The Challenge of Building a GreatCorporate Design OrganizationBy Jeneanne Rae
Commoditizing global markets as well as                 Know the difference between design thinkingincreasing sophisticati...
However, if stock price can be viewed as a proxy        design work streams seamlessly integrate withfor the impact of des...
embraces the required change.                         design culture because they effectively become                      ...
Author BiographyJeneanne RaeJeneanne is a nationally recognized thought leader on innovation management and designstrategy...
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The Challenge Of Building A Great Corporate Design Organization (White Paper)//Motiv Strategies


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"The Challenge of Building a Great Corporate Design Organization"

White paper from Motiv Strategies CEO Jeneanne Rae

Most executives today now recognize that design can be a source of competitive advantage. What most executives DON'T recognize is how to manage design strategically, how to use design to win in their industry, and how high-performance design organizations are organized to deliver great results.

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The Challenge Of Building A Great Corporate Design Organization (White Paper)//Motiv Strategies

  1. 1. The Challenge of Building a GreatCorporate Design OrganizationBy Jeneanne Rae
  2. 2. Commoditizing global markets as well as Know the difference between design thinkingincreasing sophistication among consumers have versus designled many leading organizations to make building Much has been made of using design methodsinternal capabilities for design a priority in recent (commonly referred to as “design thinking”) foryears. While design has always been solving complex business challenges. In fact, thefundamental to industries such as fashion and term has gotten so much coverage lately I fearconsumer electronics, it has now spread to non- that many people are starting to think abouttraditional settings such as airlines, consumer design and design thinking as interchangeablegoods and even governments, where it has terms when they are not. Design thinking isbecome the driver for differentiated end-to-end methodology that is taught in certain types ofcustomer experiences as well as innovation. design schools, notably industrial design and architecture; therefore only a subset of allToday most executives now recognize that designers are bona fide design thinkers throughdesign can be a source of competitive their academic training and practice. While betteradvantage. What most executives DON’T use of design thinking methods should berecognize is how to manage design strategically, desirable for any corporation to use in solving itshow to use design to win in their industry, and most wicked problems, design thinking will not inhow high performance design organizations are and of itself drive better design.organized to deliver great results. This article,based on years of leading assessment and Hiring superstar designers is not the answerchange management efforts with global A common theme that we’ve observed over thecorporations, reveals what leaders need to know last several years is that senior executives whoto start to build design into the DNA or their are hot on pursuing design as a businessorganizations. strategy coerce a seasoned design executive into their companies only to find themselvesAlign goals and strategy frustrated twelve to eighteen months out whenThe most effective design organizations set goals they haven’t become the “Apple of their industry.”that are aligned with their organization’s Worse is the situation where corporations gocorporate strategy. When Mark Hurd, former through the time, expense and trouble to hireCEO of HP, went on a cost cutting spree, its multiple superstar designers only to have themdesign organization heroically delivered over leave within a short period of time frustrated by$200 million a year in savings through the system and lack of results they are able tostandardization of the HP “jewel” logo that produce. Not only does this situation beget veryadorned its vast array of equipment. Having a low returns on substantial investments, but alsoclear design vision and strategy like this allows a significant product disruptions and low morale fordesign organization to know what it is shooting the people left behind.for and to put in place the appropriate talent andother resources to execute the plan. However, While getting the best talent is an important goal,getting the vision and strategy to align with the creating an environment where design can thrivetalent and resources required to execute is most should be the more important focus.often where things go awry. Measuring the return on investment forIn nascent situations, neither the design design is a long-term pursuitexecutives nor the executive leadership team Skeptics always want to know why they shouldunderstand the extent of the organizational make such significant investments in design.development effort required to support the Unfortunately, this is a difficult question tocorporate strategy. Consequently, progress is answer. Companies such as Nielsen thatoften slow and more painful than it needs to be. analyze marketing mix investments do notSimple tools like organizational road mapping account for design. The impact of design canand the resourcing to support the plan can set span a variety of activities. And measuringthe right course for transformation, yet I’ve seen emotional impact, or “delight factor” of design isfew companies treat design capability building poorly understood in corporations that do notseriously enough to merit this type of attention. invest heavily in the social sciences behind whyWhy? people choose or don’t choose their 2
  3. 3. However, if stock price can be viewed as a proxy design work streams seamlessly integrate withfor the impact of design in the marketplace, the larger set of processes that constituteconsider the performance of this bucket of ten production in their organizations. Whether thefirms who have invested significantly in design process is budgeting, innovation, engineeringduring the last ten years. Using an approach development, branding, supply chainsimilar to how performance of the S&P 500 is management, or something else, design has anderived, our analysis shows that a $10,000 uncontested role and decision rights. It is thisinvestment in our design index of diverse design- “devil in the details” approach where design cancentric companies would have yielded a 64% make its strongest contributions.return whereas an investment in the S&P wouldhave yielded a -22% return. The outsized returns Mature organizations aspiring to use designfor design-centric organizations represent a strategically will find this state of nirvana elusivecollective set of design investments on the part of without significant intervention. The processeach firm as no one investment could possibly modification required is painful; managersdrive the type of momentum realized. Note: despise the usurpation of their former roles;Apple is not included in the list on purpose so design culture and training leave managersthat data is more normalized. unprepared for such organizational wrestling. Further, such far-reaching change cannot solelyGreat design leadership is important; but be design’s job. Any organization that wantsgreat change management is even more more and better design must make it a mandateimportant for its various functions to wholly embrace howIt is true that most high performance corporate design must work in order to gain the highestdesign functions have seasoned leaders who can benefit for what design can offer.command what it takes to make the “magic”happen for a multi-billion dollar, global enterprise. Organizations that do this quicker than most employ a range of internal help, not the least ofWhat is less known but also true is that a which is a senior leadership team whosehallmark of design-centric companies is that unwavering support ensures the 3
  4. 4. embraces the required change. design culture because they effectively become designers themselves when using the process.Companies that get the most from design relyon a culture of designAny organization that wants to leverage design Along with understanding design process,for strategic advantage needs to know that this achieving a culture of design means thatcannot be achieved overnight. A better way to everyone in the organization understands whatthink about this is to understand that you will be design is, how it is used for strategic advantageon a journey for many years -- maybe even in the organization, how and when designindefinitely given the pace of change today. One resources are used, what the work of designway to shorten that journey is to concentrate entails, and how design efforts should integratesome portion of the effort on building a culture of with the company’s production The best corporate design leaders areSignificant design capability building was champions in getting these messages across,underway for over a decade before Procter & especially in the early days of their tenure. In anGamble took up the challenge to teach design organization the size of Procter & Gamble, Coca-thinking to the greater organization. One R&D Cola, 3M, Johnson & Johnson, Kraft Foods, ormanager told me recently that it is now a Hewlett-Packard, where remarkable design“mainstream problem solving practice” for the transformations are presently underway, this canorganization. It is interesting to note while P&G’s be a difficult task. Nevertheless, individual anddesign function is responsible for the initiative; collective efforts like those mentioned here arethe practice of design thinking extends far making a difference every day in making thesebeyond the walls of design, and has greatly admired companies, as well as many others, thehelped thousands of its employees to embrace design leaders of the future. 
 Top Tips from the Author for Building Corporate Design Organizations:

 Consistently great corporate design is the product of the following elements:

 1. A vision and strategy that is well-articulated and understood by its
 2. Leadership that is capable and committed to driving its vision
 3. An organization that is structured and resourced for success
 4. A talent pool that is diverse in design disciplines and deployed at key points of

 functional integration
 5. A culture that embraces the myriad dimensions of design 4
  5. 5. Author BiographyJeneanne RaeJeneanne is a nationally recognized thought leader on innovation management and designstrategy. Rae was hailed as one of Business Weeks "Magnificent Seven Gurus of Innovation" inits cover story on the creative corporation. After receiving an MBA from Harvard Business School,Jeneanne has now spent twenty years mastering the art and science of innovation, includingspending seven years on the senior management team of IDEO. A columnist for Business Weekonline, Jeneanne writes on cutting-edge innovation topics. As an adjunct professor for nine years,she taught new product development and service development at Georgetown UniversitysMcDonough School of Business and currently teaches executive education through various topranked programs. Jeneanne can be contacted at:; 5