Design Driven Innovation – Bang & Olufsen an HBS case, powerpoint by Wesley Shu, Ph.D.

Bang & Olufsen You can watch a B&O TV for hours – and then you turn it on. The product itself is ‘experience’ – Wesley Shu

You can watch a B&O TV for hours – and then you turn it on.

The product itself is ‘experience’ – Wesley Shu

Issue Impact of iPod : extend into virtual space, not only physical form or function Extend to virtual space, where great design meant great software and network-based interaction with other products and services

Impact of iPod : extend into virtual space, not only physical form or function

Extend to virtual space, where great design meant great software and network-based interaction with other products and services

Issue This differed from B&O’s traditional expertise The company formed Idealab “ supplementary innovation” – a way of injecting new ideas into products from outside the traditional process Move away from designers’ near absolute control over products But how to decide the ‘right’ amount of change?

This differed from B&O’s traditional expertise

The company formed Idealab

“ supplementary innovation” – a way of injecting new ideas into products from outside the traditional process

Move away from designers’ near absolute control over products

But how to decide the ‘right’ amount of change?

Survived from Asian competition 1960s By allying with a group of architects & designers By focusing on ideas and design behind its products Emphasizing high quality

By allying with a group of architects & designers

By focusing on ideas and design behind its products

Emphasizing high quality

Design Style Influenced by Bauhaus and Scandinavian preference for clean lines

Influenced by Bauhaus and Scandinavian preference for clean lines

Bauhaus

Scandinavian clean-line

Scandinavian clean-line

2001 strategy to overcome difficulties Car stereo systems Mobile phone Hotel Luxury yachts

Car stereo systems

Mobile phone

Hotel

Luxury yachts

Vision (mission?) Statement Courage to constantly question the ordinary in search of surprising, long lasting experiences For Bang & Olufsen, design is far more than mere styling of existing products; rather it is the expression of an idea, the concept made conscious Business Model

Courage to constantly question the ordinary in search of surprising, long lasting experiences

For Bang & Olufsen, design is far more than mere styling of existing products; rather it is the expression of an idea, the concept made conscious

Self Position “ We see competition more in the recreational car or home, high-end furniture or luxury travel… We relate more to a BMW than to the generic product ranges of electronics giants.” Very hard to imitate – technology and material to support the unique design (cf. Philip, Fisher) Business Model

“ We see competition more in the recreational car or home, high-end furniture or luxury travel… We relate more to a BMW than to the generic product ranges of electronics giants.”

Very hard to imitate – technology and material to support the unique design (cf. Philip, Fisher)

Customer Vital core customers 80% revenue came from 800 to 1,000 customers in the U.S. Customer relations are important – CRM. Not only design, but the way the product works Business Model

Vital core customers

80% revenue came from 800 to 1,000 customers in the U.S.

Customer relations are important – CRM.

Not only design, but the way the product works

Designer – never in-house! Away from the influence of its daily business Not need to understand their industrial limitations, e.g., manufacturability Making Ban & Olufsen Products

Away from the influence of its daily business

Not need to understand their industrial limitations, e.g., manufacturability

Designer – never in-house! “ Designers have to be free to look in an unconditioned way at what’s happening in our society, how people live and furnish their homes…” Making Ban & Olufsen Products

“ Designers have to be free to look in an unconditioned way at what’s happening in our society, how people live and furnish their homes…”

Who Are the Designer A senior designer – British 3 external designers Competitions Good designers have strong personality Making Ban & Olufsen Products

A senior designer – British

3 external designers

Competitions

Good designers have strong personality

Design Competition “ When flat screen TVs started to take off, B&O launched a competition among nine designers from different parts of the world for ideas on what the B&O flat screen concept should be.” Making Bang & Olufsen Products

“ When flat screen TVs started to take off, B&O launched a competition among nine designers from different parts of the world for ideas on what the B&O flat screen concept should be.”

Designer Then, B&O attracts more talented designers. Making Ban & Olufsen Products

Then, B&O attracts more talented designers.

Process No standard process for product design and development Culturally evolved collaboration between designers, concept developers, engineers, and technicians Making Ban & Olufsen Products

No standard process for product design and development

Culturally evolved collaboration between designers, concept developers, engineers, and technicians

Process Close physical proximity to production departments Thesis by designers – antithesis by engineers – synthesis : one or two years Making Ban & Olufsen Products

Close physical proximity to production departments

Thesis by designers – antithesis by engineers – synthesis : one or two years

Concept Developers Bridge art towards the repetitive processes of an efficient industrialized manufacturing process Constantly question the ordinary Give hard time to manufacturing guys Making Ban & Olufsen Products

Bridge art towards the repetitive processes of an efficient industrialized manufacturing process

Constantly question the ordinary

Give hard time to manufacturing guys

Coming up with new ideas From designers From engineers – new technology inspiring designers From perceived needs to fill out the product portfolio Making Ban & Olufsen Products

From designers

From engineers – new technology inspiring designers

From perceived needs to fill out the product portfolio

Ideas from designers See how customers live, not ask what they want. Customers only know what’s already hot in the market. Go beyond customer expectation Making Ban & Olufsen Products

See how customers live, not ask what they want.

Customers only know what’s already hot in the market.

Go beyond customer expectation

Design – Prototyping Idea iterates until it has ‘substance’ – unique personality Product Development Life Cycle

Idea iterates until it has ‘substance’ – unique personality

Prototypes – product commitment Decision was made with the heart, not financial or technical considerations Product Development Life Cycle

Decision was made with the heart, not financial or technical considerations

Product commitment – development A dedicated project team formed Designers remained involved Concepts or development process may change if a convincing new idea comes up. Product Development Life Cycle

A dedicated project team formed

Designers remained involved

Concepts or development process may change if a convincing new idea comes up.

Some Products BeoSound 9000 originally unmanufacturable Took 5 years from the decision point to manufacturing BeoLab 8000 Originally a crazy idea BeoCom 2 New technology & material to support design, e.g., hydroforming used by Porsche Product Development Life Cycle

BeoSound 9000

originally unmanufacturable

Took 5 years from the decision point to manufacturing

BeoLab 8000

Originally a crazy idea

BeoCom 2

New technology & material to support design, e.g., hydroforming used by Porsche

Conclusion “ If you wanted to express power and determination as a manager here, it would be difficult, but if you allow a certain degree of freedom you get a very creative environment.” Product Development Life Cycle

“ If you wanted to express power and determination as a manager here, it would be difficult, but if you allow a certain degree of freedom you get a very creative environment.”

IdeaLab – B&O’s effort to digital world Goal: untapped or uncontested markets, network economy, media convergence (is iPod one?) The most challenging part is how to integrate into existing business environment IdeaLab

Goal: untapped or uncontested markets, network economy, media convergence (is iPod one?)

The most challenging part is how to integrate into existing business environment

Effort to integrate Find the way to communicate Follow existing way of communication Collocate chief graphic designer with concept developers at IdeaLand Demo facility without pushing designers to visit Supplementary functionality for existing products Patience! Usually took longer than anticipate IdeaLab

Find the way to communicate

Follow existing way of communication

Collocate chief graphic designer with concept developers at IdeaLand

Demo facility without pushing designers to visit

Supplementary functionality for existing products

Patience! Usually took longer than anticipate

Some B&O Products

Some B&O Products BeoLab 5 Loudspeakers

Some B&O Products

Some B&O Products BeoVision 7 and BeoLab 8000

Some B&O Products

Some B&O Products BeoLab 3

Some B&O Products BeoCom 2