire. Step into the candy aisle and you’ll discover a colorful candy brand named Choxie (by Target). Walk down the auto aisle and you’ll see twenty feet of brushes, sponges, hose attachments and polishing cloths under the Vroom brand name (guess who?). Target has changed the game on their house brands, because they don’t feel like house brands anymore – they’ve become good products people just want. And the important point is that structuring house brands this way helps differentiate Target from its retail competitors. Unique products create unique aisle experiences, and unique aisles means Target doesn’t feel like Wal-Mart and the rest.

Which brings me to their latest creation, Up & Up.

Target developed Up & Up as the new brand name for household consumables like paper towels, diapers and disposable dishware.  Gone is the Target bullseye and clean, generic brand package. In its place is a new brand with a more modern look and feel. The reasons for change make sense to me…

What I don’t get is why Target abandoned the street fighter mentality that has worked so successfully for them in other parts of the store – taking on the big guys aisle by aisle. For some reason they didn’t create new, distinct brands around baby, food storage, cleaning, beauty, and the rest. They just made one big brand to try and cover an entire corner of the store. But the rub is that these are unique categories, with unique dynamics and unique shopper needs.

Too unique for just one brand to satisfy?

Did Target miss a big one here?

I’m sure that folks like P&G, J&J and Method are sure hoping so.

The Design Management Review‘s current issue features a piece by our sustainability experts Grant Kristofek and Mark Bates. Colorblind, our extensive in-house research project on consumers and their perception and digestion of all things green, is the focus of the piece.

Download it here.

I have found myself in some interesting research situations in my career, but none quite like my recent project. This time I was talking to people because they were HOMELESS. Along with Kristen Johnson, a fellow envisioner at Continuum, Chris Miller, a professor at the Savannah College of Art and Design,  I was selected to organize a workshop at the Ethnographic Praxis in Industry Conference (EPIC) 2008. This year’s conference was held in Copenhagen, Denmark and focused on using fast and efficient research methods to understand social problems, like homelessness.

Then came the hard part…we actually had to do the research.

Standing in front of five parents who were homeless, and all I could think was… could I get to the “right idea” for this problem? Is it really going to work?
Our interviewees were homeless for different reasons: domestic violence, illness, loss of job, teen pregnancy, foreclosure, but they shared two key characteristics. They all had children and they were all able to self-advocate to get the aid they needed.

We wanted to explore the effect of social isolation on homelessness; however when it came time to design solutions to prevent or alleviate social isolation, our homeless respondents were not in the least bit interested. They wanted to talk about “the system” and after learning about more acronyms than we could count, it became obvious that many people where homeless, because they did not know what options were available to them.

Fifteen minutes into the conversation, I realized that this by far the most fascinating research I have ever done. I stopped worrying and started listening.
Our users talked about waiting at the welfare agency for 6-8 hours with their children, not knowing what to expect, or where they would be sleeping that night. They also talked about the frustration of loopholes in the system–being turned down for aid because they were too young, too well educated, or not pregnant enough.

They also talked about the dependency that the welfare system creates. “I am trying to put money in my savings to create a better life for my kids, but if I have more than $2,500 in savings I get kicked out of the shelter. I want to get out of the shelter, but $2,500 barely covers first and last month’s rent…what if something bad happens?” They also lamented about the process of applying for subsidized housing. They did not know where or when they would qualify for subsidized housing, which led to much anxiety . As one interviewee shared: “I don’t want to get a job before I qualify for housing. What if I get an apartment far away from my job, then what?” So, the participants were stuck in a state of extended transition.

While the topics we discussed were incredibly emotional, I left the interview session feeling that we could make an impact through design strategy. This was an eye-opening experience that culminated with an amazing workshop. And while we did not get to the “Right Idea” yet, we took a step in the right direction to understanding a persistent problem so we can enact social change.

As we travel and interview people, some of the stories that we hear shed light on this. People tell us about the things they’re doing to make it harder – not easier – for them to do things like spending money or eating food. Can you imagine someone putting a credit card in water and freezing it to help them stop and think before they spend? It’s happening. But on the other side, the New York Times reported that at least one 401k provider is issuing debit cards to allow consumers to effortlessly borrow from their retirement savings.

There’s been a lot of innovation energy (and marketing energy) put around bringing consumers’ impulses and decisions closer together. As we approach the possibility of too much convenience, a new growth opportunity lies in helping people push them apart instead.