00Cagan_FM.

qxd 5/6/05 9:21 AM Page i

The Design of Things

to Come
How Ordinary People Create
Extraordinary Products
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00Cagan_FM.qxd 5/6/05 9:21 AM Page iii

The Design of Things

to Come
How Ordinary People Create
Extraordinary Products

Craig M. Vogel
Jonathan Cagan
Peter Boatwright
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Library of Congress Catalog Number: 2005920661

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00Cagan_FM.qxd 5/6/05 9:21 AM Page v

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00Cagan_FM.qxd 5/6/05 9:21 AM Page vii

To Elizabeth, Melissa, Joshua, Benjamin,

Annabel, and Brayden—next-generation
innovators
00Cagan_FM.qxd 5/6/05 9:21 AM Page viii
00Cagan_FM.qxd 5/6/05 9:21 AM Page ix

TABLE OF CONTENTS
Foreword xiii
Preface What to Expect from This Book xxi
Acknowledgments xxix
Chapter 1: The New Breed of Innovator 1
The New Breed of Innovator: Pragmatic Business 2
The New Breed of Innovator: Global Brand and
Industrial Design 6
The New Breed of Innovator: Engineering and Advanced
Thinking 13
So Who Are the New Breed of Innovators? 17
Innovation Revealed 18
Chapter 2: Pragmatic Innovation—The New Mandate 21
A Mandate for Change 22
Pragmatic Innovation (and How It Differs from Invention) 23
Moving from Invention to Innovation at Ford:
The Redesign of the F-150 29
Innovation in Start-Ups 32
Manufacturing Quality—The New Commodity 37
Innovation—The New Mandate 39
The Global Dimension of Innovation 42
Surfing the Waves of Innovation 45
Chapter 3: The Art and Science of Business 47
Launching the Adidas 1 49
The Role of Marketing in the Early Stages of
Product Development 52
The Ambiguity of Figuring Out Winning Products 54
A Sound Basis for Vision (Yes, You Can Go with
Your Instinct) 55
A Process for Pragmatic Innovation 57
Identify an Area of Strategic Importance 58
Research People 59
Define the Opportunity 60
Define Design Criteria 60
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x THE DESIGN OF THINGS TO COME

Achieve the Criteria 61

Go/No-Go Decision 61
The Ground Rules: Understanding the
Innovator’s View of Procedures 61
Point 1: Thinking Required 62
Point 2: Innovation Yields Differentiation 64
Point 3: Don’t Stop at Success 64
Point 4: Motivation Needed 65
Chapter 4: Identifying Today’s Trends for Tomorrow’s
Innovations 67
Lead Users and New Technology 69
Apple: Trend Reader 70
So How Does One Read Trends? 72
Products Impacting Trends 74
In Reading Trends, It Is All About People 78
Designing the Mirra Chair 82
Chapter 5: Design for Desire—The New Product
Prescription 87
The Harry Potter Phenomenon 88
Form and Function 90
The Experience Economy 91
The Fantasy Economy 92
Fantasy in Everyday Products 94
Form and Function Fulfilling Fantasy 97
The Harry Potter Fantasy 98
Fantasy-Driven Products in Everyday Experiences 101
Chapter 6: The Powers of Stakeholders—People Fueling
Innovation 105
Lubrizol—from Technology to Product 107
The Lens of Powers of 10 112
Powers of 10 in Action 114
Powers of 10 One: Molecular 114
Powers of 10 Two: Blending 116
Powers of 10 Three: Blending Machines 116
Powers of 10 Four: System Operation 117
Powers of 10 Five: Community 119
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CONTENTS xi

Powers of 10 Six: Region 120

Powers of 10 Seven: Continent 121
Powers of 10 Eight: Global Environment 121
Scenarios Ensure That People Remain Real 121
Chapter 7: B-to-B Innovation—The New Frontier of
Fantasy 125
The Industrial Frontier 128
Fantasy in Industrial Products 129
RedZone Robotics: Going from Projects to Products 131
The Strategic Plan 134
Strategy One: Identify and Understand Stakeholders 134
Strategy Two: Planning the Product 135
Strategy Three: Planning the Corporate Approach to
Product Development 137
The Result: Sewer Repair and Beyond 139
The World Above the Sewer 142
Chapter 8: Making Decisions for Profit—Success Emerging
from Chaos 145
Complexity in the Decision-Making Process 147
Organizing the Decision-Making Process 149
The Butterfly Effect 153
Chaos Within Structure 155
Interdisciplinary Decision Making 156
Chapter 9: A Process for Product Innovation 163
New Balance 165
Innovation by Cooperation 166
A Case Study in Innovation for New Balance:
Four Phases of New Product Development 168
Phase I: Identifying Product Opportunities 169
Phase II: Understanding the Product Opportunity 172
Phase III: Conceptualizing the Product Opportunity 177
Phase IV: Realizing the Product Opportunity 179
Chapter 10: Creating a Blanket of IP to Protect Your Brand
from the Elements 183
Swiffer: A P&G Innovation Success 185
Why Is Swiffer Out Front? 187
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xii THE DESIGN OF THINGS TO COME

IP: Utility Patents 188

IP: Design Patents 189
IP: Copyright and Trademark 191
IP: Trade Dress 192
IP: Trade Secret 193
IP: Provisional Patents 193
Using IP for Brand and Product Life Cycle 194
Patenting a Product System 195
Patenting Product Manufacture and Delivery 197
IP in Summary 198
Chapter 11: To Hire Consultants or Build Internally—
That Is the Question 199
The Power of Design 201
Using Product Development Consultants 202
IDEO: The Starbucks of Product Design 205
The Consultant Menu 209
Product Insight: Customer Research and Design 211
Hiring to Balance Soft and Hard Quality 214
Managing Design 216
Epilogue: The Powers of Innovation—The New Economy of
Opportunity 221
The Power of the Individual 222
The Power to Redirect the Company 224
The Power to Expand the Market 225
The Power to Redefine Our Local Environment 226
The Power of Shifts in the Global Economy 228
The Power of the New Renaissance 230
Index 233
00Cagan_FM.qxd 5/6/05 9:21 AM Page xiii

FOREWORD
If there is one lesson from the dot-com craze and meltdown that will
endure (until the next time, anyway), it was this: A great idea is not
the same thing as a great innovation.
We saw some truly fabulous ideas come over the transom here at
Fast Company: There was, for a few shining months, balls.com,
proud 24/7 purveyor of any sports ball you could imagine, and
gesundheit.com, offering comprehensive relief for the allergy suf-
ferer. But these late, mostly forgotten sites didn’t deliver much in the
way of value. People didn’t need this stuff—not enough, anyway, to
pay the bills. Ordering pet food online and having it delivered to your
home was a terrific idea, but—no disrespect to the sock puppet—it
just wasn’t pragmatic.
Now consider Google, a dot-com survivor (needless to say) whose
dedication to innovation verges on the maniacal. A Google engineer
once explained to me the calculus behind temporarily adding a brief
pitch—“New! Take your search further. Take a Google Tour”—to the
site’s otherwise austere home page. Those nine words, Google knew,
comprised 120 bytes of data, which would slow download times for
people with modems by 20 to 50 milliseconds. But Google could also
measure precisely how many visitors took the tour, downloaded the
Google Toolbar, and clicked through for the first time to Google News.
At Google, an idea that provides no demonstrable value to cus-
tomers just doesn’t happen. The company is constantly testing new
features on its site. The ones that people use, that don’t degrade the
search experience, and that fit the business strategy—those are the
ones that stick. The others—well, they’re just ideas, and they disap-
pear. “We don’t show people things that they aren’t interested in,”
said another engineer, “because in the long run, that will kill your
business.”
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xiv THE DESIGN OF THINGS TO COME

The gearheads at Google are pragmatic innovators—exactly the

sort that Craig Vogel, Jonathan Cagan, and Peter Boatwright describe
in this book. They understand that innovation isn’t defined solely (or
sometimes, at all) by daring acts of technological invention.
Innovation is, instead, about providing advances that are valued by
customers.
The difference between the two was brought home to me several
years ago in Craig’s office, then (and, I assume, still) a crowded reli-
quary positioned at the intersection of creative destruction and con-
sumerism. The shelves were packed with old rotary telephones,
radios, coffeemakers, toasters, and Coke cans.
And with potato peelers. Here was the “Rotato Potato Peeler,” a
mechanical marvel that applied high tech to the low art of removing
a tuber’s skin. It worked—but it was cumbersome and ugly, and it
removed an eighth of an inch of potato flesh. The seven-dollar OXO
peeler, by contrast, was just an incremental advance on the century-
old mechanical standard. But that increment—a more comfortable
handle, a curved blade, a cleaner look—was valuable. It turned the
mundane into something enjoyable, even beautiful.
That’s the ballgame today. Not, What can you make? Not even,
What can you make that people will buy? But, What can you make
that will add enough value to people’s lives to sell profitably? That’s
why one of the coauthors of this book is a marketing guy.
Pay special attention in the pages that follow to the consumer
profiles that introduce each chapter. They’re important, because they
acquaint us with the central players in any discussion of innovation—
the people who buy and use your products. Note that they are not just
wealthy, well-educated professionals. Consumers of all stripes have
become, in the last two decades, remarkably savvy about design and
its value in our lives. If this book is about “how ordinary people cre-
ate extraordinary products,” it’s also about how ordinary people have
become design nuts. Call us the Target Generation.
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FOREWORD xv

It’s all too easy for companies to forget about their customers—
and easy as well to spot the results. (The Rotato! Just $19.99!) Do this,
obviously, at your peril: A new product strategy is not complete unless
you understand who these people are, how your innovation will
improve their lives, and what that change is worth to them.
If you don’t, some nimbler competitor surely will. Motorola and
Nokia dominated the growing Chinese cell phone market for years—
until a local outfit, Ningbo Bird, became a pragmatic innovator.
Instead of producing phones that were simply cheap, Ningbo Bird
began studying what Chinese consumers wanted—and making
phones that were sexy and easy to use. Its market share jumped from
5 percent to over 50 percent in just a few years.
So, which is it? Is your company a Ningbo Bird, or a Motorola?
An OXO, or a Rotato? A Google, or a gezundheit.com? This book will
help you understand your customers and then create products and
services that they want, products and services that are likely to be
great innovations and not just ideas.
Keith H. Hammonds
Deputy Editor, Fast Company magazine
00Cagan_FM.qxd 5/6/05 9:21 AM Page xvi
00Cagan_FM.qxd 5/6/05 9:22 AM Page xvii

ABOUT THE AUTHORS

Craig M. Vogel is a professor in the School of
Design and director of the Center for Design
Research and Innovation in the college of Design
Architecture, Art and Planning at the University
of Cincinnati. He has developed an approach to
design that integrates teaching and research. He
has worked with a variety of companies as a con-
sultant for new product development and strate-
gic planning.

Jonathan Cagan, Ph.D., P.E., is a professor of

mechanical engineering at Carnegie Mellon
University. His research, teaching, and extensive
consulting focus on product development, strate-
gic planning, and design. He has developed
team-based tools and computer-based techno-
logies to improve the process of design concep-
tualization.
Photo by Larry Rippel

Peter Boatwright, Ph.D., is associate professor of

marketing in the Tepper School of Business at
Carnegie Mellon University. His expertise and
teaching focus on new product marketing, con-
sumer marketing, and marketing research meth-
ods. In his research, Professor Boatwright has
developed new statistical methods, as well as
additional theories of consumer behavior.
Photo by Larry Rippel
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xviii THE DESIGN OF THINGS TO COME

The authors have worked with a variety of companies, including,

Procter & Gamble, International Truck and Engine, Respironics,
Alcoa, Kennametal, New Balance, Kraft Foods, Motorola, Lubrizol,
Ford, General Motors, Whirlpool, RedZone Robotics, DesignAdvance
Systems, and Exxon Chemical.
Professors Cagan and Vogel are coauthors of the book Creating
Breakthrough Products, which is a detailed approach to navigating
the fuzzy front end of product development.
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ABOUT THE COVER

Burnie is our animated robotic toaster, the one on the book cover.
You may be wondering why we put Burnie there, since he is not a real
product like the others in this book. These days, if a product team
walked into the office of their VP of New Product and said, “We have
just developed the world’s first walking toaster!” the answer might be
“Great! But can it walk on water?” Burnie represents the incredible
requests made of teams and individuals working in the area of new
product and service development. A walking toaster may or may not
be what the public wants, nor may it fit a company’s strategic plan.
The question is, “How do you know?”
In this book, we give many examples of real products. The teams
developed these products only after fully understanding their cus-
tomers’ needs, assessing the strength and boundaries of their com-
pany’s brand, considering how and how far they could extend the
brand, and thinking of their company’s strategic needs for innovation
and organic growth. A smart shoe, a device for cleaning floors with-
out water, a robot that is not a toaster but that does repair sewer sys-
tems, and a pickup truck that fulfills fantasy expectations are part of
the array of case studies and their corresponding methods of devel-
opment we provide to enable you to make the right choice in the
design of things to come.
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PREFACE

What to Expect from This Book

Two guys walk into a Starbucks and wave to a woman at a table. After
getting their lattes, they head over and join her.
Paul: Hey, Caroline, looks like you got here early.
Caroline: Traffic wasn’t bad today. Did you two come together?
Rick: No. We just happened to arrive at the same time.
How are you doing? How’s work?
Caroline: It’s pretty interesting these days. Today we had a
planning meeting to set objectives for the next few
quarters. We had a poor performance last year, and
budgets are getting cut. I was asked to reduce cost by
20 percent and increase profits by 150 percent. [She
smiles.]
Paul: Are these just goals to see how high you can jump?
Or are they somewhat realistic?
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xxii THE DESIGN OF THINGS TO COME

Caroline: It’s part of an ongoing internal discussion. We’ve gotten

really efficient at delivering high quality with decent costs.
But, you know, everybody else is pretty good at it now. So
the discussion is about what to do next. For years, we’ve
had the dual strategy of beefing up quality and reducing
costs, and that strategy has worked well for us. But now,
we’re pretty close to the efficient frontier, and everyone
else is catching up pretty quickly.
Rick: I know what you mean. We’re lost as to how to respond to
the latest competitor who is trying to drag everyone into a
death rattle on price. It isn’t like there is much more we
can do with our manufacturing costs or quality. I am a
black belt Six Sigma, and we’ve integrated the latest on
lean manufacturing into our StageGate process. Now that
we’re accustomed to putting out high quality at low cost,
we’ve settled back into our old bunkers. The sales force is
on our back to put out some new product that can com-
pete on cost. But we’re putting out great stuff, so we won-
der why sales can’t move product by just showing buyers
our quality difference.
Paul, now that I think about it, you guys don’t seem to be
in this cost battle at the moment. You guys are thinking
innovation instead of costs, aren’t you?
Paul: Yeah, I told you guys about the new CEO a while back.
He has a different focus. Still too early to tell what will
happen, but I have to say that there’s excitement in the air
that wasn’t there before. He believes that we can no
longer compete on price but instead need to be leaders in
innovation. A couple of weeks ago, he sent out a memo
with suggested reading. I read an article in Business Week
about the power of design. Usually, articles about design
just talk about industrial design and how they make prod-
ucts better. But this article was different. It said that
01Cagan_Preface.qxd 5/6/05 9:23 AM Page xxiii

PREFACE xxiii

product design means that everyone has to be innovative,

not just the industrial designers you hire. Another article
talked about the challenge of the growth of China, stress-
ing how companies in Asia are getting smarter, not just
cheaper, and that means innovation is the only way to
compete. He also sent some literature about programs
that a number of B schools are teaching on “entrepre-
neurship and innovation.” He is actually willing to support
us getting into those programs. Even he admits the inno-
vation seminars we are constantly attending can only get
us to the beginning of what we need to do.
I’ve not yet read the book The Design of Things to Come
that he suggested, but I’ve heard it has some pragmatic
ideas on creating profit and growth by focusing on cus-
tomer needs and desires, and that it has techniques that any
of us can understand and incorporate into our process….

Deconstructing Innovation
Everyone is talking and writing about innovation. It is the fuel of busi-
ness strategy. Design and innovation are words that are often used
together or interchangeably. Design for us is both a broad concept of
change through human problem solving and a word used to describe
specific fields such as engineering design, interface design, or indus-
trial design. The power of the new design for innovation is fueling an
engine of change that is driving the production of things to come. It
is the result of interdisciplinary teams, and it dynamically leads to
comprehensive solutions that consumers respond to emotionally, cog-
nitively, and then economically. Few books, however, provide an
understanding of how to deconstruct the process in a way that anyone
can use to turn a cost-centric approach into an innovation-driven
strategy. The challenge in design for innovation is to help everyday
people stretch and grow to accomplish extraordinary things.
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xxiv THE DESIGN OF THINGS TO COME

As authors from three different disciplines, we are strongly com-

mitted to understanding the innovative process. We repre-
sent three core areas that companies rely on for innovation of physical
products: business, engineering, and industrial design. As a result of
our diversity and commitment to the topic, we believe it is possible to
provide a distinct useful, usable, and desirable angle on the current
trend of how companies are growing organically through innovation.
We have developed an ability to see current and emerging issues
through three sets of eyes translated into one common transdisciplinary
voice. The result is something that can educate the novice and help
experienced practitioners in business alike. The potential in companies
is not just the ability to create a pool of talent and capability, but how
to give diverse teams of people the power, methods, and courage to be
creative and to explore new opportunities. As our own example of the
power of teams, writing this book required significant give and take for
each of us as individuals. The result is a product that is better than any
one of us could have written in isolation.
In our roles as university professors, our work has evolved into a
balance of research, consulting, and teaching that has allowed us to
become an example of what we talk about in the book. We are not just
reporting what we have observed; we have lived it. We know what it
is like to manage interdisciplinary teams of bright, headstrong people
and help them produce innovative and patentable solutions through
our methods. We have impressed company executives with the abili-
ty to take a vague discussion of possible new markets and, using an
integrated product development process in a university context, pro-
duce insightful, thoroughly developed and patented products. We
have consulted with a wide variety of consumer and business-to-
business companies and helped them produce successful products.
The first book of two of the authors, Creating Breakthrough
Products1, has been incorporated into the product development
process of many small and large companies alike.
1 Cagan, J. and C. M. Vogel. Creating Breakthrough Products: Innovation from
Product Planning to Program Approval. Financial Times Prentice Hall, Upper
Saddle River, NJ, 2002.
01Cagan_Preface.qxd 5/6/05 9:23 AM Page xxv

PREFACE xxv

As research professors, we have had the opportunity to step back

and reflect on what we have observed. We have identified consistent
patterns that led to successful innovation. Our goal as writers was to
produce a book that organizes and expresses these findings in a way
that the Carolines, Ricks, and Pauls of the preceding vignette can
incorporate into their way of thinking and practice. In short, it is a
book written by people who have lived with, successfully managed,
and thoroughly researched the topic. Said another way, we are arm-
chair quarterbacks who have also played the game.
This book deconstructs innovation into understandable chunks
that form a compelling argument of what innovation is, why it is
important, and how you can begin to transform yourself and your
company to meet the needs of the current marketplace. You cannot
just hire innovative consultants; you have to learn to create an innov-
ative culture organically within your company. That is the only way
the core of your brand can be strategically connected to every prod-
uct you make and service you provide.
This book is also about people who are at the heart of the inno-
vation process. We mention two types of people throughout this
book: those who purchase and/or use the product or service, and
those in companies who are the innovative developers of the products
and services. We include scenarios about the users throughout this
book to provide a context for each chapter. The scenarios that start
these chapters are fictitious. A common practice used in the early
phase of development of new products and services, scenarios are
often composites that represent critical aspects of the lifestyle ten-
dencies of the intended market. The second type of people referred
to are people in companies, and all of these people that we describe
in our chapters are real. They have been extremely helpful and sup-
portive in letting us find out what makes them tick and what enables
them to become one of the new breed of innovators. We have worked
with them in developing many of the case studies throughout this
book.
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xxvi THE DESIGN OF THINGS TO COME

This book is written to help you leverage your ability to find a way
to thrive in the complex world we find ourselves in. As the often-used
quote from Dickens’ A Tale of Two Cities states, it is the best of times
and the worst of times. The side of the coin you choose depends on
how effective you are at turning obstacles into opportunities. You can-
not plan for the future with the hope of always being lucky to suc-
ceed, but you can learn to always take full advantage of opportunities
when you see them and increase the odds of success. As you look to
the future and account for global economic and societal change, inno-
vation is not everything; it is the only thing. Innovate or perish. Or,
even worse, innovate or struggle to survive in the ever-tightening
downward spiral toward cost-focused commoditization. Because
there can be only one cheapest provider, no other choice is left.
This book is written in the sequence we would like you to read it,
but each chapter stands on its own for the most part. We strongly sug-
gest reading Chapters 1 through 3 before you roam. Chapter 1, “The
New Breed of Innovator,” talks about the new type of innovator, high-
lighting three outstanding leaders of innovation and aspects of their
approach that anyone can use. Chapter 2, “Pragmatic Innovation—The
New Mandate,” argues that reliance on quality of manufacture initia-
tives can no longer be your buoy of survival; instead, innovation is the
only approach to differentiation. Chapter 3, “The Art and Science of
Business,” gives a brief overview of the process of innovation and pro-
vides a context for understanding how to make it work for you.
The rest of the chapters discuss various aspects of the innovation
process. Chapter 4, “Identifying Today’s Trends for Tomorrow’s
Innovations,” talks about reading trends and converting them into
product and service opportunities. Chapter 5, “Design for Desire—
The New Product Prescription,” argues that innovation is about
meeting people’s desires, about fulfilling their fantasies. Chapter 6,
“The Powers of Stakeholders—People Fueling Innovation,” presents
a new approach to analyzing all the stakeholders who affect or are
affected by a product or service, a technique we call a Powers of 10
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PREFACE xxvii

analysis. Chapter 7, “B-to-B Innovation—The New Frontier of

Fantasy,” argues that the business-to-business world is ripe for fanta-
sy-driven innovation, and that a corporate strategic plan must connect
the company to its brand and product.
Chapter 8, “Making Decisions for Profit—Success Emerging
from Chaos,” highlights the complexity of making decisions during
the process of product development. Chapter 9, “A Process for
Product Innovation,” then highlights the detailed process focused on
the earliest stages of product development, where innovation takes
place. Chapter 10, “Creating a Blanket of IP to Protect Your Brand
from the Elements,” follows with a discussion of how to protect inno-
vation and develop brands through the intellectual property system.
Chapter 11, “To Hire Consultants or Build Internally—That Is the
Question,” helps you think about developing in-house innovation
groups and complementing internal innovation with external consult-
ing. Finally, the epilogue looks at the power of innovation through
people and the opportunities they create.
We begin Chapter 1 with three people who manage large organi-
zations and who have consistently produced innovative solutions in
challenging and highly competitive markets. These individuals set the
tone and provide the foundation of this book because each exempli-
fies the attributes of the new breed of innovator. As these three
evolved in their professional careers, they connected their vocations
and avocations to form a broader view—both of what was presently
going on and of what was possible in the companies where they
worked. As they developed, they were able to balance creative
approaches with practical methods and to understand how to balance
cost with a vision of how innovation could increase profits. Through
a combination of education, personal ability, and effective partner-
ships, these three evolved into the role of the new breed of innovator,
having established and managed environments for pragmatic
innovation.
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ACKNOWLEDGMENTS

As with any major endeavor, there are many people to thank for their
input to this book and our thinking about this work.
Particular recognition and thanks go out to Keith H. Hammonds,
Deputy Editor of Fast Company, for taking the time and interest to
write the Foreword for this book.
Many people in the companies we write about have spent many
hours speaking with us about their work and ideas. In order of
appearance in this book, these include Dee Kapur of International
Truck and Engine, Chuck Jones of Whirlpool, Edith Harmon and
Josh Kaplan of New Balance, Astro Teller and Chris Kasabach of
BodyMedia, Stephen Pierpoint of Adidas, Scott Charon and Gabe
Wing of Herman Miller, Paul Basar of Lubrizol, Eric Close of
RedZone Robotics, Bob Schwartz of Procter & Gamble, James Kyper
of Kirkpatrick and Lockhart, Bruce Nussbaum of Business Week,
David Kelley of IDEO, and Elizabeth Lewis of Product Insight.
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xxx THE DESIGN OF THINGS TO COME

Many students have worked with us in developing this work.

These include Hillary Carey, Mark Hamblin, Harlan Weber, and
Erika Wetzel. John Bellinger, Nathan Goldbatt, Rachel Lin, and
James Raskob developed the quick-change machine tool interface
mentioned in Chapter 7. Joshua Aderholt, Jeremy Canceko,
Courtney Chu, Luke Hagan, Patrick Marcotte, Seth Orsborn, and
Lisa Tsui developed the intelligent insole discussed in Chapter 9.
We are grateful to Jeff Calhoun of VistaLabs for his detailed
comments on this manuscript and the ideas behind it. We also thank
Anne Akay for her comments on this book and Stephen Boatwright
for his comments on selected chapters.
We are indebted to our editor, Jim Boyd of Prentice Hall, who
has made this process as seamless and as easy as possible. His encour-
agement and support throughout are deeply appreciated.
Several colleagues at Carnegie Mellon have provided inspiration
and support. Professor Laurie Weingart of the Tepper School of
Business has been our partner in teaching the Integrated Product
Development course and has worked with us on several research
projects. Ilker Baybars and Ken Dunn of the Tepper School of
Business, Adnan Akay of Mechanical Engineering, Pradeep Khosla of
the College of Engineering, and Dan Boyarski of the School of
Design have been active supporters of our effort and proponents of
our course.
We would also like to thank the illustrator, Shane Machir, for the
artwork. Additional artwork, by Lisa Troutman.
02Cagan_ch01.qxd 5/6/05 9:24 AM Page 1

1
THE NEW BREED OF
INNOVATOR

Innovation is about people. Companies focus on customer needs,

wants, and desires as they design new products; after all, products are
purchased by and for those who will use them. Those who design the
products also are people—ordinary people who apply their skills to
develop new ideas and products. Yet certain individuals have evolved
to a level of innovator who envisions, leads, and manages the complete
context of a product or service. These people are the new breed of
innovator, and they are the model for all of us to follow. Who are these
innovators of today, how did they acquire the insight to innovate
products that excite consumers, and how do they simultaneously
inspire and motivate the people with whom they work? In this chap-
ter we introduce three of these innovators in order to reveal their
mentality and methods.
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2 THE DESIGN OF THINGS TO COME

The New Breed of Innovator: Pragmatic

Business
At the age of 18, Dee Kapur left India and arrived in New York City on
the first leg of his journey to California to attend Stanford University.
His flight was late, and he missed his connecting flight; Kapur found
himself stranded in the Big Apple with $200, his suitcase, his tennis
racquet, and little sense of what to do. He eventually got to Stanford,
and although economically poorer, he gained a new sense of confi-
dence. With no money to his name, he found that he had to be innov-
ative in small ways every day just to make ends meet. His current drive
for innovation in business has its roots in such experiences, when he
had to seek new and efficient solutions in daunting circumstances.
After earning a degree in mechanical engineering from Stanford
and his MBA at Carnegie Mellon, Kapur eventually landed at Ford
Motor Company. At Ford, he continued to seek innovative ways to
turn supposed barriers into opportunities. At one point, he ran the
most profitable line of vehicles in the United States and was part of
the group at Ford that helped transform the SUV and a pickup truck
from a service vehicle into a lifestyle vehicle. In 2003, after a suc-
cessful career at Ford, Kapur was named president of the Truck
Division of International Truck and Engine.
Kapur believes in what he refers to as pragmatic innovation, a
term that perfectly captures the balance between creativity and
profit. He recognizes that, even as he leads an organization, he can-
not mandate innovation. However, he can institute a management
process that fosters it. Kapur models his approach to his employees
with one dose inspiration and one dose instruction. The level of
interpersonal relationships is reinforced by the practical, by budget
allocations, and by reward and recognition. In his work with others
and in his business procedures, Kapur holds up innovation as a clear
signpost that shows the direction of his leadership. How you allocate
your time and money and how you groom your employees show your
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CHAPTER 1 • THE NEW BREED OF INNOVATOR 3

priorities and establish incentives within a company. At the end of the

day, Kapur keeps an eye on results. Although his upbringing and
engineering training continuously ensure attention to facts, logic, and
results, often the road to the outcome is newly laid. He likes to set
targets for his company that he has “no freakin’ idea how to get to.”
These targets are not just goals; they shape corporate culture. The
targets create a demand for unconventional input, and, more often
than not, they coalesce into a game plan that would not happen with
a “safe” goal. In setting such goals, he has developed an instinct for
finding the sweet spot between the acceptable and the impossible.
Setting the bar where he does helps motivate those under him and
creates an environment of creativity. He also sets a positive example
by walking the walk; he strives to be the ideal he wants others to be.
He has a directness and honesty that you instantly respect. He wastes
neither words nor time. He does not look to blame others; instead, he
looks to accomplish goals. He never seeks to embarrass people, and
he knows the power of win-win.
Throughout his career Kapur has looked to identify the people
who, like him, are looking at the broader picture. He realizes that you
can never bring everyone along with total conviction, but if you build
a core team right away, you can change the way a group or project
team works. In any organization, he says, approximately 30 percent of
the people are passionate about wanting to win or at least make a dif-
ference. The leader’s challenge is to identify those people, groom
them, harness their energy, and let them be a beacon for others. If
one can garner the allegiance of that 30 percent, that is success.
Spend time with the people who want to be motivated. Challenge and
“jazz” them, and they will introduce a velocity and energy that will
propel the rest along with them.
For Kapur, pragmatic innovation requires a balance of the left
and right brain working in unison. Such a balance enables him to see
situations in a broader way than many others. He can manage the
duality inherent in complex corporate decision making. He intuitively
understands the concept of moving from one level of viewing the
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4 THE DESIGN OF THINGS TO COME

problem to another. He attributes this in part to the fact that he not

only has an analytical ability to understand engineering and business
systems, but he also has a feel for the lifestyle side of products, he
appreciates the human reaction, and he recognizes the compulsion
that drives prospective buyers. He was raised in the Himalayas in
India, but he also spent time in Europe when his father was trans-
ferred there in the course of his career. He has a global perspective
born of his personal life: high school in the Himalayas, several years
in Europe as a child, and an exposure to life’s possibilities without the
luxuries of coddling.
His ability to see the value of the different major players in the
process enables him to manage and motivate others and to unify
them toward common goals. It is not who is right or wrong, but what
needs to be done to get to the next level. In our work with the auto
industry, we saw many examples of managers who were loyal to their
area of expertise and defensive about the requests for change or per-
spectives offered by other areas in the company. Many complain that
employees in other areas of the company are myopic. If only they
could learn to see the situation from another’s perspective, they could
move faster and make the right decision. Design stylists complain
that others fail to grasp the gestalt, or entirety, of a design; when non-
designers pick it apart and make changes to the pieces, they compro-
mise the overall effect. Engineers argue about cost overruns and the
inability to deliver on style without compromising performance qual-
ity. Manufacturing argues about the feasibility of maintaining toler-
ances given form complexity or material choices. Human factors and
safety specialists constantly call for changes in engineering and styling
to ensure a higher degree of safety. Cars are designed to be driven,
but human-factors specialists are trained to think about when the car
will fail. Marketing argues for details that stylists reject as incompati-
ble with the new approach to style. In short, there are plenty of rea-
sons to disagree. Kapur does not like to take sides; when he must,
however, it is to ensure a successful outcome, and he strives to bring
his team along with him. A persistent operating theme for him is
“integrated execution!”
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CHAPTER 1 • THE NEW BREED OF INNOVATOR 5

When Kapur started in automotive design, he was as fascinated with

styling as he was with engineering. While directing the Truck Division
at Ford, Kapur, along with marketeers Bob Masone and Allison Howitt
and head truck designer Pat Schiavone, was viewing an old two-seat
roadster with saddle leather interior. The car exuded high class, and at
the same time, the leather reminded him of the saddles cowboys used.
And those cowboys happen to be customers of pickup trucks. Wouldn’t
it be great if a pickup had a similarly luxurious interior, one that still con-
nected to the cowboy aura? That leap led to the development of a lim-
ited-edition F-150 pickup with saddle leather interior, co-branded with
the King Ranch in South Texas. The King Ranch accomplished a num-
ber of things inside Ford as well as with the F-150. The project not only
made a strong brand statement of innovation for Ford, it also created a
great working relationship with the whole team. Trucks and SUVs
became the place where everyone wanted to be; it was where the action
was. The new line of F-150s introduced in 2004 (and further discussed
in the next chapter) was a product of the team that brought you the King
Ranch as well as the Harley Davidson F-150 (designed jointly by
Gordon Platto and Willie G. Davidson himself). According to Kapur,
“The name of the game is to continually change it.” That is the focus of
Kapur’s view on innovation.
Yet Kapur’s last assignment at Ford was to deal with the chal-
lenging problem of controlling costs in vehicle programs. Controlling
costs by itself is not a difficult task—cut out all unnecessary parts, and
cheapen those that are integral. But that approach leaves the com-
pany with little to sell other than a low price. The challenge is to pro-
duce great products while meeting cost goals. More managers are
needed who can handle both the creative innovation such as that in
the King Ranch and the pragmatics of cost, because the combination
of these two positions gives Kapur the ying and yang of what it takes
to develop innovative products. Now, Kapur will see whether that
same approach can help clarify and rebuild the International brand in
the trucking industry.
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6 THE DESIGN OF THINGS TO COME

Kapur sums up his approach to managing innovation in three steps:

1. Make innovation and boldness part of the culture—everyone

needs to know what you stand for.

2. Role-model innovation as often and in as many forums as

you can.

3. Institute a management process that fosters innovation.

Kapur lives by the vision that “the future for society and the coun-
try is vibrancy in innovation.” Kapur is a new breed of innovator.

The New Breed of Innovator: Global

Brand and Industrial Design

It was August, and Chuck Jones was at Michigan International

Speedway competing in a vintage Indy car race. Jones started racing
cars at the rather young age of 8, turned professional at age 15, and
now—in addition to his career as vice president of global
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CHAPTER 1 • THE NEW BREED OF INNOVATOR 7

consumer design for the world’s largest appliance manufacturer,

Whirlpool Corporation—at age 44, he still keeps sharp by participat-
ing in a half dozen high-speed races each year. Driving at speeds of
168 mph requires a level of concentration that anyone could learn
from, and Jones excels at it…he is still winning regional champi-
onships against competitors less than half his age. Jones considers this
experience to be the kind of event that allows him to escape from the
daily grind and keep things in perspective. He learned how to man-
age quality programs when working at Xerox Corporation, programs
that were a major part of the Xerox success story of the 1980s. At
Xerox, he directed several successful product programs for new
copiers, and he came away with a thorough understanding of digital
product interface. The discontinuities between his day job and hobby
are very much how he views innovation—the ability to arrive at
discontinuous solutions that yield paradigm shifts in your product,
service, and brand.
Although Jones’s formal degrees are in industrial design and
human-factors engineering, his first degree was really from the fields
in Indiana, where he grew up in farm country. He knows all about
machines and how to disassemble and fix an engine. As a side note,
Jones family lore has it that Chuck successfully diagnosed a problem
on an engine, disassembled it, reassembled it, and got the engine run-
ning at age 5. On the farm, innovation meant having to find a fix for
a broken gear on the combine during harvesting season at 4 A.M.
when no stores were open. Discontinuity meant working on the fam-
ily farm at 4 A.M. during harvest season when running the farm was
just a family hobby and your dad had a day job as a chemical engineer.
Tending to a hobby farm at 4 A.M. as a kid built a strong work ethic
and solid values.
Although he trained primarily in industrial design, Jones, like
Kapur, has balanced capabilities in the left and right parts of his brain.
His engineering side is comfortable with the precision and logic of
math, which has enabled him to thrive in management; at the same
time, he explores the possibilities of creation through design. After
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8 THE DESIGN OF THINGS TO COME

finishing college, he gained experience in business and quality systems

development. He went through several product development cycles at
Xerox and had developmental jobs such as running the business strat-
egy office, eventually becoming the manager of industrial design and
human interface. Whirlpool recruited him, and he now directs one of
the biggest global brand design, user interface, and consumer under-
standing programs in the world. From the headquarters of little-
known Benton Harbor, Michigan, he manages the global design
empires of the Whirlpool and KitchenAid product lines in the United
States as well as the 11 other Whirlpool global brands, and he manages
design for appliances under the Kenmore and IKEA brands.
One brand innovation championed by Jones and a team inside
Whirlpool’s North America business unit is the Gladiator
GarageWorks line of products for garage and basement storage
systems. The innovation team that developed the idea of Gladiator
GarageWorks recognized that, in many households, women tend to
take the lead for purchase decisions in every “living quarters” room—
the kitchen, living room, bedrooms, bath. Therefore, the last bastions
for men in the home are the basement and garage. With the Gladiator
GarageWorks system, consumers may pay up to $25,000 extra when
building or refurbishing a house for the sake of a “dream” garage
shop, complete with quality shelving and cabinetry, a “Freezerator”
that allows one to adjust the percentage used for refrigeration versus
freezing, and a “Beverage Box” to keep 170 cold ones. The appliances
sense both hot and cold temperature extremes; they not only refrig-
erate, they also have built-in heaters, ensuring that the contents stay
chilled in a steamy hot garage but are never frozen in an unheated
one. This new Whirlpool brand brought in $25 million in revenue in
just its second year!
Jones’s timing in going to Whirlpool was perfect. He had just
gained experience in a company that went from being a “copier com-
pany” to a “document company.” Xerox was in the printing business
and making some of the most complex modern industrial and busi-
ness printers in the world. The company was attempting to integrate
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CHAPTER 1 • THE NEW BREED OF INNOVATOR 9

complex digital-driven products with electronic, electromechanical,

and mechanical systems in one product. The daily use of these
machines is intense, and the complexity of interaction and range of
users demanded an entirely new approach to the design of the inter-
face of the products. Jones learned the power of digital interface
design to connect people to machines. The best copier or printer in
the world is useless if you cannot understand how to use it and if you
waste more time making mistakes than the copies you want.
Jones understood that the appliance industry was ripe for the
same change. He recognized that an appliance company could dom-
inate in the industry if it could figure out how to improve the func-
tion and service without making the product interface too complex.
He also knew that most appliance companies were still living in the
“big white box” world without grasping the fact that the market had
changed. Kitchens and laundry rooms were taking on a whole differ-
ent meaning in the contemporary United States home. The washer
and dryer were seen as a bland and generic commodity—a “sea of
white,” as Jones likes to call it. The old paradigm was that no one
cared about the aesthetics of the laundry room—when one machine
broke, you bought any other one, and possibly from the same brand.
Only 18 percent of washers and dryers were sold as pairs.
So Jones leveraged the international structure of his group and,
along with global engineering and brand marketing in Europe and
the United States, helped create the Duet washer/dryer. The Duet
adapted a technology platform from Europe to the tastes and relia-
bility expectations of North America. The focus on consumer inter-
action and ergonomics led to the insight that the washer and dryer
should be raised on a pedestal so that consumers do not have to bend
over to reach inside the machines. The aesthetic and ergonomic
statement of Duet has changed the face of laundry rooms. Today,
more than 90 percent of Duets are sold in washer/dryer pairs. The
product is so successful that Whirpool was able to raise the price
three times after its initial introduction. Each Duet machine sells
for three times the average competitive machine because of its
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10 THE DESIGN OF THINGS TO COME

integrated consumer benefit package of world-class aesthetics, great

energy efficiency, and benchmark ergonomics. Consumers see the
value, and that is successful innovation!
While the Whirlpool brand has been enjoying tremendous suc-
cess, there is an equally interesting story in Jones’s developments in
KitchenAid (another brand of Whirlpool Corporation). The
KitchenAid mixer is an icon of the American kitchen and stands head
and shoulders above the competition in perceived value. In the age of
digital-driven products, the KitchenAid mixer stands alone as a
throwback electromechanical marvel. Timeless like any great icon, it
sits supreme in a kitchen of baby boomers or newlyweds. Often the
anchor gift for a young couple’s new kitchen, the mixer will last them
until retirement. That’s the good news.
The bad news is you cannot sell a lot of products if each lasts a
lifetime—that is, unless you can leverage the brand equity, which
KitchenAid has done with its new Pro Line series of countertop prod-
ucts. If you go to the nearest Williams-Sonoma store in the United
States, you will see a line of products that are all in a neutral, metal-
lic gray. They look like scale models of little factories and embody the
heft and robust nature of the KitchenAid stand mixer. These are seri-
ous, professional-looking products. This new line is the interaction of
organic growth and consulting at its best, designed by the in-house
KitchenAid Brand Design Studio with support from Ziba, one of the
world’s best design consulting firms. The new line of gray KitchenAid
children sits right next to the proud mixer parents, which come in a
range of colors and finishes. The offspring are contemporary but bear
a striking family resemblance both in appearance and in their iconic
potential. The price tag of many of these new products is a mere $300
plus tax. Williams-Sonoma signed an exclusive agreement for six
months, and, during Christmas 2003, they could not stock them fast
enough. Imagine paying $300 for a waffle maker, which in the Pro
Line series is not a waffle “iron” but a waffle “baker.” On display
nearby is a European waffle maker that sells for $50. Why would
someone pay $300 for a waffle iron?
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CHAPTER 1 • THE NEW BREED OF INNOVATOR 11

It is often the case that an experience on a vacation can

become the stimulus for the purchase of a new product. For example,
your kids may have loved the brunch at a Hilton because of the
make-your-own-waffles experience with the large-scale professional-
grade waffle iron. This big waffle iron has large handles that lock shut
and allow the whole unit to be turned over, enabling users to make two
waffles at a time. You walked the children through it the first time, and
from then on, they were on their own. The machine steamed and
hissed as the waffles cooked. The kids loved turning over that big han-
dle and in a few minutes, out popped huge, thick waffles. Forget the
muffins, Danishes, pancakes, and eggs. All the kids wanted to eat were
waffles, and lots of them. Wouldn’t it be great if you could give your
kids the same experience in your home? Somehow the small, single-
waffle iron no longer cut it. So when you got home from that vacation,
you went to Williams-Sonoma, and there it was. Sitting next to the $50
Belgian waffle iron is the $300 KitchenAid waffle baker, just like the
one that made the waffles the kids raved about on vacation. People
buy SUVs for the experience of height, the roominess, the safety, and
sometimes for all-wheel drive. These benefits are worth the extra fuel
costs. Similarly, people buy KitchenAid for the experience; cost and
size are thrown to the wind. Now Saturday can be a special family
event as everyone relives a vacation experience.
What Jones (in a Field of Dreams scenario) knew and the team
delivered on was that if they could make a compelling product that
drafted off the success of KitchenAid, they would succeed—“If they
built it, they would come”…and they would buy. The profit margins
are enormous, more so than for many traditional Whirlpool products.
Giving Williams-Sonoma a six-month exclusive for the new line
added to its appeal and supported the price tag. The rest of the story
is equally as interesting from a brand perspective. If you go into
Target, you will see the same KitchenAid mixer (because this product
crosses all demographics), but you will not see the Pro Line series.
What you will see instead is a $50 set of KitchenAid products
in Target red and individual KitchenAid tools selling for $20. This
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12 THE DESIGN OF THINGS TO COME

extension from upscale to box store is not easy to accomplish. Using

the KitchenAid mixer as the anchor is an innovative marketing move
that so far has paid huge dividends. The idea of updating and extend-
ing the brand of KitchenAid caught the competition napping.
Like Dee Kapur, Jones has learned to see the other perspectives
in the company with equal clarity and respect. While he has a keen
sense of visual design and style, he also knows the issues that impact
the bottom line—the core business architecture. He and his Brand
Studio directors oversee a group that includes industrial design,
graphic design, interface design, user research, and human-factors
engineering. His brand teams are multidisciplinary and work in an
integrated way with other areas of the company.
Jones is one of the new breed of innovator. In five years, he has
built his global brand group to more than 100 people from the 15 he
started with, and his staff are all in demand from other brand- and
consumer-driven companies that hope to hire them away and capture
some of Whirlpool’s success. When Jones was awarded the
Smithsonian Institute’s National Design Award at the White House in
2003, it was the culmination of his and his team’s success of a multi-
year strategy to make Whirlpool the most recognized appliance brand
in the world and recognized as a design leader. Consistent with
Kapur, Jones can “see” the playing field; that is, his experiences have
enabled him to see and understand the interconnected challenges of
design, engineering, and marketing.
As a leader of innovation, Jones has several main goals:
1. Make the resources—time, space, money—available for the
team to explore; 20 to 30 percent of his resources goes to
innovation.
2. Use the resources to keep a pipeline of innovation going; on
a yearly basis, the group generates hundreds of ideas,
explores dozens of the promising ones, and then focuses on
a dozen as possible product or brand introductions.
3. Make the tough decisions on which ideas fit the corporate
business case.
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CHAPTER 1 • THE NEW BREED OF INNOVATOR 13

4. Create an environment where everyone has the opportunity

to contribute; to build such a rich team of talent is meaning-
less unless you use that talent.
5. Track innovation, understand its impact, and make it visible
throughout the company so that the value of the group is
clear; what gets measured gets attention!
6. Hire people who embody both “book smarts” and “street
smarts”—those who can use both sides of their brain.

The New Breed of Innovator:

Engineering and Advanced Thinking

Edith Harmon’s bachelor’s and master’s degrees are in mechanical

engineering. But today, she heads one of the most dynamic advanced
products groups in the clothing industry. Unlike a fashion company
that makes shirts or jackets, New Balance makes state-of-the-art
technology to support your body while you exercise. Athletic apparel,
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14 THE DESIGN OF THINGS TO COME

then, is more than fashion. It is materials, manufacturing, ergonom-

ics, biomedical, and lifestyle all rolled into some clothes and a pair of
shoes. Harmon was exposured to technology during a brief stint at
GM followed by a career of designing aircraft engines at GE, and
even a stint designing alternative power plants in a start-up in the
1980s. But she wanted to connect with consumers, and she wanted
products with shorter life spans that she could follow from inception
to market success. In the aircraft industry, you are lucky to see any
real innovations, and one product literally lasts a lifetime.
With all of this engineering focus, how did she end up as the
manager of future product concepts in what many see as a fashion-
focused industry? Like Kapur and Jones, Harmon also has a
well-tuned right brain to balance her engineering left brain. Raised in
New York City, she grew up with strong exposure to and a love for the
arts, with regular visits to museums and the theater. When she was an
undergraduate engineering student, her favorite courses were art his-
tory and film. She gained an appreciation and respect for the more
artistic people, an appreciation that she brought with her to her job
at New Balance.
When you meet Harmon, you really aren’t sure how to classify
her; she fits none of the stereotypes of the engineer, designer, or busi-
ness executive. Harmon meets the criteria for the new breed of inno-
vator. She is a polyglot and can talk with equal comfort to designers,
marketing, material engineers, and manufacturing. She is a skilled
manager of the multiple disciplines needed to produce the new ideas
developed in the advanced product concepts. Harmon fosters the
kind of thinking that allows her team to balance creative possibilities
with costs and production realities.
When Harmon hires someone to join her group, team dynamics
is one of the main drivers. People need to respect each other. They
need to balance each other; there should be no duplication in talents
and effort, and each person’s skills must be valued in the team. Each
person must be self-motivated. Harmon sees her role as finding
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CHAPTER 1 • THE NEW BREED OF INNOVATOR 15

talented people who fit this mold and then giving them the environ-
ment and resources to excel.
Harmon encourages her team to try new ideas, as long as they fit
in the larger business case of New Balance without the need to jus-
tify or defend them to the larger company. As a manager, she creates
a buffer zone that protects her team and gives them freedom to
explore. The goal is for the team to create fresh, usable ideas that bal-
ance aesthetic and functional appeal and that do not meet a precon-
ceived notion—in other words, ideas that are innovative.
In managing the Advanced Products Group, Harmon focuses on
the process rather than the end result. She gives her team the free-
dom to explore and meander within the process, the flexibility to
obtain insights and findings that will direct their path to an end result.
This freedom encourages self-motivation, a critical ingredient for
innovation, and the process is a requirement to replace the lone
inventor with the group innovator, who churns out a wealth of fresh,
workable ideas. The group has balance, whereas the individual typi-
cally does not.
One of the many successes for Harmon’s Advanced Products
Group is the 1100 Ultra Trail Shoe. The shoe is a premium running
shoe for trails, featuring waterproof, coated uppers, integral “scree”
gaiters to prevent dust and pebbles from getting into the shoe, and
rubberized toe bumpers to protect the toes. The outer sole looks
almost like a tire tread, engineered for traction in rough terrain, pro-
tecting the sole from bruising, and allowing water to pour through the
shoe (more on that in a minute).
The team embraced a user-centered design approach from start
to finish. In developing the product, they focused on “ultra runners”
who race for at least 50 miles and perhaps even 100 miles at a time.
By meeting these runners’ needs, the team knew that they would
meet the needs of the average trail runner as well. The research was
holistic, representing a range of stakeholders interviewed from race
directors to the publisher of UltraRunning magazine—and, of course,
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16 THE DESIGN OF THINGS TO COME

ultra runners. Three different types of ultra runners were inter-

viewed: “newbies” just getting into it, “veterans” to whom ultra run-
ning is the center of their lifestyle, and “elites” who are driven to win
these grueling races and are often sponsored by shoe companies.
Three of each type were interviewed in their homes, on the trail, and
at races. The team spent many hours running with these folks and
experiencing their world firsthand. To make sure they understood the
needs of runners in all different terrains, they conducted studies of
runners in places they couldn’t get to, like Utah, Colorado, New
Mexico, and Alaska. Here, they sent the runners disposable cameras
for them to record their experiences, and then they conducted phone
interviews using the images as a catalyst.
One interesting aspect of ultra running discovered by the team
was that these runners intentionally run through streams. When run-
ning 100 miles, feet begin to burn and swell. Cool water is a way to
refresh irritated feet. So Harmon’s team wanted to both allow water
in and then whisk it out. Near the toe is an open hydrophobic mesh
that lets water in but dries quickly, while in the sole are “drain and
dry” holes that open while a person is running to let the water back
out.
The team also researched related sports, such as adventure rac-
ing and orienteering, and other lifestyle products that address related
needs identified through their research. A business case was built,
including branding and strategic research, understanding the com-
petitor landscape, and determining how to position and distribute the
new product—namely, in specialty stores.
The team followed the type of process we discuss in Chapter 9,
“A Process for Product Innovation.” As soon as they understood the
opportunity, they began extended brainstorming sessions followed by
prototyping of the concepts. Any feasible concepts went immediately
into usability testing. Many of the users they had interviewed tried
the working prototypes and then gave the team feedback. After mak-
ing further modifications, the team repeated the process until they
had designed a great product.
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CHAPTER 1 • THE NEW BREED OF INNOVATOR 17

This process is the ideal product development process. Few

teams in practice are given the resources and support to follow such
a complete, user-driven design process. But the results speak for
themselves. The shoe was awarded a gold award from Running
Network, and sales have been at about 10,000 pairs per year—quite
good for a specialty product like the 1100 Ultra. It takes a manager
like Harmon to develop and support a team and environment for this
approach toward innovation and developing new products.
As a manager of the Advanced Products Group, Harmon’s goals
include the following:

1. Make resources available—not just time and money, but also

the freedom to fail.

2. Create innovation groups of individuals, each of whom has

some distinct skills to bring to the table, so that the value of
each person’s ideas contributes to mutual respect within the
groups.

3. Foster self-motivation within the groups to encourage enthu-

siastic participation stemming from belief in and enjoyment
of the process and goals.

So Who Are the New Breed of

Innovators?
Edith Harmon, Chuck Jones, and Dee Kapur are the new breed of
innovators. They have achieved a pragmatic sense of balance between
the pressing needs of business and the open-ended possibilities of
product opportunities. They also balance the corporate strategic big
picture with the needs of particular product programs. It is more than
using a different set of methods; they have a different state of mind
that they bring to every decision they make. They have acquired this
state of mind; they have learned how to manage a process for inno-
vation and how to cultivate people to succeed in that process. It is a
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18 THE DESIGN OF THINGS TO COME

mentality and understanding that you also can learn. We introduce

you to these individuals so that you can learn from them. The ques-
tion to ask yourself is this: What can you do now to become an effec-
tive pragmatic innovator?
They have become respected in their companies, even though
their approaches are not typical, because they understand how to fos-
ter and manage a corporate environment of innovation in companies
such as Ford, Whirlpool, and New Balance. Although these three
innovators are all in larger companies, innovators exist in every type
and size of company. The next chapter describes the young and the
restless team from start-up BodyMedia, and later in this book, you
will read the case study of Eric Close, president and CEO of
RedZone Robotics. In contrast, these individuals have made prag-
matic innovation work in small start-up companies. This book also
discusses David Kelley of IDEO and others in product-development
consulting firms.
These individuals know that innovation is all about people, from
the team who develops the product to the customers who use it. They
know how to identify motivated and skilled people with whom to
work and that innovation is about succeeding with others and learn-
ing how to set goals. These leaders are comfortable with and often
enjoy the challenge of finding innovative solutions in seemingly con-
tradictory situations. Where others see risk, they see opportunity.
Their managing style is reminiscent of hockey great Wayne Gretzky’s
style of playing (when he was still playing): Instead of skating to
where the puck was, he skated to where the puck would be.

Innovation Revealed
This book is about people. It is about the innovators who envision and
create new products and services for the new global economy. It is
also about the people who demand innovation at home, work, and
play; in other words, it is about you. Throughout this book are many
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CHAPTER 1 • THE NEW BREED OF INNOVATOR 19

case studies about people and companies that innovate solutions for
the consumer and the business-to-business world. These people and
case studies are real, many taken from our consulting, research, and
educational initiatives—people like Kapur and Jones and Harmon.
But also throughout this book, especially at the beginning of many
chapters, are stories about users of these products. Because innova-
tion is about understanding the needs, wants, and desires of those
people who affect the success of the product in the marketplace, sce-
narios of these people are a critical tool in the practice of innovative
product development. These scenarios are developed by product
developers to provide product-use context. Although they are projec-
tions of real people, these stories of end users are not real.
This book is also about the process of innovation. It is not about
managing new products after the fact, where a new product created
elsewhere in the company now requires strategic marketing. It is
not about the traditional business topics that fall under the label of
innovation management. It is about the business of innovating—the
business of finding opportunities in the marketplace and of develop-
ing products to achieve those opportunities. The tools, methods, and
insights discussed result from our consulting and research projects.
These are the tools of the new breed of innovator.
The result is a step-by-step guide to help you through the inno-
vation process. It is not, however, a set of mindless instructions, a
checklist that will do the work for you. Innovation requires thought.
You, the reader of this book, can excel at it if you take the time to
think about the context of the world around you. If you are looking
for a way to reshape the way you lead, direct, manage, think, and
practice, this book helps you learn how to fish in the seas of
opportunity that exist in the interconnected new global economy. If
you are someone who just wants to view the excitement of innovation
up close, to understand what it takes to create a great product and
deliver it to your door, this book gives you front-row insight into great
companies, processes, people, and ideas in product and service
development today.
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2
PRAGMATIC
INNOVATION—
THE NEW MANDATE

As companies struggle to look for ways to compete against low-margin

overseas competitors, they must turn to their creative side because
cost-cutting manufacturing and quality initiatives no longer provide
the competitive edge. Differentiation now must happen through inno-
vation; that is the strategic weapon that drives profit in the new glob-
al economy.
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22 THE DESIGN OF THINGS TO COME

Burlington, VT. Robert Nicholson was not really concerned about the
health of his heart when he went in for his annual physical. Although his
dad had died of a heart attack, Rob figured he was reasonably healthy at
46. He worked out a few times a week and, although he did have a soft
spot for pepperoni pizza, he usually watched what he ate. So he was par-
ticularly shocked when he found out that his cholesterol count and
blood pressure had risen over the past year. His physician seemed con-
cerned as well, which is why he put Rob on a 24/7 continuous health-
monitoring system. Because Rob imagined and dreaded the hassle of
wearing a monitor, he was pleasantly surprised to see and feel the
SenseWear armband that held the sleek little monitor by BodyMedia.
The system continuously monitored his relevant vital functions and then
downloaded them to his computer. The software then tracked his health
with the promise of telling him to call his doctor if anything looked awry.
But the biggest surprise was that he found himself showing off the little
monitor to all his friends. This was the first body monitor he heard of
that could really become a part of your life.

A Mandate for Change

In their struggle to adapt to the new forces affecting the development
of emerging products and services, executives of many companies
find themselves “drinking from a fire hose.” These managers are
thirsty for answers but find it hard to handle all that is streaming at
them: the volume of opportunities and demands, of ideas and con-
straints, of potential directions and hurdles. The pressures of external
competition, of internal management issues, and of financial hurdles
are overwhelming. These often result in analysis paralysis and a lack
of insight into where to proceed, leaving one trying to put out daily
fires instead of working productively toward larger goals. Managers
and VPs have been accustomed to being part of companies that
buy and sell divisions and, in a sense, to being bought and sold
themselves. As a result, they have constantly been under new CEO
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 23

leadership and often have been required to move semiannually to

newly acquired divisions, where their assignment is to obtain unreal-
istic results in the new environment with new personnel.
Executives have been handed a new mandate: Grow the business
using innovation, and do it organically using the company’s existing
resources, outsourcing only as needed. If that is not enough, they have
been told they cannot compromise on manufacturing quality. Now
that salary raises and career advancement are based on staying in one
place long enough to establish cycles of innovation, managers are chal-
lenged to find methods and tools that are replicable and that connect
to corporate strategy to grow market share and brand loyalty.

Pragmatic Innovation (and How It Differs

from Invention)
One of the key concepts to understand is how innovation today dif-
fers from invention and why innovation in business must be prag-
matic. When Thomas Edison developed the system of electrification
and the electric light bulb, and when Ford perfected the assembly
line to produce an affordable automobile, the Model T, those were
inventions. One replaced gas as the primary energy for lighting at
work and at home, and the other made gas (fossil fuel)-driven vehi-
cles as inexpensive as horses and horse-drawn carriages. What was
formerly beyond the imaginative daydream of the common person
became an essential part of new routines and enhanced lifestyles.
These inventions were technological leaps. The scale of the leaps was
significant in one dimension but lacking in others. The Model T was
noisy, uncomfortable, and dangerous to start, and early electric light
was not as warm and attractive as gaslight or candles. We are at a
point in the evolution of technology where inventions are still occur-
ring, but innovation has replaced invention as the main day-to-day
driving force in the global economy.
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24 THE DESIGN OF THINGS TO COME

It is common for a word to shift in meaning to reflect changes

that are occurring in business or the world at large. The term inno-
vation is now being used to describe a new force in business in the
same way the word quality shifted in emphasis and in meaning in the
last two decades of the twentieth century. What we mean by innova-
tion extends beyond invention of new technology and includes a
thoughtful and insightful application, delivery, extension, or recombi-
nation of existing technology. Although innovation might involve a big
engineering leap of technological invention, innovation may simply
be technologically incremental. The key is that an innovation is a
valued leap from the viewpoint of consumers whether or not it is
incremental from the producer’s standpoint.
Innovation, then, is a new comprehensive approach to product
and service development that scores high on consumer value, con-
necting to and altering consumer lifestyles. Innovation is the ability to
find nonobvious opportunity in what, after the fact, seems obvious
and needed to everyone else. It is the ability to see extraordinary
potential in ordinary events. It is the ability to see how to fulfill the
desire of others, to elevate their common, everyday world into
uncommon lifestyle experiences. We have further clarified the term
innovation by adding the word pragmatic. Pragmatic innovation is a
balanced approach that not only explores a range of interesting alter-
natives but converts that exploration into successful, profitable prod-
ucts. Pragmatic innovation is a process of inspired management of
diverse teams working on a significant opportunity in the market. We
use the term pragmatic innovation and innovation interchangeably
throughout this book.
Whereas everyone can be innovative in addressing the problems
in his or her own personal life, managing innovation in a corporate
context is a more complex challenge. In business, innovation must be
not only the development of products or services that are useful,
useable, and desirable, but it also must be marketable and profitable.
Balancing new insights with the practical realities of the marketplace
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 25

requires a balance of vision and business acumen. Finding the right

pH value between a product that is too acidic for the public to digest
and one that is too basic to generate appeal is the challenge that com-
panies face. The stakes are significant, but so are the profits. The
point is that “basic” commodity products will not generate significant
profit. Companies often choose the basic option because they see the
opposite as dangerous, that developing “acidic” products might be
trendy but too costly to risk without a clear return on profit. Instead,
finding the balanced approach of pragmatic innovation will grow the
company and keep it competitive in today’s global economy.
A great example of innovation with minimal technological
advances is the redesign of a pager by Motorola in the 1990s that had
few enhanced features but offered colorful faceplates. Based on the
faceplates alone, Motorola was able to successfully charge an extra
$15 per unit.1 Or consider the design of the Palm V, a commercially
important advancement in the generations of Palm PDA devices.
IDEO designed the unit for Palm. According to Tom Kelley, general
manager of IDEO, the Palm V was designed with essentially the same
technology as the previous-generation Palm but was aesthetically and
ergonomically designed to appeal to executives and to women in gen-
eral. The device was given organic lines, made thinner, and finished
with brushed aluminum. The product was successfully sold at an
additional $150 and expanded the PDA market.2
Invention is often the output of an individual genius, and inven-
tions also come out of groups dedicated to an objective that results in
a superior technological advance. The focus in invention is on the
device more than the experience. Inventors are happy with Rube
Goldberg solutions that work, failing to see the value in ergonomics

1 Postrel V. I. The Substance of Style: How the Rise of Aesthetic Value Is

Remaking Commerce, Culture, and Consciousness. HarperCollins, New York,
2003. p. 67.

2 The InnRoad. A film produced by R. Lambert and presented by Advanced

Elostomer Systems, 2004.
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26 THE DESIGN OF THINGS TO COME

and aesthetics. Innovation is customer-driven, a carefully crafted

integrated response to customer needs and desires. It must be broad-
er in scope to take into account the myriad of factors that make prod-
ucts successful. Starbucks did not invent coffee; it changed the way
you experience it. Starbucks took a risk pushing the quality of the
taste of coffee, the feeling of the drinking environment. It charged a
price that no one would have anticipated, but everyone was willing to
shell out. Chrysler did not invent the PT Cruiser; it created an inno-
vative retro-future interpretation of a hot rod, a small van and a sta-
tion wagon, while simultaneously extending its established brand.
General Motors took the Hummer and turned it into the ultimate
statement of fashion and security and hit a post-9/11 emotional need
to make the bulky and awkward into a trend. BodyMedia, as we will
soon see, did not invent sensors to measure acceleration, heat flux,
skin temperature, or skin response. Their innovation was to extend
sensor technology into a contemporary-lifestyle wearable product
with easy-to-interpret and up-to-the-minute personal health data
being collected 24/7 regardless of the activity.
Invention has an important role in advancing society’s abilities to
meet demanding needs. Consider the technological challenge for
fuel-cell technology, biodegradable materials, and nanotechnology to
noninvasively perform surgery. But invention tends to be focused
along the technology dimension only. The invention—the technolo-
gy—is not enough. A successful product needs to consider the com-
plete delivery of the technology as an object or service to be used,
desired, and considered useful. In other words, the successful deliv-
ery of a new technology requires innovation.
Invention and discovery must continue. We do not question the
basic and core value of these two activities. The difference is that we
are now talking about pragmatic innovation rather than applied tech-
nology and invention. Pragmatic innovation requires observation,
interpretation, and cycles of prototyping comprehensive versions of
intended solutions, not only of technology. This is as true in consumer
products, the medical industry, and business-to-business. The other
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 27

important concept of today’s innovator is that he or she is customer-

driven, not invention-driven. Finding what customers want and
developing innovative solutions often means that you must bring new
capabilities to a company to meet emerging customer needs. It also
means that the company is not defined by its history of invention or
by the number of utility patents it owns. The company’s core is its
knowledge of the customer and its capability to meet customer needs.
Pragmatic innovation is driven by and must respond to three fac-
tors: social change, economic situations, and technical advances.
Each opportunity for a new product arises due to different combina-
tions of changes in these factors. The social dimension is especially
interesting. Responding to changes in trends and developing solu-
tions that meet those trends tends to be the most successful strategy
from a brand standpoint and allows for fat profit margins. The
Segway is a great technological solution for personal transport, but
the company failed to predict the lack of societal acceptance. The
Prius, introduced by Toyota, anticipated the growing acceptance of
hybrid power magnified by an increase in gasoline prices. Whereas
both Honda and Toyota made initial hybrid versions that were met
with mixed results, Toyota stuck with it and found a breakthrough
solution.
Developing innovative products is not easy. The challenge now is
not inventing and rushing new unrefined technology into the mar-
ketplace. The challenge is to provide more integrated, holistic solu-
tions that address consumer needs, products, and services that
respond to the changes in social conditions, economics, and technol-
ogy. Given consumer expectations at home and at work, a product
must successfully maximize its core technology, have a clear use in
daily life, be easy to use, and be attractive enough to appeal to senso-
ry desires. Many companies have been trying to compete by being
excellent in one or two of these categories. We fully recognize the
challenge in optimizing all these categories, but it is the level
required for effective global competition and the core to achieving
successful innovation. To be an innovative company, everyone must
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28 THE DESIGN OF THINGS TO COME

contribute in his or her own way to changing the culture and creating
an environment that generates true consumer value.
Everybody, in some way, is an innovator at either work or home.
Companies need to help their employees turn their innovation abili-
ties, often focused on their avocation at home, into innovation in their
vocation. Almost every way that you find to improve upon a task is an
innovation. You may have found the perfect way to save time getting
to work. You may have a unique strategy for raking leaves or for shov-
eling snow. It may be that you find yourself pressed for time and are
preparing the same meal over and over, such as macaroni and cheese.
Sometimes, you just open a package of the Kraft mix, that blue box
sitting in everyone’s pantry. But at other times, you might cook it from
scratch. It’s pretty easy. You boil the elbow noodles. Mix in some
melted butter, milk, shredded cheddar. Sprinkle with breadcrumbs,
and bake. You might experiment a bit by changing the pasta to penne
and adding a dash of mustard and Worcestershire sauce. Each change
is an innovation, a modification, or extension from the original. Not
every example of personal innovation converts into a profitable idea,
and some of the innovative ideas that work best for you might be
rejected even by your family. When making a meal, you can afford to
have some ideas that work and some that do not. When companies
innovate and fail, the price is much higher and the factors that dictate
success and failure are far more complex. The process of
experimentation to find the right solution, however, is fundamentally
the same. You can be the average Joe making adjustments to improve
your car in your garage, or Steve Jobs inventing the personal com-
puter industry in his.
How do you instill that feeling of risk and experimentation in
employees in a 100-year-old company with publicly traded stock in a
mature industry with global competitors aimed at defeating you in
every market segment in which you compete? When you do get that
new insight, how do you translate it into a useful, useable, and desir-
able solution that will be produced flawlessly, distributed, and sold in
a systematic and thoughtful way in an appropriate amount of time to
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 29

be ahead of your competition? If that is not enough, your solution has

to stay competitive long enough to generate a return on investment
and contribute to the company’s well-established reputation for
excellence. This is exactly what Dee Kapur was faced with when he
started the program to develop the 2004 Ford F-150.

Moving from Invention to Innovation at

Ford: The Redesign of the F-150
The Model T was an invention that made the automobile accessible
to the middle-class, mostly male, consumer 100 years ago. The recent
trend in the pickup industry, which is both male- and female-driven
across many economic segments, required an innovative solution that
would reestablish the F-150 as the undisputed leader in the pickup
truck market. The F-150 has been the best-selling vehicle in America
since 1982, having sold almost 30 million units. In 2003 alone,
850,000 F-150s were sold. Every seven years or so, the company
undertakes a major redesign of the vehicle. Because Ford makes a
significant percentage of its profits on its wildly successful F-150, why
should it mess with success? Why redesign it? Well, there are many
reasons. Three main ones are Chevy, Chrysler, and Toyota, and a
fourth is Nissan. Each of these competitors must adapt to changes in
the marketplace. Industry styles change, and a vehicle begins to look
dated. Lifestyle trends change, so the expectations of the customer
base change with regard to features and performance. New technol-
ogy becomes standard on vehicles and must be incorporated into the
design. Manufacturing technology changes, requiring the design to
change to maximize the effectiveness of the production capabilities.
Regulations change, requiring new fuel-efficiency standards with
new engine technologies and new use of materials to lighten the vehi-
cle. Perhaps the most important change during the 1990s was that the
truck as a workhorse evolved into the work and play stallion. The SUV
lifestyle trend started to extend into the truck market.
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30 THE DESIGN OF THINGS TO COME

Ford was being attacked by Chevy’s more aggressive designs,

Toyota’s quality, and Chrysler’s muscle theme with Ram trucks. If
Nissan creates a more exciting and better-performing truck, which it
has in its Titan, Ford loses market share and its core profit. So the
product development team at Ford had to innovate to compete. If
they failed, the company would lose its cash cow. If the team suc-
ceeded, however, they could regain market share and gain a signifi-
cant part of the new number of buyers in that evolving truck segment
(mostly upscale). The challenge was to develop an innovative
approach to re-creating and extending the concept of “Ford Tough,”
and the solution was evident in the 2004 release of the F-150.
Ford designed models for five different market segments.
Instead of relying on geographic, age, and income segmentation,
Ford studied how F-150s were being used and created product user
segments and scenarios. The base model F-150, the XL, is the basic
workhorse for farm and construction. The STX is for a younger
“wheels and tunes” crowd, those who customize their trucks and pre-
fer certain features to be base-level and expendable. The XLT is for
families, with the option of a spacious supercrew cab, complete with
a full-size back door. It has all the functionality of a truck. At the same
time, a two-car family does not have to compromise their ability to
haul the kids, because the work truck is also a family mobile.
Kapur’s team went beyond these three traditional truck markets
and identified two additional segments. These segments were com-
posed of people who buy trucks because they are cool and provide
the fantasy of off-road driving and safety. The FX4 is for bragging
rights, for those who want a truck that stands out. It has options that
are not available on other models, such as the black leather interior
complete with leather-wrapped steering wheel and chrome-clad floor
shifter. Its flashy look weds truck strength with sports car style. The
fifth model is a luxury truck, the Lariat, with an interior more closely
related to a living room than to a vehicle. Although still a truck, it
provides the essence of comfort, even having power-adjustable foot
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 31

pedals so that the huge dude and the tiny wife can both call this truck
theirs. The reality, however, is that this “pickup” truck will likely
never stray from an asphalt road and never carry more than antiques
and the family suitcases.
Dee Kapur, who is highlighted in Chapter 1, “The New Breed of
Innovator,” led the beginnings of the F-150 redesign. At a time when
Ford had tarnished its “Quality Is Job 1” badge as a result of the
Explorer tire fiasco, Kapur kept his eye on the challenge ahead of
him. He was faced with maintaining the number-one position for the
F-150, the center of profit for the company. He sheltered the team
from the major external problems the company was facing and pro-
vided a forum for innovation. He supported the ambitious tiered-
segment approach because of innovations he saw in the marketing
research and analysis. Innovation resulted in both the external and
interior aesthetic and feature design to create a distinctive new look.
Kapur challenged engineering to meet the demands of the new
design while maintaining a commitment to quality and craftsmanship.
Kapur knew that the status quo was not good enough, and Ford
retained its leadership in the small truck market with the introduction
of the new line.
Although Ford did its homework to assess its customers’ desires,
even its own expectations have been exceeded. In the months follow-
ing the new F-150’s release, 57 percent of buyers bought the FX4 and
Lariat versions of the pickup, models that have the highest profit
margins, whereas Ford had expected that these premium models
would account for only 40 percent of sales. Although automobile sales
were slow in early 2004, the F-150 was on target to set a sales record.
On top of these five models, Ford maintained a flagship, signa-
ture vehicle that it created as a rolling advertisement for its brand.
The market size was not as important as who purchased the truck and
what statement they made with it. The King Ranch version of the
F-150, mentioned in Chapter 1, has seats made from saddle leather.
No two seats are identical in look, and owners are responsible for
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32 THE DESIGN OF THINGS TO COME

treating the leather as they would a saddle. Ford produces only

20,000 of these each year, but they meet a premium-priced market
and enrich Ford’s brand equity. Ford also chose to increase visibility
and brand equity at the upper end of its pickup portfolio with a co-
branded model with Harley Davidson. The Harley truck, designed in
collaboration with Harley legend Willie G. Davidson, captures the
look and feel of Harley’s renowned bikes. These special models, the
King Ranch truck and the Harley truck, are outcomes of insights
based on extensive customer research, the result of an innovation
process in which product developers became so familiar with real
people that they could design those customers’ dreams in truck form.

Innovation in Start-Ups

On the twelfth floor in a renovated office building at the foot of the

Smithfield Street Bridge, a famous Pittsburgh, Pennsylvania, landmark
built two centuries ago, sits an entrepreneurial high-tech start-up com-
pany that epitomizes the concept of innovation. The office space has
won several awards for its novel use of low-cost materials and has the
feel of an open landscape that characterizes the company’s horizontal
organization. White stretch fabric hangs from the ceiling in a dramatic
way that shields but does not completely hide the exposed details of
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 33

the original architecture. When the heating and cooling system kicks in,
the fabric expands into large sails, giving the feeling of being on a sail-
ing ship, an apt metaphor for the river below and the activity within.
The atmosphere is creative but minimalist, and it is just the right mix
to keep the mostly young interdisciplinary employees inspired. The
views out the windows show a panoramic view of the confluence of the
Allegheny and Monongahela Rivers, the point in Pittsburgh where the
Ohio River is conceived. These are the same rivers that were used in
the last Pittsburgh revolution. The once-polluted rivers that were filled
with coal and slag barges are now a center of tourism and leisure boats.
The new revolution is innovation.
The open space is filled with desks, laboratories, computers, and
a prototyping studio that can build anything from high-end electron-
ics to wearable product concepts; they even have professional sewing
machines used in fashion design and manufacture. Bulletin boards
appear throughout, filled with charts, pieces of the latest technology
in materials, and images of people involved in all sorts of everyday
activities. In the lobby, which melds with the desks of programmers,
is a glass-top table with a box underneath filled with sand that you can
reach into and play with, a remnant icon from Sandbox Advanced
Development, the predecessor to BodyMedia.
In that space are also the some of the world’s leading experts on
body sensing, ergonomics of wearable devices, the analysis and min-
ing of monitoring data, and cutting-edge aesthetics. BodyMedia, a
small but growing biotechnology company, was founded by a
foursome in 1999 with the mission to “be the recognized leader in
integrated products and services that track and promote health and
wellness through continuous body monitoring.” CEO Astro Teller has
an impressive lineage as the grandson of Edward Teller and of Gerard
Debreu; Edward Teller was the father of the hydrogen bomb and
advisor to six United States presidents, and Debreu was an econom-
ics Nobel Prize winner. Astro Teller has a Ph.D. in computer science
and looks more like a rock star (with his below-shoulder-length hair,
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34 THE DESIGN OF THINGS TO COME

goatee, and mustache) than an executive. Another founder, CTO Ivo

Stivoric, does not have an engineering degree. Neither does the
VP of product design and mechanical development, Chris Kasabach.
Instead, both have several degrees in industrial design. The fourth
founder, Chris Pacione, VP of interaction design and marketing com-
munications, does not have a marketing degree. Before teaming with
Pacione and Teller, Stivoric and Kasabach had worked together in a
research lab at Carnegie Mellon University developing five genera-
tions of wearable computers. Prior to returning to Pittsburgh to
teach, where he ended up connecting with the other founders,
Pacione had worked as an interface designer for one of the leading
interaction design consulting firms in the world, Fitch. The team
leads one of the most advanced and exciting technology companies in
body health monitoring today.
Their product, the SenseWear armband body monitor, has won
multiple national awards and has been featured in the Wall Street
Journal, Time, and Business Week, among others. Against the odds in
a climate of start-ups going bust, the company grew to 31 employees,
raised $22 million in venture funding, and became a profitable com-
pany in its first five years. It has three significant utility patents issued
on its core technology and nearly 50 more pending in the United
States and abroad! The company also sells its products indirectly
through partnerships that include Roche Diagnostics for clinical
weight management and Apex Fitness as part of a weight-loss pro-
gram and through resellers in the scientific research market.
The four founders represent further examples of the new breed
of innovator. As an innovative team, they have developed a style of
working that allows them to deliver state-of-the-art solutions to prod-
uct opportunities. That working style incorporates interaction
between their employees and their customers, a research and devel-
opment approach, and a culture that keeps them on the cutting edge
of discovery and application. For instance, SenseWear is not only an
elegant monitoring device, it is also part of a complete service of
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 35

interpreting the diverse streams of information generated by and

stored within the device over periods as short as a few minutes or as
long as a few weeks. BodyMedia’s breakthrough insight into the need
for a complete product and service solution occurred when the
founders realized, after extensive observation and research with end
users, that people want to incorporate the body monitoring into their
everyday life (a product) and that both experts and novice users had
a variety of potential applications for the information they monitored
(a service). For instance, the SenseWear device might be used to
accurately track calories burned during exercise, information that can
be used in Web-based software (also provided by BodyMedia) that
enables both personal trainers and their customers to track the suc-
cess of a weight-loss regimen. Or the device might track vital cardiac
signs for someone such as Rob Nicholson, mentioned previously in
this chapter. The SenseWear combination of an elegant unobtrusive
product, one with a simple and seamless download and easily under-
stood interface, gave BodyMedia the right combination of innovative
ideas to create a breakthrough in body monitoring.
Innovation can happen in both large and small companies. The
nimble small companies, however, are often in a position to innovate
without the bureaucracy and inertia of stability and the status quo.
Large corporations have also found ways to build an entrepreneurial
attitude, often by relying on small interdisciplinary advanced product
development teams. But the new generation of start-ups is all about
innovation, about change. BodyMedia developed its SenseWear
product not because it had a technology looking for an application.
Instead, the team had the training to observe societal trends. The
team put forth the effort to understand the emergence of the desire
for—and, in some cases, the need for—unobtrusive real-time moni-
toring of body performance. They were able to recognize this oppor-
tunity because they had extensive experience and expertise in
wearability and computing.
The team of four founders at BodyMedia had gained experience
in these areas through their education and experiences at Carnegie
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36 THE DESIGN OF THINGS TO COME

Mellon University. The team was a spin-off of a research lab in the

College of Engineering. The lab was focused on the fact the technol-
ogy advances were allowing for the development of highly functional
computers that could be carried or worn. Whereas most labs would
have addressed size alone from a technology standpoint, this lab hired
research assistants who had recently graduated from the university’s
department of industrial design. The team of Chris Kasabach and Ivo
Stivoric started to produce much more comprehensive prototypes
that included product semantics—the form and interface features
that describe the aesthetics of the product, human factors, and mar-
ket-driven aesthetics not found in most engineering-driven labs. The
result was prototypes that looked and operated like mass-produced
products. When designing wearable technology for military applica-
tions for equipment inspection, they took into account that most sol-
diers using the equipment were Game Boy-savvy and between the
ages of 18 and 24. Their work attracted researchers at Intel, and they
were asked to push the concept of usability and reduction of size to
new areas of application. This project brought the entire team togeth-
er as Astro Teller added a computer science dimension and Chris
Pacione brought in communication and interface expertise. They also
added new industrial design research assistants to the team—
Francine Gemperle and David Aliberti.
The first prototype concept in the university setting was given the
name Digital Ink. The idea was that your pen could also be your
computer. The nice thing is that everyone carries and uses a pen, and
building off that common tool would make everyone instantly com-
fortable with “computing.” Although the concept was fantasy from
the team’s imagination, they had enough experience with technology
to know this product was feasible, and enough practical understand-
ing to create an innovative integration and delivery of technology in a
product that everyone would embrace and that was eventually
patented. The success of the product concept enabled the core team
to spin out of Carnegie Mellon to start a consulting firm, Sandbox
Advanced Development. The goal was to generate enough money
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 37

consulting to start a new company where they would develop their

own products. Within a year, they were on their way, and the original
sandbox is in the lobby today, as mentioned earlier, as a reminder of
where they have been and the attitude of free-flowing ideation they
want to maintain.
Small and large companies alike need to build off of expertise.
But innovation comes from trained insight and process. BodyMedia
follows a rigorous process of innovation and exploration, processes
that we discuss throughout this book. The result is a unique capabil-
ity in the growing market of body monitoring.
The SenseWear device itself is comfortable and nonintrusive to
wear, located at the optimal location of the body, balancing ergonom-
ics and function. Rather than projecting a medical image, the device
is a beautiful aesthetic. So it can be worn overtly rather than hidden.
It is a statement of lifestyle rather than a banner of medical need. Its
patented system analyzes body output such as total calories burned,
duration of physical exercise, number of steps taken, active energy
expenditure, and sleep onset and wake. The functional, ergonomic,
aesthetic, and overall experiential qualities of the SenseWear rede-
fined body monitoring in a market that had provided technology with
little care for the experience of use.

Manufacturing Quality—The New

Commodity
BodyMedia’s success comes from a pragmatic approach to innova-
tion. Any company producing a product or service that wants to dif-
ferentiate, that wants to avoid being a commodity, must innovate.
Innovation is the key to the competitive edge. That edge used to be
found downstream in quality programs. Today, innovation is the
theme that has replaced quality improvement in companies around
the world. Not in the sense that quality programs are lessening in
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38 THE DESIGN OF THINGS TO COME

importance, but quality programs no longer offer a competitive

advantage. Quality programs, such as Six Sigma, focus on producing
zero-defect manufactured goods, where the goal is to improve the
short-term and long-term hard-quality aspects of a product or deliv-
ery of a service. These methods have led to successful production of
high-quality products, yielding goods that meet tolerance and other
functional expectations, products that maintain that effectiveness
throughout the life of the product. These quality methods have set a
new standard; they have improved company processes and products
so well that practically all companies now implement some kind of
quality initiative. In fact, they must, because to be competitive every-
one now must have high-quality manufacturing standards.
But now that quality manufacturing is simply the cost of doing
business, corporate leaders have recognized their mandate to find
other avenues for increasing bottom-line profits. Much recent effort
has been directed at cost cutting. Wal-Mart’s success has led many
companies to see lower costs as an avenue for higher profits.
Although Wal-Mart’s no-nonsense price negotiations with suppliers
are well known to the public, business leaders have been enticed
more by Wal-Mart’s cost-cutting improvements to the supply chain
itself. Wal-Mart was a leader in implementing continuous replenish-
ment programs and vendor-managed inventories, systems that have
been critical to Wal-Mart’s ability to keep costs down. Like quality
programs, these business process enhancements are quickly becom-
ing necessary standard operating procedures for every industry. But
efficiency gains from these systems are showing up less and less in
bottom-line profits and more and more in lower prices for con-
sumers, which results in lower top-line revenues.
Attention is back on innovation as a way for top-line growth, now
that companies are efficiently producing and supplying high-quality
products and services. Quality programs had a guaranteed impact on
the bottom line for those companies that were the first to adopt them.
But after all competitors implement quality initiatives, quality pro-
grams no longer provide a competitive advantage. If they are not a
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 39

competitive advantage, they are like a commodity, something every-

one has. Microeconomics teaches that marginal profits are zero for
commodities, that revenues simply cover the costs of wages, depreci-
ation of equipment, and so on. Only those companies that are on the
efficient cost frontier can continue to stay in business—anyone whose
costs are too high must sell at a loss. Previously, when some compa-
nies had higher quality to offer, they could sell at higher prices and
afford higher costs. Now that quality manufacturing is accessible to
all, quality differentials have shrunk, and higher costs are unafford-
able. Offshoring is a result of firms’ need to stay on the efficient fron-
tier, the need to keep costs down and profits up. But it is a short-term
solution for profits, even though the moves offshore may be perma-
nent. Innovation cannot be commoditized, for innovation leads to dif-
ferentiation because innovative products offer unique value benefits.
A process of innovation is a fountain of youth, a source of a profit
stream that cannot be quenched from competitive replication. Each
innovative solution yields its own differentiated market and unique
source of revenues.

Innovation—The New Mandate

Not only are firms returning to innovation as a central source for
growth and sustained viability in the competitive marketplace, they
also recognize that the greatest growth potential comes from a skill
they already possess—growth from within, which is organic growth.
An alternative for growing revenues is acquisition. Intelligent acqui-
sition is without doubt a valid and important growth strategy. But
there are two pitfalls of acquisitions. One pitfall is that it directs the
firm’s energy and focus outside of the existing firm boundaries, away
from existing knowledge, skills, customer insights and loyalties, and
brand identity. With attention directed outside the firm, growth
opportunities that are in-hand may be unseen or ignored due to man-
agement time constraints and corporate budget allocations.
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40 THE DESIGN OF THINGS TO COME

A second pitfall, similar but not identical to the first, is that the
company underestimates its own potential for innovation, and it may
be tempted to delegate innovation to outside firms. Although outside
viewpoints add valuable fresh insights, it is those inside the firm who
best know their own customers, who best know their own brand iden-
tity, who best understand their own core competencies. New prod-
ucts are not only expressions of a brand or corporate identity, they can
also alter identity, for better or for worse. Volkswagen’s redesigned
Beetle not only expressed the company’s history, it modernized its
whole brand image, reinvigorating Volkswagen’s connection with con-
temporary culture.
Organic growth—stemming from innovation, knowledge, exper-
tise, and skills already owned by the firm—utilizes rather than ignores
the company’s latent potential (not growth through acquisitions, nor
that ephemeral growth seen only on the balance sheet). Organic
growth is growth through innovation and new customers and markets.
But many innovative ideas never see the light of day because
commodity-oriented companies are not structured to identify and
foster an atmosphere that supports innovation. The intense time-to-
market pressures challenge a firm’s ability to thoroughly research the
product opportunity, and a quality product that is precisely manufac-
tured may fail because it never was a valid concept from the cus-
tomers’ viewpoint. To avoid product failure, many companies follow
a rigorous process for intermediary steps of product design. A popu-
lar and prototypical one is the StageGate process of Robert G.
Cooper.3 This process creates the structure for timely process to mar-
ket, with a checklist along the way to make sure the process meets the
target schedule and budget. This type of process keeps companies
precise. If the right decisions and valid insights are not made in the
earlier stages, however, the later stages will not correct a poorly con-
ceived product opportunity. The process will get you to production,

3 Cooper, R. G. Winning at New Products: Accelerating the Process from Idea to

Launch. Perseus Publishing, Cambridge, 2001.
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 41

but you might be producing a product that misses the mark in the
marketplace. Unfortunately, mistaking precision and quality manu-
facture for true product value, which is based on an accurate assess-
ment of one’s customers, is sadly common and costly. Unless the
product is designed to meet the customer’s experiential expectations,
the well-made product will fail in the marketplace. We do not argue
against a precision-oriented product development process or a well-
manufactured product. On the contrary, we believe both are critical
for product success. But the best and the average companies today
follow those processes. To stand out and deliver value takes more; it
takes a process of innovation.
Companies need to develop a culture and mind-set for innovation
and organic growth. New companies, such as BodyMedia, are creat-
ed with this attitude. People are there because they believe in what
they are trying to do. They thrive on the challenge. They work in an
integrated fashion without turf ownership and friction. Larger com-
panies need to find ways to change the course. They must take their
best creative and energetic people and provide an environment that
gives them the freedom to innovate. Their success provides the veloc-
ity to pull the others along.
Although company culture and mind-set are an important foun-
dation for successful innovation, the challenge is to develop a method
to identify and develop a truly innovative product. Although some
inventions and innovations have been serendipitous, innovation is
generally the result of disciplined activity. Several aspects of innova-
tion and organic growth must come together in a unified strategy in
the development and marketing of new products and services. These
include an approach to researching the needs, wants, and desires of
the target market; an understanding of who the customer is and how
the product impacts the end user and indirect users; and an under-
standing of societal trends. This also includes a rich and unified base
of people within a company from the management to the product
development team, a corporate culture that encourages and supports
innovation, and a complete approach to managing and protecting
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42 THE DESIGN OF THINGS TO COME

intellectual property. Finally, a comprehensive process must unify

each of these themes in an effective and efficient approach to inno-
vation. These components together represent the product develop-
ment process of today’s most innovative companies.

The Global Dimension of Innovation

In terms of product and service development, three major changes
are affecting the world we live in. The first is the balance of global
production and consumption; the second is the way products and ser-
vices are conceived, developed, and delivered; and the third is the
perception and expectation of consumers around the world.
As China and India and other less-developed but highly populat-
ed regions gain new buying power, the center of gravity of world con-
sumption is shifting from the United States to these larger populaces.
Not only are these economies increasingly voracious in terms of con-
sumption quantity, but consumer perceptions and expectations are
rising at the same time, as the new wealth allows them to also pursue
life, liberty, and happiness.
At the same time, these other countries are gaining new produc-
tion skills beyond just the ability to manufacture. The United States
is certainly still a significant global market for and source of innova-
tion. At the same time, the EU is still evolving as an entity, and new
alliances are forming to help countries and companies compete more
effectively and open the borders for the development of intercon-
nected markets. Russia is still a question mark but has tremendous
potential given its natural resources and population, and the rest of
the former Soviet bloc nations are emerging in the global economy as
well. Emerging markets in China, India, and several countries in
Africa are new growth areas for production and consumption of prod-
ucts and services.
China is now making a major change that will affect all the com-
panies in that country and also worldwide competition. China realizes
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 43

that to become a serious player in the World Trade Organization, it

must be more than the world’s leading supply manufacturer. China is
not only turning out 300,000 engineers annually, but the country is
putting major investment into industrial design. By the year 2010,
China will have 500 schools of industrial design. China will become a
major source of business, engineering, and design for its own emerg-
ing consumer market and will compete in global markets as well. It is
already beginning to take over development of new products from
former powerhouse engineering countries, such as Germany and the
United States. China will follow in the same development path that
first occurred in Japan, then in Taiwan and Korea. You might not
drive a Hyundai today, but in fewer than 10 years, you will be tempt-
ed to buy a car from China from a company that you do not yet even
know the name of. Haier has already become a competitor in the
United States in refrigerators and TV monitors.
Just a decade ago, China did not have any business schools.
Chinese engineering was based on copies of the Russian approach to
mechanical and electrical design. Its design schools were either craft
schools or based on Russian and East German models of design edu-
cation and practice. We are witnessing one the fastest movements to
modernize in history by the world’s largest country. Remember one
thing: The Chinese have been here before. Two thousand years ago,
China was way ahead of Europe and light years ahead of the
Americas. You might not know much about its heritage, but China
invented the compass, paper, printing, and gunpowder. This is a
country that was “built to last,” and it won’t have any problems going
from “good to great” again.
If China is attempting to become a global competitor based on
innovation, and India is close behind, there is no turning back for
other countries. Finland is investing huge resources in design and
innovation in a program aptly named Finnovation. Building on the
early success of Nokia, Finland wants to become a knowledge- and
innovation-based country. Even Poland is trying to redesign its brand.
It is seeking to rid itself of its image as a land of labor and strife, and
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44 THE DESIGN OF THINGS TO COME

is working to bring a fresh look to improve tourism. From countries

to companies around the world today, the key is finding a brand strat-
egy that serves as a center for sustained innovation and implementing
a method to achieve that strategy—to innovate. The strategy must
serve as guide for using methods that promote organic growth and
serve evolving needs of consumers as the social, economic, and tech-
nological (SET) factors continue to change and produce opportuni-
ties for new products and services.
Not only is there a shift in global production capabilities, but the
new ease of delivery of product and information is hastening the
demise of economic borders. Products and services can now be
developed anywhere by anyone and shipped everywhere. Soon, GM
will likely sell more Buicks in China than in the United States. Haier
has set up a manufacturing and distribution center in South Carolina
and is competing in many white goods categories. Samsung recently
became a global competitor in design and innovation after decades of
being the low-cost option, and its major competitor is Nokia in
Finland, not just Motorola.
The media channels that bring information and entertainment
into our homes are becoming increasingly global; markets are form-
ing around interests and themes more than geographic location. As
fantasy is beamed around the world, everyone is forming his or her
own visions of the ideal fashion, car, home interior, and lifestyle expe-
riences. Harry Potter and Michael Jordan transcend geographic lim-
itations. There is an air-conditioned Starbucks in the Forbidden City
in Beijing, and there is an Eiffel Tower in both Paris and Las Vegas.
The interplay between the innovative, empowered individual and
the forces of global commerce have never been more important. The
emerging economies are not threats but sources of endless opportu-
nities. What they all point to is two directions for business strategy.
Companies can either choose to be the cheapest, or they can choose
to be innovative. This book talks about the latter, because in every
market, only one company can be the cheapest, and the competition
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CHAPTER 2 • PRAGMATIC INNOVATION—THE NEW MANDATE 45

to be the low-cost provider is fierce. Unlike the lose-lose economics

between low-cost competitors, innovation is a win-win that lessens
competition among companies by differentiating products, allows
producers to increase their prices, and delights customers by provid-
ing greater value to them. As companies determine their core values
and capabilities, they establish unique brand identities that connect
company to consumer. Competing up the price ladder enriches
people and companies. It is well demonstrated that people will pay
for products they value. As the SET factors continue to shift, the
companies that can most effectively read market trends will win.

Surfing the Waves of Innovation

The marketplace emphasis on innovation is not going to go away. It is
here to stay, and the rules are not as obvious as in the era of mass con-
sumption and predictable markets. This is very much a hands-on,
learn-by-doing world. The people who are having success in this new
environment are working hard but having fun. They see the current
world as an opportunity, not as an insurmountable challenge. They
are surfing the biggest waves with a healthy respect for the forces
under the surfboard, but they have overcome the fear of failure and
have become the new breed of innovators. These individuals have
mastered the process of pragmatic innovation.
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04Cagan_ch03.qxd 5/6/05 9:30 AM Page 47

3
THE ART AND SCIENCE
OF BUSINESS

Despite the pervasive view that innovation depends on serendipitous

inspirations from creative individuals, today’s innovative companies
rely on disciplined research and procedures to achieve innovation.
These procedures for creativity are fundamentally different from
what we typically think of as “procedures,” but they are procedures
nonetheless, and they can be learned, used, and adopted by anyone—
anyone, at least, who is willing to intelligently take the uncertainty
head on to risk and endure failure in the disciplined quest for a
brilliant idea.
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48 THE DESIGN OF THINGS TO COME

Villeneuve d’Ascq, France. Isabelle, a new owner of a pair of Adidas

1s, would not surface as an obvious candidate for this shoe according
to demographic studies. She does run for exercise, but she thinks of
herself not as a runner but as a mom, a tennis player, and an employ-
ee of local canner Bonduelle. She is healthy and active and has won
and placed in multiple local tennis tournaments, but she has never
participated in any competitive running event.
Isabelle blends into demographic groups; she could be used as a
representative of the average educated 40-year-old married woman.
She lives in a suburb of Lille, the second most densely populated city
in France. The narrow and windy streets feel like walled corridors,
passageways lined by a continuum of homes and storefronts that are
partially clogged by cars parked half on the street and half on the side-
walk. Isabelle’s house shares a wall with a small grocer, a convenient
neighbor given her standard French penchant for fresh produce.
Not only is the location of her residence typical, she herself is
quite representative in terms of household income and religious and
political views. Unlike the few and the loud who end up portrayed on
the American news, she likes America, not just its movies. Her dual
household income is also typical, being ample for comfortable living
while not allowing for abundance. She, like most, is careful in her
expenditures, careful in her product choices.
Where this typical French woman is unusual is right there—in
her product choices. For years, she drove a Dodge Grand Caravan, a
great family vehicle but an unusual choice in France. Now she drives
a PT Cruiser, for her two girls are older, and the still-roomy but small-
er PT Cruiser fits her family’s current needs. Although both of these
vehicles arguably make sense as functional purchases, both also dis-
tinguish her family from others, which is one of her unstated reasons
for choosing them in the first place.
Her real excitement in purchasing these automobiles is that they
were cutting-edge products in France. What does not show up in a
demographic profile of Isabelle is that she is an early adopter of new
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CHAPTER 3 • THE ART AND SCIENCE OF BUSINESS 49

products. After all, her home was one of the first in the area to have
a DVD player, and before that, she was one of the first few to have a
Sony videodisc player. When she bought the Adidas 1s, Isabelle con-
vinced herself that her feet needed them, because in truth they are
increasingly sore after her jogs. Her shoes are far more to her than
running comfort. She is more excited about these shoes than she
would be about similarly superb inserts, because the Adidas 1 run-
ning shoes are the first of a new generation of products.

Launching the Adidas 1

Athletic apparel companies intensely compete for each customer. In
fact, in some ways, their behavior is much like that of their most
intense users, the hard-core runners. Many serious runners are slow
to change in terms of their routines, training, diet, and equipment.
Once they have found a system that works, they stick with it. It
becomes their ritual, their passion. They have bought the same model
and brand of shoes for years, and they are upset if that model is ever
phased out. Other serious runners always look for an edge, even a
micro-edge. They are willing to try any change as long as it promises
to offer a fraction of a second.
The same goes for the companies such as Adidas, New Balance,
and Nike, companies that make the shoes and clothing worn by these
hard-core users. These companies simultaneously act like both types
of runner. Each company has its core strengths in terms of techno-
logy and loyal following. Change here is not an option. At the same
time, each vies for a micro-edge relative to its competitors, and each
looks to innovation to steal a fraction of market share. So far, each
company has independently worked on similar innovation, so not one
of them in recent times has put much distance between its own prod-
ucts and those of the competition. All are racing forward, picking up
speed rather than tiring, not exactly sure where they are headed but
working to stay ahead.
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50 THE DESIGN OF THINGS TO COME

Now Adidas has a revolutionary product—not a micro-edge

improvement, but one that promises a substantial lead in the race.
The accomplishments of the Adidas 1 have always been a dream in
the footwear industry, a fantasy idea on every shoemaker’s wish list,
because each individual has not just different-size feet, but different
cushioning needs. Adjustable cushioning has been discussed in the
industry for years, and the solution from Adidas is far superior even
to what most have dreamed about. Even more importantly, it is the
first of a new generation of products, the first of a new realm of
inquiry and innovation.
The Adidas 1 was developed in secrecy in the German company’s
U.S. headquarters in Portland, Oregon. The Adidas 1 is an intelligent
shoe, with a 20-megahertz computer embedded in the arch and
linked to a sensor in the heel cushion. Taking up to 20,000 readings
every second, the computer-powered shoe constantly measures the
impact on the sole. It re-tensions a tiny screw- and cable-system to
optimize the shoe’s cushioning not only to the runner’s size and stride
but also to the runner’s current speed and terrain, whether concrete
or grass. The shoe adjusts itself every fourth step, and all the shifts
occur mid-stride so that the runner doesn’t feel them and so that the
shoe conserves power, extending battery life. If the terrain is too soft,
a motor adjusts the cushion so that it is less springy when the runner
steps down. If it is too hard, it allows the cushion to expand.
Stephen Pierpoint heads up the marketing of the Adidas 1 in
Germany. He grew up a fanatic of consumerism and was keenly
brand-oriented at an early age. He studied business at Sheffield
University in his home country of England, concentrating primarily
on marketing. He took advantage of the range of courses the univer-
sity offered to not only expand his business knowledge but also to
further his interest in the human side of marketing, because he espe-
cially enjoyed the creativity of advertising appeal. Both when growing
up and later at the university, much of his interest centered around
sports, so his marketing role at Adidas was a realization of a lifelong
dream.
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CHAPTER 3 • THE ART AND SCIENCE OF BUSINESS 51

As of autumn 2004, Pierpoint was in the midst of planning for the

March 2005 product launch of the Adidas 1. There is much to be
planned, especially because the impact of this launch supersedes that
of the product. It is a launch that affects the essence of the Adidas
brand worldwide. Central to every product launch is the identifica-
tion of target consumers. For the Adidas 1, Pierpoint talks about two
broad consumer segments. One segment is simply those who would
go out and buy the product. These are the early adopters, serious
runners who look for new technologies to give them an edge. Adidas
wants to make sure these early adopters are fully satisfied by the
experience of using the shoes—so satisfied that they will never go
back to any old-generation running shoes. So Adidas is being careful
in its distribution, deciding not just which countries in which to
launch the 1, but which stores in which countries, and how much
inventory should go to each of these stores. The company wants to be
sure to put the product in front of the right people first. For every-
thing changes from this point forward.
The other segment is the brand audience, the listeners who will be
influenced by the message of the product itself. This landmark prod-
uct not only gives Adidas the ability to change the perception of its
whole brand, but it also forces a change in perception, because this
product puts Adidas at the forefront of innovation in the athletic
apparel industry. The challenge for many product marketers is to think
of ways to make the product as new and exciting as possible. The mar-
keting challenge for Pierpoint is probably harder, because his market-
ing efforts must live up to the true greatness of this very new product.
To convey the story of this new shoe, one focus is how it will
appear at the retailer. It is not a typical shoe, so use of the typical
packaging would fail to communicate content differences. Another
initiative is to write a user manual for the shoe. To those of us who are
not writing that user manual, the task appears straightforward.
However, this is the first shoe that comes with an instruction manual,
so there is no template to follow. Remember how bad the first com-
puter manuals were? Adidas knows that even the simple task of an
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52 THE DESIGN OF THINGS TO COME

instruction manual can have a major impact on the image of the

whole company, so the manuals are being crafted as carefully as the
shoe was designed. One of the reasons why Adidas launched the pub-
licity more than six months before the product was released was to
get the idea out there so that it could work with focus groups that
were already aware of the product and could read the opinions in chat
rooms and on Web sites. Pierpoint wanted to see the types of words
used by consumers, to identify any fears that exist so that his team
could properly address them. How consumers reacted to the shoe’s
announcement gives his marketing team a sort of test market to use
so that the real product launch goes smoothly.
Pierpoint is not stopping at launch; the planning continues.
Adidas has marketing plans beyond the launch for the Adidas 1 and
for other shoes. It is already planning the next level of intelligence,
laying out a map of how it intends to strategically evolve the product
and its extensions.

The Role of Marketing in the Early

Stages of Product Development
In the companies that we have worked with, marketing professionals
are often not involved directly with innovation. They are involved
prior to innovation by setting strategic directions, and they are
involved after products are developed to take the product to
market. Adidas likewise sets up small innovation teams composed of
engineers and designers. Many of their outcomes do not see the light
of day. Whenever they are ready to come to life, however, the inno-
vation team is integrated with a marketing team. The teams typically
unite smoothly because of their unified focus on the athlete—how to
make a difference to the individual athlete, ways to innovatively reach
and meet the athlete, recreational or serious.
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CHAPTER 3 • THE ART AND SCIENCE OF BUSINESS 53

However, there are also benefits to including marketers on the

original innovation teams, not just after the idea is judged a “go.” In
fact, many marketers do not even perceive that they have the needed
skills for innovation and product development. During their studies
for their MBA, marketers receive excellent training in how to solve
problems, and they are well equipped to recognize ramifications of
various solutions and strategies. In the early stages of product devel-
opment, however, the issue is not to solve a problem but to define it,
to recognize and understand the opportunity. Thinking in terms of the
case studies used in business schools, business students are taught to
analyze case studies, not to write them. Early product work is more
like writing the case than analyzing it, of setting up the opportunity
rather than deciding how to meet it, of identifying a problem to solve
rather than actually solving it.
An emerging trend in business education is to require students to
wrestle with ambiguous situations where the facts and issues are not
neatly organized into a case study, to practice the kind of skills need-
ed in the fuzzy front end of product development. But even if there
is a person with a marketing MBA who is trained only to solve prob-
lems and never to define them, even that marketer already has skills
that are useful for early product work—skills that help define the
opportunity to explore.
Marketers have been trained to study people, to think about why
people purchase products. Marketers have learned how to identify
segments of consumers, they have studied quantitative methods that
describe large groups of potential and real customers, and they have
developed measures of advertising reach, brand recognition, and pro-
motion reaction. Traditional marketers’ practice of thinking about
people is transferable to the type of research needed to identify and
explore product opportunities. They just have to learn to see the
problem differently, to be comfortable with uncertainty and missing
information. They have to make decisions based more on insight and
less on irrefutable fact, because the facts simply are not available at
the early stages of innovation.
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54 THE DESIGN OF THINGS TO COME

Another beneficial characteristic of marketers is that they tend to

keep close tabs on business needs, even while they are busy in the field
of understanding customers. When marketers are involved in the early
development process, their constant attention to business perspective
aids alignment of product and brand, of product and corporate strate-
gy. Built in to the marketing discipline is an economic perspective, that
consumers are economic agents whose purchases balance costs with
benefits. Engineers have a keen mind toward what is possible, regard-
less of need. Industrial designers bring in those strong forces that cause
double-takes, such as beauty, and create features that ease implemen-
tation and pleasure of use. The cross-functional synthesis of all of these
perspectives leads to a workable and exciting solution.

The Ambiguity of Figuring Out Winning

Products
Early product development entails numerous choices, and it seems at
first glance like these choices could be 100 percent left brain or analyt-
ical activity. For instance, the product development team at Adidas had
to choose whether to bring out separate men’s and women’s shoes or to
make a unisex shoe. They could have made this decision an analytical
activity by surveying potential consumers to see what customers want,
just like U.S. presidents have been known to use focus groups to test
policy ideas. Similarly, a product development team makes many other
decisions, questions that they answer one way or another. In the Adidas
1, the sensors assess the sole’s compression, affected by weight, terrain,
and runner’s speed, but the design team could also have incorporated
a pedometer and calorie counter, as Puma AG considered doing back
in the late 1980s. Should the Adidas 1 include a pedometer? In other
words, would sales be higher if the model had a pedometer, or lower,
or would it even matter? Until this is tested, the answer is unknown.
Although the current shoe is not equipped with a link to a desktop or
laptop, the in-shoe computer could conceivably have an outlet to
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CHAPTER 3 • THE ART AND SCIENCE OF BUSINESS 55

download information into a laptop. What would happen to sales? Or

the shoe could have a wireless transmitter to send data to a handheld
PDA. Would sales be higher? Similarly, the design team has chosen to
show off the circuitry via a clear plastic panel, but that, too, was a fac-
tor that could have been optimized. How are costs affected by the clear
panel? Will sales be higher? Adidas’s first smart shoe did not need to be
designed for running—it could have targeted soccer, a sport Adidas has
long dominated and a core area of its expertise. The possibilities are
seemingly endless. Each decision can be tested in an experiment, like
a test market. But not all decisions can be tested; there are just too
many.
Without market tests that would show which integrated features
are the best combination for the marketplace, it is not clear what
exact product the company should develop to achieve the greatest
improvement to the lives of customers and to the company’s bottom
line. The answers to the choices (exact product specifications) are
ambiguous rather than clear. Answers are ambiguous because infor-
mation is lacking, but decisions still must be made. Decisions here
are not safe, and ramifications of decisions are unpredictable.

A Sound Basis for Vision (Yes, You Can Go

with Your Instinct)
Ambiguity is common, especially in innovation, and it is the uncom-
mon individual who has the vision to make good decisions when deal-
ing with ambiguity. These individuals must be willing to take a stand
in spite of lack of hard evidence, and they personally shoulder the
risks of their choices. These are managers like Dee Kapur, Chuck
Jones, Edith Harmon, and the others mentioned in other chapters in
this book. Rather than relying solely on results of experiments, they
arm themselves with vision. Rather than waiting for overwhelming
evidence of a correct path before moving forward, they use existing
knowledge, experience, and resources.
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56 THE DESIGN OF THINGS TO COME

By necessity or by training, innovators are comfortable with

uncertainty. But not all of us are. Think about yourself. How comfort-
able are you making decisions without hard evidence? Would you
defend human judgment as scientifically valid? Suppose, for example,
that you and a friend cannot remember who paid for lunch last time,
so you decide to flip a coin to see who pays today. You pull a U.S. quar-
ter from your pocket, and you notice that it is one of the new quarters,
each of which features a different state; this one is from Texas. If you
are typical, you would not think twice about using that coin to decide
who pays for lunch, even though you have never flipped any of the
new Texas quarters before. If someone asked you whether you knew
for certain that the coin was “fair,” you would have to agree that you
do not know the exact probabilities, that one outcome may be slightly
more likely than the other. Should that coin be used without further
investigation? Should you first test it, maybe flipping it 1,000 times to
see whether you get around 500 “heads”?
Most of us would use the coin without ever thinking about testing
it. Put another way, we would simply assume that coin has equal
chances of heads and tails. Would you be able to justify such an
assumption? If you strictly apply the teaching of the typical required
college statistics class, you would argue that you have no idea of the
probability of a heads on a Texas quarter until you see some evidence.
Yet, even while reading this, you probably still think it is close to being
fair. Why? Is it not equally plausible that heads will show 9 times out
of 10? The quarter could be more heavily weighted on the side that
shows the state—everyone know that Texas is a really big state!
Science does support your gut here—that you can reasonably
believe the coin is “fair” even though you have never tested it. How
so? A relatively new statistical system, Bayesian statistics, supports
the use of past information (such as experience) to help current
decisions. You have probably flipped many coins over your lifetime,
even though you have never flipped a Texas quarter. Because coins in
your lifetime have been fair, or close enough to fair, your natural reac-
tion with the new coin is to believe it also is fair, at least until proven
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CHAPTER 3 • THE ART AND SCIENCE OF BUSINESS 57

otherwise. The formal, simple framework of your college statistics

class would say you know nothing about the Texas coin until testing
it. The Bayesian statistics framework would say that your wealth of
experience with coin flipping is exactly what you should believe about
this coin until it proves to be any different. The Bayesian statistics
framework has revolutionized modern research methods. It is used as
the basis for Internet search engines, e-mail spam filters, artificial
intelligence systems, pharmaceutical tests, and much more.
Certainly, the Bayesian framework does not give you license to
unbridled opinion and postulating. It does not toss out scientific rigor.
You need the rigor of the Bayesian, the recognition of valid data, the
discipline to throw away the irrelevant, the willingness to dive into
the uncertain, and the care not to become overconfident. But it also
tells us that educated insight has merit, just like statistical validation.
This world is that of the innovator—the simple acceptance of
uncertainty, a willingness to make decisions in spite of a lack of infor-
mation that reveals the “right” decision. The innovators’ familiarity
with ambiguity has shaped their mind-set, has led them to see ways
to improve their world that may be missed by others.

A Process for Pragmatic Innovation

The natural question, then, is how to innovate. As Peter Drucker and
others have written before, innovation is not serendipity but the out-
come of disciplined activity. What is the nature of that disciplined
activity? What kinds of procedures can be adopted that can and will
yield good ideas when so many decisions must be made—too many to
answer via experimentation?
In his book The Sciences of the Artificial,1 economics Nobel
Laureate Herb Simon describes the science of design. He recognizes
that “exact solutions to the larger optimization problems of the real

1 Simon, H. A. The Science of the Artificial. The MIT Press, Cambridge, MA, 1969.
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58 THE DESIGN OF THINGS TO COME

world are simply not within reach or sight. In the face of this com-
plexity the real-world business firm turns to procedures that find
good enough answers to questions whose best answers are unknow-
able.” Simon invented the word satisficing to describe this situation,
in which a person “accepts ‘good enough’ alternatives not because he
prefers less to more but because he has no choice.” Product innova-
tion is not about optimizing but satisficing.
The procedures he suggests are to set goals and make decisions
relative to those goals. Rather than the impossible task of optimiza-
tion, in which one would ask, “Of all possible worlds, which is the
best?,” the question in innovation is, “Does this alternative satisfy all
the design criteria in a preferred way?” A challenge for satisficing in
innovation, then, is to define the criteria for success.
Akin to the philosophy of Herb Simon, we will articulate a
sequence of steps and procedures for the earliest stages of innovation
that the best innovators seem to follow. This early part of the product
development process is often called the “fuzzy front end” because it
is counter to the precise facts known about the product in the later
stages, where the product is detailed for production. In brief, the
early tasks set up the criteria, not from irrefutable fact but from
insights based on user observation, and the later tasks create product
alternatives that meet those criteria. This process is equally useful in
designing products as well as services. We highlight these procedures
here, we discuss many aspects of them throughout this book, and we
illustrate the details of this sequence of steps in the process in
Chapter 9, “A Process for Product Innovation.”

Identify an Area of Strategic Importance

First, pick a general area of strategic importance to the company or

target market. This could be a key market for your company, such as
baby boomer males who run aggressively. This general area narrows
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CHAPTER 3 • THE ART AND SCIENCE OF BUSINESS 59

down the scope of research and development, making it feasible

rather than impossible. Of course, it also helps ensure that the work
being performed is consistent with the company’s goals.

Research People

Research the people and the social, economic, and technological

factors (also called the SET factors) related to that area. We discuss
SET trends in Chapter 4, “Identifying Today’s Trends for Tomorrow’s
Innovations.” As for the people, innovators need to research real peo-
ple, to get to know actual individuals of importance to their strategic
domain. We emphasize “real” people in order to steer research away
from aggregate statistics that describe groups of people. We hold no ill
will toward statistics, but statistics generally provide answers to ques-
tions that have been important year after year. To a great extent, then,
statistics answer old questions, and innovation is all about the present
and the future. Another problem with statistics is that they provide
simplified, summarized, arms-length knowledge of people. Without
direct interaction with real people, innovators do not truly know these
key individuals; they just know a limited set of facts about “typical”
people in a target set.
Coincidentally, Simon was also a psychologist. He spoke of proto-
col analysis where, rather than studying the masses, one studies only a
few people in depth to understand their process and approach to solv-
ing a problem. Extensive surveys provide a rich quantity of informa-
tion, but the survey is only as good as the questions asked and the
validity of the people as a cohort of the market who answer them. At
the fuzzy front end, the innovator doesn’t yet know what to ask and
therefore cannot refine a questionnaire to identify who the masses are.
Innovation is all about people, not products. It is about the team
inside the company that has the role of innovating as well as the peo-
ple outside the company who interact with or are impacted by the inno-
vation. Because people are central to innovation, we have filled our
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60 THE DESIGN OF THINGS TO COME

book with people. We began in Chapter 1, “The New Breed of

Innovator,” with biographical sketches of a handful of innovators.
Chapter 6, “The Powers of Stakeholders—People Fueling Innovation,”
discusses analysis of product “stakeholders.” Also every chapter begins
with a scenario of a prototypical individual using a product.
The rest of the activities in innovation are best learned by doing
them. As such, in Chapter 9 we illustrate the steps described next in
the context of an actual project. If you want to read more, we also
have described these steps in detail in Creating Breakthrough
Products: Innovation from Product Planning to Program Approval.2

Define the Opportunity

The dynamics of trends are constantly providing new opportunities in

the marketplace, and the research and knowledge of key stakeholders
will reveal multiple opportunities within the specified strategy area.
Using an analogy, an opportunity is to a product as a problem is to a
solution. The opportunity is a positive way to define a current state,
and a product is the goal of the desired state. Here, the objective
is not to think of products but of what products will achieve for
people—what are the needs, wants, and desires of the opportunity.
What do the people you researched value that is not currently
provided?

Define Design Criteria

Based on that research, what characteristics does a product need to

have (not what should a product look like) to fulfill the desired state
of the opportunity? These characteristics are the design criteria.

2 Cagan, J. and C. M. Vogel. Creating Breakthrough Products: Innovation from

Product Planning to Program Approval. Financial Times Prentice Hall,
Upper Saddle River, NJ, 2002.
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CHAPTER 3 • THE ART AND SCIENCE OF BUSINESS 61

Achieve the Criteria

Develop numerous product ideas that can potentially meet the crite-
ria, and prototype the most promising ideas that do meet the criteria.
Obtain feedback from target users about the prototypes, and itera-
tively redesign until the product design seems to be the best you can
make it, or at least within the criteria you defined.

Go/No-Go Decision

The product now is specified well enough to make a go/no-go deci-

sion. At this point, if it is judged worthy to pursue, the product enters
a new phase, into preparation for production and product launch. For
some companies, this is the point at which the innovation team leaves
this product and starts afresh on others. We like the approach of
Adidas, which at this point integrates the innovation team with a mar-
keting team so that expertise and momentum are not lost in transfer.
One improvement to Adidas’s already great innovation structure
would be to have had marketers on the innovation teams along with
designers and engineers.

The Ground Rules: Understanding the

Innovator’s View of Procedures
These steps for satisficing-based product development are funda-
mentally different from what we typically think of as “procedures.”
Even so, they are methods, and therefore they can be learned,
adopted, and used by anyone. But because of how much they differ
from other procedures with which most people are familiar, we here
step back from the methods and discuss how they are to be used and
what to expect from them. In particular, we cover four aspects of
methods for innovation: 1) the methods require the user to work and
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62 THE DESIGN OF THINGS TO COME

think, 2) the methods cannot mass-produce ideas, 3) company invest-

ment should be in the process rather than the outcomes, and 4) the
methods require not just intelligence but internal motivation. We
contrast these four points with the “For Dummies” series of books so
that you will understand the different nature of the decision philoso-
phy and mentality of innovators.

Point 1: Thinking Required

Many of us prefer to improve ourselves and our world without risk,

without uncertainty. We like step-by-step guaranteed procedures,
such as those of the “________ for Dummies” books. Fill in the blank
any way you want—someone has written it. You can buy Low-Carb
Dieting for Dummies, Catholicism for Dummies, Guitar for
Dummies, Japanese for Dummies, NASCAR for Dummies, and even
Sex for Dummies. When we recently searched its Web site, Barnes &
Noble listed 2,519 entries that are “for dummies.” These titles offer
methods that eliminate uncertainty, procedures that are no-brainer
methods for guaranteed success, improvement without risk.
Of course, the “For Dummies” type of procedure is widely
embraced. Such procedures for risk-free improvement have yielded
large profits and have benefited society for countless years. Consider
technology available to farmers over centuries. An ox-drawn plow was
certain to yield gains relative to a human-powered hoe. Then mech-
anized solutions (such as tractors) offered still greater profits; farmers
could cultivate more land per hour and thus obtain greater revenues
for the same hour of labor. There is no uncertainty—a farm with
mechanical equipment will be able to produce a larger harvest, per
labor hour, than a farmer using Amish-approved techniques. A more
modern example comes from a mathematical research field called
“operations research,” the science of optimal business decisions.
Operations researchers provide schedules for airlines and baseball
seasons, figure out the best locations for product warehouses, and
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CHAPTER 3 • THE ART AND SCIENCE OF BUSINESS 63

devise inventory management policies so that retailers do not waste

precious capital on items that sit on shelves for most of the year.
These scheduling formulas, inventory management solutions, and
other operations research techniques offer risk-free improvements,
like tractors for farmers. The improvements can be worth vast sums
to the company. For instance, John Deere recently saved $1 billion
through the supply-chain tinkering of SmartOps, an operations
research consulting firm.
With a “For Dummies” checklist, it is the process that does the
work. The person implementing the process does not matter, does not
need to think—hence the series title. But with the methods for inno-
vation, the user of the methods is critical, for the methods aid but do
not replace the innovator. They enable the innovator. They are a tool,
like a hammer for a carpenter, and like computer-aided design (CAD)
in the hands of an architect. The Freedom Tower in New York has
been designed using the latest development in CAD tools, a 3D draw-
ing and modeling program called Revit. Similar programs have long
been used by engineers and designers in the design of motorcycles,
airplanes, and other consumer products. The tool tremendously lever-
ages the ability of the architect, but the architect still must do the
work. Methods of innovation are tools that leverage the skills of the
user, tools that take that person’s productivity beyond what it would be
otherwise.
Consider the work of Frank Gehry, the famous architect who
designed, among other masterpieces, the Guggenheim Museum in
Bilbao, Spain. Gehry’s buildings are large-scale livable art forms that
flow and curve in ways only imaginably drawn on paper or molded in
clay. Yet these organic shapes that meet and multiply at many levels of
complexity form the basis for Gehry’s buildings. There is no
repetition or standardization; no two forms or parts of forms on his
buildings are the same. One can imagine what a nightmare to the tra-
ditional construction contractor must be the daunting task of con-
structing one of these buildings. Yet they are envisioned, designed, and
then successfully built. The only way that this can happen is with the
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64 THE DESIGN OF THINGS TO COME

tool of CAD/CAM. The CAD system allows Gehry to represent and

communicate his imagination. The CAM (computer-aided manufac-
turing) system allows each piece of material on the outside of the build-
ing to be individually manufactured and labeled for assembly. The
CAD/CAM system, in this case one called CATIA, is just a tool, but in
the hands of his engineers, it is a sophisticated enabler that allows
Gehry’s innovation to become a commercial and structural success.

Point 2: Innovation Yields Differentiation

A second aspect of the methods is that they are not for mass produc-
tion. Thinking again of the CAD example, a tour through Houston
suburbs shows that houses can be mass-produced, through replica-
tion and permutation of components. But innovation is sorely lacking.
The Houston suburb is no Bilbao.
It isn’t the fact that these methods are difficult to understand that
prevents mass production. Even complex mathematical equations
can be reduced to a “For Dummies” framework; they can be simpli-
fied to the point-and-click of software, and any competitor in any
country can then adopt that method. Methods for innovation have a
nice advantage over those that can be mass-produced, because they
require smart people. They are not “For Dummies.” If you are that
smart person, your job stays with you. Your job cannot be coded into
software that ships throughout the world to legions of replacements
for you. If your company has a process for innovation, a greenhouse
for organic growth, your innovations become competitive advantages,
not commodities that spread quickly to imitators worldwide.

Point 3: Don’t Stop at Success

A third aspect of the methods is that they should be part of a larger

process, an incubator to grow ongoing innovations. Innovation is risky;
the failure rate is high. Consider for a moment an industry that makes
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CHAPTER 3 • THE ART AND SCIENCE OF BUSINESS 65

a business of risk: casinos. The big money of the speculative world

comes from a system of speculations, not a single gamble. The “house”
may lose any gamble—it never knows which ones will pay off and
which will not. But the odds are in its favor, so repetition yields its
lucre. Although the statistics on new product success rates reveal low
winning probabilities, the lesson is the same—that repetition is impor-
tant. With innovation, any particular project may fail dismally. It is rep-
etition of the process that yields the payoff. You can, however, slant the
odds in your favor; you can beat the house odds in the introduction of
new products if you have the right tools and methods and diligently
follow them. Certainly don’t stop at success—keep the greenhouse
intact in order to keep growing new ideas.
Many innovative companies do put mechanisms in place to con-
stantly feed the innovation cycle. Lubrizol, a company that develops
“fluid technologies for a better world” that we discuss later in this
book, has a process by which every year two new technologies are
developed into product possibilities. In the first chapter, Chuck Jones
talked about a constant stream of product ideas that are in the
pipeline at Whirlpool. Other companies support advanced R&D to
develop new areas of growth. New Balance, also discussed in this
book, has a strong advanced product group that constantly seeks not
only new product opportunities, but also new approaches to deter-
mining those opportunities. Still other companies create divisions to
support new growth. For example, Respironics, a maker of sleep
apnea and support products, formed a division for “sleep onset” to
recognize the emerging technologies and growing demand for prod-
ucts to help people sleep and sleep better.

Point 4: Motivation Needed

Finally, the methods for innovation are not a step-by-step guarantee

for success, unlike the promise of the “For Dummies” series. In the
hands of an unmotivated employee, the methods yield no benefit. As
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66 THE DESIGN OF THINGS TO COME

an illustration, compare Kate and Susan. Kate has the entrepreneur-

ial spirit, that inward drive to maximize the possibilities around her.
In college, she took pride in her work (for most classes, at least). For
instance, for her case study analyses in marketing class, she read more
on the company than what was presented in the preprinted case
study. She put herself into the role of the decision maker, researched
competitor companies and their strategies, and took the time to think
seriously about the actual and potential customers of each company.
Susan also was diligent and hard-working in school, but her goal was
mainly to get an A on each project. In her marketing class, she made
sure to discuss each of marketing’s “four Ps” (price, product, place of
distribution, and promotion). Her motivation was external—to fulfill the
letter of the law, to get the letter grade. For Susan, the instructions did
the work for her; she basically filled in the blanks, and she got her A.
Both Kate and Susan have found jobs in which they are success-
ful, but only Kate would be successful with the methods for innova-
tion. Susan’s approach to work is to fill in the blanks of a “For
Dummies” process; Kate’s approach is to use the process to gain deep-
er insights. The world of innovation is all about deeper insights. There
is no forward and upward movement when the blanks are just filled in.
The innovators’ methods that we describe are best practices, used
by the successful innovating companies. They are like CAD for the
architect, a framework and set of tools to improve innovation. They
are insufficient by themselves for successful innovation, because they
require the motivation like that of entrepreneurs, like that of Kate.
The methods just become more paperwork for the Susans of the
world, but the same methods allow the Kates to be ingenious, to
make an impact, and to stand out from the fray. Overall, these meth-
ods serve as the early stages of product research, a repeatable process
to find and develop successful innovative products.
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4
IDENTIFYING TODAY’S
TRENDS FOR TOMORROW’S
INNOVATIONS

In light of the opportunities that are already here in the present, there
is no reason to long for unavailable crystal ball forecasts of future
prospects. The earliest work of innovation is to research existing
trends and to understand them in the context of customers, because it
is market dynamics that provide new opportunities that will be ful-
filled by tomorrow’s successful products.
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68 THE DESIGN OF THINGS TO COME

New York, NY. Fredrick Marano put down Newsweek. The article on
iPod’s explosive sales growth had caught his eye because he very much
enjoyed his iPod. For Fred, most products were extras—good
appendages, but appendages nonetheless. The iPod was different, more
central. Fred remembered his first Walkman. Big, bulky, heavy (at least
in comparison to nowadays). A cassette tape player that jammed and
jumped as he exercised. All the hassles of having to tape LP music.
It was clear to Fred why the iPod fared so well: It was the right
product at the right time. The iPod is great. Stylish and easy to use.
Any music he had or wanted to buy, he could download. He had just
started using iTunes, a service to download individual songs for 99
cents. The last time he purchased an individual song was back in the
days of vinyl in the 1980s when he used to go to CBGBs on the Lower
East Side! It took Fred awhile to feel comfortable paying for some-
thing he could not hold. He can download a song, but it exists only on
his iPod or computer. He cannot touch it. But he also is not stuck with
a CD full of songs he does not want to listen to anyhow.
Most of the music Fred listens to on his iPod, he copied over from
his collection of CDs. Much like he used to do with his cassettes, he
chuckled to himself. Well, they had the idea right, but not the medi-
um. Now all he has to do is pop in a CD, pick a track, and click a but-
ton. The rest is magic. As far as he could figure out, it really was magic.
But it worked and worked well; so, like everything else today, he will
go with the flow as long as he doesn’t have to think about it.
Fred’s teenage daughter, Liz, was always getting new music on
her MP3. She kept telling Fred to go on Kazaa to get his music. She
got most of her music that way. CDs are so overpriced, and who
needs them cluttering up her room?
Liz and her friends believed it was their right. No bureaucratic
corporate giant had the right to charge 20 bucks for a CD. Most mega
bands had too much money already, and most independent groups
who did not play the game made no money. It was her right to listen
to what she wanted whether or not big business decided to mass-
produce it.
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CHAPTER 4 • IDENTIFYING TODAY’S TRENDS FOR TOMORROW’S INNOVATIONS 69

Fred did not believe in piracy for himself, but he did not make a
big deal of it to Liz. She was one of a million kids doing this. But Fred
did like the idea of being able to change his music selection in
minutes, and to store hundreds of songs on his tiny player.
Ah, yes, the smallness of current players provides an incredible ben-
efit. Besides being cool-looking and so intuitive, the iPod is truly small.
How does it store 10,000 songs? 10,000 songs would fill 750 CDs, which
would take up a bookcase in his study! Instead, he can go running with
it clipped to his belt, and the quality of sound is as good as it gets.
The iPod is not the only small player, for it is the MP3 technolo-
gy that allows it to be small. One of Fred’s friends at work has had an
MP3 player for years now. But, then, that guy always had to have new
gadgets first, even if he stayed up all night figuring them out. Fred
always could tell what was coming down the road by talking with his
friend, but he also waited until he knew he would not have hassles.

Lead Users and New Technology

MP3 technology was developed in the mid-1980s in Germany. All
digital music, be it on CD or in MP3 format, is stored as 1s and 0s, or
bits. A typical song is 32 megabytes (MB) of data, or 256,000,000 bits.
A CD can store close to 800 MB, meaning 74 minutes in practice, or
essentially an album. MP3 is a format that compresses the data by
removing information that either the human ear cannot hear or that
is much quieter than other sounds, making them hard to hear. This
allows storage of almost the same quality music in one-tenth the
number of bits. So a CD could now store 10 albums! The issue for
portability is certainly size. MP3 players either work through “flash,”
where songs are stored on a stationary medium, or through small
hard drives, as with the iPod. Either way, there is limited storage
space that, if each bit had to be stored, would make it impossible to
store enough songs to keep the consumer happy in the small space of
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70 THE DESIGN OF THINGS TO COME

the player. MP3, and other compressed digital audio formats, such as
the one iTunes uses, is a technological breakthrough that was a
tipping point in making portable digital music desirable.
For any new technology, there is always a group of innovators
who enjoy the cutting edge, the lead users who tolerate usability
glitches in order to own the benefits of the new features. The pur-
chases of lead users can serve as early indicators of trends, of changes
in opportunities. But it is critical to keep in mind that lead user pur-
chases point to new opportunities rather than to new products that
will eventually hit big time; after all, the solutions that lead users tol-
erate do not necessarily “cross the chasm” into mainstream purchase.
The iPod, for instance, was not new technology. Since the late
1990s, there had been several MP3 players on the market. With a bit
of research, innovators had been able to find MP3 players that met
their functional needs—reliable MP3 music with a usable interface.
For everybody else, the majority of people, it was an abstract tech-
nology for kids and nerds. As Geoffrey Moore1 would say, there was
a chasm or gap between the small group of early adopters and the
large early majority market who liked new technology as long as it was
a complete product. In this case, cultural and economic trends had
readied the majority market for a complete product and had provid-
ed opportunity for the insightful company.

Apple: Trend Reader

This is where Apple came in. In the computer industry, Apple is
known as the innovator. The rest follow. Apple has consistently
provided models of where the industry needs to go. Most PC
manufacturers have made commodities, computers that are
exchangeable parts housed in generic dark gray boxes. No wonder
companies such as Gateway struggle, fighting for razor-thin profit
margins, for such is the natural way of commodities. For the first time

1 Moore, G. Crossing the Chasm. Harper Perennial, New York, 1999.

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CHAPTER 4 • IDENTIFYING TODAY’S TRENDS FOR TOMORROW’S INNOVATIONS 71

in the history of computers, saturation at the new millennium

brought a slump in sales, and PC manufacturers are hit hard, because
thin margins require large sales volumes. Apple, on the other hand,
understands that this is the experience economy, and it has main-
tained price premiums by focusing on the user experience. Apple has
even moved its product beyond the experience economy to appeal to
the nascent fantasy economy, which we describe in the next chapter.
The line of iMacs are examples of high-styled products that rely on
more than just the latest technology. Apple is a trend reader.
Of course, not all of Apple’s products have been perfect. Trend
reading does not offer the imaginary promise of a look into a crystal ball.
Apple went wrong by maintaining a proprietary operating system, insist-
ing on delivering a complete hardware and software product. Because it
kept competitors out, fewer Macs were available to the market. Fewer
Macs meant fewer programs being written for them. Then, in the mid-
1990s, as the personal computer market flourished, Apple sought to join
the other manufacturers in their Wal-Mart strategy—high volume and
low costs. Apple fired innovator Steve Jobs and hired businessman John
Scully. Scully focused on cutting costs and strayed from the company’s
innovation mantra. The resulting lackluster products and poor quality
almost sent Apple into bankruptcy. The return of Steve Jobs brought
Apple back on the path to innovation, and Apple flourishes again after
retaking the smaller but premium market. In spite of these problems,
Apple has consistently brought out insightful products that other com-
panies end up imitating. Apple is an ideas leader, consistently better at
anticipating trends because it reads the trends, and its ideas not only tap
pools of lead users but cross the chasm to the mainstream.
Focusing back on MP3s, the technology existed, and lead users
had it, but no product had grabbed the attention of the rest of the
market. Companies that are adept at developing new products recog-
nize such situations and have learned to use design as a means to
translate barely useable technology into useful, useable, and desirable
products. For instance, Palm Computing built the wildly successful
PDA out of the ashes of Apple’s Newton, Sharp’s Wizard, Microsoft’s
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72 THE DESIGN OF THINGS TO COME

WinPad, and others. Technology is part of the equation, but equally

important is the user interaction, ergonomics, and lifestyle features.
Palm’s first PDA had a form factor far smaller than its predecessors
and was truly portable and therefore usable. Apple’s computers, for
example, have technical capability, are easy to use, and also look
great. They set the standard rather than follow. They are the first
products in the computer industry that look so good that they become
the focus of a room rather than the blemish.
The same is true for the iPod. The iPod itself defines the con-
temporary aesthetic for portability with its simple lines and white
plastic shell and its intuitive and easy-to-navigate interface through its
click wheel. At 6 ounces, it is light and fits in your pocket. But Apple
went further. As if the iPod weren’t small enough, sleek enough, or
beautiful enough, Apple introduced the iPod mini, which weighs less
than 4 ounces, is significantly smaller, and comes in a variety of
anodized aluminum finishes, and then Apple introduced the even
smaller iPod shuffle.
All the uncertainty feared by the early majority is missing from
this product. It is hip and cool, it is easy to use, it is affordable, and it
is produced from a company that people trust. Apple invested in a
great advertising campaign that communicates the positive experi-
ence in making the product a part of the individual by having the sil-
houette of an X- or Y-gen dancing to tunes with his or her iPod. In
sum, it is the product that is taking the compressed digital audio for-
mat across the chasm.

So How Does One Read Trends?

Trends provide immense profit opportunities to those who read them
and can leverage their power. Niall FitzGerald, of Unilever and
Reuters fame, talked about trends being analogous to the ocean
waves and companies as surfers, saying, “You can be the best surfer
in the world. But if you sit with your surfboard on a flat ocean, you
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CHAPTER 4 • IDENTIFYING TODAY’S TRENDS FOR TOMORROW’S INNOVATIONS 73

won’t go very far.”2 If the ocean had no waves, there would be no surf-
ing. If the world were not dynamic, there would be no new opportu-
nities to propel corporate growth. The companies that recognize the
trends can be borne along on their energy.
As a first reaction to the idea of “trend reading,” many people
assume that the task is to foretell the future. But the real task is to
understand the present and the dynamics in the present tense and to
use that to anticipate future successes. This approach is called “antic-
ipatory design,” and it is used by cutting-edge, consistently innovative
companies. In many cases, extrapolation to the future is straightfor-
ward after one understands the present. For instance, a well-known
trend is the aging of the baby boomer generation. Once recognized in
the present tense, some future implications are crystal clear, such as
the increasing need for medical devices and health-care products.
As an aid to identifying and understanding trends, we use a
framework of three broad areas: social, economic, and technological.
The idea is that these three main categories are a dynamic window
into what the market has and what it wants. In other words, it helps
you see where there are gaps between what products are on the mar-
ket and where there are opportunities to introduce new products. We
call these product opportunity gaps.
The social factor looks at a market’s cultural, lifestyle, and politi-
cal aspects. The economic factor focuses on a market’s buying power
and buying focus. The technological factor summarizes advances in
new uses for technology within a niche area. The social, economic,
and technological (SET) factors summarize a given, often narrow,
market segment or focus. They are dynamic and can be driven by or
lagged by any one of the factors. The goal is for any company to con-
stantly read these factors and look for opportunities to create new
products. The power behind the factors is that they are constantly
changing. The best companies read these factors in the present tense
and react to changes as they occur.
2 The Wall Street Journal. “On Buy-and-Purge Strategy, Need to Keep Changing.”
May 24, 2004.
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74 THE DESIGN OF THINGS TO COME

Not all changes can be easily accommodated. Not all present

wonderful opportunities that can be leveraged by all. Consider the
catastrophe of 9/11, which adversely affected international travel but
boosted local travel industries in the United States such as snowmo-
biling. Or consider Ford and Firestone after the Explorer tire explo-
sions, an adverse trend for them. Ford was one of the prime auto
companies to be followed by all the rest of the industry until this
tragedy. The system could not react quickly enough to the tire prob-
lem, and Ford’s position in the market declined. This was only part of
the problem. The economy had burst, and Ford had invested many
resources in the purchase of companies under former CEO Jac
Nassar. But clearly, the bad press and concern for safety in a vehicle
that was supposed to be safer than the rest led to mistrust of the com-
pany and a decline in Explorer sales. The good news for the Ford sys-
tem is that the impact was temporary. The system had enough
robustness to slowly recover and regain market share.
But even the recognition that not all trends are helpful to all
industries does not belie the argument that companies succeed by a
keen understanding of their competitive marketplace. Exceptionally
innovative companies are helped or hurt by good luck or bad luck,
but at the same time, they provide consistent insights that provide a
constant stream of revenues during good and bad economic times.
Companies such as Apple that can consistently introduce great
products have learned to read those trends and are leaders of indus-
try. Often, the products of tomorrow emerge from trends; at times,
they create the trends.

Products Impacting Trends

Thinking back to trends as ocean waves and companies as surfers, an
aspect of the analogy is interestingly incomplete. Although surfers
enjoy the dynamic thrill of the waves, they do not reorient the waves
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CHAPTER 4 • IDENTIFYING TODAY’S TRENDS FOR TOMORROW’S INNOVATIONS 75

themselves. Their position is changed by the waves, but their little

surfboards do not change the direction of the ocean’s temperamental
flow. However, products do impact trends at the same time that
trends impact products. The iPod as a product and MP3 as a tech-
nology are both reacting to and setting trends and expectations. MP3
technology allows consumers far more flexibility and demand in
music than ever before. People download only the songs they want.
The need for physical product gives way to choice and variety. For
those who download complete CDs, there are Web sites from which
the CD cover can be printed. But for many, the album cover is no
longer needed or desired. The social aspects of sharing move to a new
level with international participation in shareware sites.
Even before MP3s were developed, music and entertainment
delivery systems were continuing the drive toward miniaturization.
Smaller is better, and the inconvenience of needing any physical
device is compensated for with the iPod through another Apple
trend-setting aesthetic and lifestyle statement. For the early adopters,
what is next is MP3 in every product that is a part of their life. Even
cars today offer MP3 technology. The logistical problems and incon-
venience of downloading music to the car stereo is still a roadblock to
cross the chasm. But it will happen, and soon MP3 and downloaded
music will be the norm.
The iPod holds more music than most people own and organizes
it far better than most people organize their CD collection. The con-
cept of portability has implications for producers of environments
where people listen to music. Already BMW includes a connection
for iPods within some cutting-edge-performance vehicles; customers
can take their entire music collection into their car, play it over 10
speakers, and then take it with them when they leave. Also, high-
quality speaker systems with an iPod docking station are available for
the home and office, effectively replacing the traditional stereo
system.
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76 THE DESIGN OF THINGS TO COME

Never before has a music technology been driven by the con-

sumer instead of the recording industry. Kazaa and Limewire are,
today, replacements for the original Napster. Shareware software
allows each participant to download music from the hard disks of oth-
ers on the system and to make their music available to others in the
same way. The desire and ability to access any music at any time
immediately is an expectation of the Y generation today. It is also an
illegal exchange format that, through the power and benefits of the
Internet, is difficult at best to track down and stop. The original
understanding that an individual can copy for himself or herself pur-
chased music has been pushed to a new dimension. Of course, peo-
ple used to make copies of their albums for their friends. But one,
two, or even the occasional hundred copies were noise in the music
industry’s sales and profits. Today, in theory, one sale of one CD can
be distributed to everyone in the world. All they need is Kazaa and
someone to fork over $19.95 for the first copy to put online. Although
many who use these shareware programs leave the music on their
computer or MP3 player, it can easily be copied onto a CD with any
burner, creating a perfect copy of an album for anyone who desires it.
The music industry did not push the technology to new formats;
instead, the industry has fought the new platform tooth and nail.
Lawsuits and arrests to keep shareware sites off the Internet, or at
least people off those sites, show the fear the industry rightly feels.
For those isolationists who fear the impact China will have on our
economy, the answer is that it is reality; learn to work with China
rather than fight it. The same is true here. The Internet and compact
digital audio technology have changed the business model for the
recording industry. Instead of fighting it, the industry must look to
new ways to earn the consumer’s business—something it has never
had to face. Instead of overpricing CDs, companies must look to pro-
vide added features to those who buy their product. They must
demonstrate in their product the expected morals that people
demand so that honesty of purchasing a product wins out over the
piracy of Kazaa.
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CHAPTER 4 • IDENTIFYING TODAY’S TRENDS FOR TOMORROW’S INNOVATIONS 77

The impact on all of this for the Y and X generations is the

demand for more. What they want. When they want it. Now. And
free! The reality of the MP3 concept has reinforced the need and
demand for immediate gratification.
For the long term, the implication for the music industry is to
revisit what it means to be part of the emerging fantasy economy. The
industry will produce more singles more often and fewer albums. It
will price them at what consumers believe is a reasonable cost. It will
support smaller artists. It will recognize that independent record com-
panies have a legitimate business and place in the industry—that, like
the MP3 players, bigger is not better. For the consumer as well, the
quality of new music will improve. People will have the ability to pre-
view for free anything they would consider buying. The music compa-
nies will have to provide a positive enough experience through quali-
ty sound and production to earn the purchase of that song. Trust will
drive the relationship between the industry and the consumer.
For the majority of people who will pay for the service of down-
loading music, the virtual stores to purchase the music will become
commodities. Services like iTunes will become the Wal-Mart of music
everywhere on the Internet (and Wal-Mart now has a music down-
load service). Opportunities will emerge for high-value services that
provide more than just access to the music. These services will offer
suggestions for music that meet an individual’s tastes and will learn
what a person likes and dislikes. They will offer virtual and possibly
physical social experiences that encourage use of their service. They
will provide access to quality entertainment-delivery systems far
beyond the transfer of songs to MP3 players.
On a broader scale, the impact of compressed digital audio
goes beyond music and entertainment. Businesses need to have
accelerated product introductions with more rapid time-to-market
development processes. Mass customization will become the norm,
where consumers will choose what features they want in a product
and what color and style it will be. Nokia was an early proponent of
mass customization in what is called “postponement.” Consumers not
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78 THE DESIGN OF THINGS TO COME

only choose the style phone they want, they can also choose from 50
or more faceplates that allow them to express who they are. Nokia can
design and manufacture those faceplates at the last minute to have
the most up-to-date style, “postponing” the design of that part. In the
future, people will create their own expression in almost every major
product they purchase.
Personalization, immediate gratification, and immediate accessi-
bility of the digital music realm spills out into the rest of life; it is part
of the future of product development. Companies are constantly
developing or seeking out technology to help them produce more,
faster, cheaper, and smaller with higher differentiation. This is a
global trend. There are others.

In Reading Trends, It Is All About People

There are a host of trends to consider at the outset of product devel-

opment, forcing those considering trends to identify which are the
most relevant to the task at hand. One way to help do so is to frame
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CHAPTER 4 • IDENTIFYING TODAY’S TRENDS FOR TOMORROW’S INNOVATIONS 79

the trends in the context of the product users or other product stake-
holders. For the rest of this chapter, we use Herman Miller’s Mirra
chair as an example of how trends can be identified and presented in
the context of a person, a representative of a key customer type, Tom.
Tom had become an expert on chairs. Not because he was inter-
ested in fashion trends in the furniture industry, but simply because,
at the age of 50, he was suffering from severe back problems. Like
many aging baby boomers, Tom was facing an illness that had evolved
over the past decade. The doctor called it a life-limiting illness, but
Tom had no time for limitations.
After the proper diagnosis was made, that his back problem was a
form of arthritis, the challenge was how to thrive in spite of a disabili-
ty that affects not only every moment of your waking life but also your
sleep. Office seating, more accurately called task seating, is a major
challenge to back comfort. Tom started looking into the different types
of chairs available to him at work and found that none of them were
comfortable, especially over time. He had been able to sample a few,
but each time, he ended up using the money-back guarantee. His car
seat was better than most seats he sat in at home or at work, and he
could not figure out why no one could make a chair as comfortable as
his car seat. His wife stumbled on a catalog at a friend’s house, the
friend with all the “designer” furniture. Not that her friend’s furniture
was any more comfortable than his own; it was a style thing. Even so,
he browsed the catalog, Design Within Reach (DWR), finding chairs
that never appeared in the local Office Depot inventory. One in par-
ticular, called the Aeron chair, interested him because he had seen
that chair become popular in high-flying dot-coms. What caught his
attention was that the Aeron was classified as ergonomic. He had
thought the Aeron was only a status symbol, one heavily sought out by
start-ups that wanted the appearance of stability, not that it was a chair
to alleviate back and shoulder pain. The names of the guys who
designed it, Chadwick and Stumpf, were in the catalog, and so was a
reference to Herman Miller, the company that manufactured the
chair. Intrigued, he looked the company up on the Web.
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80 THE DESIGN OF THINGS TO COME

The Aeron chair was there with a slew of other chairs. All of
Herman Miller’s chairs had good ergonomics, which meant they were
alternatives to his car seat. The big new chair was not the Aeron, but
the Mirra chair. He had seen the chair in the DWR catalog, but it car-
ried more intrigue on the Herman Miller Web site. Herman Miller
presented the chair primarily as an ergonomic solution, with “total back
support,” a result of four years of research and development. When he
looked back at the DWR catalog, the chair was surprisingly inexpen-
sive, priced less than the Aeron and less than most competitors’ task
chairs. The next day at work, Tom filled out a work order for a Mirra
chair, taking a walk on the wild side and getting it in lime green.
After sitting on the chair for a week, he had much less pain, could
work longer, and could concentrate better. Sure, the chair cost almost
twice as much as the chairs the company normally provided, but he
was more than twice as productive. He figured he had actually made
up the difference in cost in the first week alone. He had actually
saved the company a fortune in terms of better quality work time at
the office. Now everyone asks him about his chair—after all, it is hard
to ignore the lime green—and he has evolved into being the compa-
ny advocate for comfortable seating. He even eventually got his pur-
chasing agent to start ordering directly from Herman Miller, saving
some money to obtain not just ergonomics but looks. For him, the
comfort was the best thing, but he also relished the fact that the chair
is a conversation piece and is the best-looking chair in the office. The
youngest office workers love how it looks, and the oldest workers just
feel better the minute they sit down.
Over time, as Tom continued to research ergonomics and furni-
ture design, trying to help the company achieve not just physical
comfort but visual appeal as well, he found new insights into innova-
tions and evolving objectives in the furniture design industry. For
instance, he became familiar with the idea of universal design, that a
number of companies are trying to design products that are univer-
sally acceptable, or at least they are careful to explain why their prod-
uct is not intended for any particular group’s use if that is the case.
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When you order a prescription, you often get two types of tops. One
is child-proof, whereas the other is actually easy to open. Neither top
is universal. If you have young children, you need a child-proof lid; if
you are older and have limited hand strength, you want an easy-open-
ing lid. Possibly, some company or someone will find a way to have
one lid, a universal top that achieves both objectives. But the Mirra
was different. It was a chair for everyone; it was a universal design like
that universal top.
Tom is one of many office workers at all levels dealing with back
and repetitive stress injuries. There are now experts in ergonomics,
sometimes called human-factor experts, who can design a work envi-
ronment to minimize the impact of long-term task seating in the work-
place. The chairs designed by the best office furniture companies are
now being made available to consumers, just like the best industrial-
grade butcher knives have begun to appear in consumer kitchen cata-
logs. As many people age, they find they need a host of new products
to help them stay active and fully functional, where “fully functional”
to them means that their bodies will continue to perform like
30-year-old bodies instead of 50-year-old ones. They have disposable
income and are happy to part with it if it pays for products that
deliver. They have no time or patience for inferior substitutes.
The Toms of the world are legion, now that baby boomers are
feeling the aches of aging. While appealing to this market and the
broader market of those generally seeking ergonomic support in the
office environment, Herman Miller has the daunting task of continu-
ing the success of the Aeron, one of the few office furniture pieces
ever to attain the status of public sensation. By any measure, the
Aeron chair has been one of the most successful office chairs in the
past 50 years. Herman Miller was looking for the next big design.
How do you improve on a breakthrough success and make it com-
petitive in a tough economy? By understanding the trends laid out by
Tom and converting that understanding into a product.
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82 THE DESIGN OF THINGS TO COME

Designing the Mirra Chair

The Mirra chair, which debuted in the spring of 2003 at the Annual
NeoCon International furniture show centered in the Merchandise
Mart in Chicago, was an instant hit, winning a number of awards. It
is an excellent example of global design coordination: A furniture
company based in Zealand, Michigan, blended a German design
team and the concept of Nike shoes while holding to a new environ-
mental standards system developed in conjunction with William
McDonough and Michael Braungart. Herman Miller had made a
major commitment to work with McDonough and Braungart to make
their company an environmentally friendly manufacturer. Their
buildings and manufacturing facilities were environmentally respon-
sible, and now they had a new process for designing their chairs. The
end result is the latest office seating sensation in the industry, the
Mirra chair. The chair design not only added a new dimension
ergonomically, it also used new technology and introduced a new
visual design that may have the same impact on office seating trends
as the Aeron did a decade ago. The German design group Studio 7.5,
working with the new environmental standards team within Herman
Miller, delivered a design that continues Herman Miller’s tradition of
brand excellence and innovation. The chair costs less than the Aeron
and Herman Miller’s competition. This new chair design is starting
with the same success that its predecessor had a decade ago. The
Aeron also won an award at the NeoCon show when it debuted and
has been reviewed and discussed by design organizations and muse-
ums across the globe. It remains to be seen whether the public will
embrace the Mirra and whether sales will follow a trajectory similar
to that for the Aeron.
The breakthrough idea was based on the concept that a chair
should be as comfortable as an athletic shoe. When giving the project
to Studio 7.5, Herman Miller had no idea what the chair would look
like, but it was convinced the idea was worth researching and devel-
oping. At the same time, during the early phases of the design of the
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CHAPTER 4 • IDENTIFYING TODAY’S TRENDS FOR TOMORROW’S INNOVATIONS 83

new chair, Herman Miller developed a new environmental approach

to help designers ensure that material and manufacturing decisions
would be the best from an environmental standpoint and that prod-
ucts would be designed for disassembly, reuse, and recycling. A team
of two Herman Miller specialists—Scott Charon in marketing and
material purchasing, and chemical engineer Gabe Wing—worked
with Studio 7.5 to make sure the design would be the best possible
solution environmentally.
When you look you at the chair, the first thing you notice is the
form of the back support and the unique pattern of holes in the hard-
molded one-piece plastic shape. Just when the competition respond-
ed to the advanced breathable mesh of the Aeron, Herman Miller
introduced a new solution. The Mirra achieves a new hybrid aesthet-
ic by combining a solid polymer back with a set of organically shaped
holes to look like a cross between a butterfly and a piece of Swiss
cheese. This new ergonomic aesthetic provides a viable alternative to
the Aeron. The shadows projected by the profile of the shape and
holes add a light and unique new visual element to the landscape of
a home or office. Herman Miller had to take a risk to see whether its
customers would accept this new visual style and the idea of a solid
one-piece back. Herman Miller has had an uncanny instinct as a
company during the past 50 years, anticipating and setting new trends
in material choice, product aesthetics, and ergonomics. Under the
direction of George Nelson in the 1950s and 1960s, Herman Miller
introduced one new classic after another for the home and then for
office seating. The designers hired by the company introduced
designs using bent plywood, fiberglass, and aluminum. The designs of
Nelson, Charles and Ray Eames, and Eero Saarinen set a new stan-
dard for design in the office environment. The Mirra chair continues
that tradition.
When you sit on the chair, the first thing you feel is the chair back
conforming to your back and the woven seat supplying a firm support
for your bottom. The adjustable arms are easy to set, and the mater-
ial has a slight friction that prevents your elbow and forearm from
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84 THE DESIGN OF THINGS TO COME

slipping, keeping your arms positioned where you set them. The best
thing is that, after awhile, you stop being aware of the chair. The feel-
ing is just like a good pair of running shoes. The design team at Studio
7.5 actually consulted with Nike when designing the chair. The design
team took the perspective that your back should receive the same
support as the bottom of your foot. A shoe has to flex and respond to
a number of three-dimensional movements of the foot, and so does a
chair in a modern office environment. The challenge with a chair is
the difficulty in making a size that fits everyone. Although the Aeron
does accommodate size differences with three sizes of chairs, Studio
7.5 wanted to make one back and seat to fit the whole spectrum of
people. By achieving this goal, it allowed Herman Miller to have to
manufacture only a one-size chair, which cuts costs on tooling, man-
ufacturing, and inventory. This feat was accomplished by choosing a
plastic material for the back membrane that, enhanced by a series of
organic-shaped holes, has just the right flex to conform to different-
size backs. The support of the membrane is done via a Y-bar that
went through several redesigns because it originally did not meet the
design team’s environmental standard. The original design was made
from different materials. The drive to stay true to the environmental
mission led to an innovation that improved the chair’s comfort and, at
the same time, reduced production costs. The end result is also a
chair that is 96 percent recyclable.
In this case study, we roamed far and wide to identify trends. The
Mirra chair is a product that is international in scope, universal and
ergonomic in design, and thoughtful in terms of material, manufac-
ture, assembly, disassembly, reuse, and recycle. It is an exciting, con-
temporary new look and feel for the office landscape and costs less
than the leading chair it is designed to complement in the Herman
Miller stable of seating options. Herman Miller is willing to share its
new cradle-to-cradle environmental furniture design method with
others. The company has more than enough innovation in ergonom-
ics, aesthetics, engineering design, and manufacture, so it can be gen-
erous with its new environmental innovation. The key trends that
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CHAPTER 4 • IDENTIFYING TODAY’S TRENDS FOR TOMORROW’S INNOVATIONS 85

started this discussion are aging and associated back problems, and
relevant trends ended far beyond those boundaries, touching on
aspects of life relevant to every country in the world.
The art of reading trends can be learned by anyone intimately
involved in developing new products. You need to learn to read the
dynamic social, economic, and technological factors. Based on those
factors and changes in them, what are the probable directions for new
needs, wants, and desires? From those directions emerge multiple
opportunities for new products. The iPod and the Mirra chair each
emerged from an insightful but straightforward understanding of
contemporary trends. All the innovations discussed throughout
this book similarly emerged from an educated understanding of
yesterday’s trends.
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5
DESIGN FOR DESIRE—
THE NEW PRODUCT
PRESCRIPTION

The average consumer is full of unmet and unconscious desires for a

wide range of experiences. Connecting with consumers’ emotions and
desires will make one product more appealing than another. The right
blend of emotion and basic needs drives purchasing decisions and
maintains brand loyalty and integrity while fulfilling consumer fan-
tasy. Developing a sense of delight and trust in products is at the core
of pragmatic innovation for both lifestyle consumer products and
more functional business products.
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88 THE DESIGN OF THINGS TO COME

Rochester, NY. On June 20, 2003, at 9 p.m., Susan Vaughn took her
daughter Stacy to the Barnes & Noble in the mall. It was a Friday
night, so the mall was still crowded for that time of the evening. Even
so, Susan was amazed at how many people were in the store, and still
coming. As she walked in, someone reached out to give Stacy a plas-
tic pair of wide-rimmed black glasses, but she turned them down.
They just did not go with her witch costume. Half the store had witch
or wizard costumes on. For at midnight, Harry Potter and the Order
of the Phoenix would become available. The party was just getting
started, and the store would be open until 4 a.m., with food, music,
Harry Potter readings, and, of course, the book for sale.

The Harry Potter Phenomenon

Order of the Phoenix is the fifth book in the Harry Potter series,
the escape into the world of witches and wizards through the eyes of
Harry, the lovable, only slightly mischievous wizard whose parents
were murdered by the evil Voldemort when Harry was just an infant
and whose soul, during the murder, somehow connected with the evil
one himself. The series documented Harry’s progress from his first
year at the Hogwarts School of Witchcraft and Wizardry, when he
first found out about his roots, through each year of school, and deep-
er into his battle with Voldemort.
The anticipation of the fifth book was an international phenome-
non. The previous four books had sold nearly 200 million copies in
more than 50 languages. Nearly 10 million copies of Order were
preprinted, and more than 6 million of those sold the first day of its
release. It was the fastest-selling book ever. Susan was one of those 6
million customers. Stacy had begged her to take her to the Barnes &
Noble party and prepurchase the book “in case they run out.” Susan
had also been looking forward to the release of the new book and had
wondered how long it would take her daughter to read it before
Susan got to read it.
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CHAPTER 5 • DESIGN FOR DESIRE—THE NEW PRODUCT PRESCRIPTION 89

Although targeted to ages 9 to 12, the book reached younger and

much older readers. Everyone could partake in the Harry Potter
phenomenon. You didn’t have to be one of those who loved “fantasy”
literature. Harry was, really, an ordinary boy. Everyone could sympa-
thize with Harry’s childhood as an orphan raised without love by his
aunt and uncle and bullied by his spoiled cousin. It is that seemingly
ordinary front to Harry that allows us all to accept without question
the extraordinary part of his being a wizard. Once we accept that he
is a wizard, we can partake of and enjoy all that the world of witches
and wizards has to offer—Bertie Bott’s Every Flavor Beans (be care-
ful which one you try), Quidditch (a game played on brooms), giants,
werewolves, dragons, screaming plants, the feasts at Hogwarts with
the ghost Nearly Headless Nick, potions that really work, and the evil
spirit of Voldemort. Everyone, too, wants to visit Hogsmeade and
indulge in a hot butter beer! Author J. K. Rowling has designed an
entire realm by integrating new experiences that readers desire with
the best of what readers remember and long for in historical context,
such as Victorian England and quaint villages.
One of the most interesting parts of Rowling’s world is Quidditch. It
is a complete game that combines elements of competitive field games
such as lacrosse, cricket, hockey, and roller ball with athletes playing in
the air on broomsticks. What a great innovation to take a symbol, the
witch’s broom that is associated with scary women in black, and turn it
into a vehicle for a game that children play. The Wizard of Oz had
immortalized the flying witch when the spinster schoolteacher on her
bicycle turns into the Wicked Witch of the East during the cyclone.
Rowling redefined witches on brooms as inviting playmates.
Her books have inspired girls and boys to read—not just short
stories, but huge volumes—and they cannot get enough. How many
parents like Susan do you know who were forced to stand in line to
make sure they could get the first available copies of the latest install-
ment? Just when kids’ primary interests appeared to be digital enter-
tainment and the Internet, Harry Potter turned them back to the
printed word. There has not been a dedication of this magnitude in
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90 THE DESIGN OF THINGS TO COME

children reading for entertainment since dime novels about cowboys

and the Wild West hit bookstores in the United States and Europe
around the turn of the last century.

Form and Function

Form has usually been thought of as the envelope that encloses a
technology. In some situations, the two are seamless, so the technol-
ogy and the form are seen as continuous. An airplane propeller or
wing is an example of blended form and function. Such examples are
rare. In most cases, the internal structure or mechanism must be cov-
ered by a surface to protect consumers from the product’s inner
workings, which might be sensitive, dangerous, or just ugly. No one
covered a horse pulling a carriage, but automobile engines had to be
covered by hoods for a number of reasons.
In the best examples of form encasing function, a product’s shell
can be used to accomplish a number of goals. The cover of a CD play-
er can protect the inner workings from damage or dirt, make the
product easier to hold, help the person who uses it to find the con-
trols, be made into a form using a material and color that will connect
to and enhance the consumer’s lifestyle, and make the product dis-
tinct in the marketplace. Even the simplest of products can be dif-
ferentiated from the competition with a thoughtful addition of
details. The concept of form and function is at its best when both are
integrated to fulfill the complete expectations of the manufacturer
and the consumer. In this case, form and function can fulfill the fan-
tasy of the consumer and generate a profit that is sustainable and that
allows the company to prosper. In the case of a propeller, the form
must keep the plane in the air. Beyond that, it has little additional
value. A car body must protect a customer from crashes, it must
house the engine, and it must also create a visual statement that peo-
ple respond to. There are a variety of airplane propellers, but all the
variations are driven by function. No one would use a propeller to
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CHAPTER 5 • DESIGN FOR DESIRE—THE NEW PRODUCT PRESCRIPTION 91

make a fashion statement. With a car, the statement and the function
are equally important, so the form and the function must work in
complement. A sports car and a van have the same basic function, but
the forms vary significantly to meet the needs of the different types
of consumers who buy these vehicles.

The Experience Economy

Since Pine and Gilmore’s insightful book, there has been much
discussion of the “experience economy.”1 To a great extent, today’s
consumers buy experiences. Rather than vacations that are simply
observational, such as traditional trips to Europe, recent years have
witnessed increasing interest in participatory excursions such as
backpacking in the Himalayas. Rather than just purchases of nonde-
script coffee in generic white cups, coffee consumption now entails
carefully crafted purchase environments and containers, not to men-
tion the new quality levels demanded of the liquid itself. Consumers
are increasingly interested in the experiences that accompany prod-
ucts and services, in being personally engaged.
Consumer demand for experience is part of an evolution of the
marketplace and of society. In an agrarian society, microeconomies at
the household level produced and sold commodities. Food and cloth-
ing were goods created from commodities, put together in-house. As
the industrial age replaced the agrarian, manufactured goods
replaced the homespun. Food and clothing looked homespun but
were mass-produced. Diners, for instance, served the same foods that
were served in homes, but on a larger scale. As the service industry
has grown to be a major portion of Gross Domestic Product (GDP),
it has added its own unique value to the marketplace. Chefs created
new blends of commodities, and food no longer mimicked the home-
made. The fashion industry reinvented clothing. Now that consumers

1 Pine, B. J., II, and J. H. Gilmore. The Experience Economy. Harvard Business
School Press, Boston, 1999.
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92 THE DESIGN OF THINGS TO COME

are moving beyond simple services to experiential purchases, not only

do consumers at Asian restaurants manipulate chopsticks rather than
knife and fork, but restaurants such the Rain Forest Café have
emerged that imitate the environment of South American rainforests,
or at least what people want them to look like. Clothing fabrics, such
as Eliotex, speak of outdoor adventure even while worn comfortably
indoors. Of course, this progression applies far beyond food and
clothing to other product spheres. Lawn care? Homeowners who
once replaced their lawn mowers with lawn services now use profes-
sional landscapers to achieve outdoor gardens of bygone castle eras.

The Fantasy Economy

When Thomas Jefferson penned the goals of the United States as “life,
liberty, and the pursuit of happiness,” he set into motion one of the
most powerful engines of change in the history of the world. Two hun-
dred and thirty years later this objective has been adopted as a global
mantra.
Now that China has joined the world of economic freedom, the
overwhelming majority of the earth’s population feels entitled to live in
pursuit of the themes that Jefferson established as a basis for the found-
ing of the United States. The end of communism and the overthrow of
dictators around the world have increased the potential of individuals
to achieve a life where liberty is a basic right. People have more free-
doms than ever before and, as a result, more options to choose from.
The increase in global consumption has driven the pursuit of
desire, or fantasy, to achieve everyone’s personal sense of happiness.
Not only has this pursuit altered the direction of life, for the concept
of life itself is being understood as never before, but life itself has
simultaneously been extended, for the average life span has almost
doubled from the time when Jefferson lived. To meet this new glob-
al demand, companies now have the goal of developing innovative
products and services.
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CHAPTER 5 • DESIGN FOR DESIRE—THE NEW PRODUCT PRESCRIPTION 93

Fueled by global communication of information, infotainment,

and pure entertainment, individuals around the world have access to
the latest changes and emerging ideas, and change occurs with an
ever-quickening pace. What is the next step in the progression from
commodity to good to service to experience? In our view, it is fanta-
sy. Fantasy, according to one definition,2 serves the purpose of fulfill-
ing a wish or psychological need. People not only want to experience
their environment, they also want to project their environment and
their emotions about that environment to a deeper level of desire.
They do not want to just participate in the experience; they want to
live it. They already live one experience—the reality of their own
lives. Fantasy is a desirable experience that, at least currently, is not
that reality.
Consumers are adept at life in realms outside their own
reality, at times more comfortable in a fantasy realm than in reality.
Individuals converse using movie imagery. Video games, an $11
billion industry, allow consumers to interact with and even control the
fantasy realm. Disney World is more than an experience; it is a fanta-
sy for every child and adult. You can stay in the Wilderness Lodge at
Disney World and not only experience the simulated Great
Northwest, complete with Aaron Copland music always playing in the
background, but also fantasize about living it.
In the meantime, the definition of reality itself is being changed
via “reality television,” where participants live for the short term in
undesirable circumstances in hopes of a substantial prize. With such
a definition of reality, an awkward and nightmarish world if we were
confined to it, fantasy by contrast becomes all the more normal. In a
post-9/11 society, people project a fantasy in which terrorist threats
no longer drive reality. Even the world’s money is increasingly virtu-
al, unreal. Consumers spend money they do not have, and virtual
markets exist with individuals buying and selling on the Internet with
virtual PayPal accounts. Even at an international level, virtual money
2 The American Heritage Dictionary of the English Language (taken from
www.dictionary.com).
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94 THE DESIGN OF THINGS TO COME

passes between countries in stupendous volumes in almost no time.

As reality becomes more challenged and as people come to expect a
more desirable experience, fantasy becomes the driver of product
and service purchasing—for this is the fantasy economy.

Fantasy in Everyday Products

Product developers today understand this evolution in purchasing

expectation. It has transitioned from the entertainment industry
to any industry where people interact with a product or
service—not only consumer products, but industrial and business-to-
business as well. One consumer company that exemplifies the motto
of form and function fulfilling fantasy, in each of its 500 products, is
OXO International. OXO’s first product, the popular GoodGrips veg-
etable peeler, has received extensive publicity. The product was envi-
sioned by Sam Farber, whose wife had arthritis in her hands. She
found it difficult to use the typical 100-year-old peeler design and
most other kitchen utensils, but she loved to cook. Whereas younger
consumers may not see the ability to hold a product comfortably as a
fantasy, many arthritis suffers do. They long for the time in life when
simple things, such as opening jars or waking up without pain, were
something you took for granted. Farber’s peeler was an unexpected
entrance into the world of kitchenware. The large oval handle made
from neoprene provided an easy-to-grip shape and surface for those
with less grip strength. The patented fin pattern provided added grip
when the handle was wet (and was a unique aesthetic that became
the product’s brand identity). The improved blade required a blade
guard that added visual substance and balance to the overall design.
The product cost five times its traditional competitor, the designed-
for-manufacture metal peeler that had been the standard design for
the past century. Yet the peeler, originally designed for people with
arthritis, met the needs of the growing societal trends toward
improved aesthetics within refurbished kitchen environments. Soon,
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CHAPTER 5 • DESIGN FOR DESIRE—THE NEW PRODUCT PRESCRIPTION 95

the GoodGrips became a mainstay for all kitchens, and all people,
young and old.
The GoodGrips led to a revolution in kitchenware from an aes-
thetic or style perspective, but also from the perspective of comfort
and usability. The idea of great-looking products that could be used
by people of different needs became the company’s identity. Today,
OXO has more than 500 products, all designed with the goal of uni-
versal design. In other words, anyone who should be able to use the
product will be able to do so, as with the Mirra chair featured in
Chapter 4, “Identifying Today’s Trends for Tomorrow’s Innovations.”
OXO has received numerous design awards, including a Gold Design
of the Decade award from the Industrial Designers Society of
America (IDSA) and Business Week. OXO, which began as just a
vegetable-peeler company, was bought in mid-2004 by Helen of Troy
for $275 million.
Every product that OXO makes competes against mature products.
Yet each of the 500 products designed by the company is a unique inno-
vation, usually focused on usability and aesthetics. In other words, every
innovation from OXO is an extraordinary part of the ordinary. Each
product—a vegetable peeler, a salad spinner, a measuring cup, a dust-
pan and brush—has well-established overall functionality. But the way
that the functionality is met through its design is extraordinary, unique,
and an improvement over the state of the art.
Consider what some regard as OXO’s best product—its salad
spinner. Traditional salad spinners are bowls with colander inserts
and a cover that meshes with the colander and enables the colander
to spin through a crank mechanism on top. The user turns the crank
with a rotational motion of the arm while pulling the crank knob, and
the spinning colander then throws the water off the lettuce and into
the bowl, thus drying the lettuce and inviting your favorite salad
dressing to stick to the dry green leaves. The problem is that the
motion and effort to make the colander spin is difficult for some and
cumbersome for all.
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96 THE DESIGN OF THINGS TO COME

OXO’s innovation came from the desire to have a person use a

simple one-handed motion to cause the colander to spin. The insight
came from children’s toys where a pump on top of a clear plastic
dome causes the dome within to spin, providing the means for images
to rotate and colored balls inside to jump over bumps on the base.
OXO figured if a two-year-old can use one hand to get a bowl to
rotate and balls to jump, the same mechanism could allow an adult to
spin a colander to dry lettuce.
The result is a beautifully executed design. The black neoprene
knob on top stores flush and pops up for use. A smooth vertical
motion inputs the user’s energy into the system. The knob’s color and
form contrasts with a white top and colander within a clear bowl. The
colander and bowl work to provide minimal friction during spinning.
The form is well thought out, with the colander having a refined rec-
tangular mesh pattern that completes the clean look of the overall
product, making it attractive enough to store on the countertop
rather than hide in a cabinet.
Another one of OXO’s products, the measuring cup, has an
angled surface that allows you to look down at a partially filled cup to
see exactly how much liquid is stored within. The extraordinary part
of the design, the innovation, came from identifying the difficulty and
frustration that people have with needing to level a cup, at eye level,
while filling it to see how much liquid is being added. Since its
inception, OXO has sold more than $9 million worth of these mea-
suring cups.
Even OXO’s simple dustpan and brush provide a superior means to
sweep up crumbs off the floor. Its bristles flow out from an ergonomic
egg-shaped handle that encourages a natural and effective sweeping
motion. The handle also provides the means to wedge the brush into
the dustpan’s handle for easy storage and to make sure that the two
don’t get separated and lost, a frustration with other designs. The side
of the dustpan is molded with teeth that serve as a means to clean the
brush, another frustration with competitive products.
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CHAPTER 5 • DESIGN FOR DESIRE—THE NEW PRODUCT PRESCRIPTION 97

Many of these innovations have been patented. They all brilliant-

ly execute their functions. The vegetable peeler easily and comfort-
ably peels, and the brush and dustpan efficiently work in concert for
dirt removal. They also beautifully express an appropriate aesthetic.
If on display in a modern kitchen, any of them would make the
kitchen look even better. All of these provide not just an experience,
but fantasy.

Form and Function Fulfilling Fantasy

Fantasies take place on a personal level, in that individuals create fan-

tasy. A product can support and even engender the fantasy, but the
fantasy is that of the individual. It is like seduction, in which the
seduced is a willing partner. Humanity has canonical fantasies; we
have collective dreams. We dream of adventure, of independence, of
security, of sensuality, of confidence, and of power. To achieve a sense
of adventure, products promote excitement and exploration. To
achieve the feeling of independence, products provide freedom from
constraints. For security, products provide a feeling of safety and sta-
bility. For sensuality, products provide a luxurious experience. For
confidence, they support the user’s self-assurance and promote moti-
vation of product use. For power, products promote authority and
control.
The OXO vegetable peeler, through its ergonomics, gives older
users the ability to work comfortably, which is independence. Along
similar lines, it supports their health, touching on security. Because
the product works so easily and efficiently, it promotes their confi-
dence in daily tasks—confidence that tends to be eroded as people
age. Although these everyday tools are not luxurious relative to
jewelry, they are luxurious relative to other kitchen tools, providing
sensuality.
How does this vegetable peeler foster fantasy for a broad market?
It is simply that the experience it provides exceeds the reality of the
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98 THE DESIGN OF THINGS TO COME

typical user. A young buyer does not have luxury throughout the
house, so a luxurious vegetable peeler speaks to the fantasy of a life
of luxury. Elderly buyers’ physical mobility constrains their tasks,
and the ease with which they implement this peeler speaks to their
fantasy of independence.
How is fantasy put into a product? What elements of a product
induce users to fantasy? Customers expect a product to enhance and
fulfill their lifestyle, not simply to perform a function or even to
exhibit a desirable aesthetic. When a product fulfills fantasy, it fulfills
a desired lifestyle beyond, and in contrast to, the current reality. In
this book, the methods and tools support the development of fantasy-
enriched products and services. The products and services fulfill
some level of fantasy in their users, and the companies and product
developers understand the paradigm of the fantasy economy. They
drive successful product development under the mantra that form
and function fulfill fantasy.

The Harry Potter Fantasy

Harry Potter is a great example of a product for which form and func-
tion fulfill fantasy. Almost all products are accompanied by a service,
and the Harry Potter series is no exception. Although the creation of
the book prose itself is relatively straightforward, coming from the
mind of a single product designer, J. K. Rowling, a vast production
and distribution system prints, ships, and sells the product. For book-
stores, the book brings in people who are likely to purchase other
books, or to drink a latte at the café. The book also has the same pos-
itive impact on Web-based retailers (minus the latte), where recom-
mendation agents tempt purchasers with additional options and
where delivery is an additional service. Because of the popularity of
the Harry Potter series, Order of the Phoenix could be preordered
months in advance on Amazon.com with the promise of quick deliv-
ery at a discount.
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CHAPTER 5 • DESIGN FOR DESIRE—THE NEW PRODUCT PRESCRIPTION 99

Beyond the book and the services that accompany it, Harry
Potter has created an industry. Merchandizing has led to products
including multiple computer and video games, Lego games, sun-
glasses, Bertie Bott’s Every Flavor (Jelly) Beans (of course), and even
Harry Potter cologne. The books have led directly to the production
of movies. The first three Harry Potter movies each grossed around
$90 million in the first weekend of their release. To date, they are
three of the top six movies in terms of gross receipt their first week-
end, each grossing more than $250 million over time.
The movies, themselves an entertainment service, have stayed
true to the spirit of the books. They are accessible to the young and
old. Like the books, they are an escape into the world of wizards and
witches. Rowling’s rich writing is as descriptive and captivating as the
movie set. The connection of the movies to the Harry Potter stories,
which everyone fantasizes about being a part of, have allowed for an
exceptional cast, each supporting the mystique of Harry’s world.
The Harry Potter movies are an interesting contrast to the Dr.
Seuss movie The Cat in the Hat. Dr. Seuss books, written for readers
and soon-to-be readers who are younger than the Harry Potter reader,
have brought smiles to children for the past 70 years. The books stim-
ulate children’s imaginations while teaching them the magic of words.
Although some of the characters are slightly naughty, they are never
bad, crude, or mean. The message of Dr. Seuss was lost in the movie
The Cat in the Hat, which featured the industry of Mike Myers as a
rude and crude Cat in the Hat. The technology was there, but the
translation was a dismal failure. Rowling approved the translation of
her books into movies, but unfortunately (or fortunately for him), Dr.
Seuss did not live to see his book translated. The movie was largely
panned and, although not a complete financial failure, likely because of
the fans of Mike Myers, the film appears to have barely broken even
through theater distribution (although video sales will probably bring
the studio a fair profit). In contrast, the third Harry Potter movie,
Harry Potter and the Prisoner of Azkaban, which remained true to the
Harry Potter themes, made a hearty profit in the just the first weekend.
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100 THE DESIGN OF THINGS TO COME

If you look for other writers of fantasy with a clear English her-
itage, J.R.R. Tolkien comes to mind. With his extensive background
in the mythologies of ancient cultures, Tolkien crafted a world of
characters and dramatic contexts for The Lord of the Rings, released
in 1954. Tolkien used his knowledge of geography to make an imagi-
nary kingdom with subcultures that reflect ideal settings for epic
adventures. Tolkien went so far as to create his own language, merged
from different ones, and the theme of the search for the ring was
modeled from ancient myths. This was a brilliant literary achieve-
ment and one of the best-selling books of the twentieth century, yet
The Lord of the Rings did not flourish into mainstream until pirated
paperbacks appeared in the United States in 1965. The success of
The Lord of the Rings then quickly grew from a grassroots movement
into cult status.
Although The Lord of the Rings movies that were introduced in
2001 were blockbusters and included an Academy Award for best pic-
ture for The Return of the King, the first attempts in the 1970s to
make a movie based on the Rings trilogy did not have broad-based
appeal. They were animations, most likely because special-effects
capabilities were too primitive to effectively capture the story.
So the social, economic, and technological (SET) factors for the
Rings trilogy were not as aligned as the SET factors for Harry Potter.
Both the Potter books and films were instant mainstream hits with
children and adults around the world because the social aspects of the
story and technological aspects of the films were perfectly aligned
with cultural and market demands. Although both were economic
blockbuster successes in the end, it took more than a decade for the
Rings books to grow in popularity and nearly 50 years for the movies
to strike, whereas for Harry Potter, both were instantaneous hits.
That is the lesson for product development. If you are developing a
product in today’s fast-paced world, you do not have the luxury of
waiting a decade for your product to reach the tipping point to
become mainstream.
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CHAPTER 5 • DESIGN FOR DESIRE—THE NEW PRODUCT PRESCRIPTION 101

The story behind J. K. Rowling and her writing of the first Harry
Potter book, Harry Potter and the Sorcerer’s Stone, is itself inspiring. A
divorced mother who was on the dole in Edinburgh, England, Rowling
would bring her baby in a stroller into a coffee shop and would write
while her baby slept. Rowling, whose 2003 earnings surpassed even
those of Queen Elizabeth, at present lives in a castle and is now one of
the most recognized women on the planet. Although Rowling’s success is
clearly literary genius, her accomplishment is a lesson in innovation for
all. Envisioning the extraordinary part of the ordinary, a wizard’s blood-
line in an ordinary-looking boy, was the kernel of her success. For each
of us, all that is ordinary holds the possibility of the extraordinary.
Harry Potter serves as a metaphor for innovation in product
development. Finding a way to make the ordinary into something
extraordinary is a key lesson in product innovation. Sam Farber, of
OXO, is a J. K. Rowling of new product development, taking the ordi-
nary peeler and transforming it into an extraordinary kitchen utensil.

Fantasy-Driven Products in Everyday

Experiences
It is easy to see the fantasy in the Harry Potter series. In the fantasy
economy, however, fantasy can be fulfilled in the midst of everyday
experiences, for fantasy is just a wish or desire. Another ordinary
product is the bicycle. The basic design and function of today’s bicy-
cle is more than 100 years old. Yet the desire for improved perfor-
mance on the racecourse for that added edge and the increased fea-
ture comfort for families on excursions have both driven new
innovation. In each case, an unobvious aspect of the bicycle riding
experience has improved the obvious design.
Trek is a company that for 25 years has pushed the innovation
edge on bicycles for both the serious racer and the casual rider. Trek
has used emerging composite materials technologies to reduce
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102 THE DESIGN OF THINGS TO COME

weight coupled with functional innovation to improve ride perfor-

mance and comfort. For example, Trek did not invent shock
absorbers for bikes, but its “fuel” suspension system better reduces
bobble and sway and its “liquid” frame design adapts the bike’s geom-
etry to maintain weight distribution toward the rear tire for better
control. Most recently, the company has embraced industrial design
as a means to emotionally bridge the gap between the company and
the end users. The new sculpting in conjunction with engineering
performance has provided an identity built on performance and ful-
fillment of user expectations.
Lance Armstrong is very much a model of Harry Potter. Raised
in Plano, Texas, he overcame a troubled family life and pedaled his
way to becoming the record six-time winner of the grueling Tour de
France.3 Along the way, he also became a cancer survivor, furthering
his mystique of greatness.
Trek has gained international recognition through its sponsorship
of Armstrong. Armstrong’s relationship with the company goes deep-
er than Tiger’s or Michael’s or Kobe’s with Nike and others, who just
use sponsors’ products, maybe even exclusively. Armstrong is an inte-
gral connection to Trek’s brand, and, as such, Trek has become an
advocate for cancer research. Although the Trek brand will maintain
strength without Armstrong, the long-term relationship has strong
brand association with the public. The connection predates
Armstrong’s amazing world record, yet the long-term association has
propelled Trek to the forefront as Armstrong became the wizard of
bicycle racing.
Starbucks is the prototypical company that took a commodity,
coffee, and transformed it into a high-value experience at high mar-
gins. Everything about Starbucks shows success: from the coffee
itself—Arabica beans carefully obtained from select growers world-
wide—to a roasting process that provides consistent flavor, to the
brewing process, to the store environment that is a cross between a

3 Wasch, H. “Armstrong cycles hope across the miles.” ESPN.com, 2004.

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CHAPTER 5 • DESIGN FOR DESIRE—THE NEW PRODUCT PRESCRIPTION 103

high-end European café and an inviting college coffeehouse, to all

the coffee-related accessories you can purchase as gifts for others or
self. Starbucks as a service provider is the Hogsmeade of Harry
Potter, and its coffee the hot butter beer, both ultimate experiences
that support fantasy.
Although Starbucks is still on a rapid expansion curve, CEO
Howard Schultz recognized that the growth potential for coffee
consumption and new store placement are limited. Rather than wait
until that limit is reached, he wanted to begin to explore new ways to
grow while maintaining the company’s guiding principles. Schultz
read the social, economic, and technological trends. He understood
the trend in music laid out in Chapter 4. He also understood the soci-
ological connection between sophisticated coffee tastes and sophisti-
cated music tastes. Schultz stumbled upon the Hear Music retail
store. He immediately loved its service-based approach to music.
Customers could buy sophisticated, unusual music and call on the
educated staff to help out not just with the transaction but also with
music selection, much like the service provided to patrons of an inti-
mate wine store. Rather than commoditizing itself with shelves of
ubiquitous popular top-40 hits, the store is known for hard-to-find
adult-oriented music, specialty R&B, and jazz. Hear Music reaches a
larger market than its target, the affluent 25- to-50-year-old who lis-
tens to NPR. The music-shopping experience at Hear Music met the
coffee-buying experience at Starbucks!
Schultz believes in organic growth, so the story continues. Not
only did he buy the business, he made one of its founders, Don
MacKinnon, his VP of music and entertainment. He didn’t just keep
the business separate; he began to merge and integrate. First,
Starbucks sold compilation CDs of various artists made by Hear
Music. Then, Schultz and MacKinnon created a new model for cof-
feehouses. Customers can get their double mocha nonfat grandé latte
and sit at a music station where they have access to tens of thousands
of songs. As they select their menu of music as eclectic as their cof-
fee selection, they design their own CD. They pay per song, and the
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104 THE DESIGN OF THINGS TO COME

CD is burned and personalized with a CD label and jewel case insert

that they select. They walk out with their half-drunk coffee and per-
sonalized CD in five minutes. The Hear Music Coffeehouses have so
far been a hit, and expansion has begun, much like the initial expan-
sion of Starbucks itself.4
From wizards to vegetable peelers to bikes to coffee, innovation is
found by identifying the extraordinary part of the ordinary. Innovation
is not wizardry or luck, but is the flower of diligent work—work that
uncovers the potential that a product can achieve for its users. Harry
Potter is a wonderful example of converting the ordinary into the
extraordinary. Every product and service highlighted in this book is an
example of meeting or exceeding the customer’s emotional expecta-
tion, of form and function fulfilling fantasy. As long as those four Fs
drive what you do you in planning, researching, developing, and exe-
cuting your product, you will set the bar for innovation in your own
field. You will deliver a product or service in the fantasy economy.

4 Overholt, A. “Thinking Outside the Cup.” Fast Company, Issue 84, July, 2004
p. 50.
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6
THE POWERS OF
STAKEHOLDERS—PEOPLE
FUELING INNOVATION

Companies know that the customer is central to product development.

But it is not enough to design for the customer, because sometimes the
most removed stakeholder with the least perceived power can have a
significant impact on the product’s success. The Powers of 10 analysis
helps product developers identify all relevant stakeholders and proac-
tively account for their needs, wants, and desires.
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106 THE DESIGN OF THINGS TO COME

Houston, TX. Pete was finishing his shift, taking his bus back to the
parking and maintenance area. He had driven buses in Houston for
15 years and, for the most part, enjoyed a job that some might con-
sider monotonous. Every day seemed somewhat different, with the
almost infinite variations of traffic jams and the truly infinite variety
of passengers. At times, he thought of leaving the company, consid-
ered driving delivery trucks or maybe buses for another company. But
driving was his life. At some point or another during his career, he
had driven just about every type of vehicle with a diesel engine. Being
a driver did have its downside. Pete’s life was great as long as he
was out on the streets, away from the boss. The office guys—the
managers—didn’t respect the drivers, and Pete couldn’t believe he
had put up with it for 15 years. Most of the guys worked hard; they
spent long days not just driving, but also taking care of their buses,
making sure they were clean and full of fuel and bringing them in for
maintenance. It seemed that every time Pete brought his bus in for
unscheduled maintenance, the boss would grill him on everything he
did wrong to cause the problem. All the drivers knew that they should
use extreme caution to never let water into the fuel tank (for exam-
ple, when they have to fill up the tank in the rain). One guy got fired
for that one.
But Pete’s company recently purchased a new fuel mixture called
PuriNOx that encapsulates water molecules into the fuel. Unlike
adding water to a tank that mixes diesel with water, the water is actu-
ally encapsulated into the fuel in a way that it can be released when
the fuel combusts. Doing so removes most of the particulates and
nitrous-oxide emissions from the exhaust. But Pete did not under-
stand that. What he knew was this new fuel looked white, like milk.
Now, after all the years of telling him to keep the tank free of water,
he is being forced to add the “fuel with water” to his tank.
Milan, Italy. Antoinette was frustrated about the growing level of
pollutants in the air around the city. A mother of three, she worried
about the health of her children. She frequently found herself angry
when the bus came and she watched the black diesel fumes engulf
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CHAPTER 6 • THE POWERS OF STAKEHOLDERS—PEOPLE FUELING INNOVATION 107

the bus as it left for school. Antoinette saw an article in the newspa-
per Corriere della Sera that mentioned the new “Q White” fuel that
the buses would be using. Q White burned cleaner and removed
harmful pollutants from the exhaust. Although she originally doubted
there could be such a simple solution, she was thrilled to watch the
bus pull from her stop the next week. As she watched it leave, the
usual black plume was replaced by a clear steam. Antoinette found
herself almost gleeful that her kids were riding off to school. Of
course, she would miss them, but at least now she knew they weren’t
being exposed to the noxious, black diesel fumes.

Lubrizol—from Technology to Product

PuriNOx, sold in the United States, and Q White, sold in Italy by
Kuwait Petroleum Italia SpA (KPIT), are the same product under a
different name. Scientists at Lubrizol, a company based in Cleveland,
Ohio, developed this innovation in diesel fuel. Since its founding in
1928, Lubrizol has invisibly and profitably provided solutions for the
oil and transportation industry. Like BASF, it didn’t make the fuel; it
made the fuel better. Its oil company customers came to Lubrizol
with problems, and it provided solutions. It was a closed, profitable,
and noncompetitive loop. Lubrizol did not have a marketing depart-
ment; it did not need an ad agency or brand experts to name its prod-
ucts. Nor did it have to deal with competition for shelf space in a
competitive point-of-purchase retail environment. It had a seamless
partnership with oil companies and the transportation industry
equipment manufacturers. Then, things started to change. The well
started to dry up in the 1990s, and profit projections started to look
like one long, continuous plateau. This was after decades of continu-
al growth. The competition from companies that underbid its prod-
ucts and services and the slowing of the economy had turned
a positive, predictable business into one that had a flat growth
projection.
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108 THE DESIGN OF THINGS TO COME

The management at Lubrizol was faced with two real options.

One was to consider the safe status quo, a path that would limit
growth. Or they could become a consumer-driven company built on
innovation and organic growth, looking at the saturation of their cur-
rent product line as an opportunity rather than as a problem.
Like many technology-oriented and successful companies,
Lubrizol was fortunate enough to have resources in hand to drive
organic growth. Some companies have grown by buying other compa-
nies, but utilizing existing resources offered an attractive strategic
alternative and did not require the large investment needed for acqui-
sitions. If Lubrizol was going to continue to grow, it would have to grow
by becoming its own center of innovation. It could no longer rely on oil
customers and the transportation industry to bring opportunities to its
door. Moreover, Lubrizol recognized that it already had cutting-edge
skills in an area with high growth potential, creating technology to
reduce or eliminate the negative environmental impact of fossil fuels.
It decided to pursue a course that would focus on bringing its techni-
cal expertise to bear on an environmental solution that would help it
grow organically, from within.
Lubrizol looked back to its heritage, when the founders discovered
an unmet need in the auto industry. The first product in 1928 was end-
customer-driven and appeared in gas stations and auto stores
all over the United States. It helped lubricate squeaky suspension sys-
tems and made lower-priced cars quieter to ride in. It was not until
after World War II that the company distanced itself from the lubricant
end consumer and earned its profits by supplying chemical additive
solutions to the lubrication problems of the Big Three automakers,
other equipment manufacturers, and the major oil companies.
Throughout the latter part of the twentieth century, Lubrizol’s
rich base of highly educated and, at times, brilliant research staff was
given the charge to invent new but relevant technologies. More
recently, chemical engineer Deborah A. Langer and her colleagues
became alchemists, inventing a technique to mix oil and water.
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CHAPTER 6 • THE POWERS OF STAKEHOLDERS—PEOPLE FUELING INNOVATION 109

Although it wasn’t exactly gold from lead, it was significant because

everyone knows that oil and water do not mix. This patented tech-
nology would provide the basis for many products that had previous-
ly been unable to take advantage of the moisturizing qualities of
water. It was known that if water could be combined with fuel, it
removed particulates and nitrous oxide (NOx) from the combustion
process. The problem was, as Pete the bus driver knew, you cannot
just pour water into an engine and hope it burns properly. Instead, it
typically clogs and breaks down the engine. What Langer figured out
was a process to shred and encapsulate the water molecules into the
diesel fuel. When the diesel burned, it passed the water through as
well, providing a clean burn while still producing sufficient BTU out-
put. Nothing could be more innovative than developing a method for
blending water and oil—the two things that are never supposed to
mix. Nothing could be more valuable than reducing the output of
NOx and particulates from internal-combustion diesel engines.
To take advantage of this new technology, the company put
together a team whose mission was to transform the technology into
a product. The team included Robert T. Graf, Ph.D., research man-
ager; Daniel T. Daly, Ph.D., technology manager of fuels and two-
cycle additives; John A. Mullay, Ph.D., principal research scientist;
and Langer, principal engineer and project manager of emulsified
fuel technology. What they would find out is that it takes more fire-
power than good chemists and engineers to meet the needs of this
opportunity. It would take powers of different magnitude and scale to
turn a habit of a century of diesel pollution into a neutral environ-
mental impact.
Product developers often focus on the aspect of the product clos-
est to their comfort zone. Technologists tend to focus on the technol-
ogy alone, and technology-driven companies often believe that “if you
build it, they will come.” Here was a situation where the products
benefits were clear. Burn this new fuel mixture in your system, and
you reduce pollutants. There is no need to modify your engine to use
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110 THE DESIGN OF THINGS TO COME

it, so what could be the downside? Companies often fail to take into
account all the different views and requirements of all the stakehold-
ers who are impacted by their product. They fail to consider the
potential difficulties in gaining market acceptance. They do not real-
ize that end users like Pete can cause an otherwise successful prod-
uct to fail in practice just because he has been taught that water in
diesel is bad. They also fail to take advantage of other stakeholders
like Antoinette and her enthusiasm for the product and her potential
role in encouraging its adoption to protect her children. Knowing
how to identify all relevant stakeholders and take into account and
leverage their needs, wants, and desires is the lesson of this chapter
and is illustrated by this particular Lubrizol innovation.
The Lubrizol research team developed PuriNOx, a new diesel
fuel for buses and other on-highway diesel fleets. The team soon
learned that despite being a great technical innovation, PuriNOx did
not sell itself. Sometimes, the most removed stakeholder with the
least perceived power can have significant impact on a product’s suc-
cess. Historically Lubrizol did not need to worry about end users.
They were considered more remote stakeholders. The company had
only two stakeholders that mattered: the oil companies, and the auto
companies and other transportation-equipment manufacturers. The
oil companies worked with Lubrizol and paid the company to invent
additives to maximize performance in engines, transmissions, axles,
and other power units. The auto companies and other transportation
equipment manufacturers supplied hardware systems through new
vehicles. Lubrizol additive products were practically invisible to end
customers, distributors, and society in general. The challenge now
was to redirect the team, to inspire them to become customer-driven
in a new way, and to start seeing the end consumer as a key customer.
Commercialization of PuriNOx came with three challenges; two
were anticipated, and the other was not. The first anticipated prob-
lem was the need to use 1.2 gallons of PuriNOx for every gallon of
diesel. This reduced the range that vehicles could travel between fill-
ups because they would have to obtain fuel from a central location.
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CHAPTER 6 • THE POWERS OF STAKEHOLDERS—PEOPLE FUELING INNOVATION 111

The benefits of PuriNOx seemed like a fair trade-off for the reduced
range, but this disadvantage made the new fuel less attractive to
potential customers. The second anticipated problem was cost. There
was an added price for mixing water with oil, for reducing pollutants
and helping the environment. It cost 25 percent more per equivalent
gallon, taking into account the greater volume of PuriNOx to diesel.
But with increased pressures on companies to improve the environ-
ment and the government providing tax benefits for those who use
technology to reduce pollutants, the additional cost seemed to be
justified. The third problem was unforeseen—the problem of Pete’s
reaction and those of other end users. Although Lubrizol chemical
engineers did not mind that the water-oil mixture created a white liq-
uid instead of one with the familiar diesel color, the drivers and main-
tenance staff did. When these workers, many in the union, were told
that there was water in the milky white substance, it elicited a strong
and unexpected reaction. There was no way they should be using this
fuel! They were told pretty much from birth that water has the poten-
tial to foul up an internal-combustion engine. In one test city, sever-
al bus drivers were so annoyed at being told to “put water in their
tank” that they protested by urinating in the tanks! It took the evi-
dence that the engines actually ran cleaner with PuriNOx to finally
calm down these union men. They had to see it with their own eyes.
Lubrizol had jumped into the world of complete product solutions,
into the world where a vast number of stakeholders really did matter.
The issues at Pete’s company were not ones that Lubrizol tradi-
tionally considered. Having to address the union problems and deal-
ing with the unexpected reaction of the drivers almost ruined its
product launch. Lubrizol could have minimized these issues if only it
had identified them in the first place. Lubrizol could have educated
Pete and other drivers on the difference between this fuel and the
one he was used to. Lubrizol could have explained why the water per-
forms differently with this technology and how using this product
would improve the environment at no cost to them. Fortunately, this
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112 THE DESIGN OF THINGS TO COME

problem was seen early in the launch of this product, and the com-
pany was able to communicate with and educate the end users. In the
end, the company succeeded in introducing this innovation into
U.S. communities such as Houston, Texas, and Los Angeles and
Sacramento, California. Internationally, PuriNOx was also success-
fully introduced into London, England, as well as Milan, Genoa, and
Sicily in Italy.

The Lens of Powers of 10

The key to understanding the impact of immediate and remote stake-
holders is to understand the power of product adoption from the
smallest (micro) to largest (macro) view—to identify stakeholders
affected by each view and to understand the impact of the product
based on that view. We developed a technique to identify such a
broad range of stakeholders in the context of a product, a technique
that we call a “Powers of 10” analysis. The name and inspiration came
from the film Powers of 10, produced by Charles and Ray Eames.
They were a husband-and-wife team and two of the most influential
designers of the twentieth century. Their furniture designs from 50
years ago are still considered some of the best today, from airport
seating to the famous Eames lounge chair. They also produced more
than 120 films for various companies such as Polaroid and IBM.
Powers of 10 was produced for IBM in 1977 for internal presen-
tation to highlight the possibilities of metric scaling. The film is an
8-minute, 47-second summary of the known universe, from the
smallest particle to the largest view of the galaxies, looking at what
happens every time you magnify or reduce the same view by a power
of 10. The film begins with an image of a couple resting in a Chicago
park next to Soldier Field after having a picnic. The camera zooms
back every 10 seconds, increasing the view of the scene by an order
of magnitude. First, the image is of the couple, then the park, then a
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CHAPTER 6 • THE POWERS OF STAKEHOLDERS—PEOPLE FUELING INNOVATION 113

section of Chicago, then a section of the Great Lakes, and then the
country, globe, solar system. Eventually, the earth is viewed from the
distance of a light year, and the camera view continues outward
through clusters of galaxies until, at 1024 power, the movie stops,
showing a macro-cosmic view of the known universe.
From the known universe, the camera begins to quickly zoom
back down through each power until the hand resting on the stomach
of the man at the picnic is seen. The movie slows, and every 10 sec-
onds, the field of view decreases by a power of 10. First, one views
the skin on the hand, then the inner layer of cells, on down to mole-
cules of neutrons and protons, and finally down to 10–16, the smallest
known particle in the universe at that time, the nucleus of an atom of
a cell on the hand of the man at the picnic.
This vivid film quickly gives us a perspective of our place on the
earth and in the universe, raising questions about our own context and
role in the universe, questions that we normally might not voice but
often ponder. Similarly, insightful product developers understand the
role and benefits of developing a product in small-to-large relative
contexts. Scientists often focus on their own small piece of the puzzle,
understanding the physics and mechanics behind the atomic struc-
ture. Meanwhile, technologists focus on the machines, or components
of machines, that cause the chemical reaction to take place.
Consistently successful product developers understand not only the
product’s molecular- and machine-level context, but also the influence
of the product on the people who use it and those affected by its use.
In that sense, insightful product developers perform a Powers of 10
analysis, from a micro to macro view of stakeholders and the context
of product use. A Powers of 10 analysis helps them anticipate where
their strategic advantages are and where their potential pitfalls lie.
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114 THE DESIGN OF THINGS TO COME

Powers of 10 in Action
To help Lubrizol understand the Powers of 10 view of a product and
the stakeholders affected by that view, we worked with Lubrizol as it
developed a new product for refineries based on the PuriNOx tech-
nology. The technology itself is the same, the same basic approach of
emulsifying water into oil. But innovation is required beyond the core
product itself; it is also needed in the fuel’s delivery system. We dis-
cussed the three product issues earlier: range, cost, and product
appearance. The fourth potential problem with this technology is that
the encapsulated or emulsified water in fuel can stay in suspension
for only a limited period of time unless it is agitated. For diesel
vehicles, the fuel mixture can be mixed off-site and delivered to the
fueling station. For larger refineries, the diesel fuel and water have to
be mixed on-site just prior to being burned. So the delivery of the
modified fuel is quite different, requiring the development of a new
product system. This new product Lubrizol called Emulsified
Heating Fuel, or EHF for short.

Powers of 10 One: Molecular

The most micro view of the PuriNOx technology is the chemistry on

the molecular level—the creation of water molecules that can be sus-
pended in the oil. The way to mix water and oil is to shred or shear
the water into droplets so small that they can be “hidden” in the fuel
molecules. The water is actually suspended inside the diesel fuel. The
people who concern themselves with the chemistry are the technolo-
gists at Lubrizol, the ones who actually invented the technology. But
there are other concerned parties (for starters, the Lubrizol execu-
tives who invest in the technology and envision the product’s com-
mercial success). As mentioned earlier, historically Lubrizol has not
been a marketing-focused company. It has been driven by chemical
innovation and technical development. Marketing and brand identity
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took a backseat to the technology. Not in the case of PuriNOx or

EHF, however. Lubrizol’s traditional approach needed to change.
The company hired an advertising agency to promote this wonderful
new innovation. The first problem came when the ad agency, anoth-
er stakeholder at the most micro level, looked at the molecule that
was formed around water droplets, the chemistry that allowed the
water to be suspended in the diesel fuel. The agency reaction was that
the new molecular structure looked like one of the early sex-educa-
tion movies used to show an egg being impregnated by sperm. In the
agency’s opinion, the smaller molecules that encapsulated the water
droplets looked a lot like sperm cells! It was a toss-up as to who was
more concerned about this potential comparison—the upper man-
agement of a conservative company or the ad agency afraid of the
jokes that their ads might provoke. So they did what any self-respect-
ing agency would do: They found another way to visualize the new
miracle molecule.
They ended up making it look like a new type of candy with a
chocolate center, a caramel second coating, and an outer coating of
chocolate. It turned out to be an interesting collaboration. The ad
agency was not used to promoting micro-level molecules as a prod-
uct, and the company was not used to promoting itself. To make
things even more interesting, the original team of chemists and
inventors were not happy that their innovative complex molecule now
looked like a new type of junk food. This was the first Powers of 10
challenge. Another challenge was a concern about showing too much
detail regarding the construction of the molecule and the chemistry.
Reveal too much, and Lubrizol could be giving away valuable trade
secrets. The ad firm and technologists should have worked to tell the
story about the insight that led to the innovation rather than focus on
the look of the molecule itself. The answer from the Powers of 10
analysis was not to corrupt the way the molecule works but to talk
about the innovation and its potential impact.
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116 THE DESIGN OF THINGS TO COME

Powers of 10 Two: Blending

To properly place the modified water molecule in the oil, it must be

blended in a particular way. Thus, machines needed to be designed
and built to accomplish this process, adding engineers and possibly
suppliers to the list of those who matter to the success of this prod-
uct. This was also an opportunity to anticipate the third Powers of 10
level and to think about new opportunities and the need to establish
a brand identity for the product and for the company. What form
would the blending take? Would it be hidden from view or promi-
nently displayed in a machine in the center of the refinery? The
decision was the latter, requiring the development of a complete
blending unit. The original plan was a gray box hiding the product
and company, as Lubrizol was used to doing. But the Powers of 10
analysis indicated that this blending unit also provided the opportu-
nity to begin establishing a visual brand identity, drawing attention to
the unit and the unique product within.

Powers of 10 Three: Blending Machines

The modified water molecules can float, but not permanently; even-
tually, they settle to the bottom of the mixture unless they are stirred.
In a refinery, the goal is to have the blending machine on-site, mixing
the fuel only as it is sent to the burner. All of a sudden, there are many
people who need to care about the EHF product. The key customer
to Lubrizol is the plant manager and buyer who make decisions
regarding the fuel (including whether to purchase it). These key cus-
tomers’ concerns have always been of Lubrizol’s target. But there is
also the person who maintains the boiler and the new mixing unit.
The ability for this person, and others like him, to incorporate the
new product into his work routine is critical to the product’s long-
term success. How will he react? Because stakeholders are real
people with their own individual goals, needs, egos, and viewpoints,
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rich descriptions of stakeholders are used within the Powers of 10

analysis through scenarios to reveal insights into how stakeholders
can facilitate or hinder the progress of new products. Anticipating
stakeholders’ needs affects the product design itself; companies want
their products to be widely appreciated and accepted.
Consider Eric, who is responsible for maintaining several boilers
in the plant. How will he react? One attribute of the product is that
it can be burned by current boilers without having any retrofit. One
approach the company can take is to have the refinery try out EHF
on a single boiler. They can observe the burn and emissions. If they
are not happy, they can just bypass it and go back to their original
setup. The blending mechanism is intimidating to Eric. The chem-
istry is unfamiliar to him; he works with mechanical things. He is
skeptical about the EHF product, and he now has one more job to do
in maintaining the equipment. Does he know that maintenance is low
and Lubrizol support will always be available, 24/7? Lubrizol antici-
pated the concerns of maintenance guys like Eric and instituted a
support program that is available any time, any day. Eric is curious
about the white liquid, and wouldn’t believe it if he didn’t see the
results himself. The flame looks better than he has ever seen it burn,
and the machines are clean. Eric can tell his family and friends that
the plant has made an effort to be more efficient and reduce pollu-
tion that is harmful to the environment.

Powers of 10 Four: System Operation

At the next Powers of 10 level is the system-level analysis of the refin-

ery operation, including the new blending unit. Here are the facilities
planner, who makes room for the new equipment, and the person
who controls the boiler that burns the fuel. Again, these people need
to be considered, and the Powers of 10 analysis at this level helps us
do this. Are they allies or foes? If foes, can they be turned into an
advantage?
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118 THE DESIGN OF THINGS TO COME

Think about Steve, a union member who has been working as a

boiler operator for 20 years. He prides himself on his efficiency with
his boiler. He is comfortable with the controls for optimizing fuel
mixtures and knows exactly how his boiler reacts to different qualities
of fuel. For Steve, switching to EHF means a loss of knowledge and
a need to learn new proportions and characteristics to control the
fuel. The tools for optimizing the mixing will stay the same, but effi-
ciency will change. He will also have a new responsibility added to his
daily tasks—managing the blending unit that will be installed at his
station.
The management might explain that the fuel burns cleaner and is
more efficient, but will Steve have trouble explaining to his family
and friends why he has to burn greater quantities of fuel for the same
output? (Again, as mentioned earlier, the water adds volume, so it
takes more fuel for the same output, although not more diesel.) As
did the bus drivers with PuriNOx, Steve talks to his peers, the other
guys in the plant who are also not sure about putting water in the
equipment—that, again, has always been a hard-and-fast rule. As pre-
viously mentioned, this new stuff looks like milk! Steve will do what
his plant manager says to do, but he doesn’t want any headaches or
any problems changing over to this new product.
However, what about Steve’s colleagues? Will they be as open-
minded? They are members of the union. Will they complain about
this change and make demands that could seriously impact the
acceptance of the fuel product?
One way to address Steve and Eric’s concerns is to educate them on
the benefits and use of the product, not to pitch the benefits to the plant
manager alone. From the start, the operators and maintainers will have
a sense of the goals of the new product and the purpose behind the
process changes. Also, education will help product idiosyncrasies to be
less strange, more familiar. Remember, this new white stuff looks noth-
ing like a petroleum product. The challenge is to use the white color as
an advantage in establishing a brand identity for the product.
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CHAPTER 6 • THE POWERS OF STAKEHOLDERS—PEOPLE FUELING INNOVATION 119

Powers of 10 Five: Community

Most companies would stop there, if they considered such a broad

range of stakeholders at all. But there are more. As the Powers of 10
increase, the refinery produces particulates and NOx emissions. This
affects residents around the refinery, politicians dealing with pollu-
tion in their city, and even the gas stations that sell the gas produced
by the refinery. Could these stakeholders harm the product’s success?
Or could they be used to the company’s advantage? Do they under-
stand how many pollutants come from the refinery? Would they be
willing to pay extra for their fuel if it is produced with EHF and the
air that they breathe is cleaner? Not only does this power begin to
address quite removed stakeholders, it also begins to indicate how
politics and visibility to the public can influence the product’s success.
Consider Felicia, a high-school science teacher from Boston and
mother of one. She pays a lot of attention to the news, especially envi-
ronmental issues. To contribute to cleaning up the environment, she
uses public transportation to get to school, believing that automobiles
are the leading cause of the city’s pollution.
Felicia brings clippings about Boston’s environmental concerns to
her classroom and asks her students to bring in articles as well. This
week, her class is discussing pollution because she recently read an arti-
cle in the Boston Globe about NOx pollution and particulate matter.
She had thought that cars were the major cause of pollutants, but it
turned out that industrial plants were. Cleaning up the air and reduc-
ing pollution will cost money. She encourages her students to decide
for themselves whether they would pay more for clean air. Felicia asks
her class to write letters to representatives in Congress and to the gov-
ernor as well as to executives of the refinery in their community, asking
them to support initiatives that reduce pollution. Felicia and others like
her are impacted by and can have impact on refineries in their com-
munities and thus are an important part of stakeholder analyses that
cannot be ignored, as highlighted by the Powers of 10 analysis.
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120 THE DESIGN OF THINGS TO COME

Powers of 10 Six: Region

As the Powers of 10 increase, so does the range of their influence.

This is often the power that becomes the political decision-making. If
the scenarios take place in the New England area, then that area’s
politicians become stakeholders, as do members of environmental
organizations and neighboring regions who might breathe the air that
flows from New England. Will the governor want to clean up the air
if doing so only means using a different type of fuel? One other polit-
ical arm that might become an ally is the policymakers who examine
pollution. One such organization is NESCAUM, the Northeast States
for Coordinated Air Use Management. Capturing the attention of
these policymakers may lead to a government subsidy for the more
expensive EHF product, and may even lead to mandates for its use.
Although Felicia by herself wields little power, she may reach
those who have considerable influence—someone like Deion, execu-
tive director of air quality management at NESCAUM. He received
his Ph.D. in environmental policy and has worked his way up through
the levels of the organization. His main task is to make proposals for
regulations in the Northeast. He has earned the respect of his peers
with his strong commitment to people, no matter what. Although he
is adept at political maneuvering, he stays true to his ideals.
He recently learned about EHF as an alternative clean fuel.
Because he works closely with industrial plants, he knows that all
alternatives are costly, but this option requires little upfront capital
because the current machines will not have to be replaced or retro-
fitted. The product offers significant and instant reduction in NOx
and particulate matter.
The immediate solution of fossil fuel extension is appealing to
Deion because converting to new fuels is either too far off in the
future or has its own political and environmental issues. Retrofitting
industrial sites with more efficient equipment is an option but has
high upfront costs and takes time. Deion has the ability to look at the
bigger picture, the cost of buying the EHF assembly versus other
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CHAPTER 6 • THE POWERS OF STAKEHOLDERS—PEOPLE FUELING INNOVATION 121

means of purifying the air. He will set up a committee to pursue the

possibility of NOx credit trading with high-pollutant areas to reduce
the cost of the new product to the industrial plants.

Powers of 10 Seven: Continent

At the next level is the continent, where the issues are the air in one
country affecting that in another, leading to a potential increase in
sales to improve air quality throughout the larger region.

Powers of 10 Eight: Global Environment

Finally, the highest power is the global environment. Problems of

global warming and ozone depletion seek low-cost solutions that will
have a profound impact on the human race. Might the world embrace
EHF as a means to deal with this threat to humanity? This bold
thought is one that the chemists and engineers who invented the
product and the executives who support its commercialization might
only dream of.

Scenarios Ensure That People Remain

Real
The Powers of 10 analysis identifies people who are relevant, and sce-
narios of each of the identified individuals provide needed insight and
understanding. By sketching the profile of stakeholders in scenarios,
product developers can anticipate their reactions. They become real
people to design for and with. The Powers of 10 analysis helps inno-
vators identify stakeholders, envision scenarios of how their product
may be used, and anticipate how it may make a difference in people’s
lives. It helps them think about positive influences and negative ones,
and how they might design the product differently to lessen the
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122 THE DESIGN OF THINGS TO COME

impact of the negative ones. Designing the product includes design-

ing the communication of the product and the services that support
it; similarly, designing a service includes designing the products that
support it. The Powers of 10 analysis helps the product developers
understand how changing a product feature at a micro level has ram-
ifications beyond the product itself, even impacting the experience of
those who interact with it.
The important lessons from this analysis, and ones that all good
product developers consider, are the extensive list of stakeholders
and scenarios of their experience in using or interacting with the
product or service. By considering the reaction of all stakeholders
early in the process, the product developer can design solutions to
potential flaws into the product itself proactively, rather than reac-
tively after it is on the market. The cost of waiting may be negative
product reviews or negative word of mouth, or the significant cost of
redesigning, retooling, and remanufacturing a product—all of which
can have significant impact on its bottom-line profitability.
It is always interesting to see the limited view that so many com-
panies have of themselves. They fail to see themselves at different lev-
els of magnitude and reduction and to understand their strengths and
weaknesses. Every company should conduct a Powers of 10 analysis
for its products and itself so that all product development teams
understand and then reassess the charter with every new product.
In terms of Lubrizol, as the company redirects its energies to
organic growth, it has dedicated itself to help make the world a bet-
ter place through its fluid technologies. One way to do that is through
technologies such as PuriNOx and EHF. Although Lubrizol has
visions far beyond fossil fuels, it will first use its expertise to foster
new growth. In 2001, R&D magazine recognized Lubrizol along with
its project partner Caterpillar for developing one of the top 100 sig-
nificant technology breakthroughs of that year. The company was
particularly pleased that the award recognizes technology that signif-
icantly changes the quality of people’s lives. The award was for
PuriNOx and the start of a new corporate culture.
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CHAPTER 6 • THE POWERS OF STAKEHOLDERS—PEOPLE FUELING INNOVATION 123

EHF currently is in front of regulators, oil company partner can-

didates, and end users in the Northeast United States, with an expect-
ed product introduction in 2005. EHF, PuriNOx, and any paradigm
shift in a prominent industry, such as fuels, will require intense scruti-
ny and evidence of likely success. A Powers of 10 analysis, along with
a value-driven product development process, will maximize the
potential for success. Paul Basar, commercial development business
manager (author of the PuriNOx and EHF business plans), says that
the Powers of 10 analysis (and Value Opportunity Analysis, discussed
in Chapter 9) has profoundly influenced the company’s thinking in all
its new product concept projects. Basar says, “The concept of looking
at all players, all stakeholders, and understanding both the micro and
macro view of what we are doing, is very key now in all our thought
processes on new concept development.”
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7
B-TO-B INNOVATION—
THE NEW FRONTIER
OF FANTASY

Companies in business-to-business (B-to-B) markets often look at

innovation as a consumer-driven revolution and not as something that
applies to them. Their primary customers have been all about price
and functionality, not lifestyle and desire. Because only one company
can be the cheapest and most price-driven, commoditization stifles
growth; these companies must find the power of innovation. Now the
same high-value user experience is starting to be expected even for
business-to-business products and services. Meeting these expectations
requires not simply research and development but also a thoughtful
strategic plan.
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126 THE DESIGN OF THINGS TO COME

Trenton, NJ. It was a evening in November. Joey Russo and his team
were getting in place for a long night. They would have 12 hours to
get their work done and then inspected so that the day crew could
move on to the next segment of pipe. Every day, the day crew relines
decaying sewer pipes. Every night, Joey and his team surgically “cut
the laterals.”
In every major city in the developed world, the sewers are more
than 50 years old. The original piping was mostly clay-based, a mate-
rial that becomes fragile and susceptible to cracking with age. Sewer
pipes are typically 8 inches in diameter, too small for humans to phys-
ically enter to repair. There are two approaches to rehabbing sewer
lines. The oldest is to dig up streets and yards to gain access to the
pipes and replace them. This approach is prohibitively expensive and
undesirable for everyone who lives in the neighborhood. The second,
noninvasive procedure is to pull tools through the pipe. These tools
are used to lay out a liner and then cut out the openings that connect
the main pipe to the outlet to the homes, called “laterals” in the
industry. The process is still essentially manual. Locations for the lat-
erals are mapped out ahead of time, and a machine with a camera and
cutting tool is then pulled through the pipe with a winch and is
stopped at the locations that have been mapped. A skilled person like
Joey then sits in a truck and looks at a video monitor that shows the
location where the lateral is to be cut. (The liner has a dimple in it
where the pipe coming into the main pipe intersects.) The person in
the truck controls the cutter and watches the dim and colorless
images on the monitor as he directs the machine to cut the lateral.
The process is slow and tedious and takes years of experience to mas-
ter, but it is instrumental to the success of the operation. Although
this approach is preferable to brute-force digging, it does have its
downsides. First, this expert lateral cutter demands a hefty salary (in
some cases, more than $100,000). Second, this person and the equip-
ment are the bottleneck to the speed of opening the pipes that lead
to people’s houses. Third, the crew has up to 12 hours to open the
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CHAPTER 7 • B-TO-B INNOVATION—THE NEW FRONTIER OF FANTASY 127

lateral, or else sewage backs up into the house, forcing the sewer
rehabber to quickly dig up the yard and open the pipe while irate
homeowners look on.
Joey is that master cutter. He is often away from home at night,
but the salary is worth it. His boss, Sal, knows Joey can jump ship and
go to another company at any time, so Sal has to make sure he treats
Joey well. Sal is nervous because Joey is not easy to replace, and if he
is sick or leaves, Sal will not be able to get the jobs done. Joey’s
apprentice does not have enough experience, and Joey is not inter-
ested in giving him on-the-job training to create his own competition.
Even though Sal does not have to stay and direct the night crew, he
often loses sleep hoping that the morning will bring a completed sec-
tion of cut laterals. Sal loses a small fortune if the laterals back up
because they are not cut in time. He faces crews showing up with
nothing to do if the laterals do not pass inspection. His agita is so bad
that it prevents him from eating his favorite foods, and his blood pres-
sure is off the charts if he fails to take his medication. Whereas the
day crew’s work is important, the night crew critically impacts both
the physical output of the business and its income statement.
Everyone had thought the liner technology was the perfect
answer when it was invented. When he bought the business, Sal was
told how much pipe could be lined and how profitable the business
was. The lateral cutting seemed like a small part of the operation,
with a specialized cutting tool to do the job remotely. But a large
chunk of the profits go to Joey and his team. Plus, his current cutters
break down all the time, so the crew has to travel with spare parts and
be expert repairmen on-site. The business is really not that profitable
after all. Sal would love a better pipe rehab process.
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128 THE DESIGN OF THINGS TO COME

The Industrial Frontier

In one industry after another, people fantasize about the perfect
product or environment. It may be the worker on the job, the man-
ager who does not sleep at night, the family member who wishes that
a spouse could return earlier and less fatigued from work, or the chil-
dren who wish their parents could attend their hockey games.
Sometimes, the fantasies are in direct conflict. Joey wishes he could
work better hours. He is the master of his job and competition is
scarce, but he is concerned about burnout. Sal wishes there were
three guys who could run his lateral cutter so he could pay the oper-
ators less and reduce his cost, have more options for who is working,
and rotate his crew to limit burnout. The important thing to realize is
that fantasy and value expectations are now desired in the realm of
business-to-business products and services. The fantasy economy has
expanded from the home and into the workplace.
Jeff Calhoun, vice president of product development for labora-
tory equipment company VistaLabs, says that industrial products are
the “last frontier” in new-product development. The B-to-B product
domain in general suffers from a lack of good design, a lack of atten-
tion to the experience of use, and a general lack of connection to the
user. The goal, then, is to tame the industrial frontier. To take the wild
landscape of mundane and functional but undesirable technologies
and transform it into an oasis of user experience, of fantasy.
Many industrial technologies are mass-produced but are usually
designed and manufactured with a cost-cutting commodity mind-set.
A bolt is a bolt is a bolt, so the company that makes them cheapest
will sell the most. But someone will be the first to design a bolt with
attention to ergonomics of use, with color codes that instantly
communicate different thread sizes, and with a brand identity that
associates those innovations with the company that makes them. That
company will find itself with growing profits while everyone else des-
perately works to stay in the black by continuing to cut production
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CHAPTER 7 • B-TO-B INNOVATION—THE NEW FRONTIER OF FANTASY 129

costs. In other words, the form and function will create value for both
the company and the purchaser.

Fantasy in Industrial Products

There are already many existing examples of industrial and business-
to-business products that fulfill fantasy. Consider, for instance, the
agriculture industry. What if there was an agriculture combine that
not only was extraordinarily efficient at its main function but also was
designed with an eye toward ease of maintenance, with easily opened
panels to provide complete maintenance access along with a built-in
service platform and foldaway maintenance ladder? What if its elec-
tronics were the most sophisticated in the industry, not only adapting
the performance to field conditions but even including a system to
identify and remove stones from the field? What if the combine
looked so sleek and exciting that it seemed almost fun to drive, was
comfortable to sit in, and had state-of-the-art lighting and a global
positioning system? New Holland created just that combine, with an
international team of American and Belgian engineers along with
industrial designer Russell Strong of Integrated Vision. This com-
bine, the CR, has won awards worldwide, such as the 2002 Gold
Business and Industrial Product IDEA award, given jointly by the
Industrial Designer Society of America and Business Week magazine.
What if a machine tool operator could just flip a lever to quickly
release and change a tool bit and then flip the lever again to secure it
in place? This rather than taking an Allen wrench and unscrewing
each bit, replacing it, and then having to screw down the bit with the
Allen wrench again. A tedious job and one that is typical in the indus-
try, the standard approach may change due to the patent-pending
ergonomic lever design by mechanical engineering students at
Carnegie Mellon, working with Paul Prichard and others at
Kennametal’s Breakthrough Technology Group.
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130 THE DESIGN OF THINGS TO COME

What if you had constant continuing education via a hands-on

magazine, one that even provided samples of new materials and tech-
nologies so that you could incorporate the most cutting-edge tech-
nologies into your product? And what if you knew this because you
could subscribe to such a magazine provided by the company
Inventables? Every third month a technology kit called DesignAid
would be delivered to your door, complete with Web support to keep
you abreast of the latest developments not only by text, but also by
touch and feel. Inventables is a supplier of knowledge, of the building
blocks for technical innovation. Zach Kaplan and Keith Schacht, the
principals, developed the company after meeting in college. Today
their customers include GM, HP, and IBM. Although their main goal
is to provide information for teams to use in product development, the
kits have been applied in a host of different ways. For example, they
are used to help to stimulate teams to think out of the box, and man-
agers are using the kits as a creative education tool to open up indi-
viduals and teams as a warm-up exercise.
The final example considers respirator masks. In every hazardous
work environment, employees need to wear respirators. The problem
is many of these masks are so uncomfortable that workers often fail
to comply with health and safety rules. What if workers in hazardous
areas wore comfortable masks that were made to be comfortable not
only during work but also during breaks? Hired by the Aearo
Company, Elizabeth Lewis and her team at Product Insight, Inc.
designed such a respirator, and it won the Bronze IDEA award in the
same competition as the New Holland CR. Lewis, her company, and
the mask are discussed further in Chapter 11, “To Hire Consultants
or Build Internally—That Is the Question.”
The farm machinery combine, the quick change for machine
tools, the DesignAid technology kit, and the respirator mask may not
seem to have the aura of Quidditch, or the Trek bike, or the OXO
salad spinner, or a Starbucks nonfat double latte with a shot of
caramel. But they are still examples of form and function fulfilling
fantasy. The fantasy here is to have an experience that exceeds the
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standards of current products, beyond the reality of the industry sta-

tus quo. Even on the farm, the combine provides a comfort level and
an aura of a high-end office space and yacht. Even in the midst of a
production tool room, the fantasy is a clean environment and effort-
less maintenance of the machines. Even in the midst of a rapidly
changing technological world, the fantasy is continuing education
that explains the complexity of the latest technological advances with
the simplicity of “show and tell.” Even in the midst of hazardous envi-
ronments, the fantasy is the ease and comfort of a world especially
designed for humans rather than opposed to them.

RedZone Robotics: Going from Projects

to Products
A common business model for industrial technologies is that of one-
off projects. A one-off project is a single solution made to a given
specification of functional requirements within a cost constraint.
These projects are means to flex technical prowess, and each one is
satisfying to the team that develops it. But one-off industrial technol-
ogy projects are produced by companies that typically have no brand
identity, no contact with end users, and no understanding of a
customer-based value proposition with attention to the experience of
use. This kind of project-based company faces operational hurdles,
both with the constant need for acquisition of new projects and with
the internal needs to juggle people and resources to meet delivery
dates. At the same time, no equity is being built. The company pos-
sess capabilities but no repeatable income stream that generates
profits for company growth. This kind of company works to keep up,
not get ahead.
The alternative is to focus on repeatable business and develop
products and services that can be reproduced or even mass-
manufactured. Here, technical prowess would translate into com-
plete product proficiency. An example of a company that has
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132 THE DESIGN OF THINGS TO COME

successfully made that transition is RedZone Robotics. Previously a

custom robotic project shop, RedZone robotics will be the company
to resolve Sal’s indigestion and high blood pressure caused by his
sewer rehab company.
Founded in 1987 out of the robotics technologies developed at
Carnegie Mellon University, RedZone went into Chapter 11 bank-
ruptcy in 2002. Although RedZone’s technology was state-of-the-art,
its one-off project business model was not. The key words in the mar-
kets for robotic technology are “dangerous, dirty, and dull,” and
RedZone had especially focused on the dangerous. Prior to its bank-
ruptcy, the company built high-profile, one-of-a-kind robots for tasks
where humans could not or should not go. For example, RedZone
developed robots to help clean up Chernobyl and Three Mile Island.
Current CEO Eric Close and his investors acquired RedZone
Robotics while it was in Chapter 11 and brought it out of the bank-
ruptcy process. Close says he “loves bankruptcy.” He should. He has
been dealing with it for nearly a decade. But he doesn’t get compa-
nies into bankruptcy—he gets them out. Close is a turnaround spe-
cialist. He buys companies in bankruptcy and turns them into prof-
itable enterprises. In his short career, he has bought four troubled
companies. These companies were either on the brink of bankruptcy
or already in bankruptcy when he took control of them and turned
them around. According to Close, bankruptcy has its advantages, pro-
viding “great bargains” if chosen well. The problem with starting a
new company is that it is hard to develop technologies, infrastructure
is expensive to buy, and it is hard to get the first customer. Close says
that companies in bankruptcy can get you through these first hurdles.
They come with technologies that they have developed but could not
turn into profitable revenue streams. They come with facilities and
equipment where that technology was developed. Oddly enough,
they usually have happy customers.
Happy customers may seem like an oxymoron for a company in
bankruptcy. But, according to Close, these companies often have a
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CHAPTER 7 • B-TO-B INNOVATION—THE NEW FRONTIER OF FANTASY 133

small customer base that they have given a lot of attention to. They
must, because it is their only hope for sales. Surprisingly, suppliers
are not a significant roadblock either. Although some may stop doing
business with the company, many are happy to maintain the account
and are pleased to see new management trying to turn the business
around. Even though the company has normally defaulted payment
on its obligations to the supplier, most suppliers want to retain the
company as a customer. If you can convince suppliers that you will be
a stable customer going forward, they want to work with you.
The big problem with companies in bankruptcy is the employees.
Many are disgruntled; morale is down. The culture is a negative one
based on a long period of cost cutting and a stifling environment.
Often, these employees may be technically talented but may not be
team players. So the task is to reinvigorate the employees.
RedZone was one of these companies. Close purchased RedZone
in June 2003 and became its president and CEO. The “bargain” he
got was some of the most advanced robotics technology commercial-
ly available at that time. His challenge was to turn RedZone from a
project-based company into a product-based company. How could he
use the impressive technology basis to produce an assembly-line
product, one that could be produced on multiple runs, if not mass-
produced? As he searched the social, economic, and technological
(SET) factors looking for trends, he realized the $120 to $200 billion
possibility in sewer rehabilitation in the United States (and two times
more worldwide in developed countries). More than 600,000 miles of
small-diameter sewer line exists in the United States alone, and a sig-
nificant percentage is more than 50 years old. The vitrified clay pipes
are beginning to crumble and clog from debris and tree roots. Sewage
is leaking into the environment and finding its way into streams. All
that sewer line will need to be repaired in the next 40 years. This is a
great opportunity for robotic technology.
Close’s business plan was as good as his reputation, so he had
been able to attract funding. But he had two other major challenges.
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134 THE DESIGN OF THINGS TO COME

One was to motivate employees, to get everyone in the company

focused in the same new direction, and the other was to make an
impact in an industry completely new to RedZone. The solution for
both was to connect the vision of the robotic product with the com-
pany’s vision. Close wanted a product where service, product perfor-
mance, and interface all smashed current industry standards, a prod-
uct that would achieve fantasy status. This is the only way that sewer
pipe rehabbers like Sal would leave behind existing equipment to buy
the RedZone system.

The Strategic Plan

Designing a product that is so fantastic that it is beyond the status quo
experience of expert users requires not simply research and develop-
ment but also a thoughtful strategic plan. That plan includes three
major parts: first, an understanding of who are the key stakeholders
and what are their needs and desires; second, a complete product
strategy that includes the development of the product and the ser-
vices required to support the product through its entire life cycle of
use and its interaction with its stakeholders; and third, a corporate
strategy that establishes its brand and aligns itself with its products
and customers.

Strategy One: Identify and Understand Stakeholders

In terms of stakeholder analysis, Close used the Powers of 10 analy-

sis described in the previous chapter to identify and understand his
stakeholders. As a result of that analysis, Close visualized the product
on all levels of its functionality and recognized stakeholders at each of
those levels. These stakeholders included not only owners or general
contractors like Sal, and crew members like Joey, but also the inspec-
tors of the pipes, the engineers for the communities, the politicians
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CHAPTER 7 • B-TO-B INNOVATION—THE NEW FRONTIER OF FANTASY 135

who set policy, and homeowners and taxpayers who are affected by
the efficiency and effectiveness of the process. The scenarios that
were developed for all the stakeholders made it easier for Close to see
all the players as real, tangible people, like Joey and Sal. It was then
clear that the product had to be easy to use, easy to learn to use, and
easy to repair on-site. It was also clear that the product had to gener-
ate reports that would be easy for inspectors to review. As an outcome
of the Powers of 10 analysis and scenarios, Close had a road map to
show the direction in which the product and company needed to
head—specifically, what the different levels and scope of the product
would be, as well as the user needs for each level.

Strategy Two: Planning the Product

The next step was a micro-level analysis of the product itself, a strat-
egy for the development of the product. RedZone’s long-range prod-
uct strategy is a sewer robot that will accomplish a variety of tasks.
The trade-off with any multipurpose tool is accuracy for a given task.
If a number of tasks, say six, need to be accomplished in sewer
repair—such as inspecting the state of the main pipe, removing
debris from it, lining the pipe, identifying locations where other pipes
join the main line, cutting the laterals, and grouting the resulting
joints—the easiest product approach would be to produce multiple
stand-alone machines specifically designed to perform each task. The
problem is that the customer then would need to purchase, store, and
maintain each machine. At the other extreme, a single product that
does it all is difficult to have as an approach to accomplish all the tasks
well. Such a machine would look like something out of a Dr. Seuss
book!
Rather than a line of separate machines, and rather than the
Rube Goldberg approach of all in one, the solution for RedZone is a
simple, robust, and powerful base machine that is the platform for
multiple modules. The modules are designed to attach at a given
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136 THE DESIGN OF THINGS TO COME

place in a given way that each serve an individual task. The platform,
loaded with a module, goes into the sewer and accomplishes one task.
The platform is then removed and the first module taken off, and
then the next module is placed on the platform for the next task. The
core platform needs to have certain capabilities, some of which may
not be used for a given task, and others that will always be used.
The product strategy is to design the platform and modules, and
this strategy has implications for the product development team. The
team needs to design an interface that will connect all modules to the
platform. The team must understand all the capabilities the platform
must have to meet the demands of each module. The physical inter-
face for the modules must be easy to understand and use. Changing
the modules will require some training for the crew, training that the
RedZone team must design into the product system. The platform
and the modules individually and together must be easy to manipu-
late in accomplishing the task. The robot platform, together with a
module, must be easy to carry from the truck where it is stored, easy
to manipulate through a manhole into the sewer main, and easy to
remove from the sewer. It must be easy to clean and maintain. The
accuracy of the tool must be at least as good as each of the individual
machines available today.
Anything less than this will jeopardize the success of the product.
In any established industry, it takes a true breakthrough in cost or
performance to convince a market to make a change in how it per-
forms its job. RedZone decided to improve both: decrease price,
increase the speed of accomplishing the task of lateral cutting,
increase the quality of the cuts, and decrease the skill level needed to
accomplish the task, thus further reducing the customer’s overall
costs. What a task to put on a development team!
The advantage to RedZone and the only way it could meet this
seemingly absurd challenge is the “bargain” that Close purchased when
buying the company. RedZone has some of the world’s best robotic
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technologies and the know-how to create new technologies to meet

challenging performance conditions. RedZone has some of the best
minds in the industry who, time and time again, were able to overcome
technical challenges to design and manufacture machines that few oth-
ers could have created. So, although the team had the most outrageous
challenge to date, it had the confidence and experience to know that,
through sweat and turmoil, it could get the job done.

Strategy Three: Planning the Corporate Approach to

Product Development
To go a step futher and provide vision and direction for not only the
product but also the company, Close used a Powers of 10 analysis on
the company itself and its approach to develop its product. Every com-
pany should perform this self-assessment to better understand how its
products relate to its corporate mission and brand. So many industrial
companies lack any brand statement. Creating a brand statement can
be a difficult task for an established company accustomed to a project-
based philosophy. But the company’s brand statement is critical to its
conversion to a process of organic growth. The company’s brand can
lead the brand directions for the products themselves.
The macro-level analysis of the corporate strategy sets the tone
for the culture of the product team, the corporate requirements for a
product, the interaction between the company and society at large,
and the corporate values and brand attributes. The corporate strate-
gy determines resources for any product and, at a high level, how
those resources can be distributed. It sets the direction for partners
with other companies in developing and delivering a product or ser-
vice. The corporate strategy determines the relationship between the
company and the local community and the global infrastructure. The
corporate strategy must recognize who competitors are and what
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138 THE DESIGN OF THINGS TO COME

threats they present, or how the threat of a new technology from the
corporation may trigger responses from the competition. Most
important is that all of these aspects have a direct impact on the
direction and quality of any product developed.
For RedZone, a key component of the corporate strategy is con-
tinual innovation. To achieve that goal, it implemented a state-of-the-
art product development process to provide a continuing stream of
innovations. RedZone began with the innovation process discussed in
this book with aspects detailed in Creating Breakthrough Products. It
then developed a tracking mechanism that followed user research
into customer requirements through to engineering specifications.
Close believed this to be a necessary step to turn a tech-focused com-
pany into a complete-product company.
Another key component of the corporate strategy is to build a
corporate identity, a brand. In a business-to-business context, the
product is the primary communicant of brand, so product identity
and corporate identity are strongly linked. Discussion of color, form
language, and logo early in the process connected the product iden-
tity to that of RedZone as a company. A mantra of “innovation, not
invention” required the company to maintain its expertise in robotics
but focus on delivering technology to meet market needs rather than
developing the next cutting-edge technical capability only because it
could. The product, then, needed to communicate innovation, tech-
nical expertise, and the importance of the user, because these were
core to the company’s identity.
Why would the company care about a color scheme for a robot
that will sit inside a sewer? Because the robot spends a good amount
of its time outside the pipes, where people see and interact with it. At
industry trade shows the robot will stand out against the competition
to clearly communicate that “there is something different here.”
The realization of the need to communicate corporate identity via
the product as well as product identity, and the realization that how
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CHAPTER 7 • B-TO-B INNOVATION—THE NEW FRONTIER OF FANTASY 139

people interact with the product will make or break the intended par-
adigm shift, led Close to hire an industrial designer as one of the first
employees of his newly invigorated company. Close charged him to
develop a color scheme for the product, an ergonomic interface, and
the communication and visualization of all the ongoing stakeholder
research that the team participates in. Because this product would
establish the company’s brand, it was critical to adopt a look and color
scheme that would protect the product from competitive reaction.
The market was worldwide, and existing U.S. companies tended to
make their products look like Star Wars spacecrafts, a look that
Europeans did not appreciate. So the product was given a
clean, simple geometric look that appealed to both U.S. and
European buyers, a decision to help both product sales and the
company’s image.

The Result: Sewer Repair and Beyond

The result is an industrial product that works in extreme environ-
ments. The product, called the Renovator, functions off a sled plat-
form with cylindrical components that fits into pipes. The functional
need of the product’s environment—pipes—produced a natural visu-
al theme. The cylindrical features create continuity in the visual aes-
thetic. Cylindrical skids on the bottom of the robot curve upward,
forming ergonomic handles that make carrying and deploying the
robot easy to do. The robat’s weight, distribution, and overall dimen-
sions are specified to enable easy manipulation by the crew. Even the
camera has a circular theme, with its spherical shape and circular lens
openings. Because the platform will house multiple tools, and
because quick swap-in/swap-out components are used to make main-
tenance and repair rapid and on-site, all handles are color-coded for
high visibility and are textured to maintain grip in slippery conditions.
The name RedZone was extended into the product aesthetics by
using red anodized components as highlights on a basic aluminum
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140 THE DESIGN OF THINGS TO COME

finish with black details. This theme was also extended to the printed
material. For safety, sensors connected to indicator lights positioned
on the robot and attachments warn users before tools are activated.
The functional capabilities and device aesthetic create a brand lan-
guage for the product and company.
The stakeholder analysis, the corporate strategy, and the product
strategy are integrated with each other. For example, if the crew is
enthusiastic in using the robot and becomes more effective in their
job, the general contractor (like Sal) who initially is testing the new
approach will have positive reinforcement, causing him to purchase
additional equipment. RedZone’s brand equity will increase, and the
products success will reinforce the development team and its process.
Their renewed energy will continue to produce successful products
that meet the customer’s needs. Society as a whole will have a posi-
tive response as their tax dollars are more effectively spent and their
lives have less disruption, with their yards no longer being dug up.
Environmental groups will be positive about improved sewage and
less leakage into the water stream. They will petition for new policies
that set RedZone’s approach as the standard, reinforcing the compa-
ny’s brand and profitability.
We worked with Close in developing this strategic plan. It
became clear that this robot was not just a product. It was the future
of RedZone. This robot would establish the company and its brand,
and the initial product release would set up all the company’s subse-
quent products in the industry. As we write this book, RedZone is
involved in its launch of this product. Initial customer reaction has
been strong. The upfront strategic planning exercise and extensive
research on its stakeholder base has expanded the company’s vision of
its product platform. If it succeeds, it will corner the market.
RedZone will have opened doors for new products with different
functions—not only for lateral cutting, but for all the major steps in
sewer and water-pipe rehabilitation. Eric Close has the vision and
courage to go for this biggest prize, to use this product to define the
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CHAPTER 7 • B-TO-B INNOVATION—THE NEW FRONTIER OF FANTASY 141

company and its brand. You never get a second chance to make a first
impression, to define fantasy for an industry.
Like those highlighted in Chapter 1, “The New Breed of
Innovator,” and throughout this book, Eric Close is a new breed of
innovator. To him, innovation is “the ability to enter a marketplace,
anticipate the needs of the consumer, and put together a product or
service that makes their life better.” He is a technical guy who loves
products. Complete products. His approach is to take successful prod-
uct development methods from the commercial and retail sectors and
apply them to the industrial sector. The innovation process outlined in
Chapter 9, “A Process for Product Innovation,” does just that. It helps
people move away from individual solutions to team-based results. It
helps teams communicate with each other and with their customers to
understand the requirements and demands from the market. It pro-
vides an approach for the team to weigh the conflicts between
different stakeholders’ needs. By putting together a team that com-
plements each other, and by developing a culture that relishes cre-
ativity, Close can build a company along with a product.
Close sees himself as a pragmatist. He embraces design and
implements the innovation process we have described because “it
works!” and a company in any field “must have it.” In the industrial
frontier, this leads to a differentiated business model, one that allows
his companies to stand out from and lead the pack.
RedZone Robotics is just one example of an industrial-based
product company that embraces the mantra that form and function
fulfill fantasy. The form and function together stand out in terms of
performance and comfort to the user, providing not only a great expe-
rience, but also a fantasy projection of a more amenable work envi-
ronment. For a crew working in the sewer, the form and function of
the sewer robot fulfills fantasy. Rather than work deep inside the sew-
ers, the crew can stay clean inside a comfortable cabin, controlling
this high-tech robot with the same skill and enthusiasm they had with
video games as they grew up.
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142 THE DESIGN OF THINGS TO COME

The World Above the Sewer

From sewer robots to respirators to machine tools to agricultural
equipment, innovative companies understand that if they don’t
embrace user-based design as a means to profit, others will. We are
seeing a renaissance in how the industrial frontier is envisioned. As
with the first Raymond Loewy-designed Sears Coldspot refrigerator,
which in 1935 transformed the refrigerator from a utility machine
that stayed on the back porch into a lifestyle device that became an
interior feature of every home, the industrial frontier is being trans-
formed into a lifestyle environment where people spend the signifi-
cant part of their day. Good design is often found and highlighted
in the consumer world. But design to create fantasy—yes, even
fantasy—has a place in every world where humans interact with their
environment, including the world of B-to-B.
When Eric Close took over RedZone, it had a reputation for
invention but not for pragmatic innovation. Close could have gone
completely the other way to become a component supplier of robot-
ic core technology for other companies. Close realized this was not a
sustainable option, instead seeking an opportunity to develop and
manufacture a core product with a long-term strategic plan. Close
sees the potential of RedZone as a company to branch out and find
new applications for its unique robotic design capability.
In Hong Kong, companies are forming a new strategy supported
by local government and industry. They have described it as moving
from supplier to designer to strategist. Many companies in Hong
Kong have been service companies for large global corporations or
have found a niche in low-end consumer markets. They realize their
future lies in moving from a mind-set of supplier to product designer
and producer and, eventually, to industry strategist, setting the future
of product development. Hong Kong wants to become the gateway to
the Pearl River Delta on the mainland and to help existing and
emerging Chinese companies make this same strategic shift.
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Suppliers are primarily cost-driven and directed heavily by exter-

nal companies that purchase their products and services. Original
product designers and manufacturers move to develop their own
products that, although they often meet current demand, may not be
trend-setting. Japanese and Korean companies went through the
phase of product design and producer, but now they are at the strate-
gist level. Toyota used to make cheap cars that undersold U.S. and
European competition; now it leads the world as a strategic design-
driven company that is arguably the most successful car company in
the world. In Korea, Lucky Gold Star used to be a supplier making
inexpensive components for the computer industry. It then broke out
to design and manufacture its own computers, but still it competed
by price. It became an industry strategist when it shifted to LG and
started to produce world-class electronic equipment. Samsung and
Hyundai followed the same path. If your company is built around a
supplier mind-set, you must start the process of shifting from suppli-
er to product designer and manufacturer on the way to industry
strategist. If you don’t want to fight the low-margin battle to be the
lowest-cost provider, you simply have no other choice.
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8
MAKING DECISIONS
FOR PROFIT—SUCCESS
EMERGING FROM CHAOS

Innovation is not just about a good idea; it is a process of managing

what can appear to be an army of people over a set amount of time
making multiple interconnected decisions. Rather than micromanag-
ing, let the product requirements guide the legions who make the
detailed daily trade-offs. Yes, these product requirements emerge from
an early research and planning stage that is chaotic. But that is good—
for the chaos enables exploration and learning. The more you can learn
about your market, the better the framework for your decisions.
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146 THE DESIGN OF THINGS TO COME

Toronto, Canada. Jimmie Spear needed a new truck. His Silverado

had lasted eight years, and it was costing him as much to maintain it
as his car payments used to cost. His truck was his life, or at least his
livelihood. Jimmie worked on independent construction. He worked
on somewhat sophisticated construction jobs, building additions and
the like. But he mostly worked independently, usually hiring a high-
school kid to help him out. He liked the freedom. In the eight years
since he bought his truck, lots had changed in his life. He was now
married with two kids. His weekends and even some nights were
filled with family things, from food shopping to going to the park with
the kids and the dog. So his wife was on his case to rethink his truck
purchase. She wanted a family car, one that could safely drive the kids
around. Jimmie needed a workhorse, but it was more. His truck was
him. It was a statement of who he is! He wanted a truck with meat,
one that looked like it could handle the tough jobs he gave it. He
knew he was pretty hard on the vehicle. Some trucks looked wimpy.
They probably were.
Jimmie decided to take the kids out Saturday to look around. He
visited GM first and was intrigued by the Chevy Avalanche, which
had a rear seat that folded down to increase the truck bed size. It
looked great. It could be a two-row family vehicle on weekends and
his construction truck on weekdays. He then found the Nissan Titan
with its four doors, its full truck bed, and the ability to fold up the rear
seats for extra storage space for his tools when the kids were not
around. Nissans were hot! The strong front with the extensive use of
chrome not only looked great but gave him the reassurance that the
truck was made of solid parts. Although the kids had had enough and
really wanted to just go home and watch TV, he also stopped by the
Ford dealer. The new F-150 was inviting. The truck sure looked
tough on the outside, but, if he really wanted to splurge, he could get
that cushy leather interior.
It used to be that a truck was a truck was a truck. What amazed
Jimmie was the amount of choice he had and the amount of feature
comfort he could enjoy in a truck. He could justify the tough-looking
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CHAPTER 8 • MAKING DECISIONS FOR PROFIT 147

exterior with safety and comfort for his family. Who would’ve thought
that, with the goal of dragging around a 4×8 sheet of plywood and
some tools, there could be this much variation in trucks?

Complexity in the Decision-Making

Process
Think about the amount of work it takes to design a toothbrush. There
are only two main parts: the handle and the bristles. But the handle
may be a bit intricate, with an area that flexes and co-molded rubber
on the plastic so that there is a solid grip when the brush is wet. The
bristles are of different lengths and angles. Some clean around the
gum line, others flex to clean between the teeth, and still others brush
the tooth surface. Deciding on each of these toothbrush features takes
significant research and decision making. This includes a thorough
understanding of the mouth and teeth, material analysis of flex per-
formance and oral compatibility, and a thorough understanding of the
ergonomics and physiology of the hand and arm.
To ensure that the intended market finds the product appealing,
the product team must be aware of trends in the bathroom and
kitchen and of general fashion trends in colors and shapes. The team
must know the latest materials that are available and might potential-
ly be used in the product and the latest manufacturing techniques
that might allow for the next innovation. A toothbrush must be sold
in a package at the point of purchase that stands out and sells the
toothbrush inside, and variations of packaging must be designed and
prototyped for market tests, with those tests conducted and analyzed
well before the product launch. The package must also connect to the
lifestyle of the person who is buying it.
There are also legal issues. In the case of intellectual property,
you need to make sure you are not infringing on another’s patents
and, if not, are protecting your unique idea with both design and
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148 THE DESIGN OF THINGS TO COME

utility patents to limit potential of rip-offs. Also, a product that is put

inside a person’s mouth carries liability issues. The label on the pack-
age has to have every important piece of legal information required
by whatever federal agency is responsible for protecting the public
from poorly designed, dangerous toothbrushes and from product
misuse. If a problem arises from poor information or product misuse,
the other side of the corporate legal department will be called into
action. Not only is product liability a nightmare for a particular prod-
uct team, it also can have an impact on the company brand identity.
Next time you are in your local drugstore, look at the number of
toothbrushes you have to choose from. It was not long ago that a sim-
ple bend in the handle under the product name Reach was seen as a
big breakthrough, but in product development terms, that design was
a century ago.
As noted, a typical toothbrush has two parts. Now let’s bring it up
a notch and think about the innovation breakthrough for the next
toaster. A toaster has 20 parts and it is an electric appliance. You have
significantly upped the product’s complexity and the number of deci-
sions that must be made.
If you are designing a new car, you take the complexity up further
by a power of 1,000, to 20,000 parts. Every part must be designed or
specified, and many of the parts must work in unison as a subsystem.
Subsystems must then work in concert to meet the vehicle’s perfor-
mance requirements. Often, to achieve the best performance in one
subsystem, another must work below expectations. For instance, the
addition of a small oil pump can dramatically extend engine life. The
trade-off is that this oil pump would circulate the oil immediately
before a cold engine start, so the benefit of this pump would cost
multiple seconds of delay before the car could start. Thus, trade-offs
are considered and aspects of the product redesigned until the over-
all product is satisfactory. The best vehicles perform beyond expecta-
tion and deliver an optimal experience that surprises and delights the
customer. Given that the vehicle’s product development cycle is still
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CHAPTER 8 • MAKING DECISIONS FOR PROFIT 149

about three years or more, consider the vast number of decisions that
must be made and that effectively come together to produce a suc-
cessful (or unsuccessful) vehicle. How many of those decisions can be
wrong and still produce an affordable, appealing, and profitable car
or truck?
When you are driving your car, with its 20,000 parts, imagine the
number of things that have to go right. Hundreds of people have to
be coordinated over several years in a cohesive plan. Innovation is not
just about a good idea; it is a process of managing what can at times
appear to be an army of people over a set amount of time making
multiple interconnected decisions. For example, as an initial concept
establishes a product direction, a brand statement must be devel-
oped, including marketing insights, visual strategy, and an attribute
strategy. At the same time, there is a need to establish technical con-
straints such as standards and manufacturing capabilities. There are
also technical development issues and the development of a market
model. Further down the process, there are financial issues in allo-
cating budgets and determining the product’s feature content from all
the options that are considered. There is the customer strategy that
includes feature packages offered in different models of the product.
There are decisions on acceptable and anticipated levels of manufac-
turing quality and expectations on the product’s fit and finish (other-
wise known as craftsmanship) and the technical feasibility and relia-
bility of the technologies and manufacturing methods. In every
successful product, many key decisions must be made if the potential
innovation will reach maximum potential and generate the equity in
brand and profit needed to sustain a company.

Organizing the Decision-Making Process

Not only are there numerous decisions, but each decision is related
to many others, typically as a trade-off. There is no way to make a
product, say an SUV, that has high fuel efficiency, lots of cargo room,
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150 THE DESIGN OF THINGS TO COME

three rows of seats, premium features, high performance, tight crafts-

manship, and individualized feature choices, all at a low cost. Choices
are made, and aspects are sacrificed. Some vehicles are exciting to
drive and have all the comforts of your living room and cost more
than many homes, while others are barely tolerable to sit in but can
carry a load and are affordable to a large market. The former vehicle
likely has a high price and high margins with low volumes, while the
latter has a lower price and lower margins but high sales volume.
There are different approaches to managing the trade-offs. The
commodity or cost-focused company sees the decision process as one
to design a product for mass consumption at minimal cost, so finan-
cial considerations serve as arbiters of ideas. As the product’s unique
and most beneficial aspects are compromised for cost considerations,
eventual margins also narrow. The narrow margins lead again to the
need for additional cost cutting. The resulting product tends to sit in
a competitive space with low price and low margins.
The high value-differentiation lifestyle-oriented company sees
differentiation as the ultimate goal, to achieve a new level of experi-
ence for the customer. The lifestyle-driven approach promotes aes-
thetics and usability as the driver, with technical superiority fulfilling
performance expectations. The result may be lower levels of produc-
tion but at much higher margins.
The pragmatic innovation company balances these two extremes
with a product that supports its brand, stands out in the crowd, and is
priced to reach an appropriate market. Its customer-focused
approach understands cost limitations based on an expectation of per-
formance and features in consideration of the context of use of the
product. In other words, the customer-focused approach delivers a
high value differentiation within the purchaser’s financial means.
If cost were the ultimate arbiter of trade-offs, decisions would be
fairly straightforward. Whichever option would be cheapest overall
would win out. But because virtually no company uses costs as the
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CHAPTER 8 • MAKING DECISIONS FOR PROFIT 151

only criterion, at least successfully, how do innovative companies

manage the host of decisions?
The StageGate model of product development is one good base-
line for companies to use and many do. StageGate defines deliver-
ables across the product development process that must be met to
move through one “gate” to the next stage in the process.1 The five
stages are major project activities run sequentially from scoping out a
market to launching a product, while the gates are checklists to make
sure each stage was sufficiently explored. Although the foundation is
appropriate, the problem is that all the models companies generate in
using this and similar approaches are ideals. These ideal models are
often generated by committee, appointed by management, and given
to teams without their understanding why the model was developed
and adopted, or even the motivation behind the steps. The teams
never interpret the model for their application. No product program
actually runs like the ideal model. When a team reaches a roadblock
or has to deal with input that was not anticipated, it often falls behind
and may never figure out how to adapt to the change. The models
don’t tell the team how to meet the gate requirements, especially the
early ones critical for innovation, just what they are.
Managing product development using a pragmatic, innovative
approach is a challenge. It requires balancing equal and opposite
forces. The best managers seem to find a way to keep the big picture
and goal in mind and also feel free to vary the program as it develops.
Instead of hoping the program will go according to the ideal, these
managers realize from the beginning that the ideal is there as refer-
ence for support, not a process carved in stone. They can shift and
interpret the process as needed and address new issues that arise as
the inevitable variation happens, adjusting accordingly. Instead of
feeling threatened and trying to make the ideal process model fit the
unanticipated issue, they enjoy the sport of meeting challenges.

1 Cooper, R. G. Winning at New Products: Accelerating the Process from Idea to

Launch. Perseus Publishing, Cambridge, 2001.
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152 THE DESIGN OF THINGS TO COME

We use the concept of rock climbing to help you understand this

approach. You can plan a climb and set your path, but even if you
have climbed a mountain before, every climb is a new experience.
Weather can vary and change the conditions. Your approach will vary
no matter how much you may want to keep it the same. The moun-
tain itself can change, making terrain more or less easy to navigate.
Aron Ralston became famous for his incredible, almost superhuman
ability to overcome defeat when he was stranded while rock climbing
in the wilderness alone. A large boulder fell and pinned his arm. He
had to make a life-altering decision. Ralston calmly realized that the
only thing to do was to cut off his arm; otherwise, he would surely die.
Not only did he effectively do that (we will let you read the details
elsewhere on your own), recognizing that he had to apply a tourni-
quet or he would bleed to death, he then had to climb down the
mountain face, lowering himself down a sheer cliff with only one arm,
and walk an extensive distance to find help. His actions are a testa-
ment to what a person can do to survive. He sees himself as a stronger
person for the experience and has turned a disaster into a personal
triumph. He is the epitome of grace under pressure. He found the
resources internally to survive the unpredictable obstacle. Because he
was a good planner, he knew how to adjust the plan rather than sit
there helplessly and starve to death. He has written a book, Between
a Rock and a Hard Place,2 and has appeared on numerous TV shows.
Just when you think you are at the brink of disaster, it is always pos-
sible to find the opportunity to turn impending doom into an
unprecedented success if you can just step back and see the big pic-
ture. You need a process that gives you structure, and you need to
adapt to the unpredictable. This is the foundation of innovation.

2 Ralston, A. Between a Rock and a Hard Place. Atria Publishing, 2004.

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CHAPTER 8 • MAKING DECISIONS FOR PROFIT 153

The Butterfly Effect

Within that structure, if the product development process at times
seems chaotic, it is! If a butterfly flaps its wings in Brazil, this could
cause a storm in Belgium the next week. You have heard the story or
maybe have seen the movie. This is the basis of the mathematics of
chaos, where a small event can have enormous and unpredictable
consequences down the road. The decision-making process in prod-
uct development has many similarities to the butterfly flapping its
wings, the seemingly small event. Decision making, like wing flap-
ping, is highly causal: one apparently insignificant decision can signif-
icantly affect the outcome, just like one flap of the butterfly’s wings
can have a profound effect on the weather.
So it is with product development that every decision affects
every other decision, with one decision connected to the next, and
each downstream decision dependent on previous choices. If a
slightly different decision were made—say, to create a different visu-
al line in a vehicle, or select a different spring mechanism in a toast-
er, or choose a different material for the bristles in a toothbrush—the
implications of those decisions produce a very different vehicle, toast-
er, or toothbrush.
Unlike the butterfly, product developers can influence the out-
come of the process. The research, insight, and feel for the product
and process allow them to make decisions that are likely to lead to
more successful outcomes. Each informed or insightful decision
affects the next informed or insightful decision, and so on. The but-
terfly wing flapping is very much a random occurrence in the weath-
er system; the butterfly at best can control its own flight and has no
awareness beyond its own activities. The butterfly does not under-
stand causation. Successful product developers understand the
cause-effect relationship and the overall implications of feature selec-
tion and form choices for the product’s gestalt—how the product
looks and functions as a whole. Unfortunately, some product
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154 THE DESIGN OF THINGS TO COME

developers are more like the butterfly. They make independent deci-
sions without a thorough understanding of the market opportunity,
the customer, or the rest of the product as a whole, never under-
standing why their product falters or fails in the marketplace.
The butterfly flapping its wings is, for the weather system, a ran-
dom event. Decision making in product development is not. That
said, many random influences provide fodder for decision making.
For example, the brainstorming process used so frequently early in
design to stimulate ways of conceptualizing possible product solu-
tions is wrought with random thoughts and analogies. The seemingly
random thought process is filtered with an early understanding of the
marketplace, directing the process toward a blissful instead of stormy
end.
Throughout the product development process, random external
events do occur that cannot be predicted. Political and social events
rapidly change needs and desires of a customer base. Increased gas
prices lead to concern about gas mileage and, eventually, fewer trucks
and SUVs sold. As a result of 9/11, there is less travel and more focus
on safety. It is hard to predict what the competition will do. A dis-
ruptive technology, or even one that makes small but noticeable
improvements, may mean disruption in bringing a product to market.
Some of these external events are devastating to a product or
company, whereas others are not. As a result of 9/11, most airlines in
the United States struggled while respirator company Mine Safety
Appliance had record earnings as people purchased gas masks in
record numbers. Although an event like 9/11 was unexpected, and its
impact on the economy and psyche clearly was unusual, it does illus-
trate the need for a system that is robust to random influences. New
Balance, having made the social decision to keep a portion of its
products “made in America,” was positioned to stand against foreign
competition and American competitors that made their products
overseas as people in the United States made emotion-based
purchases after 9/11.
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CHAPTER 8 • MAKING DECISIONS FOR PROFIT 155

Chaos Within Structure

Although the external influences are unpredictable, a structure to
good product development guides the process to success and pro-
vides methods to improve the robustness of decision making. The
structure of the product development process guides you through the
unknown, helping you define your goals, constraints, and variables.
Every product opportunity has a different set of goals (what you want
to achieve), constraints (things you cannot change), and variables
(things you can and must change). The challenge in developing truly
innovative products is first to identify a unique set of goals, then to
identify a set of variables that can be modified to reach those goals,
and then to understand the real versus perceived constraints on those
variables.
When Palm Computing came out with its first PDA, its competi-
tors believed the form factor to be a real constraint, because the com-
puting power (and the larger chips back then) required to recognize
handwriting took up substantial space. Palm’s innovative solution
came from the recognition that form factor was a variable after all, at
least as long as customers were willing to learn a new graffiti alpha-
bet. Palm’s innovation launched the whole PDA category, which had
thus far been a flop. The butterfly flaps its wings within the con-
straints of physics. The product development process must work
within the bounds of physics, but it is also influenced by humans, cul-
ture, society, and thought, all of which were key to Palm’s success.
The structure of the process does not define the goals, constraints
or variables—it does not do the work for you. It provides guidance on
how to navigate the space of the unknown. It helps you make robust
decisions based on insights and incomplete or even incorrect facts.
The fodder it provides to make those decisions is based on the cen-
trality of the customer. The customer unites all divisions of the inno-
vative company—the user is the fulcrum that balances goals, con-
straints, and variables.
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156 THE DESIGN OF THINGS TO COME

The fuzzy front end, or the early stage of product innovation, will
be chaotic. That chaos is a good thing. It enables exploration and
learning. The more you can learn about your market, the better your
filter on the chaotic ideation process. Chaos helps with the accuracy
in finding and defining a good product direction. Later, the process
begins to change. There is enough focus, enough variables and con-
straints identified, that the system begins to be more predictable, that
precision becomes the focus. Although not every random event
downstream can be anticipated, many can, and a robust process
thinks about scenarios of disruption. Some can be designed for, mak-
ing a robust product with longevity in the market; others cannot.
Accepting chaos allows you to more aptly deal with random impact as
it takes place, to work with it rather than against it. Rather than fight
it, be the choreographer of the chaos.
If you squash the chaos, you squash the exploration and research
so critical to the success of developing a product. You work hard to
produce a quality manufactured product. You later find out that your
precision was on but your accuracy was off, that the market does not
want your well-made product because it does not meet their expecta-
tions of the product’s experience of use or purpose. You find yourself
scrambling to add or remove features, not understanding that their
inherent interconnectedness causes functional, aesthetic, or manufac-
turing problems with other features. Your soft and hard quality goes
down, and you scramble to make both satisfactory.

Interdisciplinary Decision Making

All exploration centers around the customer, at least tangentially if
not directly. Marketers are well acquainted with customer research,
as are industrial designers. But the technology and financial people
should connect with the customer as well. We have found that the
best companies have integrated teams that engage in customer
research together. Different disciplines are trained to interpret infor-
mation in a different way, so the integrated and inclusive team is
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CHAPTER 8 • MAKING DECISIONS FOR PROFIT 157

more likely to have a richer understanding of customer needs and

desires, and thus a better understanding of priorities as the design
process proceeds.
To see the value of integrated teams, consider the opposite case,
the extreme case of dominance by single viewpoints. The technology
company tends to emphasize the product’s performance, technology
capabilities, and manufacturing capabilities. These high-tech products
are technically state-of-the-art but often miss the boat on customer
satisfaction. These companies excel at quality programs with precise
results but miss the accuracy of the market and lack true innovation.
Many technology companies provide business-to-business products or
services and have seduced themselves with the notion that they do not
need to worry about nontechnology product features. However, these
companies are vulnerable to competitors that can provide products
with hard and soft quality.
Cost-oriented companies emphasize financial and resource allo-
cation decisions. The result is often an unexciting but predictable
product with slim margins. These products often find themselves
considered or competing with commodities. Rumor has it that the
canned soups on today’s shelves taste nothing like the same products
of yesteryear, that manufacturers have little by little switched to
cheaper ingredients. Such is the way of cost-oriented companies in
mature product categories.
Marketing-oriented firms emphasize price promotions, direct-
mail flyers, and highly touted but trivial updates to their product
lines. Lemon-scented, anyone? Style-oriented companies emphasize
decisions based on aesthetics and trends. These products are exciting
to look at and trendy to own but often are impractical for long-term
use, or at times even short-term use.
Each discipline has something to bring to the table, essential
viewpoints and skills for competitive firms. Each needs to understand
the customer so that they can set the macro structure in place, so that
trade-offs do not compromise what the product is planned to offer, so
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158 THE DESIGN OF THINGS TO COME

that the product is not brought to a market that expects another.

Pragmatic innovators solve this dilemma by understanding the cus-
tomer through extensive research, setting decision priorities based on
that understanding, and maintaining that priority throughout the
product development process.
To consider why integrated decisions are needed in practice, con-
sider one experience of an automobile firm as it was in the midst of a
grille redesign. Grilles are one feature of a vehicle that makes a state-
ment about the vehicle’s personality. In people’s minds, this translates
to the ability for those who drive the vehicle to make a statement
about who they are, or at least who they want to be. Grilles can be
large and bold, with strong, thick, vertical lines, as with a Hummer;
they can be refined and simple, with horizontal stripes, as with a
Cadillac; or they can be subtle and nondescript, as found in many
Pontiacs. Hummer, Cadillac, and Pontiac are all brands of GM, but
each makes a unique brand and aesthetic statement, partially through
various grille designs. The Buick brand, for example, has a unique grille
only when it has an oval base with a small bump in the middle on top.
Remove that bump, and the grille looks a lot like a Ford oval. The grille
is a critical aesthetic feature that defines a vehicle’s brand identity and
personality. In the case of Jimmie Spear that began this chapter, one of
the biggest factors in the impression of the strength of a pickup truck
is the grille. The Avalanche, Titan, and F-150 all suggest a different
personality partly because of their grilles.
In the production of vehicles, every year car companies modify
vehicle features or aesthetic ornamentation to freshen up the look.
About every seven years a major redesign, possibly down to the level
of the platform itself, is taken on. The fixed investment for tooling of
the vehicles is so expensive that large portions have to be reused each
year to pay back those costs, until the major redesign occurs. Even in
those major redesign years, there is usually some level of carryover;
in other words, some of the parts are reused—“carried over” from the
previous design.
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CHAPTER 8 • MAKING DECISIONS FOR PROFIT 159

We observed the redesign process of a vehicle during the overhaul

year at one auto company. The grille became an issue of note. To save
costs, the grille was originally slated as a carryover part, one that was
used on the previous model vehicle. It looked great there, so why not
use it again? Although this company was effective at producing suc-
cessful vehicles, there was a lapse in focus on and shared understand-
ing of the customer. The finance groups drove the decision-making
process for the vehicle’s early direction. The vehicle sold well, but the
economy was shifting, so excess spending was carefully watched. The
initial program description called for the carryover grille.
Over time, however, the design studio argued that the grille
needed to be redesigned to support the vehicle’s new emerging image
and style. They argued for a significant increase in budget and time
to incorporate that change. At the same time, engineering, with a lack
of understanding of the integrity of aesthetic features, argued to keep
the carryover part to meet the cost and timing targets given to them
by finance. This stemmed from a finance group that refused to allo-
cate resources to modify that part. The studio eventually won the
argument, and the grille was redesigned. If the project management
team had better done their homework on the customer upfront, they
would have included the voice of the studio before the program
description was set. Their priorities would have been different.
Instead, the program was delayed and the cost target missed because
of this design conflict. The company was pragmatic enough to recog-
nize its error before it was too late. The production vehicle not only
has a unique and strong brand identity, with a bold grille at its fore-
front, but the vehicle has been a major success in the marketplace.
To understand why so many companies default to a commodity
mentality in decision making, which was really the problem in the
grille conflict, consider again the vast number of decisions that have
to be made throughout the process. There are many variables in the
product being designed. A car has upward of 20,000 parts. Each part
has several features that must be identified, modeled, and designed
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160 THE DESIGN OF THINGS TO COME

through variables. Many of these variables are interconnected in that

deciding the solution to one affects the solution of others; the vari-
ables are constrained to influence each other. Physical, aesthetic,
legal, and financial constraints limit the realization of the variables. It
is understandable that technologists focus on those variables that they
can understand and model, and the same goes for finance and even
design. It takes effort and insight to work as a team in communicat-
ing and negotiating solutions for all of these variables.
The interconnectedness of the variables is often quite tight. A
slight change in one variable may profoundly affect how other vari-
ables are chosen as the process proceeds. That is the effect of chaos,
which is so often squashed too soon. If the team at the auto company
decided to carry over the grille, the influence on the car’s aesthetic is
much different than if the grille is redesigned. The same is true about
the features of the grille as it is redesigned. If it is bold, the vehicle
takes a bold stand, and all the other aesthetic details must align with
its look and feel.
To not have costs end up as the ultimate arbiter of decisions, it is
important to account for the perspectives of the different functional
areas that relate to the product, to rely on a research and develop-
ment process that integrates the viewpoints of performance
engineers, industrial or studio designers, marketers, finance, manu-
facturing, technology development, and customer research. All this
input is needed because variables are understood by and often
controlled by each of these disciplines. These perspectives blend
together for decision making to achieve a solution that maximizes the
potential for each within the context of the others. Within the struc-
tured research and design process that crosses functions, the at-times
chaotic countless daily decisions about variables can be effectively
managed. To use the drinking-from-a-fire-hose analogy, the cross-
functional product design process is the hose that can be pointed in
various strategic directions, while the day-to-day decisions are
allowed to pour through, uncontrolled at first.
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CHAPTER 8 • MAKING DECISIONS FOR PROFIT 161

Finally, a certain amount of chaos exists and has to occur in the

system. If you allow it to flourish early, if it is channeled well, it
becomes a benefit, because it allows greater exploration in the early
process. Rather than getting bogged down in analyzing every last
decision early, let the customer insight lead you to your next decision
point; let the process guide you.
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9
A PROCESS FOR
PRODUCT INNOVATION

Although preceding chapters in this book each contain their own

examples of people, products, companies, and issues, each chapter’s
illustrations focus on specific topics—the individual oaks, hickories,
pines, and dogwoods of the forest. This chapter provides an overview
of the innovation forest itself using an example from an R&D rela-
tionship between a university and the athletic apparel company New
Balance. We describe a process for structuring the early “fuzzy front
end” of product development from opportunity to product approval,
showing how innovators implement the process and tools we describe
in earlier chapters.
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164 THE DESIGN OF THINGS TO COME

Sedona, AZ. “This really is God’s country,” thought Karen Anderson,

her feet pounding the red packed trails, as Bono sang the words on
her iPod. U2 had probably never even visited Sedona. The red rocks
jutted out into large cathedral peaks. The trees sent out a rich ever-
green scent. And the air was dry and clean and hot!
Next week was the race, and this was Karen’s weekly Saturday
trip from Phoenix out to Sedona to train. On-site training gave her an
extra thrill; that alone was worth the two-hour drive. Plus, she could
indulge in her ritual post-training recovery stop for an energy-
enhanced cherry papaya smoothie.
Karen remembered running as a kid. She had started running in
middle school, on Cocopah’s cross-country team. Practices were early
morning, before school. She remembered how she often felt shaky
after runs, after pounding the roads. She wondered whether the early
runs were to blame for her poor concentration in her first class of the
day, history. She had always needed recovery time, time to sit and
drink a smoothie, although smoothies did not exist back then.
How things had changed. The Phoenix area was nothing like what
it was in 1965, the year her school had opened. Back then, for
instance, Cocopah Middle School was the northern outpost of the
Scottsdale school district, located next to Camelback Mountain in
Paradise Valley. Now, when Karen’s kids are attending Cocopah, it is
the geographic center of the school district.
Not only was life changing, but products were, too. Karen’s new
running shoes, for instance, were great. The guy at the New Balance
store was right. Karen wondered how a company can make changes—
and, in this case, improvements—to a product again and again. She
always bought New Balance running shoes. She had tried others, but
there really was none better.
The consistent ankle support and the improved cushioning
seemed to relieve the pain as she ran. At the age of 44, she had
thought her running days were over, but her switch to New Balance
gave her running career new life. She enjoyed weekend 10Ks, and
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CHAPTER 9 • A PROCESS FOR PRODUCT INNOVATION 165

she enjoyed escaping from the routine of her week. She realized that
for all the wear and effort she put her body through, it was, really, the
shoes that allowed her to keep going.

New Balance
New Balance is a midsized company out of Boston, a privately held
player in an intensely competitive market. The company began by
producing arch supports in 1906. It evolved into a niche company
that produced running shoes for the serious athlete. The low-volume
market kept the company focused and lean, with early manufacturing
primarily in New England. As its reputation spread, that its shoes
were the choice of serious runners, so did the demand for its product.
Amateur weekend athletes like Karen started choosing New Balance,
and soon an almost cult-like following evolved.
Today, New Balance focuses on running and court shoes with a
theme of fit and comfort. They are known for quality. Some of the
shoes are made in the United States, separating them from Nikes
which not only are made offshore but also have run into social prob-
lems after reports that they are made in sweatshops in Asia. After
9/11, New Balance did not suffer the same decline in sales as other
manufacturers, partly due to its “made in the USA” policy. Although
only about 20 percent of its shoes are still made in the United States,
this still stands out as a local commitment in a time where tight mar-
gins keep prices low and competitive. Further, the globalization of
manufacturing is no longer just an economic consideration. Asian
technologies have, in many instances, surpassed U.S. capabilities. So
competitors at times go to Asia, not only for cost but also manufac-
turing quality. Keeping shoes “made in the USA” holds brand equity,
which overcomes economic costs.
Customers are loyal to the brand. “Comfort and fit” drives the
product and is the New Balance identity. Manufacturing quality is
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166 THE DESIGN OF THINGS TO COME

consistently high. New Balance advertises but has no high-profile

Michael, Tiger, or Kobe endorsements. It is a privately owned com-
pany that does not feel compelled to compete with the approaches
used by its competitors. In the markets where word of mouth is a
strong alternative to paid advertising, New Balance excels; however,
in the markets where names as icons have sway in schoolyards and
playing fields, its position is not as competitive. The company has
been willing to accept that compromise, and in many ways, this has
added to its sense of integrity as the shoe company for serious run-
ners. Interestingly enough, this perceived value has spilled over into
the nonrunning shoe market, where, certain high-school students
whose gear for everyday life includes backpacks and Nalgene plastic
bottles for drinking water have extended that trend and designated
New Balance as the casual shoe of choice.
New Balance products nicely balance cutting-edge technology,
especially in material use, ergonomics of fit, and appropriate but
reserved aesthetic trends. Although New Balance meets the industry
standard of new product introduction four or more times a year, it shies
away from high-fashion trends and instead improves each product line.
Its shoes are named by number, with increasing numeric value gener-
ally meaning a higher-performance and higher-priced shoe.

Innovation by Cooperation
As companies struggle to find new competitive advantage, they are
using a number of techniques to stimulate organic growth. These
approaches include working with respected experts to run workshops
and hiring consulting firms to support and bring new perspectives. To
extend R&D capability, some companies turn to universities to
conduct research and exploration into areas the company does not
otherwise have time or resources to explore. New Balance has an
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CHAPTER 9 • A PROCESS FOR PRODUCT INNOVATION 167

advanced product group, led by Edith Harmon, who we discussed in

Chapter 1, “The New Breed of Innovator,” which is the greenhouse
for organic growth in the company.
Harmon approached Carnegie Mellon University because she
believes that the outcome of such relationships can complement and
stimulate organic growth internally. She wanted the university to use
its course in Integrated Product Development to explore new oppor-
tunities for New Balance. She wanted to see what integrated teams of
students could achieve with direction from faculty and her New
Balance group, for their performance would illustrate what could be
achieved with similar teams in-house.
The award-winning course at Carnegie Mellon integrates teams
of students in industrial design, engineering, and marketing, support-
ed by four faculty advisors representing three different colleges in the
university. This course has a history of successful product concepts,
demonstrating the power of the innovation process. There are now
examples of other universities evolving a similar cooperative product
development approach, a trend for companies to take advantage of.
The Carnegie Mellon course with New Balance yielded six suc-
cessful product concepts for New Balance through six student teams
in 16 weeks. This chapter focuses on one of those product concepts.
The success of the course demonstrates the payoff of the innovation
process, and it helped New Balance recognize how it could develop
products internally that it had been outsourcing. Over the years, the
course has helped convince individuals such as Dee Kapur and Edith
Harmon and companies such as Ford and New Balance that the inno-
vation process delivers a high rate of return on investment.
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168 THE DESIGN OF THINGS TO COME

A Case Study in Innovation for New

Balance: Four Phases of New Product
Development
This chapter illustrates a comprehensive methodology that includes
the issues and tools presented in earlier chapters. It begins with how
companies identify opportunities to develop new products, how they
expand their understanding of those opportunities, and how they
translate that understanding into a set of product requirements or
specifications that fulfill the market’s needs. The examples then show
how that early set of product requirements leads to a process of prod-
uct conceptualization and refinement, and eventually production of a
product with features tailored to the needs of the individuals in the
target market.1
For this project, New Balance assigned the team the task of
developing a new market opportunity for the growing consumer seg-
ment of people who are overweight—not traditionally a market that
is targeted by athletic apparel companies. The strategic area was gen-
eral in nature, not restricted to shoes or clothing or to specific gen-
ders or age groups.
Here is a quick overview of the approach. Several factors con-
tribute to the development of new product opportunities. These fac-
tors are social, economic, and technological (SET). As these factors
change over time, they generate gaps in the marketplace between
products and services that exist and the potential for those that would
better fulfill market needs, wants, and desires. These gaps, then, cre-
ate new product and service opportunities. To respond to these
opportunities, you need to understand the value that customers will
expect in the new product. The customer’s expectations of value must

1 If you practice product development and want more information, the tools and
theory of this process are detailed in Cagan, J. and C. M. Vogel. Creating
Breakthrough Products: Innovation from Product Planning to Program
Approval. Financial Times Prentice Hall, Upper Saddle River, NJ, 2002.
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CHAPTER 9 • A PROCESS FOR PRODUCT INNOVATION 169

then be translated into product attributes. So understanding the

changing social, economic, and technological factors leads to finding
opportunities that must then be translated in value and converted
into product attributes. It sounds simple when stated this way, but
companies struggle, particularly when analyzing customer value
expectations. If you do not get the value right, the product will not be
successful, no matter how strong your quality program is or how lean
your manufacturing capability.
This innovation process is a complement to the downstream pro-
grams of quality manufacture. It is a four-phase process that clarifies
the earliest innovation stage, often called the “fuzzy front end” of
product development. The four phases are 1) identifying a product
opportunity, 2) understanding the product opportunity, 3) conceptu-
alizing the product opportunity, and 4) refining the product opportu-
nity. In 16 weeks, this method can support interdisciplinary teams in
identifying product opportunities and turn them into fully developed
product proposals and patents.
The student team described here followed the four-phase inno-
vation process to create a complete product concept, ready for patent
protection. Provisional patents were then filed to give the company
time to assess the concept in the context of its business strategy.2 In
the following sections, we walk through the steps of the innovation
process while illustrating the development of the product for the
growing overweight market.

Phase I: Identifying Product Opportunities

Bob is approaching 50, and his current health and family

genes are telling him he better lose the pounds. There are a
lot of guys like Bob.

2 Provisional patents, discussed further in the next chapter, give a company a

year of protection at a reasonable cost before it needs to invest in the more
expensive full patent.
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170 THE DESIGN OF THINGS TO COME

In the first phase of the process, product opportunities are identified,

starting with research into trends. By the end of this phase, the devel-
opment team will have identified gaps in the marketplace where a
product or service would improve the well-being of the target mar-
ket. The goal of Phase 1 is to identify one product opportunity. The
opportunity must be stated in broad terms, with a focus on the expe-
rience of the opportunity, without any hint of a product description.
It would be stated something like “a process and/or device to safely
protect a child in a car.” Most people automatically want to develop a
car seat.
Chapter 4, “Identifying Today’s Trends for Tomorrow’s
Innovations,” discussed trends and their implications—in particular,
the SET factors that interact in a dynamic way to create product
opportunities. For instance, the rising number of overweight people
worldwide, but especially in America, yields new opportunities for
athletic apparel companies to widen their target beyond the fit and
trim, to design products for those needing help with a first step
toward activity. As Americans become heavier, the pressures to get
thin have increased with current emphasis on diet control. Issues of
style in fashion have emphasized women more than men. Insurance
companies are beginning to consider obesity a disease that could
demand some level of reimbursement. This economic factor did not
come into play as the eventual product was developed, but it was
important to consider in understanding the overall opportunity.
Trends such as these lead to product opportunity gaps in the mar-
ketplace. For example, a more sedentary populace expands the mar-
ket for equipment used in low-exertion exercise, such as walking.
A heavier populace puts more stress on shoes, increasing the need for
high-performance materials that can better stand the rigors of heavier
people. Insights that identify such trends come from customer-based
interviews and interactions as well as secondary literature-based read-
ing and research.
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CHAPTER 9 • A PROCESS FOR PRODUCT INNOVATION 171

The team went in depth in each direction and brainstormed more

than 100 product opportunity gaps in the marketplace. Selecting the
best opportunity from a field of 100 requires qualitative research with
possible users, coupled with a sense of the profit potential of each.
Many could develop into exciting and successful products. Insights
from potential customers and experts become the filter that selects the
one product opportunity that survives. For instance, the product team
was composed of students in their early 20s, but after studying the
social, economic, and technological factors, they narrowed their target
to middle-aged men. As these students moved forward in their work,
the decisions were increasingly made for them by the information they
had gathered, not by themselves, because they had to look completely
outside themselves to properly serve their focal market.
As examples of the range of product opportunities developed in
this phase, the team considered changing the orientation of foot entry
into a shoe, an all-inclusive measurement system for fitting shoes, and
“sexier” walking equipment for that market. Only after much thought
and discussion on numerous ideas did the team settle on the oppor-
tunity “to allow overweight 40- to 55-year-old men who have long
been sedentary and who have become more aware of their health to
overcome physical and mental hurdles on the way to establishing an
active, healthy lifestyle.”
This phase began with general strategic directions and ended
with open opportunities, not with product ideas. This first phase
defined the scope of the problem to attack, the opportunity to be
explored in later phases, and the questions to be answered.
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172 THE DESIGN OF THINGS TO COME

Phase II: Understanding the Product Opportunity

If Bob could walk 10,000 steps a day, he could get enough

exercise to lose weight and get himself in better shape. He is
willing but does not want to wear a sign saying “Look at me;
I’m walking.” How can he get feedback and not have to
wear something overt for everyone else to see?

The next step in the process is to gain an in-depth and insightful

understanding of the user and purchaser and to identify and under-
stand all the influences and implications of the product to them and
to the market at large. The example shows how developers translate
customer insights into product requirements, which will then form
the criteria for assessing concepts developed in Phase III. Engineers
and designers often develop concepts with little frame of reference.
Without a clear framework for decision making, teams usually fail to
choose the most appropriate options. Establishing of a wide range of
criteria for a potential product helps support the parallel develop-
ment of product visual attributes of lifestyle, ergonomic aspects, and
core technology. Teams must develop actionable insights that stem
from a clear understanding of the stakeholders and a particular focus
on emerging needs of the end customer.
This is the key phase for innovation, and this is where many of the
ideas and tools discussed in this book become critical. This phase is
focused on qualitative research, an approach at times especially diffi-
cult for traditional market researchers and engineers, who are trained
in the use and comfort of statistics and numbers. It is here that a propo-
sition of value based on customer needs, wants, and desires creates a
framework for product innovation. The challenge is to identify, under-
stand, and articulate the key attributes of value and to turn that value
proposition into actionable insights that will eventually be developed
into a product. It is here that strategic planning (see Chapter 7) and
identifying a market in terms of a scenario rather than a statistic (see
Chapters 4, and 6) come together in an analysis of market value.
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CHAPTER 9 • A PROCESS FOR PRODUCT INNOVATION 173

This analysis of the value must be broken into attributes that

product developers can act on to develop so that they can produce
products that are highly desired by the end users and purchasers. The
analysis of value helps transition product development from qualita-
tive insights to realized product features. So we discuss product value
before product attributes.
The idea of value is not to get more features for less money.
Instead, value is the connection of a user to a product in a way that
augments his lifestyle and makes his activities easier and better. Value
is the product’s ability to fulfill wishes, to meet expectations of fanta-
sy. The challenge is how a product developer understands the value a
customer seeks, and translates that understanding into product char-
acteristics. All the research and analysis we have discussed so far pro-
vide that understanding. Now they need to be converted into design
attributes that evolve into product attributes.
Value Opportunity

We have developed a framework that both represents attributes of

value and provides a mechanism to translate those attributes into
product requirements. Value can be broken into seven discrete class-
es, called value opportunities, that capture an initial but complete
understanding of what people need, want, and desire in the products
and services they use.

• Emotion

The first is emotion, the direct connection to the user experi-

ence and fantasy. What fantasy do people expect from use of the
product? For overweight men who have become aware of their
need for a healthier lifestyle, emotion is critical. Products that
make them feel powerful and independent will support their
choice to be more active, and products that aid their confidence
will encourage them as they strive toward a new lifestyle.
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174 THE DESIGN OF THINGS TO COME

• Ergonomics

Next is ergonomics, the attribute that addresses the physical

interaction with a product. How easy and intuitive is the prod-
uct to use? From an interview of a shoe store manager, over-
weight men were happy just to find a durable shoe that would
fit and would have enough initial cushioning to be comfortable.
As expected, many larger individuals had trouble donning and
removing shoes.

• Aesthetics

Aesthetics includes not only visual, or form, but all the senses
that interact in experiencing a product. Overweight men are
accustomed to sacrificing aesthetics to live with shoes that are
either comfortable or visually appealing, not both. On one
hand, such a finding could support the notion that aesthetics
could be ignored. On the other hand, any product that met
other needs in addition to scoring high on aesthetics could have
significant impact.

• Identity

A product is the physical statement of the brand identity and is

central to its success. Every experience with a product affects the
identity, and identity sets up the experience. Overweight men,
like everyone else, use products to make personal statements
and to express self-definition. In the arena of health-enabling
products, whether enabling shoes or enabling medical devices,
products lack identity and differentiation, so an opportunity
exists to bring positive self-expression into this market.

• Impact

Next comes impact—addressing the societal influence connect-

ed to and addressed by the product. This includes social
relevance to groups and individuals, and environmental consid-
erations. As exercise networks and clubs increasingly become a
nexus for social interaction, as obesity increasingly captures U.S.
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CHAPTER 9 • A PROCESS FOR PRODUCT INNOVATION 175

national attention like smoking did a few years ago, the oppor-
tunity for societal impact increases the relevance of obesity-
related products.

• Core technology

Core technology addresses the functions that enable perfor-

mance. Is the product state-of-the-art in its ability to perform? To
date, exercise technologies have concentrated on the needs of
those already exercising, not those who are struggling toward an
active lifestyle. In shoes, where the provided cushioning does not
vary by shoe but the need for cushioning varies by person, the
cushioning and reliability are calibrated for the lighter and fitter.
So exercise shoes for the heavyset may benefit from technologies
to allow for size-appropriate cushioning and performance.

• Quality

Quality addresses not only manufacturing quality but also the

expectation of how the product will perform overtime. Although
traditionally viewed as manufacturing quality, it also includes
the product’s fit and finish and its durability. How quickly do
shoes wear out when used by those with larger bodies?

Innovation begins with understanding how these aspects of value

connect customers to market opportunities. The use of this under-
standing is a sophisticated process of defining each value attribute for
a product opportunity and then refining that definition into attributes
that a product or service must incorporate to succeed. As the product
development process proceeds, the articulation of those attributes
gets refined and eventually becomes the product’s form and features.
Finding a solution that holistically integrates these attributes can be a
difficult process of negotiation that requires an innovative outcome. It
is this step-by-step process of exploration and refinement that sepa-
rates comprehensive innovation from technology-focused invention,
and also the innovative from the mundane.
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176 THE DESIGN OF THINGS TO COME

Understanding Customers in the Field

Innovative product developers spend time in the field. They observe,

interview, and analyze the actual people who will use their product. At
New Balance, Josh Kaplan from the advanced product group flies
around the country and goes on runs with different lead users, under-
standing the nuances that make their running experience great.
Designers at Whirlpool go on service calls to understand the context of
where their product is used and how to make it better; that even
includes VP Chuck Jones. CEO Eric Close and the engineers at
RedZone spend days on site observing how the crews interact with their
equipment and each other to improve the experience of sewer repair.
The student team spent much time studying potential users and
other key stakeholders. They extensively read current research on
exercise, and they conducted many interviews of adults who were
formerly out of shape but had begun to exercise. They found that
exercise does not have to be relegated to a reserved part of the day,
but that small bouts of exercise scattered throughout the day, like the
walk from the car to the office, can accumulate and become a bene-
ficial, healthy, active routine. They found that lack of time was the
number one reason for inactivity, that busy lifestyles left no time for
aerobic workouts, that these busy individuals were willing to tackle
small goals but refused to commit to large lifestyle changes.
The product team narrowed its focus to men in part because a nar-
rower market segment can be more closely matched with design attrib-
utes. But there were additional reasons for the increased focus on men.
More middle-aged men are overweight than middle-aged women—
with 43.25 percent compared to 27.3 percent. Also, men tend to exer-
cise to lose weight, whereas women tend to diet. Finally, New Balance
serves a larger proportion of adult men than women, so a focus on men
fits well with current company strengths. Men who had stopped exer-
cising may have previously been the “no pain, no gain” type, but they
had too long been accustomed to comfort to have affinity for high-
performance athletics. These research findings revealed that attributes
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CHAPTER 9 • A PROCESS FOR PRODUCT INNOVATION 177

of a product solution would aid a comfortable transition to exercise

from an inactive lifestyle, fitting into current life patterns to the great-
est extent possible while motivating the user toward more activity. One
scenario that they developed read as follows:

Ted Franklin recently lost his father to a heart attack. He is

44 years old, 5 ft, 10 in, weighing 220 lbs. Although his wife
and two kids have been harping on him to lose weight, it
took the scare of his father’s death to make Ted realize that
he, too, will have serious health problems if he doesn’t start
losing his sedentary lifestyle. He was never the kind to use
exercise clubs, and there was no way he was about to sweat
in front of those buff kids. Yet he needed some type of moti-
vation to get himself moving again, to keep himself going.

Phase III: Conceptualizing the Product Opportunity

Bob would use a “smart insole” that could record his steps
and then use a device like a watch or key fob that would
more subtly give him feedback on how many steps he has
taken all day, not just during formal exercise.

Next comes the more concrete part of product development, the part
that takes the insights gained so far as a basis for generating actual
concepts, attributes that can be built into actual products or services.
At the beginning of this phase, the team has only a vague idea of what
the product will accomplish; it has no idea of specifics. For instance,
the team knew that walking 10,000 steps a day was a nonthreatening
approach to exercise that could be achieved in smaller increments
throughout the day. They wanted to reinforce the benefits of this
“bite-sized” exercise, but they recognized that many different prod-
ucts could achieve such goals. By the end of the phase, the team has
fleshed out the concept and has even made early prototypes of it. In
between, the team considered many different ideas: indicators on the
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178 THE DESIGN OF THINGS TO COME

shoe that change color, a wristband or watch pedometer device, a

“shoe garage” that downloads information from the shoe, and a mod-
ular shoe system in which worn shoe parts could be individually
replaced.
Innovation comes from staying true to the value proposition, and
product attributes are determined through the research. The
approach is iterative in that multiple concepts are considered,
refined, and tested, and then the process begins again, with each iter-
ation becoming more focused as more is learned about the product.
All aspects of the product—its form, function, and market reach—are
considered and integrated into a single concept. The product’s emo-
tional potential is realized, and the brand identity is developed. The
process is visual in that all ideas are sketched or mapped out to pro-
vide a common representation among the product development
team. The conceptualization process is energetic and exciting. At the
same time, it is frustrating and grueling, because every attribute iden-
tified through research must be translated into a feature that per-
forms as an integral part of the product.
The team looked at the dilemma of how to lose weight and
become active, a dilemma for Bob and Ted. After discussing the mer-
its and features of more than 50 concepts, the team worked on the
idea of a smart insole, one that would track and record exercise
throughout the day. The insole would be plush and comfortable, one
that would ease the man toward activity. It would have embedded
technology to count steps throughout the day, recording and report-
ing walking totals so that users can track progress toward daily goals.
Insoles would fit in regular shoes, accompanying the men in their
existing routines, encouraging them to be ever more active in the
course of the regular day. The exercise totals could be transmitted to
a key fob, an item that men already carry with them. The insole and
key fob are discreet objects, not overt advertisements that show the
user to be in need of healthful activity. Finally, New Balance already
makes insoles, and the technology of feet and exercise is well within
the boundaries of the New Balance brand.
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CHAPTER 9 • A PROCESS FOR PRODUCT INNOVATION 179

Phase IV: Realizing the Product Opportunity

The technology exists to make an appropriate-priced shoe

insert with a stylish key fob that Bob could use to read and
record his progress. We know how to price it, design it, and
manufacture it. We have a plan to package it and present it
in stores with a roll-out strategy and a forecast for sales and
profit for the next three years. Bob is happy to be getting
into shape. New Balance has a new line of products for a
new market for overweight men that will extend the brand
and keep the idea of performance and fit. This is a market
that has tremendous growth (no pun intended).

At the end of this phase, the concept is detailed to the point that the
company can decide whether to move the product to production.
This is represented in several ways. A complete and accurate visual
model is developed through prototypes, computer modeling, and
sketching. The technology is shown to be effective through mathe-
matical and computer analysis and through a working, functional pro-
totype. A business plan that includes market introduction and finan-
cials argues the business case. Finally, a manufacturing plan dictates
how the product will be produced. Even in this phase, the basis for
success lies in the eyes of the stakeholders. Very often, this phase can
be compromised by a premature commitment to the product, a
seductive feeling that the product will be a success, where internal
groups rush to judgment without gathering or properly assessing cus-
tomer feedback.
In this phase, each feature of the concept is detailed individually
and as part of the overall product assembly. The cost and manufac-
ture are balanced with the experience of using the product. So the
team must work together in an integrated manner to combine the
technology and features into a form that not only delivers the tech-
nology, but also provides a rich experience of interaction and enjoy-
ment. The product must look as good as it works. It must not only be
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180 THE DESIGN OF THINGS TO COME

useful, it must be easy to use. It must naturally fit into its environ-
ment of use as well as make that environment function better.
The team designed an insole that functions like any other insole
that New Balance makes. But hidden in the heel is a radio frequency-
enabled (RF) pressure switch, combined with a microcontroller, that
registers each footstep taken by the wearer and enters this data into its
memory. This memory is contained within a microcontroller unit,
which keeps track of the pressure sensor’s input state and stores the
daily number of steps for retrieval by a key fob monitoring unit. The
number of daily steps taken by the insole is uploaded to the fob, which
itself was carefully crafted to be visually appealing as well as discreet.
Every insole that the user has in each pair of shoes can be pro-
grammed into the same key fob. This device, then, stores the user’s
total daily footsteps and displays this number to the user, along with
other calculated quantities, possibly including mileage, calories
burned, or percentage of a goal achieved. This product also includes
in its display a graphic representation of the user’s progress toward a
daily goal. The technology is inexpensive to produce and will not need
replacement, because it outlasts the insole in which it resides.
The insole design was prototyped to prove that it worked, ana-
lyzed to prove that it would work as promised, and visualized to show
what a production version would look like. In sum, it worked, it
worked well, it was very well received by the target market in focus
groups, and it was ready for patenting. It maximized style and tech-
nology and was clearly considered an innovation within its product
field. The team did not invent new technology; they invented a new
use of the technology and an emotional way to deliver it.
New Balance submitted a provisional patent on this concept, along
with five other equally innovative and engaging product concepts that
came from teams in the same Integrated Product Development class.
New Balance will analyze the business case of each to decide whether
to invest in developing the prototypes into manufactured products. The
further investment will happen from within, organically growing the
company with new market introductions.
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CHAPTER 9 • A PROCESS FOR PRODUCT INNOVATION 181

As a partnership between the company and university, everyone

got a significant return on investment. New Balance received a num-
ber of product concepts and details that it could develop into patent-
ed products. It also acquired six case studies on the innovation
process to help solidify this approach internally throughout the com-
pany. The students were given a strong, state-of-the-art process in
innovation to take with them into industry, and the faculty had addi-
tional examples to demonstrate the process of innovation.
The process laid out in this chapter creates a product that is bet-
ter positioned for lean manufacture or other programs that assure
quality of manufacture. The most critical aspect of quality is the abil-
ity to approach launch with complete control and confidence. Any
product changes made in the later phases of product development
are extremely costly and can affect the ability to deliver quality man-
ufacturing and craftsmanship. By resolving the major issues of a prod-
uct in the fuzzy front end, the downstream process can more effec-
tively focus on manufacturing and launch.
Today’s innovative companies follow a process such as the one
described in this chapter to develop new product concepts through
the fuzzy front end. These early phases set up the platform for inno-
vation. But these early phases are, for many, the most difficult to nav-
igate. The uncertainty and incomplete information from which deci-
sions must be made are uncomfortable for the traditional breed of
engineer and marketer. Yet it is the ability to understand the com-
plete picture of what that information tells you that enables innova-
tion and successful new product development to take place. The tools
in this chapter and book are best practices that companies deploy;
they are consistent strategies for innovation from within. For that is
the approach of the Edith Harmons and Josh Kaplans at New
Balance and the Chuck Joneses, Dee Kapurs, and all the others dis-
cussed in this book as the new breed of innovator.
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10
CREATING A BLANKET
OF IP TO PROTECT
YOUR BRAND FROM THE
ELEMENTS

Innovation is as much about design patent protection and trade dress

as it is about utility. Realizing early that your best defense is a total
intellectual property (IP) offense allows you to keep your brand iden-
tity as protected as your technology R&D. Patents are for fixed
periods, but trade dress, like a diamond, is forever.
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184 THE DESIGN OF THINGS TO COME

Des Moines, IA. Susan and Steve finally got the dog that Steve had
wanted. They had been married six years and had two kids, both final-
ly out of diapers, which was Susan’s requirement before they got the
pet. For all of Susan’s efforts to find a dog that would not shed, when
they finally got the mutt from the shelter, it became a crapshoot.
Although Susan decided the dog really was cute, it shed like—well, a
dog. Susan hated to clean, and Steve was even worse (“Too much to
do!”). The twice-weekly cleaning service was fine B.C. (before
canine), but A.D. (after dog) the house, especially the floors, seemed
to be a constant mess.
In comes Swiffer, that wonderful revolution in floor cleaning
from Procter & Gamble (P&G) that has changed the practice and
expectations of floor cleaning. Swiffer is not only a trademarked prod-
uct name, but like Xerox the word has become a verb: “Time to
Swiffer the floor.” (Not that P&G should like its becoming a verb, but
more on that later.) The old drudgery of sweeping the floor is
replaced by the easy-to-use dry mop with replaceable cleaning cloths.
The cloths use static electricity to grab hold of dirt, dust, and dog hair
as the cleaning head sweeps across the floor. The Swiffer mop itself
is easy to control and get under those hard-to-reach places with the
full pivot action on the head. The cloth makes the process easy with
both its minimal resistance as it is pushed and its ability to grab dirt
just by moving over the floor. When the cloth is dirty, it is easily
pulled off, thrown away, and replaced with a simple motion.
For Susan and every working mom, the Swiffer experience fits
right into the trend of cleaning quickly and easily on demand. Rather
than making floor sweeping a major ordeal, the Swiffer can freshen
up any area of the floor quickly. It is not just for working moms, but
dads and kids as well. The Swiffer is so simple that kids can be
brought into the cleaning process.
Susan was so impressed with the Swiffer that she bought the com-
panion WetJet, a member of the Swiffer product family that has a con-
tainer of cleaning fluid that can be squirted on the floor in front of the
cleaning cloth for a wet-mop action. The WetJet has done for the mop
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CHAPTER 10 • CREATING A BLANKET OF IP TO PROTECT YOUR BRAND 185

what Swiffer has done for the broom—replaced it! Instead of grungy
mops and dirty buckets of water, the WetJet is clean and self-con-
tained, and only the cloth needs to be thrown away when dirty.

Swiffer: A P&G Innovation Success

For Procter & Gamble, those cloths are important, because that
is where P&G makes its money; the mop itself is just a delivery sys-
tem for the cloths. The idea of constant sale of disposable attach-
ments is a golden one, used long ago by IBM with its computer punch
cards and still used today by Gillette with its razor blades. Gillette will
happily give you a razor, because you cannot use it without purchas-
ing the blades. Those blades, which can cost a dollar apiece, need to
be replaced every week or so. No matter how bad the economy,
everyone wants to look good, so they will buy razor blades.
Every industry looks for punch cards and razor blades. Swiffer
has found them. Despite all the competitors in the marketplace, and
despite the fact that all the cloths are interchangeable, Swiffer is still
the category’s leader. People Swiffer their floors, they don’t Pledge
them. Swiffer is a great product. It is also a great brand.
Procter & Gamble is a company that, through its history, has
understood strategic growth. By strategic growth, we mean a balance
of external growth and internal organic growth. To be strategic, every
external purchase and internal development needs to be consistent
across the company’s core mission. In 1837, William Procter and
James Gamble founded the company in Cincinnati, Ohio, by making
candles and soap. As the company has grown to be a $51.4 billion
company in 2004, almost every product it produces finds its roots in
candles or soap. Oddly enough, Swiffer, Pampers, and Pringles all
evolved from candles and soap. Candles and soap were natural com-
panion products due to common ingredients—lard and beef tallow
from the meat-packing industry.
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186 THE DESIGN OF THINGS TO COME

Oil was used in the manufacture of soap, and in 1901, P&G set up
the Buckeye Oil Company for its oil, primarily cottonseed oil. It began
selling Crisco in 1911 after acquiring U.S. rights to a hydrogenation
patent from Wilhelm Normann. The fibrous material left over after
the oil was extracted ended up as the basis for the cellulose sponge. Its
absorbent qualities were later extended to Charmin toilet paper.
Diapers were an extension of the absorbent and soft qualities of
Charmin, and thus came the internal innovation in diapers with
Pampers disposable diapers in the 1950s. Toilet paper is a type of thin
and absorbent paper for use on the body, so Bounty paper towels were
another extension. The absorbent qualities of Bounty combined with
some innovative chemistry became the basis for the Swiffer cloths.
At times, Procter & Gamble has purchased outside expertise by
acquiring other companies. For instance, P&G bought the William T.
Young Company, which made Big Top peanut butter. P&G had
already been a supplier of oil stabilizers to peanut butter companies
and already had part of the expertise needed for its production, but
its acquisition gave P&G additional expertise and machinery to pro-
duce its peanut butter brand Jif, which it has sold since. An obvious
extension from its use of oil for food is the development and produc-
tion of potato chips. In 1968, P&G introduced Pringles potato chips,
a product that was developed in-house. A less obvious direction was
the 1999 acquisition of Iams dog food. Again, P&G already had relat-
ed expertise, because dog food includes fat. The purchase of Iams
was strategic; P&G noticed it could use that domain for additional
product introductions that would use expertise it already owned for
human products, like tartar-control dog food.
Over its more than 160-year history, P&G has developed innova-
tive brands and purchased other established brands based on analysis
that stems from the initial core products of soap and candles. During
times of acquisitions, P&G has not been immune to or afraid of
growth through purchase of other companies or product lines. While
Westinghouse was buying CBS, leaving its core instead of reinventing
it, a path to its eventual demise, P&G stayed true to its mission.
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CHAPTER 10 • CREATING A BLANKET OF IP TO PROTECT YOUR BRAND 187

P&G also has developed new products from within its extensive
and talented R&D group. In recent times, in particular, under the
direction of CEO A. G. Laffley, the drive for internal growth has
been dominant. Laffley and P&G recognize that innovation is today’s
differentiator.
This commitment by Laffley to holistic “360-degree innovation”
and complete system delivery has led P&G in recent years to devel-
op a strong internal industrial design team, thus adding industrial
design to its already strong marketing and engineering groups. The
company still uses industrial design, brand identity, and product
development firms for the majority of its form and interface work and
even some full product development. However, the growth of an
internal design team allows the company to develop and keep inter-
nal expertise on critical project initiatives with a better connection to
the internal understanding of the corporate brand identity. The inter-
nal design commitment sends a clear message that the interface and
communication of the product as a system are a critical aspect of
innovation, a core of the company’s future. The balance of internal
and external expertise is a current challenge facing many companies
and is discussed further in the next chapter.

Why Is Swiffer Out Front?

P&G created an entire system around floor sweeping through the
Swiffer brand. But the Swiffer sweeper system is not the only one out
there. S.C. Johnson’s Pledge Grab-It is a competitive system that was
introduced the same month. It seems like there is no difference
between them for the average person. Why, then, is Swiffer the brand
of choice? Why do consumers so often refer to competing products
as Swiffers, but nobody refers to the Swiffer as a Grab-It?
There are many parts to the answer. First, Swiffer was first to
market, and P&G made a bigger deal of the product introduction.
The market pioneer often gets an advantage in product and brand
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188 THE DESIGN OF THINGS TO COME

recognition. Even so, Pledge’s dry sweeper was introduced less than
a month later, not giving Swiffer much time to establish a stronghold
in consumer’s minds.
Second is the strong advertising campaign by P&G, which was
barely matched by the competition. In part, the first of a new type of
product must do the dirty work of educating consumers, so addition-
al advertising is needed. A “me too” product competes for consumers
who already know what it does. But again, Pledge came out in the
same month. In talking to industry experts, no one really anticipated
the level of success from this product, and it may be that the com-
petitors decided to spend their advertising dollars on other products
in their strategic portfolios.
The third reason that Swiffer became the market leader and
maintains that lead is because of its intellectual property. Intellectual
property (IP) is a key strategic differentiator for a company. Many
times, it is not the company’s products, infrastructure, workforce, or
customer base that separate it from the competition, but its IP.
Around the globe, countries recognize the power and importance of
IP and provide legal means to companies to protect their know-how
through the legal system.

IP: Utility Patents

The judicial system believes that, in general, everything that is made
or described can be copied by anyone else. The exceptions are those
that are protected through IP law.1,2 There are several aspects to legal
IP protection. From a product development viewpoint, these can be
divided into technology and style. On the technology side, utility
patents protect innovation in functionality and manufacturing. Utility

1 Seventh Circuit Court of Appeals. Thomas & Betts Corp. v. Panduit Corp.
65 F.3d 654, 1995.

2 L.A. Gear, Inc. v. Thom McAn Shoe Co. 988 F.2d 1117, 1993.
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CHAPTER 10 • CREATING A BLANKET OF IP TO PROTECT YOUR BRAND 189

patents are the most widely understood and well-used IP tool in new
product development. The benefit of a patent for a company or indi-
vidual is that the government basically gives you a limited monopoly
on the use of the technology. The monopoly is narrow in scope,
described by the claims in the patent, and limited in time. In the
United States, for example, the utility patent is valid for 20 years from
the date the patent application is submitted to the patent office.
The Swiffer has two utility patents: one for the overall mop sys-
tem and one for the cloths. P&G has held additional related patents
that go back 25 years, already expired but providing the foundation
for the Swiffer product and innovation. The patents for the Swiffer
focus on the mop system, including how the mechanism attaches the
cloths to the mop head. WetJet has an additional four utility patents
focused on the mop structure again, but with a fluid reservoir and
fluid dispenser for the cleaning soap. For the WetJet, the patents also
specify the cloths, with a cleaning and absorptive layer having certain
absorptive properties specified in the patent.
But there is more to the Swiffer than how it functions. Most peo-
ple think of utility patents when they hear about patents or IP pro-
tection. However, the style attribute can provide a powerful layer of
protection for a product or service as well. The look, brand, and gen-
eral association between the product and customer all can be pro-
tected. In practice, there are several different methods for protecting
the style of a product or service, including design patents, copyright,
trademarks, and trade dress.

IP: Design Patents

The design patent is the companion to the utility patent. Design
patents protect the form of an “article of manufacture.” Design
patents protect the effort to create aesthetic innovation. They are
simpler to formulate than utility patents and are as vague as a utility
patent is precise. The design patent is a sketch or two of a design. If
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190 THE DESIGN OF THINGS TO COME

another design looks like the one drawn in the figure, it is in violation
of the patent. A design patent generally has a more subjective inter-
pretation, relying on an aesthetic viewpoint. Because design patents
are relatively simple to formulate and much less expensive than a util-
ity patent, one technique that companies use is to not only protect the
final design form, but to also protect a satellite of concepts used in the
development of a product form. Every major form concept consid-
ered can be patented. This design patent protection strategy was a
technique used by Black & Decker in protecting the SnakeLight
hands-free flashlight and proved effective in litigation against several
knock-off products.
In contrast to a design patent, a utility patent is precise, and
expert wordsmiths craft the claims. For example, if the claim includes
a word such as handle, as with the Swiffer utility patent, a legal chal-
lenge might question what the definition of handle really is! Although
it is much more expensive than a design patent, companies still
create layers of protection through satellite patents, much more
strategically and generally building off the main patent.
The Swiffer has two design patents on the dry mop and two more
on the WetJet. The design patents for the dry Swiffer show the form
of the entire mop system, including the textured handle, long pole,
and flat head. The pivot function is not relevant to the design patent,
but its integrated look is. The additional patents for the WetJet focus
on the look of the grip and the reservoir.
Although in the United States, utility patents last for 20 years
from the date of submission to the patent office, design patents last
only 14 years from the time the design patent is granted. The courts
seem to recognize that styles change quicker than technology. In
some industries, such as clothing and fashion, both utility and espe-
cially design patents are used sparingly because every six months or
less a new style is introduced, making it difficult for competition to
remain current even without patent protection.
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CHAPTER 10 • CREATING A BLANKET OF IP TO PROTECT YOUR BRAND 191

Once a patent expires, anyone can produce a product that func-

tions or looks exactly like that described in the patent. Savvy compa-
nies will submit new patent applications constantly as they take an
evolutionary approach to innovation surrounding a product, improv-
ing features and updating styles to maintain the competitive edge.

IP: Copyright and Trademark

Companies use copyright and trademark protection for works of
authorship such as music, writings, art, and forms (the copyright), and
any words, names, and symbols that indicate the source of the prod-
uct, such as a logo (the trademark). In the United States, copyright
protection lasts as long as the author is alive, plus 70 years. For corpo-
rate authorship, it lasts 95 years from first publication or 120 years
from creation, whichever is shorter. Many core products, such as
books and music, can only be copyrighted. The trademark, on the
other hand, can be very important for brand protection, and as long as
you use it and maintain it, you can renew its protection indefinitely.
But it must be maintained. If it becomes a generic word, it is no longer
a trademark. Nylon and aspirin, for instance, were once trademarks
but are now part of the normal English lexicon. So P&G does not real-
ly want the public to go too far in making a verb out of Swiffer, because
then it would not be able to keep its trademark. A way to avoid loss of
a trademark is to create two names for a new product—a trademarked
name and a generic name, such as Nutrasweet (trademark) and aspar-
tame (generic). The trademarked Swiffer logo, sweeping across the
product’s package, creates a memorable connection between the
product and the person who purchased it. For many product design-
ers, the importance of trademarks is not well recognized. Similarly, for
many engineering-focused companies, the importance of brand is also
undervalued, as is discussed further later.
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192 THE DESIGN OF THINGS TO COME

IP: Trade Dress

Copyright and trademarks do not address the look of the product
itself. A powerful emerging approach to protect the look of a product
over the long term is to establish a trade dress for the product. Trade
dress is probably the least understood but most important form of IP
protection from a long-term brand benefit. Trade dress is trademark
protection for the look of a product or service that associates the prod-
uct with the manufacturer. It is less specific than a design patent, but
similar, broader, and of longer impact. Like a trademark, as long as you
use it, you can maintain it. Trade dress associates secondary meaning
to the consumer that associates a nonfunctional feature of a product
or service to the product or brand in the public’s mind. Color is a typ-
ical approach to trade dress. Consider the “purple pill,” Nexium,
which has a purple capsule and three gold lines, or the brown of UPS
(“What can Brown do for you?”). Associating the color with the par-
ticular brand differentiates the product from the competitors.
Because the color, itself nonfunctional, is associated with the particu-
lar product, a secondary meaning is established, and no other drug for
acid reflux can be purple (especially with gold stripes), nor can FedEx,
DHL, or other package shippers use brown as their identifier.
For Swiffer, the darker green box and light aqua coloring for the
handle and base are differentiators that identify the Swiffer brand
over Pledge, Clorox, and all the others. Trade dress is an approach to
protect aspects of a product’s brand identity. It takes some time to
establish the secondary meaning for trade dress. The company must
work to establish that meaning and prove to the court that it intend-
ed to create that connection of the package to the product.
Companies can show sales success, the amount spent on advertising,
consumer surveys, and even consumer testimony as evidence of sec-
ondary meaning of the product feature with the product’s identity.
Think how much Nexium spends telling us that its pill is purple or
UPS to remind us that it is brown.
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CHAPTER 10 • CREATING A BLANKET OF IP TO PROTECT YOUR BRAND 193

IP: Trade Secret

One other tool in the legal system can be used to protect IP—the
trade secret. This is an option for some companies that want the com-
petitive advantage only until their product is released, or for those
products that cannot be reverse-engineered (harder and harder to
protect with today’s technologies). A trade secret is protected, obvi-
ously, by keeping it a secret, a more and more difficult task in today’s
environment, where employees frequently are hired away by com-
petitors. Coca-Cola’s recipe and Kodak’s emulsifiers are examples of
trade secrets; no one outside the company knows those formulas.
Technologies in fast-paced markets or fashion trends are often kept
secret until release, because by the time competitors catch up, the
technology or style will be outdated. The composition of the Swiffer
cloths might have been a candidate for trade secret. However, the
technologies available today for reverse engineering mean a high like-
lihood that a competitor would create an equivalent cloth quickly. As
it stands, although each cloth is actually different in performance,
without a pointed advertising campaign the average consumer will
never know the difference between the several cloths available in the
market.

IP: Provisional Patents

The cost of submitting a utility patent is high, requiring attorney fees,
time from the inventors, and document fees. However, many compa-
nies need to discuss their concepts with others to assess their value
and the potential payoff. Provisional patents are an inexpensive way
to provide a year of protection, after which a full utility patent is sub-
mitted; if the full patent is not submitted, all protection is lost. The
provisional patent is an excellent way to assess the concept but also is
a way to protect its patentability through inadvertent disclosure.
Although in the United States an invention that is disclosed is
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194 THE DESIGN OF THINGS TO COME

protected for one year before the patent must be submitted, public
disclosure sacrifices patenting rights in many countries, including
Europe and Japan. The provisional patent, however, is considered
protection from disclosure.
Provisional patents are also a powerful tool for start-up and small
companies. Not only do they give a company a year to make sure that
the investment is worthwhile, they also give those companies that
year to bring in the financial resources to pay the patenting costs. A
new company often counts on revenues or funding within a year’s
period, but the early years are also the critical ones to build the IP
necessary to compete and differentiate in the world of innovation.
Provisional patents are a strategic tool to enable protection of that IP.

Using IP for Brand and Product Life Cycle

The goal of a great brand is to leverage IP for the long term. If secrets
can be kept, the IP never expires. But there are other ways to achieve
IP benefits after patent expiration. A strategic approach initially pro-
tects a product’s hard functional and manufacturing qualities with
utility patents and its soft aesthetic aspects with design patents over
the length of their award period. During that time, the goal is to build
consumer recognition of the product and brand and develop an emo-
tional tie to the product. Trademarks and copyrights help build recog-
nition that is then carried over to trade dress. When the patents are
no longer valid, the product’s brand recognition and association, cap-
tured by the trade dress, will be strong enough to carry the majority
of the market share as competitors enter the market. The association
of the Swiffer colors and package with the Swiffer product connects
to the product’s brand identity and, because of the product’s perfor-
mance, provides a positive feeling toward the product.
Too many companies don’t appreciate the benefits of the full
range of IP protection. Many superior technology companies file
multiple utility patents with no thought about design protection. Few
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CHAPTER 10 • CREATING A BLANKET OF IP TO PROTECT YOUR BRAND 195

product developers consider trade dress protection. In the famous

legal case Traffix Devices v. Marketing Displays,3 Traffix had made
roadside traffic signs under the protection of a utility patent. The
patent protected the utility of a spring stand that allowed the signs to
be easily placed yet stand up to nature’s elements, such as wind and
rain. The patent expired, and Traffix then claimed trade dress pro-
tection on the look of the spring. It lost the case. Once utility is
claimed, nonfunctional elements of style or ornament associated with
the manufacturer can no longer be claimed. If Traffix had coated the
spring with a color to associate the ornamental aspect of the product
with the company, it could have claimed trade dress, and the long
association of the color with the quality product might have kept it
with a significant market share. However, trying to do so after the
patent expires is too late, and the company lost part of its product
equity in the market.

Patenting a Product System

P&G recognizes that innovation today is part of the complete pic-

ture of the product. Although focus on technologies yields patentable
components, a product is not just the technology but also the deliv-
ery and interaction of that technology. For many years, the techno-
logy was the focus, the function of a utility patent. In recent years,

3 Traffix Devices, Inc. v. Marketing Displays, Inc. 532 U.S. 23, 2001.
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196 THE DESIGN OF THINGS TO COME

P&G has recognized that the style aspect of IP is equally important.

It is not just the Swiffer cloths, it is the way people use them—the
design of the mop, the means of easily and single-handedly attaching
and then disposing of the cloths, the color choice and lifestyle con-
nection of the cloths to the busy person’s home life. All of this is sup-
ported by IP development and protection.
A recent example of a complete product system is the Mr. Clean
AutoDry Car Wash. The innovative cleaning technology, a clear
extension of the Mr. Clean brand, enables the car to be cleaned with-
out a bucket and to air dry without leaving a single spot. It’s a phe-
nomenal innovation in the drudgery and time to wash and then dry a
car. The product uses a patented polymer to clean the car and then a
micro shower of filtered water to, in combination with the polymer,
enable rapid air drying without spots. The patent-pending filter
removes the impurities that cause spots, and the system takes advan-
_
tage of Pur filter technology (because P&G owns that brand as well).
The product is a complete, patent-pending system that delivers the
soap, water, and filtered water in an easy-to-use handheld sprayer,
also patented, that attaches to a garden hose. A large button easily
switches between the three settings. The sprayer is comfortable to
hold, with a purple blue color tone and light lime green accents to
lead the user to any aspect that requires interaction. A special filter is
designed to easily fit into the unit, and a rubber stop with large pull
tab accesses the special soap container. The filter and soap refill each
last for about 10 washes, a setup that provides P&G access to a rev-
enue stream analogous to that for disposable razor blades or Swiffer
cloths. The instructions complete the system with clear visual com-
munication and engaging, humorous text. For example, in the
Frequently Asked Questions section, also available on the Web site,
after telling us that the product has a money-back guarantee for an
entire year if an unsatisfactory spot is ever left on the car, the ques-
tion “What will happen to my old bucket and drying towels?” is asked.
The answer? “To be honest, the employment outlook for
towels is grim…” Most important, the product really works!
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CHAPTER 10 • CREATING A BLANKET OF IP TO PROTECT YOUR BRAND 197

As an alternative to making the car wash system, P&G could have

sold separate components. It could have sold soap to be added to a
bucket and a simple filter attachment to a hose. In that case, the mar-
gins for P&G would have been lower. In addition, the lack of a sys-
tem would have led to a less complete or engaging experience of use,
and the likelihood of consumer misuse would potentially have result-
ed in a poorly washed car and failure of the product.

Patenting Product Manufacture and

Delivery
IP and its protection are critical to the success of innovation and
organic growth in all types of products and services. This also includes
the manufacture and delivery of the product. If you have kids, or
grandkids, or just act like a kid sometimes, you probably have visited
an amusement park in recent years. As you walked around, you prob-
ably noticed and maybe even tried Dippin’ Dots, “The Ice Cream of
the Future.” Dippin’ Dots are tiny pellets of ice cream that are served
in a dish. They are ultra-cold but melt on your tongue and, amazing-
ly, don’t give you that “head freeze” feeling. If you have not tried
them, you should; it is a great experience. Because of the individual-
ly colored and flavored pellets, the banana split has strawberry and
chocolate dots mixed in with the yellow banana ice cream, giving it
the flavor and look of a banana split. The cookies ’n cream is espe-
cially tasty, with ultra-frozen pieces of chocolate cookies mixed in.
The magic of Dippin’ Dots is in its manufacture and delivery, and
both are patented. Today more than a dozen patents, including a
design patent, protect the IP surrounding that magic. (Also included
is a utility and the design patent for a new innovation, “popcorn ice
cream”—ice cream that looks like popcorn.) The patents tell us how
Dippin’ Dots are made. The inventor, Curt Jones, is an expert in cryo-
genics, the science of producing and using very low temperatures,
recently used for the freezing of organs and flesh for medical pur-
poses. Jones took advantage of his knowledge to apply the technique
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198 THE DESIGN OF THINGS TO COME

to making ice cream. The cream mixture is dripped in a special way

through a very cold (below –100 degrees C) chamber. The cream is
flash-frozen into the pellets. The company maintains the form of the
pellets by keeping them stored at –40 degrees C. Most freezers are
kept at –18 degrees C (0 F), so the storage and delivery system need-
ed to be developed as well. The consistent identity has established
brand equity recognized throughout the United States and soon
around the world.
Every product requires services to support it, such as the manu-
facturing and delivery of Dippin’ Dots. Every service requires a set of
products to support it. Starbucks has several patents covering its roast-
ing process and support products, such as tumbler cups and lids, and
quite a few design patents that cover a variety of products, such as
chewing gum tins and environmental features such as light fixtures
and sconces, all working to define and maintain its brand identity.

IP in Summary
IP-smart companies embrace the full array of tools for IP develop-
ment and protection. Companies that want to plan for and establish
every aspect of protection, including the establishment of trade dress,
engage patent attorneys early in the process, not to handcuff the
process but to help establish directions where there has been little
innovation and IP protection. Regardless of how IP protection is pur-
sued, companies today recognize that international protection of their
IP is the best way to encourage and protect innovation from within.
Fundamentally, the reason IP is such an important part of the
puzzle is that IP helps define and protect the brand. The technology
innovation is protected by the utility patents; the style innovation is
protected by the design patents; and the product’s identifier, color,
package, and general presentation are protected by copyright, trade-
mark, and trade dress, which together define and differentiate a
product’s brand identity.
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11
TO HIRE CONSULTANTS
OR BUILD INTERNALLY—
THAT IS THE QUESTION

There are many talented product development firms throughout the

world, but not all companies know how to integrate outside product
development skills with in-house expertise. This chapter discusses
how companies can leverage the skills of product developers, both as
internal employees and as external consultants. What do they do,
how can they do it for you, which firm do you hire, and how do you
manage it?
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200 THE DESIGN OF THINGS TO COME

Binghamton, NY. At the monthly meeting with top management,

Paul Dinaro was chosen to head the new design initiative the compa-
ny wanted to develop. The CEO called him in and told him person-
ally, adding that it was possibly the most important thing he could do
for the company. The first two things Paul asked himself was whether
this was a promotion, and what it meant for his future career. Paul
had been in advanced research with a promising career to become
VP—if not at the current company, then certainly with a competitor.
But his company did not have a history of making design a priority.
He was given no instructions, and there were no guidebooks to go to
for this one. What to do? Should he find an outside firm to work with?
Should he propose a budget to hire a design staff, one focused on
product rather than technology, internal to the company? Would he
have to be the one to figure out where the budget would come from
to pay for all this?
This would be either the most significant growth step in his
career or the establishment of his career plateau, and there was noth-
ing and no one he could turn to to figure out which one it was. He
decided to give it three months, but he was also going to call his head-
hunter to put his name back on the active list. The problem is he
knew that companies are not plugging management in and out like in
the 1990s, so the opportunity for advancement by corporate hopping
was no longer the sure way to go.
A big problem from Paul’s viewpoint was his company’s uncertain
commitment to design. The current CEO liked design, but the CEO
was relatively new to the company. He had vision, but his vision was
not yet part of the company culture; it was still just a vision. He was
simply not sure if the company’s commitment to design was a long-
term one or just in a trial period. The company designed products,
sure, but its true technology was focus.
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The Power of Design

Problems such as Paul’s are pervasive in companies as they seek new
paradigms of innovation. Right now, there is increasing interest in
product development, and managers are faced with the challenge of
changing their company from a project-based one to a product-based
one. Businesses have long been familiar with the world of engineer-
ing, but business is still learning to understand other members of the
product development team, such as the role of product development
consultants and industrial designers.
As an example of the evolution of the interaction of business and
industrial design, consider how Business Week’s editorial page editor,
Bruce Nussbaum, became interested in innovation. Nussbaum is a
frequent flyer, and it was a particular flight that sparked his interest
in better understanding innovation. Near him was a mother with a
young child, the worst potential challenge to a quiet and uneventful
flight. As he anticipated, the child started to cry, and his mother gave
him a bottle to quiet him down. Usually, Nussbaum would have set-
tled back in his seat to get back to reading, but he noticed something
different. The child was holding the bottle in a unique way. The bot-
tle was split in the middle and formed an integrated handle that the
baby could more easily hold than the diameter of a conventional bot-
tle shape. He wondered who was responsible for the innovative
shape. The Evenflo bottle Nussbaum had observed led him to
become an advocate for good design. As an editor for Business Week,
he started to write articles about design for the magazine. This even-
tually led to Business Week’s sponsorship, along with the Industrial
Designer Society of America (IDSA), of the annual Industrial Design
Excellence Awards (IDEA).
Nussbaum’s groundbreaking articles have been instrumental in
expanding the understanding of the role designers play in new prod-
uct development, and he has probably done more to introduce this
type of innovation to the business community than any other
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202 THE DESIGN OF THINGS TO COME

contemporary writer. In the summer of 2004, Nussbaum wrote a

Business Week cover story, “The Power of Design,” an article that has
struck a major chord in the business world. Along with his role as edi-
torial page editor, he has been the design editor for the past decade.
Even though his articles have always helped connect design and busi-
ness, this article somehow made a deeper penetration than the oth-
ers. The timing of the article recognized the emerging theme of
design and innovation as the new force in American business and
major corporations throughout the world.

Using Product Development Consultants

This chapter is devoted to the struggle that companies face when
deciding whether to hire external product development consultants,
internal staff, or both. Because the best approach is “both,” the real
issue is to understand what to expect from external consultants and
internal employees. Although the internal-versus-external issues
apply to consultants other than those who help with product devel-
opment, the nature of our subject matter leads us to narrow our
focus. Though product development requires integrated contribution
from engineering, design, and marketing, at times in this discussion
we focus even more narrowly to discuss industrial design in particu-
lar, because this component is still the least known to traditional busi-
ness audiences in spite of increased interest in design.
Paul’s dilemma, shared earlier in this chapter, is one that man-
agers in many companies face. We have seen companies struggle with
the decision of who to hire, how to hire, where to hire. One midsized
company spent significant resources looking for a manager of inter-
action design, a new position because there was only one industrial
designer on staff. This company was shifting its resources toward the
direct consumer purchase market, and it realized it needed to be
more customer-focused. Design was a competency the company had
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always purchased through consultancies rather than developed inter-

nally. This new hire would get the chance to build the in-house team
and to work with external consulting groups. The management hired
a senior designer who had experience in consumer electronics. But
the company did not quite understand how to integrate the new
design focus with its existing skills and capabilities; nor did the firm
even know what inputs were needed for design or what outputs to
expect from it. For instance, the design manager was well-paid, but
the company did not make the financial commitment to hire needed
support staff. Nor did the design manager know how to work in the
existing company culture of engineering and marketing; he was
accustomed to working with design peers. As the newly hired design
manager began to instill change into the existing culture, the engi-
neering group resented the new approach and environment. The
design manager alienated the marketing group by usurping their pre-
viously held responsibility of hiring and working with design firms; he
requested that all design services, internal and external, be coordi-
nated by him. As a result of the internal conflict, he ended up leaving
his position, putting the company in the position it was in just three
months earlier.
Another example we have seen is a company that chose to work
with a well-recognized design consulting firm on a major product
redesign. For some reason, the product (not technology) that the
consultants designed just did not work well. The core product was
designed with an integrated add-on feature. Most of the consumers
would purchase the product with the add-on, but the company also
had to compete with a core stand-alone product for trade show com-
parisons. The consulting firm designed the add-on element but did
not create a look that would have made the combined product as ele-
gant as the base, the product itself. This was a classic case of some-
thing lost in translation. A thorough brand analysis conducted for the
company was not given to the consulting firm, so the new product did
not create continuity with the look and feel of an existing product. In
addition, the interface, which is so critical to the product’s use and
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204 THE DESIGN OF THINGS TO COME

acceptance, was also disconcerting in relation to the required perfor-

mance of the device. Was it the fault of the consultancy or the com-
pany? It turned out to be the fault of both. The company did not
properly articulate the product requirements. The marketing group
that hired and directed the consultancy was hands-off from the tech-
nical and interaction requirements, and the engineering group didn’t
deliver the correct details to the consultants. The consultants took
what was given to them with little question or further research of
their own to understand the full context of the product’s use. No
department took responsibility for the whole project—only for “its”
part.
These brief situations highlight some of the trade-offs of building
in-house design groups and the proper use of external product con-
sultants. Some companies have achieved this balance. Whirlpool
creates in-house teams committed to becoming experts who can sup-
port the wide range of needs of a particular brand. At the same time,
Whirlpool’s VP of Global Brands, Chuck Jones, has success-fully part-
nered with the best design consultancies in the world. This allows
him to complement the internal knowledge and understanding of
other internal organic capabilities with the awareness and methods of
the best outside talent. Jones realizes that complacency is the danger
of relying solely on in-house groups and that lack of continuity with
the company and market is the inherent challenge with consulting
groups. If blended properly, the strength of both can keep a compa-
ny in the best state of innovation.
Some companies exclusively hire external consulting groups to
turn their technology into complete-product solutions. This is espe-
cially true of small companies that cannot afford the resources to hire
an in-house staff. The first step in properly using consultants is to
understand their capabilities and methods. To help with your under-
standing of product consultants, we describe what is arguably
the most recognized product consultancy in the United States and
possibly the world: IDEO.
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Nussbaum’s Business Week cover story article also focused on

IDEO, because it is clearly one of the most exciting product design
firms in the world today. In the broader eyes of business, IDEO’s suc-
cess has repositioned design consulting firms from being extraneous
services companies to being core players in the innovation process.
According to Nussbaum, IDEO and other similar consultancies com-
bine a new approach to mining customer insights with a more effec-
tive integration of translating those insights into product criteria and
product form. This process, if coordinated properly, strengthens a
product’s position in the marketplace, clarifies its brand identity, sat-
isfies the end customer and other stakeholders, and generates greater
profit. It is the process of innovation as used by Dee Kapur, Chuck
Jones, and Edith Harmon from Chapter 1, “The New Breed of
Innovator.” If companies such as New Balance, Whirlpool, and Ford
are using the process of innovation and are seeking to grow organi-
cally, why do they also work with consultants?
Organic growth does not mean that every aspect of expansion
needs to happen from within. It does mean that growth needs to be
consistent throughout product lines and that new directions need to
be understood, embraced, and championed from within. Organic
growth is not about who performs the work; it is about whether the
growth in the company is consistent with its identity and abilities.
Sometimes new abilities need to be grafted on; the scenario at the
beginning of this chapter illustrates the possible dilemmas when that
happens.

IDEO: The Starbucks of Product Design

IDEO is now one of the biggest design consulting firms in the world,
but it competes with companies such as Accenture and McKinsey in
influence if not in economic scale. IDEO is a design firm for giants
such as Procter & Gamble, Hewlett-Packard, Eli Lilly, and Pepsi and
little-known companies such as Zinio, ApproTEC, and Picaboo. An
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206 THE DESIGN OF THINGS TO COME

ABC Nightline show titled “The Deep Dive” exposed the company to
the world at large, featuring IDEO’s redesign of a shopping cart in
one week’s time. IDEO has also worked on sophisticated medical
equipment, designed special effects for movies, and developed toys
for children at all cognitive levels and types of activity.
IDEO, now an international consulting company with offices in
Munich and London, has its world headquarters in Palo Alto, a city a
short distance from San Francisco, where many design consulting
firms started in the 1970s and 1980s to support the rapidly exploding
digital age in Silicon Valley. IDEO was founded by David Kelley in
1978 with an engineering focus. The company soon found itself in the
middle of three-way product trade-off negotiations between itself, its
clients, and the industrial design firms that were also hired for pro-
jects. The focus of many of these battles was the tradeoff between
aesthetics and technology. The clients finally turned to Kelley to ask
him to just deal with the whole issue. At the time, he was good friends
with Bill Moggridge, head of ID Two, an industrial design consulting
firm. Moggridge was a pioneer in the new field of design for digital
products. He coined the term interaction design, which has since
evolved into one of the biggest new areas of design, involving the
fields of computer science, human-computer interaction (HCI), and
communication design. Kelley and Moggridge were also friends with
Mike Nuttall, another industrial designer who had spun off his own
firm from ID Two. Kelley’s view, and the one he used when first start-
ing his business, was that if he were going to expand his capabilities,
he would work with friends and enjoy the process. In 1991, he
approached Moggridge and Nuttall with his idea, and together they
formed a left brain/right brain combination that would lead to the
biggest design consulting firm in North America. The combined
effect was far greater than the sum of the parts. This was one of the
early examples of merging engineering and industrial design into a
comprehensive product development consulting firm. Over the past
several years, IDEO has evolved beyond product design into a con-
sultancy that designs services, environments, and digital interactions.
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IDEO provides qualitative market research, helps companies talk

with their users, and teaches companies how to be more innovative.
One of its biggest clients is P&G. Not surprisingly, P&G’s CEO A. G.
Laffley is one of IDEO’s biggest fans.
Raised in a blue-collar town in Ohio, David Kelley studied elec-
trical engineering in college. Like Kapur, Jones, and Harmon from
Chapter 1, Kelley has a balanced comfort between art and science.
He chose to study at Carnegie Mellon because the school had a top
engineering program and a top art program. He was a generalist who
never wanted to dig narrowly deep into a field of engineering.
Instead, he took many art classes and was exposed to the multidisci-
plinary atmosphere that has been the hallmark of the university
(again, the theme of innovators having that balanced left and right
brain). After finishing school, he worked at Boeing and then National
Cash Register and then went to Stanford for a unique (at the time)
master’s degree program that combined engineering with an indus-
trial design-balanced creative approach. The program stressed cre-
ative qualitative problem solving and gave Kelley an entirely new
dimension to add to his engineering education to date. He then
became a doctoral student during the Silicon Valley boom. He found
himself consulting with all the high-tech companies and soon decid-
ed that product development practice was more his calling than an
engineering Ph.D., so he formed IDEO.
Soon after forming his new company, Kelley and his team
designed the first mouse for Apple. The core technology had been
invented at SRI (Stanford Research Institute), but it was too
unwieldy to use, too expensive, and too prone to failure to be sold in
high quantities. Kelley’s group focused on interaction of use and pro-
duction and developed a mouse that could be cost-effectively manu-
factured with subtle ergonomic features, such as covering the ball in
rubber. No one had ever held an interface to a computer in their
hands before, so it was a new world. Today, IDEO has more than 400
employees and has designed thousands of products.
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208 THE DESIGN OF THINGS TO COME

There are many reasons for IDEO’s success. Kelley says that real
innovation comes from understanding humans and their needs as
individuals and groups. IDEO’s approach is to understand how peo-
ple interact with the world around them and to balance that with
technology and business points of view. IDEO hires a wide mix of
people with a variety of backgrounds. Social scientists, for example,
are key to understanding real users and real needs. At IDEO, the cul-
ture of innovation is above all else.
To enable that culture, IDEO hands over responsibility to the
work teams. IDEO is divided into small groups, each of which is
responsible for its own profit and loss, which directly affects bonuses.
In IDEO’s view, the more decisions that teams can make themselves,
the better. People need to control their own decision space and
understand those parts that they cannot control. If a boss dictates the
rules, the team cannot understand them or be part of them, prevent-
ing buy-in to the philosophy of the rules. When IDEO is called in to
a client organization to audit its innovation capabilities, hierarchical
structures are often the main deterrent. As Kelley says, “Creative
people don’t like the boss’ boss’ boss affecting their lives.” Rules lead
to less creative cultures. Put differently, giving teams responsibility
sets up the proper incentives for them to perform. In IDEO, for
example, a team is responsible for its own rules on coffee clubs. If
coffee is free, the team’s profits are down, but free coffee is a benefit
that encourages interaction. On the other hand, if the team charges
for coffee, that money can be used to buy equipment, improve the
office environment, or be donated to charity. Although this example
is seemingly trivial, this and other more far-reaching decisions are
made by each group, empowering the team members to create the
environment in which they want to work.
IDEO also believes in an innovation process that provides a
framework for design without precisely dictating each step. The team
does need to work through specific steps to accomplish the process
goals laid out. But each step cannot be so precisely specified that
there is no, or even little, room for exploration and change. The
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process IDEO uses must be as dynamic and innovative as the results.

This does fly in the face of most companies, which look for and try to
lock onto one process that must replicated. IDEO even finds itself
adapting the best practices from its client companies and others to
improve its own innovation process.
Finally, Kelley says that the biggest deterrent from innovation is
fear. If everyone is afraid of being fired, of having your boss or even
colleagues chastise you for mistakes, you move to survival mode with
layers of protection. When you are in survival mode, where you don’t
want to make mistakes, you are no longer innovative, because inno-
vation requires risk.

The Consultant Menu

IDEO for product design is like Starbucks for coffee. Other great
product development firms exist and can be hired. Many predate
IDEO. But IDEO has created a brand and quality level that is rec-
ognized throughout the world. It offers a premium product at a pre-
mium price. It keeps innovating, offering new skills and services for
its clients. Pittsburgh, home to two of the authors, has several
Starbucks coffeehouses. But there are also a suite of other excellent
choices, local brands that have followed Starbucks’ lead but created
their own personality and product offerings. Many services of these
coffeehouses are good, just as good as Starbucks (if, at times, not bet-
ter), or offer an interesting variation. But none of them offers the
range of goods or consistency in experience that one finds in
Starbucks throughout the world. Many of them are less expensive
than Starbucks.
The same is true for product design firms. IDEO is the spearhead
of a movement that is sweeping the best companies and product con-
sulting and strategy branding companies. Many talented product
development firms throughout the world and in every local commu-
nity offer creative and complete services, even if they don’t have the
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210 THE DESIGN OF THINGS TO COME

visibility of IDEO. For many companies, local product development

firms can provide services that otherwise are not afforded through in-
house support. Many of the larger firms can provide insights and
results that establish a strong brand presence in any market.
Not all companies can afford to hire IDEO, but all companies
can afford many local specialty firms that can similarly provide high-
quality services that meet the needs of a growing organization. What
is important is to recognize that, whether grown in-house or pur-
chased externally through consultants, these capabilities are critical to
the success of innovation-driven companies. Recall the problem that
the company discussed earlier in this chapter had with its lack of
communication with its consultants. Whether innovation is sought in-
house or externally, a company must understand the tools of innova-
tion to succeed.
So, what are some of the various product-related consultants?
What can they do for your firm? An ad agency controls all channels
of communication, including print, Web, and television. It also coor-
dinates communication design services. You might want to hire a
brand development company that specializes in branding. It focuses
on a company’s identity and branding message and overlaps with
advertising companies on the services they provide. Branding firms
focus more on identity, whereas advertising firms focus on the distri-
bution of your message. There are product development firms that
vary from turnkey consultants who can do every phase for you, such
as IDEO and Product Insight (discussed next), to specialists who are
engineering-focused or industrial design-focused. These services vary
significantly. Engineering firms tend to be highly specialized by area,
such as heat transfer or structures, diagnostics, and manufacturing.
Industrial design firms vary by type of product and scope of service.
Some industrial design consulting firms specialize in medical prod-
ucts, and others in toys, and some other firms focus on consumer
products, computers, and digital equipment. Still other firms just
specialize in point-of-purchase or even trade show booth design. The
trend for most consulting firms is to try to offer a greater range of
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design services. Many industrial design and engineering groups are

merging and offer full product development services. The biggest
product development firms also provide research, packaging, and
point-of-purchase design. Many other firms offer communication and
graphic design services. These companies can design logos and iden-
tities, but at a different scale and cost than branding companies.
Some firms just specialize in Web design.

Product Insight: Customer Research and

Design
An important element that should underpin any of the tasks men-
tioned in the previous paragraph is customer/user research. Some
hired consultants expect that the firm will provide the research,
whereas other consultants conduct the research themselves. The
research itself can even be outsourced; there are firms that specialize
in the type of research that is critical for product insights, like ethno-
graphic tools developed by anthropologists. Ethnographic methods
include observation, in-depth interviews, and other methods of qual-
itative user research. These techniques are complementary to mar-
keting tools and are especially effective in the early stages of product
development and for maintaining a healthy dialogue with customers.
Companies vary significantly on how well they integrate these con-
sumer research techniques with the standard quantitative large sam-
ple techniques traditionally used by marketing.
Consider Product Insight in Boston. At Insight, Elizabeth Lewis
heads one of the largest customer/user/people-centered research
groups in the United States. Most projects at Insight start with Lewis
and one of her teams. Lewis is an ethnographic researcher. She
has her degree in anthropology and started her career under the
direction of Liz Sanders, one the pioneers in the field of product
ethnography, while working at Fitch in Columbus, Ohio. Fitch did
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212 THE DESIGN OF THINGS TO COME

some landmark work with companies such as Xerox and Texas

Instruments. Both Lewis and Sanders left Fitch, Sanders starting
her own firm, Sonic Rim, and Lewis moving to Boston to work at
Product Insight.
Product Insight is one of the few companies that can routinely
sell its product research as a core competency. Although Insight is a
complete product development firm, companies often just hire it to
conduct research to find emerging opportunities. Lewis learned to
apply her anthropology education to design better products and ser-
vices. She went from studying subcultures in a nonapplied context to
using her education to determine how to design better products and
services. She also learned how to effectively hand off research
insights to a product development team. One difficulty many firms
have is making that conversion, understanding how to convert the
product research findings into features and form. Their process is
similar to IDEO, and Insight realized that the research teams should
have industrial designers and engineers as well as psychologists, soci-
ologists, and anthropologists. Many industrial designers can conduct
product research because they have backgrounds in human factors.
But they also have excellent observation skills. Social scientists are
trained to observe human nature and infrastructure and convert
those findings into observed patterns and tendencies of behavior and
preferences. Engineers bring an additional perspective to the
research through task analysis, functional reasoning, and statistical
analysis. Together, the group understands what the product develop-
ment team needs to turn this research into product or service fea-
tures and form. No one ever asks Lewis to look for cheap insights to
lower the cost of their products. Instead, the group is always looking
for observations that will lead to innovative shifts in the way products
function or look in a marketplace.
Lewis and her team at Product Insight were approached by
the Aearo Company to look for new insights into how people
wear respirator masks. The company was looking for a way to use
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innovation rather than cost cutting to compete with its main rival,
3M. It seems that 3M not only owns the tape and Post-it markets, it
also owns, the low-cost end of the respirator mask business. 3M’s abil-
ity to control the price of material cost allows it to drive the cost so
low that competitors cannot compete at a profit. Aearo was wonder-
ing how to stay afloat. It did not just hire Insight to design a new
mask; Aearo hired Insight because it also has the talented user
research group so important for this task.
Lewis and her team observed mask users and had several
insights. They studied people who wear their masks extensively
throughout the day. It was not a big deal to find out that people hate
to put their masks on in the morning and take them off at night. Most
masks have thin headbands that tangle hair and put annoying pres-
sure on the wearer’s scalp. The surprise came from watching these
workers on breaks. Because of the awkwardness, no one wanted to
take the mask off during every break. Instead, they slid the mask
down onto their neck, moving the tension onto their throat. People
can take 5 to 10 breaks a day. Most breaks are for smoking cigarettes,
an irony not missed by the team at Insight. The opportunity was to
make the mask easier to deal with on breaks, as well as to put on and
take off. The solution was an award-winning mask with an ergonom-
ic insight that allowed Aearo to charge more for its masks and get the
sales. Product Insight developed an innovative release latch that
allows the wearer to release the front of the mask, thereby relieving
the tension. Because the wearer lifts the mask back onto the face by
closing the latch, the attachment around the head does not have to be
made of thin elastic material that pulls over the hair. A cup at the back
of the head keeps the mask in the right orientation for closure and
helps maintain a more comfortable position while worn. The mask
costs more to make, but the profit margin for Aearo is far greater than
anything it could have made while trying to compete with 3M
by cost.
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214 THE DESIGN OF THINGS TO COME

In the case of Aearo, Product Insight helped save a company and

made the respirator mask industry more competitive by driving up
the value of innovation. The most important outcome of this design
project for the worker is that more people will wear their masks.
Compliance with wearing masks was previously found to be a big
problem. If a mask design is better and more comfortable, the com-
pliance of employees, and the possible reduction in insurance rates,
will more than pay for the higher cost of the mask. The employees’
improved working experience may also mean fewer sick days and
reduced turnover, both major problems for industries that require
respirator masks. The cost implications of these problems have far
greater impact on the bottom line than a slight price increase
per mask.

Hiring to Balance Soft and Hard Quality

The type of design developed at Product Insight, IDEO, and other
top-notch consulting firms is a new level of practice, a meta level
above the subfields of design engineering, industrial and communi-
cation design, marketing, and computer science. On the one side,
there is product design, communication design, interface design,
interior design, and architecture; on the other side are computer sci-
ence and HCI, systems engineering, electrical engineering, mechan-
ical engineering, chemical engineering, materials engineering, and
civil engineering. These two categories have long been viewed as
polar opposites, with marketing, sales, finance, and strategy somehow
living in the corporate space in between. The companies that are
making a difference today are taking the structure of the modern cor-
poration and developing a new model, a model in which these disci-
plines work together in cohesive, semiautonomous teams. It is a
model in which people are central, where project teams practically
become entrepreneurial start-ups, a veritable set of small companies
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within the larger company. This approach allows the product teams to
get close to the customer. This must all be coordinated in a way that
allows the larger corporation to manage the corporate identity and
connect in more significant ways to society at large.
We consider two dimensions, or qualities, of innovation—the
hard and the soft. Hard qualities are the more traditional engineering
qualities, such as manufacturing, technology, environmental, and
ergonomic specifications. Soft qualities are the emotion, aesthetic,
brand identity, social, and interaction aspects of a product or
service—those that integrate into and define lifestyle.
Companies that integrate both dimensions of innovation have a
significant competitive advantage. The challenge is to make room for
the company’s soft-quality aspects—those that create the look, feel,
and emotion of products and services. There are several dimensions
of soft-quality management to consider. The first is economic. Soft
quality is not a cost; it is its own profit center. This psychological and
philosophical shift is important. Whirlpool, Nike, Apple, VW, and
BMW understand this, and so does P&G. Starbucks started that way.
The automotive industry has been working to balance soft and hard
quality ever since Harley Earl’s new designs for GM in the late 1920s
forced Ford to close down to respond to the infusion of design and
market segmentation. Other companies tend to go back and forth at
the whim of the current CEO, with design growing and shrinking
every few years. HP bought Compaq because it could not grow con-
sumer innovation internally. The main thing is that budgets and com-
panies need to be realigned to understand the investment (not cost)
of doing business in an emotionally driven world.
Whether developed internally or hired externally or both, soft
quality is not seen as integral to corporate strategic planning, nor is it
viewed as an essential component of an entrepreneurial start-up pro-
posal for venture capital. Companies are not measured by the ability
to be innovative as a subset of economic success. There is a need to
develop new types of measures to effectively determine success of
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216 THE DESIGN OF THINGS TO COME

innovation and its direct impact on the bottom line. These measures
need to be core to the planning of any company, regardless of scale.
Investing in innovation will yield return. It is essential to sustained
growth and brand continuity. This is not a cost that companies can
debate whether to include, but a new line item that must be allocat-
ed to support growth. When computers became a standard in busi-
ness operations, companies invested inordinate amounts of human
and technical resources to improve efficiency. During quality initia-
tives such as Six Sigma, companies also invested heavily in consulting
and the development of internal quality policy procedures and
human resources to improve manufacture. The need for these initia-
tives was clear and the principles fairly easy for executives in compa-
nies to learn and adopt. Today, companies must invest in soft-quality
initiatives to excite customers and integrate into their lives.

Managing Design
The next issue is who leads soft quality in the company. Companies
vary on how they manage soft quality. It may be centralized or decen-
tralized. Companies can have one VP in charge or allow division man-
agers to hire and coordinate design and branding as independent
agents. A vice president or director from marketing may be asked to
take on the design and branding assignment, or a new person from
design, branding, or advertising may be brought in. Design and
branding may be split with the former under the auspices of engi-
neering and the latter marketing. Most of the senior management in
companies today have been taught and worked under hard-quality
(manufacturing-based) and cost philosophies. A major problem
facing companies today is that few engineers, particularly senior engi-
neers, and few in marketing and sales have the skills to manage
the range of product design services, in the broadest sense, that are
needed to develop a comprehensive approach to innovative organic
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CHAPTER 11 • TO HIRE CONSULTANTS OR BUILD INTERNALLY 217

product and service development. Yet industrial designers have not

been taught how to effectively navigate or manage within the busi-
ness context. As well, when industrial design managers are hired, they
often seem like an immigrant landing in a foreign country. They speak
a different language and find a culture that works based on com-
pletely different assumptions.
Looking at the military for an analogy, we know that the best
strategy of defense is a combination of land, sea, and air (and cyber-
space as well). One of the biggest problems in World War II was get-
ting the different branches of the U.S. armed services to work togeth-
er, never mind to coordinate with the Allies. You would never take a
general and make him an admiral. In sports, how many NFL football
coaches could manage basketball in the NBA? Many companies think
they can do this without hesitation. The ability to grow managers for
the new innovation culture is a tremendous challenge facing compa-
nies. It is not just adding services, but managing the existing hard-
quality divisions with an understanding of the new soft-quality play-
ing field. The Joint Chiefs of Staff have to be intermilitary in their
approach to battle to be effective. In World War II, D Day was the
biggest logistics event in history, led by Dwight D. Eisenhower, one
of the most enlightened military leaders and arguably the definitive
new military leader for the modern era. Every company today faces
the same logistical and political challenges facing the military. The
ability to combine logistics, politics and, from a global sense, cultural
awareness into a coordinated strategy is the key to success in global
markets.
Some companies have turned to the use of innovation festivals
and mini-conferences. Experts are invited to come in and throw
buckets of innovation water at thirsty but overworked employees who
are forced to add this new demand to an already overburdened
schedule. At the least, it means reeducating a significant number of
employees and hiring new types of workers. It is not surprising that
directors of product programs often find it easier to put their trust in
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218 THE DESIGN OF THINGS TO COME

a creative turnkey consultant group. Even with that alternative, the

need to manage and direct external innovation teams and connect
them with internal brand issues is another type of challenge. The
basic question is how many executives are willing to relearn how to
manage in an era driven by innovation?
The world of sports offers insights that are an appropriate refer-
ence for integrated management. One reminder is the importance of
the team, and the other is the role of the coach. Consider the Chicago
Bulls of the 1990s. The Chicago Bulls won championships because
Michael Jordan was a team player who excelled as an individual for
the betterment of his team. When the Bulls won their first champi-
onship, it was because Jordan made the perfect bounce pass, not
because he made the winning basket. The pass was made in a split
second with just the right touch of reverse spin so that John Paxson
got the ball at the perfect height and speed to follow through just the
way he liked it. The team’s precise execution produced the desired
outcome. Jordan’s success reached its greatest fulfillment when he
realized that no matter how good he was, he could not win a champi-
onship without helping to make everyone around him the best they
could be. As the result of personal commitment and team integration,
Jordan not only led the Bulls to six championships, he also became an
international symbol of excellence.
Yet it was not Jordan’s talent alone that helped the Bulls succeed.
For behind the individual players was coach Phil Jackson, who turned
a group of talented, egocentric individuals into a high-performing
team. Jackson taught Jordan to partner with Paxson, Scottie Pippen,
and Dennis Rodman (the “bad boy” of the NBA at the time), among
others. Then, Jackson won three more championships with the LA
Lakers and the talented egos of Kobe Bryant and Shaquille O’Neal.
The challenge for managing innovation teams is not finding the
talented individual Jordans (although they are always welcome), but
integrating the existing talent into a high-performing team; that is the
management style of the new breed of innovator. Each individual
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CHAPTER 11 • TO HIRE CONSULTANTS OR BUILD INTERNALLY 219

must be recognized for his or her strengths, and each individual must
respect the strength of the others. Forget the Donald Trump factor
of who is fired and who fits the mold, and get with the Phil Jackson
factor: Figure out how to make the most of the talent you have, and
produce something extraordinary!
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Epilogue
THE POWERS OF
INNOVATION—THE NEW
ECONOMY OF
OPPORTUNITY

The drive for innovation is being fueled at all levels of the human
scale. At one extreme, empowered individuals employ their personal
resources. At the other extreme, countries develop national programs
to support innovation. Innovation is being applied to single products
and to the development of cities. You, the reader, work and live on
this scale and can innovate to the profit of your world. How can you
enhance your own unique abilities and then connect with a team to
produce something better than any one person could?
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222 THE DESIGN OF THINGS TO COME

This book is about deconstructing the process of innovation to reveal

the steps necessary to develop successful new products and services.
It is about opportunity and the new global economy driven by that
opportunity. This book is also about people, about the new breed of
person who envisions and develops complete products and services
and about the people who purchase and use those products.
Innovation is pragmatic to product developers and life-altering to the
individuals and societies who use the new products.
As society adopts and adapts to a global infrastructure of busi-
ness, as individuals demand new useful, useable, and desirable prod-
ucts that flawlessly integrate into their lives, as global resource
demands change, and as new technologies enable possibilities, inno-
vation will drive a new economy of opportunity. This epilogue focus-
es on people and opportunities in this new economy, exploring addi-
tional examples of dynamics in social, economic, and technological
factors at various levels of the Powers of 10, discussed in Chapter 6,
“The Powers of Stakeholders—People Fueling Innovation”: new
individuals, organizations, market segments, regional impact, global
economy, and the new renaissance team of innovators.

The Power of the Individual

Sally just started her new job. Her first assignment is to be part of a
team to explore potential new business opportunities for her compa-
ny. Although the company’s products are selling well and are its core
profit center, all projections predict that profit will plateau. Growth
has already leveled off. Sally’s team is asked to find new service
opportunities using the company’s industry expertise from its prod-
ucts. This way, the company’s products will still be a part of the com-
pany but will be leveraged in a comprehensive strategy for servicing
the customer, not just supplying the customer.
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EPILOGUE • THE POWERS OF INNOVATION—THE NEW ECONOMY OF OPPORTUNITY 223

Sally will be working on a team of eight people, all from varied

backgrounds. Her education has prepared her to work with diverse
groups. She enjoys the exchange in teams and always learns some-
thing new from the different perspectives of the team in analyzing
user research and, in particular, the insights from interacting with
those customers. Sally has figured out that you learn not only by lis-
tening to and observing customers but also by involving them in the
product development process.
It is clear to Sally that the team manager will be great to work for.
When building the team, the manager made it clear that she does not
want to micromanage. Her role is to support, energize, and optimize
the team’s capabilities. The team has no idea where they are going,
because the mandate is purposely open; they have been given only a
sense of the opportunity. Everyone seems comfortable with that gen-
eral directive, and they are excited about the opportunity to define
their own direction. Sally knows that this will be the focus of the next
six months of her life. At the right moment in the project, she will start
to think about what comes next, but all she can think of now is the
potential of the task at hand.
Sally represents a variety of innovators; she could have a degree in
engineering, industrial design, information design, human-computer
information, marketing, entrepreneurship, sociology, or any of numer-
ous other fields. Throughout the world, universities are graduating the
new breed of innovators. They are coming to business opportunities
with a new fusion of skills, shaping how products are developed. In the
current marketplace, the value of a corporation is increasingly found
in its knowledge workers and less in uniquely owned business process-
es. These workers not only have a core expertise, they are also com-
fortable working across companies in integrated product/service
teams. This fusion of individual and team is a power that will fuel the
next wave of innovation.
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224 THE DESIGN OF THINGS TO COME

The Power to Redirect the Company

Xiangyang Wu was told that he would soon leave the company head-
quarters in Shanghai to work for two years in the U.S. plant. His job
is to help understand the needs of consumers in the United States.
He had just finished working with a consultant from the United
States who the company hired to teach them how to develop their
own products. To date, the company had been a major supplier, man-
ufacturing furniture for other companies in Europe and the United
States, but it had not entered the realms of product design or mar-
keting.
The company’s goal now is to develop its own furniture and cre-
ate a unique brand and line of products for the United States.
Management has decided to bypass the traditional route of starting in
low-cost markets and working its way up the quality ladder; the goal
is to produce premium furniture from the beginning. Management
does not want to undersell the competition; they want to be ahead of
the competition by introducing a new style influenced by Chinese
heritage.
The company wants to create its own brand. Market trends
appear to be in its favor with the growing interest in Asian-influenced
products. The challenge is to find the right balance of current U.S.
taste and to blend that with the right features of Chinese furniture.
Xiangyang is an expert in the history of Chinese furniture, and his
new assignment is to become an expert in the emerging tastes of the
high-end U.S. market.
China and its companies have arrived on the international stage.
The rise of the Chinese corporation brings with it amazing opportu-
nities and serious challenges for other companies around the world.
The Chinese-as-cheap-labor model has already changed. The
German firm Siemens, whose strength has always been its German
engineering, now relies on Chinese engineers for many products. The
Chinese company Haier has a plant in the United Sates in Camden,
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EPILOGUE • THE POWERS OF INNOVATION—THE NEW ECONOMY OF OPPORTUNITY 225

South Carolina, and has already become a significant market player

in several U.S. white goods markets. In 2004, the regional
government of Wuxi, China, organized an international conference
on design. Its award ceremony had more than 25,000 people in atten-
dance. During the conference, a design executive from Haier gave a
presentation about his company’s strategy for global expansion,
revealing how the company already has established product develop-
ment centers in several countries to acquire a sense of the emerging
needs of those markets. These centers have a blend of designers,
engineers, and marketing from Europe, the United States, and Asia.
The Chinese government is supporting the move of China-based
companies from being component suppliers to original design manu-
facturers. Just as Japanese and Korean companies have accomplished
in the past 30 years, China is ramping up economically using global
resources and knowledge to accelerate its economic growth. No com-
pany today can avoid responding to this new global force. The only
true competitive advantage left for companies in the West and across
the globe is innovation.

The Power to Expand the Market

Jim Pirkl has “retired” from his job as a professor at Syracuse
University, although retirement is really a synonym for a new career.
Jim was an early proponent of universal design and coined the use of
the word transgenerational, a term for products that span the gener-
ations of needs. The theory is simple: As you live through the decades
in your life, your needs and abilities change. The world already focus-
es on the development of products and services for youth markets
and for people of average or greater physical and mental capabilities.
The average person peaks in physical ability in his mid-20s, plateaus
in his 30s, and starts to lose ability after that. The rate at which one
loses ability is a factor of genetics, environment, personal habits, and
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226 THE DESIGN OF THINGS TO COME

accidents and illness. At some point, usually in his 50s and 60s, each
individual becomes less physically and cognitively able and starts to
need support systems and devices. Pirkl’s goal is to slow down the
impact of the process by helping develop solutions to living that allow
a person to age gracefully in his or her own home.
Jim now lives in New Mexico and has made retirement his new
business. His house is featured by AARP (the American Association
of Retired Persons) as a model home for people to age into. After half
a century of product and service development being focused on the
youth markets of 10-to-30-something, the post-65 retirees have
become the new market of economic power and consumer expecta-
tion. The youth market is still valuable to capture, both for its spend-
ing power and for developing long-term loyalty. Buy a Chevy and
move up to Cadillac and stay in the GM family. However, with cur-
rent life expectancies, with the size of the aging baby boomer seg-
ment, and with its volume of disposable income, the post-65 market
has become an age range worth marketing to.

The Power to Redefine Our Local

Environment
At the next Powers of 10 of product development are issues that
affect regions. One aspect of regional issues focuses on limited
resources and our ability to seek ways to save resources or develop
alternatives. William McDonough and Michael Braungart address
energy loss and pollution reduction through economically viable
approaches. They are creating manufacturing facilities and buildings
that eliminate the need for waste inspection. When water coming out
of a plant is cleaner than the water going in, the plant is beyond the
standards. The environment improves, and the costs of inspection
and rectification decrease. The point McDonough and Braungart are
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EPILOGUE • THE POWERS OF INNOVATION—THE NEW ECONOMY OF OPPORTUNITY 227

making is not to shoot for a world of compliance but to design around

the issue altogether. Rather than decide to meet a government-
assigned number on pollutants that equates to “not too much dam-
age,” they think out of the box and create positive architectural struc-
tures that actually participate in the environment they are built in. By
focusing on the larger picture, their approach actually saves the com-
pany money in the end. To do this means starting with a new way of
planning that takes into account more Powers of 10 in the design
process.
Two problems with modern buildings are that they often create
interior cubicles that block people from getting sunlight, and they use
artificial climate control. McDonough designs buildings that allow
everyone to have access to direct sunlight with windows that can open
to let in outside air. Natural airflow and sunlight help people stay
healthier and make for more positive work environments. In addition,
the materials most buildings use leach toxins into the air as they age,
a major problem for allergies and respiratory issues in general.
McDonough and his partners have generated a list of acceptable
building materials and developed new ones of their own. Their roof
concepts contribute to the environment by becoming natural exten-
sions of the location they are in. The roofs breathe and return oxygen
to the environment, they become a home for wildlife and restore the
natural balance of the ecosystem, and they insulate sound and tem-
perature for their interiors. Besides better work conditions, healthier
employees mean fewer illnesses and lower insurance costs.
Ford Motor Company hired McDonough to redesign its River
Rouge plant in Detroit. Originally built in 1917 by Henry Ford to
turn raw iron into Model-A cars, the site became an environmental
disaster. Beginning in 1999, McDonough led the $2 billion redesign
of the complex, making the land prairie again with plants on living
roofs. Not only is the environmental impact reversed, but Ford
believes the investment will make economic sense as well.
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228 THE DESIGN OF THINGS TO COME

McDonough’s next big regional challenge is no surprise. He is

part of a U.S. and Chinese team designing new cities in China. The
issues that most people have seen as problems, McDonough and
Braungart have turned into opportunity. Their approach can be
achieved only through innovation and a passion for finding the best
possible answers for complex problems. Just ask Nike, Ford, and
Herman Miller.

The Power of Shifts in the Global

Economy
Ten years ago, the IDEA awards program coordinated by Business
Week and IDSA went from being a U.S. product design competition
to a global competition. The annual spring issue of Business Week that
describes these award-winning products is one of the best annual
showcases of business innovation. When the program committee con-
sidered whether the competition should remain an exclusively U.S.
competition, they found they had no choice but to make it interna-
tional, because there were no longer any exclusively U.S. businesses.
Samsung develops products around the world and has developed
products in the United States for a U.S. market. It is no longer clear
what makes a U.S. product American and a Korean product Korean.
The Honda you might drive is manufactured in Marysville, Ohio.
New Balance keeps 20 percent of its manufacturing/assembly in the
United States, whereas Nike does not. So is New Balance more of a
U.S. company than Nike? Is it better for a global athletic sports shoe
company to be seen as centered in any one country? The help line for
Dell computers is in India, but the corporate headquarters and
assembly plant are in Texas, and some of its parts manufacturing is in
Asia. Ford Motor Company now owns Volvo and Jaguar, and Daimler
clearly owns Chrysler. The concept of the Big Three in the U.S. econ-
omy is no longer a reality. It is no longer clear what nationality many
of these companies are, and it may not really matter.
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EPILOGUE • THE POWERS OF INNOVATION—THE NEW ECONOMY OF OPPORTUNITY 229

The interconnected world marketplace is fundamentally differ-

ent from that which the United States inherited as a world power in
1945 after World War II, and the needs of consumers are becoming
more defined and segmented. Many companies that thrived in the
era of mass manufacture and in large predictable markets are
strangely caught between outdated and emerging models of product
development. Identifying the needs of emerging trends in global
marketing and finding innovative offerings of products and services
are fundamentally different from figuring out how to develop an
assembly line to make an automobile that is cheap enough to afford,
or developing a system for distributing electricity in a city. Few peo-
ple talk about the system that supports cell phones. In the modern
marketplace, everyone talks about the look and feel of the phone, its
bonus features, and what the service is like. No one is amazed by cell
phones; they just expect them to work and fit into their lifestyle.
Countries such as India and China went from limited phone access
to high saturation as a result of the minimal infrastructure and low
cost to create cellular systems. These countries went from the pre-
industrial age to the information age almost overnight.
As another example of the new world order, consider Finland. In
recent years, Finland has been considered one of the most efficient
countries in the world. Finland has the least corruption of any country
in the world, it has an exceptionally high literacy rate, and it has a
homogenous culture dedicated to being the best at whatever it does.
The government has been investing in a program called “Finnovation”
to build economic growth and global expansion. The Fins excel in sev-
eral areas, such as cellular communication, cruise ships, freight lift
equipment, logging products, and crafts and aesthetics in glassware
and jewelry. The companies in Finland are joining with a collaborative
effort of integrated research with universities of design, business, and
technology to turn the country into Finland Inc.—a clear instance of
knowledge companies helping to create a knowledge country built
around integrated innovation.
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230 THE DESIGN OF THINGS TO COME

The Power of the New Renaissance

Companies that develop new products and services do their best to
meet the needs, wants, and desires of society today. These needs
change, and products and services that meet wants of the past will not
perfectly fulfill future desires. No one can predict how society will
evolve, but human beings have a hand in directing that evolution
through the design of products and services. The common thread that
connects the advancement of products and services, such as the OXO
vegetable peeler and Starbucks coffee, to technology changes such as
the Apple iPod for music delivery, to the Prius hybrid and future
alternative-powered vehicles, is that they must be designed! These
designs are all part of the human-driven evolution that exists in con-
nection with or in spite of natural evolution. For better or worse, they
drive economies of production and consumption. The cycle will not
change, and innovation will continue to evolve, because the social,
economic, and technological (SET) factors are constantly changing.
These opportunities are complex and multidimensional.
Solutions today must be skillful translations of an increasingly sophis-
ticated global market that is informed and educated by an interna-
tional infotainment network that relays the latest trends instantly to
the far corners of the earth. Solutions today require innovation with
respect to all aspects of a product—its connection to human emotion
as well as its technical ability. No one can afford to be a disciplinary
ostrich achieving isolated excellence, because design requires the
integration of a vast and diverse set of skills. Just as important as the
skills of creating are the skills of understanding others in the context
of ever-changing SET factors. A product is developed by people for
people. The human dimension is central to the process and to the
outcome.
Leonardo da Vinci was part artist, scientist, and engineer. He
painted; developed anthropometric data; designed machines for
flight, weaponry, mechanical work, and more; and even conducted
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EPILOGUE • THE POWERS OF INNOVATION—THE NEW ECONOMY OF OPPORTUNITY 231

ethnographic-based studies for his work. da Vinci was more than an

inventor, someone who painted, or someone who made discoveries;
he has become the symbol of a broader, more expansive way of think-
ing and working. The term Renaissance man has been used to
describe him as a person who was the epitome of a period in time
when Europe emerged from the Dark Ages, and his ideas represent-
ed a multidisciplinary way of thinking. We are in a new economic age
that is in need of a new Renaissance in product development, one
that leverages multiple minds working in concert. A “Renaissance”
image that is more appropriate to our time than “Renaissance man”
is that of a “Renaissance team,” a group of people dedicated to mak-
ing the most of the art and science in all that they create and design.
The people highlighted in this book as the new breed of innovator
understand the power of teams to achieve extraordinary innovation.
They were not born innovative, but they learned how to excel as lead-
ers of innovation.
Everyone who embraces the principles and ideas of pragmatic
innovation—an interdisciplinary collaboration, a structured process
of exploration, a balance between art and science, a focus on experi-
ence and fantasy—can grow into this new breed of innovator. Those
who understand and practice these principles are the people who will
define the directions of new products, who will lead the design of the
new experiences that form the global economy of opportunity, and
who will inspire others with their vision and understanding of a
process that yields extraordinary innovation. These are the people
who will design the extraordinary things to come.
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INDEX

3M, 213 B-to-B innovation

1100 Ultra Trail Shoe, 15 industrial products, 128-131
2002 Gold Business and Industrial Product profits, 142-143
IDEA award, 129 RedZone Robotics, 131-134
strategic design plans, 134-139
AARP (American Association for Retired balancing hard and soft quality, 214-215
Persons), 226 Bayesian statistics framework, 57
Adidas 1, launching of, 49-51 Beetle (Volkswagen redesign of), 40
Advance Products Group, 15 Bernie Bott’s Every Flavor (Jelly) Beans, 99
advertising. See marketing Between a Rock and a Hard Place, 152
Aearo Company, 130, 212 Big Top peanut butter, 186
Aeron chair, 79 biodegradable materials, 26
aesthetics (as a value opportunity), 174 Black & Decker, 190
agriculture industry, fantasy in B-to-B BodyMedia, 18, 26, 33-35, 41
products, 129 brands, 7-13, 194
Aliberti, David, 36 Braungart, Michael, 82, 226
American Association for Retired Persons Bronze IDEA award, 130
(AARP), 226 Bryant, Kobe, 218
analysis Buckeye Oil Company, 186
of customers in the field, 176 business design, 201
Powers of 10, 112-121 Business Week, 95
stakeholders, 134 2002 Gold Business and Industrial
Annual NeoCon International furniture Product IDEA award, 129
show, 82 “Power of Design, The”, 201
anticipatory design, 73 shifts in global economies, 228
Apex Fitness, 34 butterfly effect, the, 153-154
Apple, 70-78
areas of strategic importance, identification CAD (computer-aided design), 63
of, 58 Cagan, J., 168
Asia, shifts in global economies, 228 Calhoun, Jeff, 128
Carnegie Mellon University, 36, 167

233
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234 INDEX

case studies, analysis of, 53 experience economy, 91

Cat in the Hat, The, 99 fantasy economy, 92-103
celebrity endorsements, 166 form and function, 90-91
chaos within structure, 155-161 global brand and industrial, 7-13
Charles, Nelson, 83 IDEO (as consultants), 205-209
Charon, Scott, 83 industrial products, 128, 131-143
Chernobyl (RedZone Robotics), 132 interaction design, 206
China, 42, 92, 224-229 management, 216-217, 219
Chrysler, 26, 228 of Mirra chairs (Herman Miller), 82, 85
Cincinnati, Ohio, 185 patents (intellectual property), 189-190
Close, Eric, 18, 132, 141, 176 Product Insight (as consultants), 211-213
Coca-Cola, 193 Design Within Reach (DWR), 79
College of Engineering (Carnegie Mellon DesignAid technology kit, 130
University), 36 designers, role of, 201
community (Power of 10 analysis), 119 development
complexity in decision-making processes, analysis of, 54-55
147-149 fantasy (in everyday products), 94-98
computer-aided design (CAD), 63 goals of, 17
consultants launching of Adidas 1, 49, 51
design management, 216-219 processes (engineering), 13-17
firms for hire, 209-210 products. See products
IDEO, 205-209 role of marketing in early stages of, 52-53
Product Insight, 211-213 diesel fuel (Lubrizol case study), 107-110
quality (balancing hard and soft), Digital Ink, 36
214-215 digital music, 69. See also iPods; MP3
use of in product development, 202-204 Dippin’ Dots (patents), 197-198
consumption, 42-44 Disney World, 93
continents (Power of 10 analysis), 121 Drucker, Pete, 57
Cooper, Robert G., 40, 151 Duet washer/dryer (Whirlpool Corporation), 9
copyrights (intellectual property), 191 DWR (Design Within Reach), 79
core technology (as a value opportunity), 175
corporate mindsets, 41 Eames, Charles, 112
costs, controlling, 5 Eames, Ray, 83, 112
creativity, pragmatic innovation, 2-3 economies, 91-103
Crisco, 186 Edison, Thomas, 23
criteria, achieving (pragmatic innovation EHF (Emulsified Heating Fuel), 114
process), 61 emotion (as a value opportunity), 173
cultural mindset of corporations, 41 Emulsified Heating Fuel (EHF), 114
customers engineering, 13-17
in the field (analysis of), 176 environments, redefining local, 226
trends (reading), 78, 80 ergonomics (as a value opportunity), 174
EU (European Union), 42
Daimler Chrysler, 26, 228 expanding markets, 225
Daly, Daniel T., 109 experience economy, 91-103
Davidson, Willie G., 5, 32
Debreu, Gerard, 33 fantasy economy, 92-103
decision-making Finland, 43, 229
butterfly effect, the, 153-154 FitzGerald, Niall, 72
chaos within structure, 155-161 Ford Motor Company, 2, 18
complexity in, 147-149 F-150 (redesign of), 29-31
go/no-go, 61 redefining local environments, 227
organizing, 152 shifts in global economies, 228
for pragmatic innovation, 57-61 trends (reading), 74
delivery of patents, 197-198 use of consultants, 205
Dell Computers, 228 Ford, Henry, 227
design form (and function), 90-91, 97-98
business and industrial (interaction of), 201 fuel-cell technology, 26
consultants, 202-210 function (form and), 90-91, 97-98
criteria (defining), 60 fuzzy front end of innovation, 59
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Gamble, James, 185 quality, 37-39, 214-215

GDP (Gross Domestic Product), 91 uncertainties of, 55-57
Gehry, Frank, 63 waves of, 45
Gemperle, Francine, 36 innovators, 61-66
General Motors, 26 intellectual property. See IP
Gillette, 185 interaction design, 201, 206
Gilmore, J. H., 91 interdisciplinary decision making, 156-161
Gladiator GarageWorks, 8 inventions, 23-31
global brand designs, 7-13 IP (intellectual property), 184
global economies, shifts in , 228 brand and product lifecycles, 194
global environment (Power of 10 analysis), 121 copyrights, 191
globalization, 42-44, 92 design patents, 189-190
go/no-go decisions, 61 products, 195-198
Gold Design of the Decade award (OXO provisional patents, 193
International), 95 Swiffer (Proctor & Gamble), success of,
Graf, Robert T., 109 185-188
grilles (automobile), redesign of, 158-161 trade, 192-193
Gross Domestic Product (GDP), 91 trademarks, 191
growth, 39-41, 205 utility patents, 188
Guggenheim Museum (Bilbao, Spain), 63 iPods, 70-78
iTunes, 77
Haier, 43
hard quality, balancing, 214-215 Jaguar, 228
Harmon, Edith, 13, 15, 17, 167 Jobs, Steve, 71
Harry Potter and the Sorcerer’s Stone, 101 John Deere, 63
HCI (human-computer interaction), 214 Jones, Chuck, 6-7, 9, 11, 13, 17, 176, 204
Hear Music Coffeehouses, 103 Jones, Curt, 197
Helen of Troy, 95 Jordan, Michael, 218
Herman Miller, 79-80
holistic “360-degree innovation”, 187 Kaplan, Josh, 176
Honda, 27, 228 Kaplan, Zach, 130
Howitt, Allison, 5 Kapur, Dee, 2-3, 5, 17, 29-31
Hummer (General Motors), 26 Kasabach, Chris, 34, 36
Kazaa, 76
IDEA (Industrial Design Excellence Kelley, David, 18, 206
Awards), 201 Kelley, Tom, 25
identity (as a value opportunity), 174 Kenmore, 8
IDEO, 18, 25, 204-209 King Ranch, 5
IDSA (Industrial Designers Society of KitchenAid, 10
America), 95, 201 Kodak, 193
IKEA, 8 Korea, 228
impact (as a value opportunity), 174 Kuwait Petroleum Italia SpA (KPIT), 107
India, 42, 228
innovation L.A. Gear, Inc. v. Thom McAnn Shoe
B-to-B, 129, 131-143 Co.(1993), 189
deconstructing, 222 LA Lakers, 218
globalization of, 42-44 Laffley, A. G., 187
goals of, 12-13 lead users, 69
growth potential of, 39-41 Lewis, Elizabeth, 130, 211
in start-ups, 32-37 lifecycles, 194
interaction between business and Limewire, 76
industrial design, 201 local environments, redefining, 226
IP (intellectual property),188-198 Lord of the Rings, 100
management of, 5 Lubrizol, 65, 110
moving from invention to (redesign of Lucky Gold Star, 143
Ford F-150), 29-31
Powers of 10 analysis, 114-121 MacKinnon, Don, 103
pragmatic, 2-3, 23-28, 57-61 mandates for change, 22-23
product development, 165 manufacturing, 37-39, 197-198
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236 INDEX

marketing phases of product development (New

of innovations, 24 Balance), 168-180
Proctor & Gamble, 188 Pierpoint, Stephen, 50-51
role of early stages of development, 52-53 Pine, B. J., II, 91
tests, 54-55 Pirkl, Jim, 225
markets, expanding, 225 Platto, Gordon, 5
Masone, Bob, 5 Pledge Grab-It (S. C. Johnson), 187
McDonough, William, 82, 226 Poland, 43
Michigan International Speedway, 6 Post-It (3M), 213
micro views, 114 Postrel, V. I., 25
micro-level analysis, 135 Potter, Harry, 98-99, 101
Mirra chair (Herman Miller), 79-85 Powers of 10 analysis, 112-121
Model T, 23 Powers of 10 (movie), 112
Moggridge, Bill, 206 pragmatic innovation, 2-3, 23-28, 57-61
molecular level (Power of 10 analysis), 114 Prius (Toyota), 27
motivation, need for, 65-66 Procter & Gamble, 184
Motorola, 25 Procter, William, 185
MP3, 69, 74-78 Product Insight, Inc, 130, 211-213
Mr. Clean AutoDry Car Wash, 196 Production, 37-44
Mullay, John A., 109 products
analysis of, 54-55
nanotechnology, 26 consultant firms for hire, 209-210
Napster, 76 decision-making, 147-161
Nassar, Jac, 74 development, 138-139, 153-166, 210-204
Nelson, George, 83 form and function, 90-91, 97-98
NESCAUM (Northeast States for IDEO (as design consultants), 205-209
Coordinated Air Use impact of (stakeholders), 112
Management), 120 industrial, 128-139
New Balance, 13-18, 49 IP (intellectual property), 194-198
product development, 165-180 Lubrizol (case study example), 107-110
shifts in global economies, 228 Product Insight (as design consultants),
use of consultants, 205 211-213
New Holland (fantasy in B-to-B products), 129 role of marketing in development, 52-53
new product development (New Balance), steps for satisficing development, 61-66
168-180 trade dress, 192
new renaissance, the power of, 230-231 trends (impacting), 74-78
new technology, 69 profiles of stakeholders, 121-123
Nike, 49, 228 profit, 2-3
nitrous oxide (NOx), 109 B-to-B innovation, 142-143
Nokia, 43 of innovations, 24
noninvasively performed surgery, 26 trends (reading), 74
Normann, Wilhelm, 186 Wal-Mart, 38
Northeast States for Coordinated Air Use protection (intellectual property), 191
Management (NESCAUM), 120 prototypes, 36
Nussbaum, 201 provisional patents (intellectual property), 193
PT Cruiser (Chrysler), 26
O’Neal, Shaquille, 218 PuriNOx, 107
offshoring, 39
Ohio, Marysville, 228 Q White, 107
Order of the Phoenix, The, 98 quality, 24, 37-39, 175, 214-215
organic growth, 39-41, 205
OXO International, 94 radio frequency-enabled (RF) pressure
switch, 180
Pacione, Chris, 34, 36 Ralston, Aron, 152
pagers (Motorola redesign of), 25 reading trends, 70-85
Palm PDA devices, 25 redefining local environments, 226
Pampers (Proctor & Gamble), 185 redesign of Ford F-150, 29-31
patents, 184, 188-198 RedZone Robotics, 18, 131-134
PayPal, 93 regions (Power of 10 analysis), 120
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researching people, 59 Teller, Edward, 33

results of strategic design plans, 139-141 terrorism, 74, 93, 165
Return of the King, The, 100 Thomas & Betts Corp. v. Panduit Corp. (1995),
RF (radio frequency-enabled) pressure 189
switch, 180 Three Mile Island (RedZone Robotics), 132
Roche Diagnostics, 34 Tolkien, J. R. R. , 100
Rowling, J. K., 98-99, 101 Toyota, 27
Russia, 42 trade dress, 192
trade secrets, 193
S.C. Johnson (Pledge Grab-It), 187 trademarks (intellectual property), 191
Sandbox Advanced Development, 36 trends
Sanders, Liz, 211 Apple (reading), 70-72
satisficing, 58-66 design of Mirra chairs (Herman Miller),
Schacht, Keith, 130 82, 85
Schiavone, Pat, 5 effect of customer demand, 78-80
Schultz, Howard, 103 lead users and new technology, 69
Sciences of the Artificial, The, 57 process of (reading), 74
Scully, John, 71 products impacting, 74-78
Segway, 27
SenseWear armband body monitors, 34, 36 United States, 42, 92, 228
September 11, 2001, 74, 93, 165 utility patents (intellectual property), 188
services, 91-98
SET (social, economic, and technical) value opportunities, 173
factors, 44, 59, 230 view of stakeholders, identification of, 112
Seuss, Dr., 99 VistaLabs, 128
shareware software, 76 Vogel, C. M., 168
shifts in global economies, 228 Volkswagen (redesign of Beetle), 40
Simon, Herb, 57-58 Volvo, 228
Six Sigma, 38
Smithfield Street Bridge, 32 Wal-Mart, profits, 38
social, economic, and technical factors. See SET WetJet (Proctor & Gamble), 184
soft quality, balancing, 214-215 Whirlpool Corporation, 7, 18, 204-205
Sonic Rim, 212 William T. Young Company, 186
SRI (Stanford Research Institute), 207 Williams-Sonoma, 10
StageGate, 40, 151 Wing, Gabe, 83
stakeholders Wu, Xiangyang, 224
analysis, 134
impact of, 112
Lubrizol case study, 107-110
Powers of 10 analysis, 114-121
profiles of, 121-123
Stanford Research Institute (SRI), 207
Starbucks, 103, 198
start-ups, 33-37, 49-51
Stivoric, Ivo, 34, 36
strategic design plans, 134-141
strategic importance, identification of areas
of, 58
Strong, Russell, 129
Studio 7.5, 82, 84
success, measurements of, 64
Swiffer (Proctor & Gamble), 184-188
Syracuse University, 225
system operations (Power of 10 analysis),
117

Target, 11
televisions, global production of, 43
Teller, Astro, 33, 36