Volvo Group - Design Management
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Volvo Group - Design Management



How to involve design managemnet in company activity

How to involve design managemnet in company activity



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    Volvo Group - Design Management Volvo Group - Design Management Document Transcript

    • Research proposal:“Volvo Group –The design challenge vs.hierarchies in largeorganizations” Artur Lipin M.Sc. Industrial Management Saint-Petersburg, 30 April, 2012
    • Structure of research proposalIntroduction – overview of my interests and possibilities1. Research design (strategy) .......................................................................................................12. Preliminary literature analysis ..................................................................................................33. Framework and central concepts .............................................................................................. 54. Research questions ...................................................................................................................75. Limitations ............................................................................................................................... 76. Research methods .....................................................................................................................87. Possible answers.......................................................................................................................9 7.1. How can be creatively used design processes and methods in new ways in Volvo Group? .........................................................................................................................................9 7.2. Cases from companies ....................................................................................................10Conclusion .....................................................................................................................................12References .....................................................................................................................................13Appendices ....................................................................................................................................15
    • Introduction – overview of my interests and possibilitiesOver the last years design management was under the focus of many researches, therefore thereis a large number of articles that brings different points of view of how design can be used, butgenerally the process of implementing design functions is not so manageable.My background in Innovation management and previous work experience are directly connectedwith design management in different areas. I started to review the challenges of creation andimplementation of design driven innovation and design management during writing my masterthesis in 2011. I found the gaps caused by poor cooperation between design group and groupcomposed of management, marketing, and engineering representatives. As a result a formal toolto simplify decision making process and make design process more efficient was proposed. Thetool contains deployment matrix with values for customers, design elements and manufacturingcosts. In master thesis the score was calculated and the success of concept was measureddepending on market segment. In future PhD work I want to enlarge research framework andtake into account all aspects of design management and prepare a range of tools and methods tomodernize current situation. Diverse working experience in huge companies like CarlsbergGroup, Unilever, Kone Oy provides me with vast knowledge basis to look at these issues fromdifferent perspectives.“Innovation killers” article of Christensen et al. issued by Harvard Business Review (2010)showed the typical challenge for innovators (more specific for designers) to protect new idea andto provide its potential value in terms of ROI (return on investments). During personal discussionwith Vice-President of Marketing of Unilever about organization of work with externalcompanies like design studio Pininfarina it was highlighted the necessity of creation online toolto visualize online NPD project in order to make the process more transparent for topmanagers(see Appendix A for more details).During research I also want to focus on implementation process of different tools and methodsfor designers because all the changes in large companies should be matched with strategicdirections and targets that additionally require internal long-run submission procedures. Forthese purposes I would like to take the Bower-Burgelman (B-B) process model which containsmethodology of integration of strategic initiatives into the corporate programs.(Noda,1996)These programs are in concordance with the company’s development vision including designmanagement changes.In order to gather best practice and experience about what are other ways of using design processand how it can be fit to the total company’s hierarchy small reference case studies with IKEA,H&M can be applied. The case-companies should have the same scale as Volvo Group and putinto use eco-rational design principles. Synergy created by this knowledge transfer will cause thedesign management improvements. An alternative source of design management knowledgecould be design-oriented Swedish firms like Nudie or Dr Demin.As for Volvo nowadays Digital Product Development (DPD) is used which allows to presentmock-up that replaces physical items. In addition to this computer tools are steadily replacingsketching design. For these reasons together with CAD specialists and engineers the designersshould be more effective integrated in this project process. The target is to reduce total time forproduct development, minimize the costs and improve the quality. This increasing number of
    • researches shows a growing interest in the Industrial Design Organizational Function consideringthat this topic becomes more and more important since severe competition in the market ismaking tougher. Industrial Design is important since the organization has a strong impact on theboundaries of engineering design. (Fuxin, 2005)In some situations in the companies marketers and brand managers often find themselvesresponsible for giving design feedback and making decisions on design concepts but they don’thave adequate skills. The possible solution to this problem is to receive from these specialists thebrief which includes only one lead insight correlated with the company strategy about directionsof design creation. At the same time from financial point of view for design innovations it isdifficult to calculate ROI. To increase the level of effectiveness in terms of design commontemplates with transparent evaluation tools should be provided. Moreover, it is important todivide the design meetings into three distinct sections: concept presentation, the critics anddiscussion, and decision making/ evaluation. Short design research based on interviewing ofcustomers (for example 5 persons) about their future design vision and feedback can be veryeffective and useful. (Alexis, 2011)
    • 1. Research design (strategy)The strategy of research contains few steps. Firstly, all communication between designdepartment and others as well as current situation with design management will be observed (seeFig.1 Research strategy, “Current situation”). In order to achieve final targets several differentapproaches how to measure communication and integration between design group and otherdepartments will be utilized. In Chapter "Framework and central concepts” communicationmeasurement described in more details. For these purposes business processes modeling will bedrawn (Appendix B as simplified example). Internal guideline, document workflow,responsibility matrix, KPIs (key performance indicators), non-formal interactions of designdepartment with other structural divisions with be observed. Decision making is one of theimportant parts of organization theory. If the company is going to be more design directed itshould involve new methods for decision making and argumentation. AHP (analytical hierarchyprocess – method for evaluating an idea or concept based on comparing criteria) helps todistinguish influence and preference of design during decision making. The list of currently usedtools and methods will be described and their effectiveness will be measured. Type of workingmode with external design and graphic studious will be presented. Artifacts can be found indigital product life-cycle systems transactions (SAP as example) which support the activity ofdesign division. If this system is not in use, in this case the supporting software will be proposedfor launching to increase transparency of design projects. Special attention will be paid to therole of design leadership in Volvo and improving motivation program.In parallel with this activity information about design applications in other businesses will begathered. In order to make it the extra case studies with transferring knowledge and checkingapplicability are proposed. Analyzing scientific articles as well as theories and methods from theliterature the basis for design initiatives will be formed. Examples of such research result can befound in Chapter “Cases from companies”.Discovered knowledge will create united data pool ("Accumulator" as presented in Fig. 1.“Research strategy”) with new design tools and methods which have influence to the corporatehierarchy. In order to prove my standpoint I suggest variants of possible usage of design in non-standard ways and will try to argue that design knowledge and tools can be applied across manyfunctions in the organization, but these functions should be not separate but united under oneidea.It is important not only to develop new design tools and methods which can be used in new wayinside Volvo Group but also to implement them successfully. Concepts like B-B model andintegrated design management are responsible for promote design initiatives in largeorganization and advocate their value as competitive advantage. (Noda, 1996) 1
    • Fig. 1.Research strategyThe final target is to create the influence to the hierarchies to use design in a more effective way.Based on design thinking, theory of organization and applying practical examples the influencecan be created by redesign of existing relationships, improving information sharing acrossproject teams, creation of well-balanced decision making tools, providing for top managementnew design activities with clear contribution, resource allocation for the new risky innovativedesign projects with long-terms perspectives, proposing new tools for cooperation, developmentKPIs which reflect fruitful design activity, improvement managerial skills of designers to helpthem argue breakthrough design based on future customer needs and trends, application ofdesign in non-standard situations, for example to use visualization to solve the company’sproblems, improvement of design culture to make the design an integral part of Volvo Group.The success of implementation would also be measured by feedback metrics – what changeswere made with the maximum efficiency. The positive changes can be easily detected bycomparison picture and graphs “as is” and “to be” after proposing new design thinking and newcommunication bridges.In the article “Design and Business Transformation” Design Council suggests the conceptualmodel and a specific survey tool to detect the level of maturity of a company in terms of designmanagement. The higher company’s level the greater strategic importance of design. Four levelsare as follows: design management has no applications, design management as a Project, designmanagement as a Function, design management as a Culture. This model has 5 metrics:awareness of benefits, design planning, resources for design, design management expertise anddesign management process. (Best et al., 2010) 2
    • 2. Preliminary literature analysisDesign management literature has a diverse range of scientific approaches. In this research thehighlight is on several Swedish books which have good interconnection of productioncompanies’ experience with case study. The book “Mötenkring design: om relationer mellandesign, teknikochmarknadsföring” (2008) by Ulla Johansson describes creative use of designprocesses in the companies like Pergo, SKF, Swepac, BabyBjörn and Berifors/Stoneridge.Marcus Jahnke in his book “Från Fråga till FärdigProdukt” (2011) review design in technicaloriented company to create new clothes by means of working very closely with operators inorder to understand actual needs.Bangle (2001) in his work provides the experience how to act in creative environment and depictwhat happens inside BMW Company. He argues that communication of designers with others isa complicated task and it requires having some protective barriers and transmitter with the helpof which designers will deliver their vision to others.Keith Goffin in his article “Maximizing the Value of Industrial Design in New ProductDevelopment” (2010) explores the gap in managerial and design languages and metrics whichcauses the conflicts during new product development. The author proposes how to fil up this gap.Michael Antioco in his paper “Integrating service and design: influences of organizational andcommunicational factors on relative product and service characteristics” (2008) discoversantecedents and consequences of the information use by design department and proposes thetheory of reasoned actions including following parts: conflicts, functional dependence, perceivedknowledge and communication that in turn divided in performance, ergonomics, and aesthetics.Another Antioco’s work “Reducing Ongoing Product Design Decision-Making Bias” (2008)devotes to the influence of functional membership on the concern for decision-making criteriaduring ongoing product design decisions.Marcus Jahnke in his work (2008) highlights the effect of design methodology in innovationprocess. According to him, the companies are quite often can’t fully use all potential of design.In large companies it is very important to get support of top managers to involve design incorporate business processes. Jahnke’s paper provides the review of NPD in an organization andreferences referring design. The fact of design contribution as firm’ competitive advantagebecame obvious.David Holston in his book “The Strategic designer, tools and techniques for managing the designprocess” outlines that design processes such as creation of software are not linear, but clearlydefined processes can increase understanding of measurable results, facilitate resolution ofinterdepartmental conflicts, accelerate development of innovation concepts, bring respect andmanage document workflow. Many designers work in idiosyncratic ways that make it difficultfor others to participate in design process. By adapting transparent process that can be sharedwith stakeholders the designers take a step forwards in allowing others to take part in theprocess. This helps to integrate design into organization. Design processes and obtaining effectcan be measured by different metrics: customer experience, financial performance, brandrelevance. Estimations of Return on investments derive from design activities help to understandfinancial drivers. (Holson, 2011) 3
    • One of the main challenges of large companies is to organize creativity groups and to make thisactivity easy to understand for other divisions. Margaret Bruce and John Bessant in their book“Design in Business, Strategic Innovation Through Design” explore these challenges. Firstly,they outline that in creativity activities there are twice as many managing persons as in otherdivisions. Everyone knows their huge contribution and at the same time worries about futureresults. Methods of creation of something new are numerous that’s why it is complicated to uniteall tactics into one guideline. In the companies there are various ways to control the designdepartment and others and divide the tasks among them – by functions, by products, by parts ofthe product. The challenge is to do this puzzle and create the whole structure. In carmanufacturing industry the core team comprised of about 100 people and they have directresponsibilities for NPD, but across the company much more actors are involved. (Bruce, 2002)Team Dynamic reflects the efficiency of a project. Environmental issues, time frames, size of theteam primary influence on the result and action plan in organization. Bruce Bessant in his workdiscusses the mechanical and organic structure of the organization. Effective innovatorsincluding creative designers do not suit well to clearly defined top-down structure of thecompany, their roles are not so clear. Hierarchy allows uniting diverse activities and finding thecompromise between individual creative efforts and aims of the enterprise. (Bruce, 2002) Fig. 2. A complex functional organization, major actors of NPDFunctional structure gives limitations. As depicted in Bruce Bessant’s book processing approachin this case can be applied to unite and transfer knowledge between actors from differentfunctional units. The challenge is to recombine actors from a complex functional organizationpresented in Fig.2 into product-based structure. During building of a comprehensive product-based structure sometimes the roles of actors even duplicated or some components/someexpertise are lost. During responsibilities’ sharing in this structure driving forces also can be lost.The major difficult in KPI measurement is that it’s hard to separate the influence/contribution ofdesign because design is subdiscipline comprising R&D, engineering and marketing. Anyway, inparticular situations the value should be measured especially for decision makers who are moreconcentrated on market share, cash flow, production costs and profits. In this case quantitativematrix of design engineering project and qualitative matrix for the product identity can bemeasured, for innovation design the uncertainty is dramatically increasing. Data about movementthrough product lifecycle stages is also a source of information to measure design performance.The following list of methods that are able to help to make right decision about inputs and 4
    • outputs of design: 1) Product Lifecycle Costing; 2) Target Costing; 3) Activity-based costing; 4)Design for Manufacture and Assembly (DFMA); 5) Value Engineering.(Bruce, 2002) 3. Framework and central conceptsIntegrated design managementTo integrate design into the corporate management system it requires to determine a few steps:put design culture and drivers, determine how design can support culture and businessobjectives(industrial design, service design, media design), create awareness and influence ofdesign (environment), develop appropriate design organization and operations (projectmanagement), measure the value gained by design (design quality), train and empower others indesign thinking methods, get information from end users, experience about design. Fig. 3.Integrated design managementIntegrated design management is a composition of key concepts and methods necessary fordeveloping the design-minded organization and generating innovations. The companies shoulddevelop these competencies by growing internally and with the help of right external experts.The most effective way is to build a combination of internal and external resources.First of all, the role of design as a process (an artifact, communication or the environment)should be recognized. The role of the designer in corporation also transferred from solvingsimple problems and working independently to solving complex problems conjointly with cross-functional teams. Designers must be independent enough to use the best design processes, but tointegrate design into the business the fully integration of design into the existing company’s 5
    • processes is required. Stage-gate process is not the most convenient way of managing projects incomparison with an open and explorative methodology. If the company needs to solve itsproblems and to really make an impact, in that case from the very beginning the designers shouldbe on the team and design-oriented processes have to be organized putting design into corporateculture.(Lockwood, 2009)Sometimes it happens that executive team does not support a full product redesign caused bymany reasons. General targets of designers are: decrease product cost, decrease new product timeto market and improve the expression of the brand. In addition to this, design can create value infour categories: more profit, more brand equity, more innovation and faster change. The greatchallenge in building design strategy is to bring strategy department and the design departmentinto alignment. It is also important to understand that every activity and output of the companydepends on design. For these reasons the design vision and a roadmap should be developed aswell as the design principles, signature elements, visual language and businesses need metrics formeasurement. By combination of key design methods and customer research with an emphasison observational processes the new solutions of difficult business problems can befound.(Lockwood, 2009)Cross-Functional CooperationAccording to previous studies, researchers have suggested a wide variety of definitions for thecross-functional cooperation with designers. Generally speaking, terms such as “collaboration”,“cooperation”, “interaction”, “communication” and “coordination” have been used in the papersexploring the particularities of interfunctional integration in NPD process and other projectprocesses. These definitions are ranging from simple measures of the frequency of interactionbetween two departments to multidimensional measures of collaborative behaviors and attitudes(Kahn, 1996). Some sources present an interaction underlining the use of communication in theform of meetings and information flows between functional departments (Ruekert, 1987). Otherssee the cross-functional integration as collaboration where departments work cooperatively inorder to achieve mutual goals and strategic aims. For instance, Lawrence and Lorsch (1986)defined integration as the process of achieving unity of efforts among the various subsystems inthe accomplishment of company tasks.Some researchers have implied a multidimensional perspective of integration. Gupta, Raj, andWilemon defined interdepartmental integration as information sharing and involvement (Gupta,Raj et al. 1986).This study also utilizes the definition of Olson et al. (2001) who state that cross-functionalcooperation is the cooperation which includes both the frequency of interaction and the amountof information and resources shared between functions involved in cross-functional projects.This overview was adapted for design issues and presented in Appendix C.B-B modelThe Bower-Burgelman (B-B) process model of strategy making in a large complex firm depictsmanagerial activities on three levels of organizational hierarchy (designers, middle designmanagers, and top managers) and conceptualizes intraorganizational strategy-making processes.B-B model is a process according to which strategic initiatives are developed primarily by front- 6
    • line managers – designers, marketing department who usually have specific knowledge. Strategicdesign initiatives are adopted by middle managers whose role is to translate from designlanguage to managerial language. Top managers can exercise critical influences on theseactivities by setting up the structural context to reflect the corporate objectives. The developmentof these strategic design initiatives can lead to the improvement or change of the concept ofcorporate strategy. The central feature of the B-B model is a resource allocation process in whichbottom-up design initiatives compete for scarce corporate resources and top managers attentionto survive within the corporate contexts-structural and strategic contexts. (Noda,1996) 4. Research questionsThe purpose of this research is twofold: firstly, to gain a profound understanding of howcommunication between design group and other departments can be improved, the influence ofdesign on the company’s business and hierarchy; secondly, to examine the companies in order todetermine – in what stage of design process integration Volvo group is located, and in what wayit has an impact on the firm’s performance. For these purposes identifying the factors that affectdesign management integration is valuable.For these reasons, the central questions of the research are as follows:  How design methods and processes can be used in a new way and how design activities should be implemented correctly in the structure of the company?  What are particular characteristics of design management in large manufacturing companies?  Which design processes from other contexts can be applied to create additional value for Volvo Group?  What communication modes would be the most effective for Volvo Group?  How to overcome challenges connected with design processes in bureaucratic large companies?  How current processes and communication between Design Division and other departments in Volvo Group can be characterized? What should be improved? 5. LimitationsFirst limitation is connected with the fact that my focus will shift on more practical things. Foranalysis of current situation of Volvo Group as a base the business model of only Volvo 3P willbe taken. In order to conduct small case studies those companies which have capability tocooperate for transferring knowledge will be involved. Another limitation refers to theapplicability of design management tools and methods from other fields to car manufacturingarea. The specific of Volvo 3P is that it is a large manufacturing company with lead engineeringview. Reference case studies with interviews and case study meetings requiring personalparticipation are possible first of all in Scandinavian companies and international companieswhich have design activity in north part of Europe. 7
    • Research examines communication and all design processes inside the company. For externalcommunication analysis the most typical experience with design agencies will be selected. Forgeneralization of results the number of examinations could vary. 6. Research methodsThe following research methods will take place in this paper: 1) Empirical study with Volvo Group case study; 2) Small case studies to gather detailed information and to support the main research; 3) Observations of the most advanced design management practice internationally through participating in the conferences and meetings; 4) Participate in debates of different professional design organization (for example DMI) to develop the network.In terms of academic and business value the most effective is a case study with collaborationelements that are reflected in knowledge sharing and consultancy during research project. Forvalidating data collected during the case study various methods will be used: qualitative andquantitative. It is planned to interview different people individually through the meetings, e-maildiscussions, phone interviews as well as observations and involvement in daily activities touncover tacit knowledge about communication standards. The aim is to understand non-formalcommunications during collaboration projects especially from the perspective of bigmanufacturing companies where all processes should be formalized and supported by transparentdocument workflow. The main reason is to compare logic of managers about design and findindicators for decision making. In this case Analytical Hierarchy Process (AHP) software can beused to compare the preferences of design values. The examination of documents andinstructions (best practice “To be”) creates a complex vision.In-depth case study approach was chosen as the best-suited research method by reason of that itcan provide the most elaborated information for each case. As a result, the integrated analysis ofthe target research problem will be explored. The research process of this thesis is based on tworesearch activities: one part is a data collecting; the second part is the data processing. The aimof this research process is to produce a solution to explicit practical problem that can be furtherimplemented. The research should also have the utility and a benefit as well as it needs to beverified and validated. Therefore, the proposed solution needs to be tested by users of the targetorganization.One of the alternatives of the research process is presented. The research process map is shownin Fig.4. 8
    • Find a practically Find a problem- relevant Analyzing the data solving opportunity construction Obtain Data collecting: comprehensive brainstorming Create a solution understanding of sessions the topic Examine the scope Discuss and edit Data collecting: fill of applicability of the questionnaire the questionnaire the solution Fig.4. An example of the research process mapQualitative methods: interview, focus groups, case studies, sketches, artifacts.Quantitative: surveys, databases, measurements.For collecting secondary data the development of design management from historic perspectivein the company will be observed as well as the changes and key projects which had influence onthe structure of the company and interconnections. For these purposes the documents whichreveal the target of these projects will be used as well as indicators of challenging situations.Secondary data: bibliometrics, context analysis, media, briefs, presentations, Internet activity.In addition to findings and concepts about methods of improving the contribution of designgroup it will be valuable to make a few minor case studies of other projects which will providethe results of implementing structural changes or improving internal methods and tools.Basically, the source of information will be interviews and study visits of those companies whichpresented impressive results in certain projects according to public statistics. The reason is tofind applicable sources of ideas and identify measures of evaluation of new model impact onVolvo performance indicators. By observation outside the study will become more general. 7. Possible answers 7.1.How can be creatively used design processes and methods in new ways in Volvo Group?How to use design in different ways? To answer this question the list of possible applications ofdesign is proposed:  Steps in new product development (coordination activity with different agents);  Commercial materials (as said in my previous work all NPD sketches could be used in future promotion as the brochures);  Design of documents, reports (typography, composition – art of preparing information or visualizing it for users);  Photo of customers with product (collecting artifacts for marketing purposes to detect covered customer needs); 9
    •  Design of office space (create comfortable environment for workers, furniture allocation);  Logos, brand style, corporate style (labels, business cards);  Cooperating with IT for development web services, interfaces for external and internal users, mobile applications;  On production line - design ergonomic tools, posters, instructions (coloration of indications), graphics, user-friendly architecture;  Internal communication, journals, magazines;  Artistic video about workers in Volvo as part of motivation;  New businesses or business models proposed by design thinking which have value for main business of Volvo Group.  Exhibitions, presenting new tracks (Appendix D as example) 7.2.Cases from companiesMany manufacturing companies under stiff competition begin to compete on the basis of valuecreation and providing new competences. Taking into account the large scale of these companiesit’s hard to transform quickly their business. Most of them have a formal product developmentprocess and not enough working experience with design, for example IDESTA Foodtech AB.(Marcus, 2008) For Carlsberg Group one of the market drivers is a new package but design isinvolved only via external agencies. (Appendix E)If the company generally gets innovations from technology push and minor improvements likeAlfa Laval, it follows permanent improvement way through stage gate system and standard toolsfor NPD like TRIZ. During further development of my master thesis the concept of designinvolvement through different tools can be developed.The existing literature sets a stress on the fact that the companies like Procter & Gamble,Phillips, Samsung could have big amount of designers and use different modes of integration(internal and external) but the main reason of their success is to define design thinkingleadership. If the company has Chief innovation officer or Chief design officer on the staff itrepresents firms’ high design expectations as well as proper resource allocation (Lockwood, n.d.)In some situations in the companies marketers and brand managers often find themselvesresponsible for giving design feedback and making decisions on design concepts but they don’thave adequate skills. The possible solution to this problem is to receive from these specialists thebrief which includes only one lead insight correlated with the company strategy about directionsof design creation. At the same time from financial point of view for design innovations it isdifficult to calculate ROI. To increase the level of effectiveness in terms of design commontemplates with transparent evaluation tools should be provided. Moreover, it is important todivide the design meetings into three distinct sections: concept presentation, the critics anddiscussion, and decision making/ evaluation. Short design research based on interviewing ofcustomers (for example 5 persons) about their future design vision and feedback can be veryeffective and useful.(Alexis, 2011)One of the main questions of this work is what is the designers’ contribution and how throughhierarchy system increase the effectiveness of designers. Scientific literature provides thetendency to involve designers into NPD process as team players. Océ (Netherland) had 10
    • experience of integration of designers as inside workers in a project using one collaborativeproject room with chemists, physics, mechanical, strategic marking specialists. After some timethe company decided to make separate design department for NPD. After that design departmentperforms only consulting role which means that project teams are free to choose – use or notdesign competences. Now it is impossible to work without designers, but designers are able toselect the location of their studio. On one side it provides the freedom for designers, on the otherside it also can be the cause of intercommunication lack. In this research the fact is mentionedthat more often managers during decision making process prefer more functional productprototypes than aesthetic beauty. That is why the problem of expressing designers’ argumentsand making their judgments strong during decision making discussion. Company also appliesrotation of designers within the projects and even in different project phases for bettercollaboration. One of important goals of in-house design at a large company is to provideunifications across all brand products. (Stompff, n.d.) 11
    • ConclusionThe case company, Volvo Group, has the intense interest to the task of improving thecommunication channels between design group and other departments and gets a goodunderstanding what contribution the design group is generated and how this group’ efforts can beevaluated. This is caused by the company’s intention to use design at the maximum extentexploring its full potential opportunities and integrate design to the corporate hierarchy in themost effective way. As far as Volvo Group is known for its dedication to creating value, thiswork is initiated to contribute new solution to the firm’s business model.The proposed research in design management has significant value for the companies becausenot all of them have high level of design integration into internal processes. New design thinkingprovides the competitive advantage for the company and develops competencies. Nevertheless,the subject of this research is up to date issue for those companies to tries to create additionalvalue, the literature has significant lack of studies concerning this narrow theme. Every caseregarding design integration into hierarchy in large organizations is unique. Thus, there is a hugegap between the company’s intent to provide new solution of the problem and its scientificsupport. As a result, supporting the case company, Volvo Group, by the methodologies andapproaches for new solution development is a vital problem to which this research is addressed.Thus, the relevance of this work is proved.Volvo Group as a leader in the market accumulates all novelties. The main aim for preparingVolvo Group’ future design is try to predict the future needs in 2020 by developing innovativeconcept that refers to the safety, ergonomics, and operator comfort. Focus of DESMAorganization supports the idea of new value creation through design. The academic interest ofthis research is also reflected in unprecedented cross-disciplinary efforts to understand howdesign can be exploited as a driver of innovation and competitiveness in Europe.The methods and tools for implementation new proposed solution will be chosen based onscientific literature investigation, conducting interviews and case studies with experiencedcompanies to collect the best practice of the topic. This study provides the formalized methodsfor the solution development coupled with the different analysis techniques in order to evaluatethe obtained results better. All of these will form a useful managerial tool for Volvo Group thatcan be applied in various design areas. 12
    • References 1. Alexis, J., (2011), How do you evaluate design concepts? Brand Packaging, November, pp 26-28 2. Antioco, M., Moenaert, R.K., Feinberg,R.A. andWetzels M.G.M.(2008), Integrating service and design: the influences of organizational and communication factors on relativeproduct and service characteristics, Journal of Academy Marketing Science, Vol. 36, pp.501-521. 3. Antioco, M., Moenaert, R.K., and Lindgreen, A., (2008) Reducing Ongoing Product Decision-Making Bias. Journal Product Innovation Management, Vol.25, pp.528-545. 4. Bangle, C., (2001) The Ultimate Creativity Machine, How BMW Turns Art into Profit. Harvard Business Review, January, pp.47-54. 5. Best, K., Kootstra, G. and Murphy D., (2010) Design Management and Business in Europe: A Closer Look, Design Management Institute Review, pp.26-35. 6. Bruce, M., Bessant, J., Design in business, Strategic Innovation Through Design, Pearson Education, 2001. 7. Christensen, C.M., Kaufman, S.P., Shih, W.C.,Innovation Killers: How Financial Tools Destroy Your Capacity to Do New Things, Harvard Business Press, 2010. 8. Fuxin, F., (2005) Evolution and Communication of Geometry Based Product Information within an Extended Enterprise, Volvo 3P, Doctoral Thesis, Luleå University of Technology. 9. Goffin,K., and Micheli, P., (2010), Maximizing The Value Of Industrial Design In New Product Development, Research Technology Management, September- October, pp.29-37. 10. Gupta, A.K., Ray, S.P. and Wilemon, D., 1986. A model for Studying R&D – Marketing Interface in the Product Innovation Process. Journal of Marketing, 50 (2), pp. 7-17. 11. Holston D., The strategic designer: tools and techniques for managing the design process, HOW books, 2011. 12. Jahnke, M., (2008) Design Methodology as a Foundation for Improved Innovation Capability, International DMI Education Conference, Design thinking: New challenges for designers, managers, and organizations, 14015 April, 2008, Paris La Defense, France 13. Jahnke M., Loft M., Från Fråga till Färdig Produkt,, 2011 14. Johansson, U., Svengren, L., (2002). The Logic of relationships in Strategic Innovation. On the design process, its management and link to competence, rationality and exploitation in corporate value creation. EURAM (European Academy of Management), Stockholm. 15. Johansson U., Svengren L., Mötenkring design: omrelationermellan design, teknik och marknadsföring.,Studentlitteratur, 2008. 16. Kahn, K.B., (1996) Interdepartmental integration: A definition with implications for product development performance. Journal of Product Innovation Management, 13 (2), pp. 137-151 17. Lawrence, P.R. and Lorsch, J.W., (1986) Organization and environment: managing differential and integration. Boston, MA: HBS Press. 18. Lockwood, T., (2010) Design Thinking in Business: An Interview with Gianfranco Zaccai, Design Management Institute Review, Volume 21, Issue 3, September, pp.16-24 13
    • 19. Lockwood,T.,(2009),Transition: How to Become a More Design-Minded Organization, Design Management Institute Review,Vol. 20, No. 320. Noda, T., Bower, J.L.,(1996) Strategy making as iterated processes of resource allocation, Strategic Management Journal, Vol. 17, pp.159-19221. Olson, E.M., Walker, O.C., Ruekert, R.W. and Bonner, J.M., (2001). Patterns of cooperation during new product development among marketing, operations and R&D: Implications for project performance. Journal of Product Innovation Management, 18 (4), pp. 258-27122. Ruekert, R.W., (1987) Marketing’s Interaction with Other Functional Units: A Conceptual Framework and Empirical Evidence. Journal of Marketing, 51 (1), pp.123. Sompff, G., n.d, Being part of it- design inside NPD teams, Department of Industrial Design, Océ Technologies B.V., Netherlands. 14
    • AppendicesAppendix ADesign innovation: result of cooperation Unilever and Ferarri designers (Pininfarina) Fulvio Guarneri, Vice President Marketing Home & Personal Care Russia In the interview with Mr. Fulvio Guarneri the NPD procedures and their effectiveness in order to create new products were discussed. Unilever is basically marketing driven company with user-centered approach. Its principle is as follows: to support 1 engineer 10 marketing specialist are required. This fact caused by the necessity to adapt products to local preferences and tastes Globally responsible for new products Innovation R&D department is supported by local division management (ice-cream, food, beauty and health care). Marketing is one of the core departments that evaluate innovations and new design. The company is characterized by high level of bureaucracy but to make the processes transparentit uses IPM software (Innovation Project Management) where CEO of the company can seeonline and check all innovations. To develop new design Unilever always uses external agencies,and for different segments it engages various actors. For the new design of toothbrush thecompany had marketing survey according to which possible end users were asked about theirfeedback of the product’s high-tech design. The survey was organized in Italian market that’swhy the most probable supplier was Pininfarina. When the agreement between these 2companies was reached, in Unilever the internal process from innovation stages was started:ideas generation, feasibility study, capacity and market identifying (launch).Unilever internal process has gates with quantitative and qualitative tests and techniques arefocused on customer feedbacks. For example, on the first stage they check product by focusgroup that consists of approximately 300 customers (depends on the country). Each concept hasits score. The duration of a good project is 9 months. Probability to success in each step is 38%,42%, 8%, 12%. During all the stages Unilever works with the same team of designers, it meansthat the same designers make the product, package, materials for commercial. 15
    • Appendix BBusiness processes modeling Fig. 5. Example of business processes modeling in NPD, simplified figure for package designBottom blocks are main actors with arrows that support the process (required human resources).The main chain is sequence of processes. After each stage the result is documented for thefollowing proceeding in the next phase. According to IDEF0 all processes should be supportedby internal standards and templates (gaps) to formalize the output in each block of processes. 16
    • Appendix CCommunication models Fig. 6. Communications between the actors, “As is” model. Lines mean the strength of connections. Fig. 7. Communications between the actors, example of “To be” model 17
    • Appendix DVolvo Exhibition Fig. 8.Volvo Exhibition/Show room space modelAppendix ECarlsberg Group case Russian market for Carlsberg Group is untypical because of customer vision. New products driven basically by design of the battle that’s why NPD focused not on the new taste but on the new forms and brand reflection. For this market was implemented complicated glass battles which reflect innovation design and visual effects. Design of new glass bottle introduced based on sensetive observation of customer vision. The main point to have angle in case of Tuborg is take brand name horixontal during drinking. 18