Design and Design Management in Nokia

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Design and Design Management in Nokia

  1. 1. Design and Design Management Past and present of Scandinavian Design and Nokia Sandra Cecet, 4118782 Marcela Izaguire, 4141652 Sanya Khanna, 4122844. Gunjan Singh, 4118707 Mart Veeken 1269976 Master SPDABSTRACT in a complex hybrid practice of Design Management.Design as a discipline is young and dynamic, but the Design Management is an academic area that straddlesimpact of design over society and cultures has changed the disciplines of design and management, as well asa lot over the decades. It has moved on from being the practice of managing designers and the emergingbeautiful wallpaper patterns to solving problems for corporate interest in the design concept. (Johansson andagriculture and corporate strategies. The authors trace Woodilla, 2008). Managing design and incorporatingthe journey of design and the evolution of design design thinking in management practices have emergedmanagement and the role it plays in the success of an as the present day success mantras.organization. They study, why and how Nokia as a This paper studies the impact of efficient designcompany with a strong design and cultural background management on organizations over a period of time andand holistic approach go wrong in managing and we also look at how design education is evolving to risepositioning its future ( design and) product strategy ? up to it. We focus on Scandinavian design, itsDespite the achieved pinnacles of growth and success influences and how they are trying to incorporatewhy couldn’t keep up with the new market trends and is design, business and technology to propagate a crossgoing downhill? functional innovative approach Being a FinnishKeywords company, which takes a lot of inspiration from the Scandinavian design philosophy, we studied Nokia as aDesign, Design Management, Scandinavian Design, case to illustrate the importance of efficientNokia. management of design and need for design (driven innovation) thinking in management.INTRODUCTIONThe meaning of Design has evolved over the years and DESIGN AND DESIGN MANAGEMENTits contribution has graduated from being a surface As Design slowly demarcated itself as a separate streamdecoration to the driving force behind renewing of knowledge from art and architecture, tracing the birthorganisational strategies (Verganti, 2009; Ravasi and history of design is quite complex and is still openLojacono, 2005). Different cultures all over the world to a lot of discussions.developed their own distinct style of design likeScandinavian Design, German Design etc and in doing According to Krippendorf (1989), the etymology ofso influenced each other as well as other disciplines design goes back to the Latin de+signare which meanswith their practices. We try an derive from, how the making something, distinguishing it by a sign, giving itinfluence of a culture is reflected in the design significance, designating its relation to other things,philosophy and management of a company and how it owners, users or goods.is represented in its products. One may say that one of the biggest milestones inDesign and Management, as two different paradigms or evolution of design was the setting up of the classicalschools of thought influenced each other and developed school of Bauhaus in 1919. The World Wars lead to 1
  2. 2. slowing down of the design activity but in the 1950s Dunne and Martin (2006) present the reasons andthere was a rise in the demand for designers. Many advantages to involve design thinking into the field ofdifferent universities in Europe and America started to management and discuss the feasibility that thisteach Industrial Design. Apart from Germanic Bauhaus thinking can address the problems affecting businessdesign, American design and Scandinavian design schools. Designers visualize a managerial problem as aemerged as other schools of thought. Eventually, design system of structures, patterns and events, andcame to be regarded as an important asset in the success understand the impact of changes of one component onof products, organization and brand identity. Gradually, the others, and on the system as a whole. The designdesign managers like Stefano Marzano, now, CEO thinking business approach is currently presented inPhilips Design, pioneered brand repositioning and successful companies and, the important fact is that it isstrategy formulation and re-emphasized the potential different from the conventional management thinkingrole of design. taught by business schools.Traditionally, design management was seen as limited At present, there are more than 60 universities aroundto the management of design projects. However, over the world, which are teaching Design Management andthe time it has developed to other aspects of the many business universities, which are integratingorganization, on functional and strategic level. design courses as part of their academic structure.Nowadays design is a strategic asset in branddifferentiation and product quality. Effective design SCANDINAVIAN DESIGN, DESIGN EDUCATION,management is not a panacea for a company, but it INFLUENCES ON OTHER DESIGN CULTURESsignificantly contributes to success. One of the major styles of design that emerged in theKathryn Best (2010) captures this term as “the 1950s was Scandinavian design, which started from themanagement of the relationships between different countries of Denmark, Norway, Iceland, Sweden anddisciplines (such as design, management, marketing and Finland.finance) and different roles (such as clients, designers,project team and stakeholders).”She mentions that According to Halen and Wickman (2003), Scandinaviandesign management deals with the question of how to Design became a worldwide term when the exhibit ofbring people, projects and processes together in a ‘Design in Scandinavia’ travelled across North Americacollaborative way, which forms a financially viable and for three years, 1954-57. This exhibition played adelightful experience. highly influential role in the development of a new type of modernism in the USA.   ’Design in Scandinavia’ wasCooper and Press (1995) state that ‘design management a tremendous success with the commercial aspects, as itis the application of the process of management to the stimulated a strong buying interest on part of theprocesses of innovation and design. They add an American consumers. After 1954, more than 3000intriguing aspect to the management of design that it ‘is retailers were handling decorative items made inabout forecasting passion for betterment and linking it Scandinavia.to the fulfillment of corporate goals and profitability.’By the words ‘passion for betterment’ they mean Scandinavian design as a design philosophy emphasizespassion for things, for the people who use these things, on simple designs, minimalism, functionality and lowfor their quality of life and aspirations. cost mass production. It is based on the idea of beautiful and functional everyday objects made affordable to all,The term design management includes a semantic and not just the rich and powerful. This acted as thecontradiction and can be interpreted in two different core theme in development of modernism andways: (1) managing design and (2) designing functionalism, and was seen completely realized post-management (BolandandCollopy, 2004). This WWII (World War II).difference refers to the traditional understanding ofdesign management as well as to a relative new Finnish design played an integral and influential part ofapproach of integrating design thinking as a mental Scandinavian design, and was marked by its closenessconcept in different business functions. to nature. Represented by an honest and open feel for materials, stark simplicity, and refined frugalityDesign thinking is the mental process and way of alongside the unrestrained and exuberant joy of creationreasoning that designers use. This results from the (Abrams, 1982).nature of a project - based workflow around wickedproblems. Nokia problems could be described as Finnish design is based on ancient folk traditions,‘wicked’ in nature. Wicked problems are defined as which, over the centuries, have developed from the“class of social system problems which are ill- interaction between the ecology of the country and theformulated, where the information is confusing, where national character of its people. In design, this qualitythere are many clients and decision makers with manifests itself in respect for materials and for organicconflicting values, and where the ramifications in the forms. Since high and reliable functional and aestheticwhole system are thoroughly confusing”. (Churchman, standards have been attained in household goods, the1967) present trend is towards solving specific problems: special equipment needed by the disabled, aids for old 2
  3. 3. people. The prominent feature of Finish design today iscreating a well-planned environment that is suitable foreveryone. These values reflect the new age term of’ Case Study Nokiauser centered design’, which is practiced by the How Nokia grew to a global giant – Example ofFinnish designers and forms an integral part of their entering the Emerging Marketsdesign philosophy. Nokia started in the GSM business in the middle of theJohn Kao (2009) identifies Finland as the second 90’s when telecommunication (telecom) was cominginnovator country worldwide. This asks for creation of up. Nokia entered emerging markets as one of the firstan education system that supports innovation in all and became a world leader in the telecom market. Apossible aspects of knowledge. A “Design Factory” few factors contributing to the quick development ofthat will focus on human centered or universal design the telecom were the open competitive market due tofor products that can be used by any adult, regardless of deregulation in the national telecommunicationage of physical ability. So, it is not surprising that monopoly and the rapid growth of the GSM network indesign management is included in as university 1991(2)programme in Finland. External factors alone were not responsible forThe Finnish holistic approach to innovation manifests success, internal decisions led to growth of theitself in the form of the Aalto University, which the company too. Key elements such as continuousresult of the merger of three established, universities: investments in R&D created a reliable technology andHelsinki’s School of Economic (HSE), University of simplified it for advantage in economies of scale.Art and Design Helsinki (Taik), and University ofTechnology (TKK). TaiK is considered one of the Importance of design for Nokiapioneers in the diffusion of Design Managementeducation. In 1991, it founded the Institute of Design When Nokia started to design their mobile phones theyLeadership and Management and established an focused on differentiation of their products. Theirinternational training program. Furthermore, it unique selling point was the personalization of theorganized the first conference focused exclusively on phones. According to Toni-Matti Karjalainen (2003) theDesign Management issues. This program has evolved mobile phones were designed for “people with a socialinto the International Design Business Management character” and the design was an addition to theProgram (IDBM), which is currently a part of the Aalto software that Nokia adopted. Each phone in the productUniversity. line had it’s own characteristics starting with the Nokia 3310 as a basic phone for the private market.As a Finnish company, Nokia is a practical example ofthe Finland large-scale initiative to develop an An important feature of the Nokia mobile phones wasinnovation system combining academic collaboration, the adjustable cover (Best, 2010). In this way theresearch institutions and structures for business in customers could choose their personal design. Thesupport of an overall national innovation strategy. design itself was not too edgy, and the phone was affordable for most customers. Due to use of low costSince 2006, Nokia has been working with a global materials with high durability and avoidance ofmultidisciplinary design unit by forming teams in expensive solutions, the cost price was kept low. Theindustrial design, materials specialists, psychologists, recognizable parabolic lines in which buttons wereresearches, anthropologists, engineers and interaction arranged almost became an icon for mobile phones. Notdesign, all guided by a design management team. Based only the physical design gave success to the product,in four main design studios in Finland, UK, China and also the interface design contributed to the success ofUS, these global teams are responsible for the entire Nokia. New users didn’t find them selves lost, and itdesign process, from strategy and conceptualization to soon became the favorite first phone.product development for Nokia’s complete productportfolio. This form of organizational structure driven Design Management of Nokiaby design management remarks the fact that Nokia has The success of the Nokia products came initially frombased design as its core competence to innovate in the the decisions and strategies of the management team.digital mobility market. Nokia focused a lot on R&D and had up to 50% of patents in the mobile market (Boland, 2004). They followed a strategy of penetrating in niche markets and then expanding in them. The management of Nokia chose an aggressive way of competing by producing a lot of different mobile devices for each niche, which they could easily expand with sequels. Unlike companies as Motorola and Samsung, who expanded their technology in other classes, Nokia remained focused on the broad mobile market. 3
  4. 4. Besides hardware, Nokia adapted to improvise their user interface (UI). Initially in the mobile phone market, softwareinterfaces were built up from scratch but Nokia adapted to user-centered approach for their newer devices. Productdevelopment time was cut from years to months; resulting devices looked less intimidating pieces with a human touch.Introduction in the Asian marketApart from Europe and the US, Nokia faced great success in Asia where they soon became market leaders (Churchman,1967). India is a great example of how Nokia captured this emerging market. Differences from the developed world actedas good triggers. The hot-dusty climate and lack of electricity in some parts were problems that emerged after extensiveresearch. Nokia responded to this with dust-proof and none slippery covers. Nokia 1100, regarded as the ‘Made in India’phone, supported a built in flashlight. This was a huge success in the mass market, and sold epidemically acrosshinterlands. Above all, Nokia entered the market with great and relevant communication campaigns for India.How could competitors like HTC and Apple catch up quickly with NokiaNokia with its high-end business phones like the 9000, was the first tosupport smart phone functions like navigation, etc., but was not a bigsuccess due its size and heaviness. After that they created another failure,the Nokia N-Gage because the focus was too much on gaming (it was a mixbetween a Gameboy and a Smartphone). N-Gage Nokia 9000 In 2006 Nokia (50,2%) was the leader in Smartphones and Symbian was the leading OS (Operating System) of Smartphones’ (67%), and the take over happened. In 2007 Apple entered the market with a new product, the Iphone (Cooper, 1995). Besides the capacitive touch, its product value came from the iTunes music and video service. This service was a huge success with the existence of Ipod, and became an added value for people to find this integrated with a mobile phone. Next came the Application (apps) store, which gave freedom for developers to create for the iPhone. Users loved the thousands of free and paid apps. Symbian was facing issues with the programming of newer interfaces. Though Symbian devices still were market leaders with the S40 platform for lower end devices, S60smart phones started loosing market share.Iphone OS and android were new open systems; Nokia still invested money and time on developing Symbian to more UIsupportive versions like Maemo, and then came the collaboration with Intel for MeeGo. These were highly unstable OS,and reduced product delivery time for the upgraded interactive features. In the run to become market leader ofSmartphone’s, Samsung switched to Android. Not much later, also Ericson choose Android as their default OS.The usability of modern devices depends largely on applications (Dorokhova, R., et al., 2008). The problem of Symbianwas that they were too late for developers to create applications. At the time that Symbian became an open system,Android and Iphone already had thousands of applications in their app store, which were reasons for customers to buythese phones. Another aspect to consider is the approach that Apple, HTC and RIM took with respect to the one taken byNokia. Apple for the better part of its existence has been a computer manufacturer. They developed a mobile device witha top down approach such that the device is a stripped down version of a desktop computer. This approach helped themaddress to consumer needs for speed, reliability and processing power. HTC, another device manufacturer started with theaim of catering to the high-end smartphone market and released its phones on multiple platforms and thereby addressing alarger but segmented group of consumers. RIM focused on addressing the needs of a corporate and business user. Theyintegrated their services such that such class of users can easily sync up with work even while on the move. Nokia did notchange its approach to address the changing needs of the smartphone user. It still retained its old approach of offeringdevices bundled with a lot of features but without focusing on user segments. 4
  5. 5. Nokia is collaborating with Micrsoft to launch smartphones with Windows 7 mobile as the OS. Meego is not the preferredOS anymore since it failed to live up to its billing. The stability and features of the platform has taken up too much timeand resources and they are still under progress.Why was Nokia a success in the mobile market but failed in the Smartphone market?Nokia focused on R&D to create affordable phones with a well-designed interface. It chose convergence of mobiletechnologies, as opposed to divergence, resulting in highly reliable and technologically superior phones. The developmentprocess time was highly reduced so that it could easily adapt to different markets. The key factor for success was theability to adjust to change. This was seen rather less emphasized in the case of new touch-based technologies.Nokia entered the smartphone market early and gained unprecedented success. Nokia invested heavily on Symbian, theOS behind its smartphones. However, the very inherent qualities of Symbian that spelled success for Nokia in the earlystages became the cause of its doom. Symbian OS was essentially designed for devices with features such as non-touchUI, medium resolution screens, limited processor speeds and extended battery life. Mobile hardware in the late 90’s wasstill evolving and Symbian suited such class of hardware. However, with the mobile market growing at a tremendouspace, mobile hardware technology started growing at an equivalent speed. Rapid progresses ensured that by mid of 2000,a mobile device could easily be compared to a fully functional computer. Newer mobile players created or adopted OSsuitable for such advanced hardware. However, Nokia decided to pursue with its old Symbian OS, which by now lookedragged and horrendously slow. Although being a firm believer in change, Nokia failed to react to new competitors. Thefailure to react to consumer needs and offer seamless web based and other services started to spell doom for Nokia’s profitmargins and its market share.Thus, though the decisions of management led to a very big success in the 90’s, the same design decisions in the 2000resulted in loss of market share. Adjustment to change was a key factor when Nokia entered the mobile market. Theyfocused on R&D to create affordable phones with a well-designed interface. Instead of diversion of technology theychoose to converge in different aspects of the mobile technology that resulted in high reliable phones. The developmentprocess time was not seen kept consistent. Following products came along with faltered time-to-market plans, E.g. N8was launched a year than it’s planned release. And contributed to loss in smartphone market share.DISCUSSION Nokia did balance out technology and design-drivenReason for success for Nokia was their convergence in innovations with their focus on user-centered design, soR& D so that technology was made reliable. The user what went wrong? The market-driven company failsdriven design was the key to success. Nokia created when the market fails, and in this case the Smartphoneniche markets and designed on user needs and market made a shift in the mobile market. Nokia, thatrequirements. They also had a good sense of marketing once dominated this space, as the introducer did notand branding. But this strategy is not the key to all- adapt to the dynamic market, instead believed that theround success as we have seen in last years. They relied market would adapt to it. This was surely provedheavily on Symbian that worked well on then available wrong, as the competitors like Samsung and Applelow hardware competencies, but it failed to deliver user came in to grab this opportunity from Nokia’ s hands.and designer aspired interactions with even betterintegrated processors. The strategic product decisions that made Nokia a global leader in mobile phones were based firmly onThe key driver of Nokia’s success was their focus and market and user trends. However, when it reached itsexploring power in their own technology. Where others pinnacle,focused on other technologies, Nokia specialized on Nokia believed in its own offered OS so much that ittheir technology that resulted in a reliable phone and a became blind to user aspirations and ignored otherstrong brand. But this tenacious way of approach approaches taken by new entrants in the market forbecame dangerous when they entered the Smartphone quite a long time. While these new players built uponmarket. The stood focused on their own technology,which had a backlog on the Iphone and Android their strategy and garnered market share, Nokia with itssystems. The gap was never caught up, but still they rigid design strategy kept losing till it realized that thekept specializing in their Symbian OS. Therefore the market had radically changed and found it lagging waydriver of success here became the driver for failure. behind the new players. 5
  6. 6. CONCLUSION portfolio. Can it be argued upon as an extension of theManagement of Design plays an integral role in shaping definition of Scandinavian design; where in userup an organization’s philosophy and thereby steering it experience contributes to the overall product?towards its success or failure. Inculcating companyculture in its employees and transmitting it to various REFERENCESorganizational levels across the globe is no mean task. 1. Aalto University, School of Art and DesignNokia is a good example that culture does influence in (March 22, 2011)the design management of a company. The company http://www.taik.fi/en/has successfully imbibed key elements of the Finnish 2. Abrams, H.N. Scandinavian Modern Designculture in the company matrix. Design management andthinking are slowly being incorporated in the fabric of 1880-1980. New York, 1982corporate business and traditional management. So a 3. Best, K. Fundamentals of Designquestion arises, does this philosophy apply in the Management. AVA Publishing, 2010emerging markets? If it does then how should 4. Boland, Richard J.; Collopy, Fred (2004).companies operating in such markets leverage it to their Managing as designing. Stanford, California:advantage? Stanford University PressAnother interesting insight from this case is the inter- 5. Churchman, C. West, "Wicked Problems",dependency of design and technology in a tech-driven Management Science, Vol. 14, No. 4,company for meaningful outcomes. Both need to go December 1967. Guest Editorial.hand-in-hand. Nokia User Interface and product 6. Cooper, R.; Press, M. The Design Agenda.experience, regarded as the most user friendly, failed todeliver due to lack of proper support from the OS. Wiley, 1995Motorola failed because its UI was not intuitive even 7. Dorokhova, R., et al. (2008). Evaluation of Modernthough it had high quality hardware. The lesson to learn Mobile Platforms from the Developer Standpointis to read the market well and adapt design to cater to 8. Dunne, D.; & Martin, R. (2006). Designthe market. The consumers of design are the users; Thinking and How It Will ChangeUser Centered is a concept that emerges from Management Education: An Interview andScandinavian philosophy and its influence is so Discussion. Academy of Managementimportant that even at this moment it is a KEY to Learning & Education 512–523success. 9. Halen, W. Wickman, K., Scandinavian DesignAnother interesting question to ponder, how are Beyond the Myth. Fifty years of design fromdifferent companies addressing consumer needs and yet the Nordic countries. Arvinius Förlag/Formdeveloping holistic services and working on design Förlag, 2003monopolies? iPad has created a vibrant tablet market. 10. Häikiö; Martti Nokia - the inside storyHow is it the most successful product in its segment? Is 11. Johansson, U.; Woodilla, J. (2008).Towards ait because of the product-services mix or some other better pragmatic partnership between designreason? How will this tablet market change thecompetitive market for hand held devices? and management. International DMI Education Conference. Design thinking: New challengesAlthough design across different schools of thought has for designers, managers, and organizations.a similar basic tenet, one of the primary reasons that Cery-Pointoise, France: ESSEC Businessthey differ is the influence of culture. As pointed out in School.the paper, although the basic principles of American 12. Kao, John. (March 2009) Tapping the World’sand Scandinavian design are same yet they differ vastly Innovation Hot Spots. Harvard Businessbecause of the type of society, one capitalist and the Review.other socialist. It cannot be said that American design 13. Karjalainen, T. M. Strategic Brand Identityphilosophy is the “correct approach” just because Appleis hugely successful in today’s mobile market. It is and Symbolic Design Cues (2003)worth to note that Scandinavian design philosophy was 14. Krippendorf, K. (1989). On the Essentialhugely successful just a decade earlier. This interesting contexts of artifacts or on the proposition thatrelation is visible between Scandinavian design design making sense (of things). Designinfluence in America in the first half of 20th century Issues, Vol. 5, No. 2 (Spring, 1989), pp. 9-39.and Nokia now. This leads to our final proposition for The MIT press.future research, as we believe Apple imbibes the 15. Lindholm, Ch.,et al. Mobile usability: howScandinavian design elements under the ideology ofmodern design. The question to ponder over is that, are Nokia changed the face of the mobile phonepatterns of this cultural influence found in 16. Nokia Company websitecontemporary outstanding products, which do not http://www.nokia.com/about-originate directly from Scandinavian culture, e.g. Apple nokia/company/story-of-nokia 6
  7. 7. 17. Peters, T., Design (Tom Peter’s Essentials), 22. West, J.; Mace, M. Browsing as the killer app: Dorling Kindersley, 2005 Explaining the rapid success of Apple’s iPhone18. Press Nokia (March 11, 2005) 23. Zi-Lin He et al., Entry and Competitive http://press.nokia.com/ Dynamics in the Mobile Telecommunications19. Ravasi, D., Lojacono, G., (2005). Managing Market design and Designers for Strategic Renewal. 24. http://www.themarketers.in/nokia-1100-the- Long Range Planning 38. first-made-for-india-mobile-phone/20. University of Art and Design Helsinki (April 2010) 25. http://tweakers.net/nieuws/72879/chaos- 125 years history of TAIK rondom-ontwikkeling-is-reden-van-uitstel- http://www.uiah.fi/opintoasiat/history2/12 meego-hardware.html 5years.htm 26. http://research.nokia.com/open_innovation21. Verganti, R. Design Driven Innovation: 27. http://www.nokia.com/NOKIA_COM_1/Abou Changing the Rules of Competition by t_Nokia/Sidebar_Teasers/Backgrounders/nokia Radically Innovating What Things Mean. designbackgrounder.pdf Harvard Business Press, 2009. Boston Print. 7

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