Marty Neumeier talks about innovation as the means to actively create wealth in his Innovation Workshop video.

Imagine a crazy world where most of what you learned in business school
is either upside down or backwards,
where customers control companies,
where jobs are avenues of self-expression,
and the barriers to competition are out of your control,
a world were strangers design your products,
advertising drives customers away,
and demographics are beside the point,
where meaning talks, money walks, and stability is fantasy.
Imagine a world where talent trumps obedience,
imagination beats knowledge,
and empathy trounces logic.
If you’ve been paying enough attention,
you don’t have to imagine this Alice in Wonderland scenario.
You see it forming up all around you.
The only question is can you change
your business, your brand, and you’re thinking
quickly enough to take advantage of it?
In an era of fast-moving markets and leap-frogging innovation,
we can no longer unlock wealth.
Today we have to actively create wealth
or else end up in the fossil layers of business history.

Neumeier goes on to elaborates his view of the value of design thinking, which could be expressed in this way:

  • Mission: to create a culture of innovation
  • Vision: to change existing situations into preferred ones
  • Values: to know truth, to make beauty and to do good

Design is the act of bringing vision to reality

If design is what happens in the gap between vision and reality, the question we need to ask ourselves is “What is our vision?” If we could envision a better world, what would it look like?

Neumeier’s vision is to lead with good design:

But we can also move design up the ladder to a point of higher leverage. In a business context, let’s look at where we can gain the most leverage from design.

The Design Ladder

  • Communication Design
  • Products and Services
  • Customer Relationships
  • Brand Ecosystem
  • Operational Processes
  • Internal Communications
  • Strategic Decisions
  • Organizational Structure
  • Business Model
  • Vision

If you want to keep innovating, you need a culture of innovation.

Highlights from Marty Neumeier’s Innovation Workshop

  • If you want to innovate, you’ve got to design
  • Traditional business: knowing and doing
  • Design thinking: knowing, making and doing
  • We have to design our way to the future.

Herbert Simon, the Nobel Laureate who pioneered artificial intelligence.

A designer is anyone who devises ways to change existing situations into preferred ones.
  • Moses was a designer
  • The dragon gap: the space between vision (what could be) and reality (what is)
  • Traditional managers avoid risk, the dragon gap
  • Amazon reinventing the book and the store. Eliminating the need for printing, shipping.

Transcript

Of course innovation is on the lips of every CEO. But you can’t just add the word innovation to your mission statement and expect magic to ensue. No way! You have to transform your company from a spreadsheet driven company to a design driven company. In the new creative economy, you can no longer only unlock wealth. You have to actively create wealth. You have to innovate to overcome the twin hurdles of the marketplace--relentless speed and extreme clutter. Now here’s the secret: if you wanna innovate, you gotta to design.

Design thinking is the skill that activates innovation. Without design thinking, your strategic and executional will choices will be limited to only what’s been done before. Traditional business thinking is based on a two-step process: knowing and doing. You know something and then you do something. You take an action: bada bing bada boom!

Now design thinking is different. It adds a third step in the middle called making. The making step combines reflection, imagination and prototyping to expand the range of what we know and therefore the range of what we can do: bada bing bada bang bada boom! You get more bang with design.

What the designer says is "Now wait a minute. Do we really know what we think we know? Aren’t there any new ways to approach this opportunity?" The designer categorically refuses to accept the old solution or the easy answer. It’s a mindset that makes traditional thinkers crazy but it’s the right mind set for innovation. We can’t simply decide our way to the future. We have to design our way to the future.

What do I mean by the word design? Well, I don’t mean decoration or beautification or styling. I don’t mean a plan for an artifact or a system of artifacts, as the dictionary says. No one ever built a business on artifacts.

I prefer the definition put forward by Herbert Simon, the Nobel Laureate who pioneered artificial intelligence. He said that a designer is anyone who devises ways to change an existing situation into a preferred one.

Now, notice the careful selection of the words “anyone,” “change” and “situations,” and notice the careful omission of the words “artist,” “styling” or “artifacts.” Using this definition, everyone in the company can be a designer, even the CEO. In fact, using this definition Moses was a designer, right? I mean, he changed an existing situation, slavery in Egypt, into an improved situation, freedom in the promised land, using a design strategy. Cutting across the Red Sea at low tide and even introduced a set of values: the Ten Commandments. Moses was all about design.

Designing differs from other activities not only in its outcomes, Simon’s preferred situations, but in its processes. You have to spend time him the dragon gap. You know, the old map makers, they put these little warnings on their maps that said, “There be dragons!” You know, places that they hadn’t explored yet.

In design, the dragon gap is the space between vision and reality. It’s really the space between “what is” and “what could be.” And, while “what could be” is the key to innovation, most traditional managers prefer the safety of “what is.” When you propose an innovation to a traditional manager, the conversation usually goes something like this:

It’s different, but has anybody done this successfully before?
No one. That’s the beauty of it!
No, no, no. That’s the danger of it!

Traditional  managers are not willing to spend time in the dragon gap. Can’t blame them, really. There be dragons there.

Unfortunately the standard case study method of business education actually reinforces the bias against innovation. It creates the illusion that a solution to a problem exists in the past. Therefore, all we have to do is grab a solution from the solution shelf as if we’re buying a pair of pants from the ready-to-wear rack.

Let’s see.
This one? Maybe.
This one? Not really.
Yeah, yeah! Let’s go with that.

The problem is no two companies are alike and no two situations are alike. So, if you really want change, you have to expand the range of options with design thinking.

In the nineties, everybody knew that an office chair looked like this, until Herman Miller came along and wondered if it could look like this.

Here’s a little known fact: at one point, the Aeron accounted for more than thirty percent of Herman Miller’s income. When the web started everyone knew that a home page looked like this, until Google came along and wondered if it could look like this. Now Google has three times the market share and Yahoo’s in trouble.

Little more than a decade ago, everyone knew that a bookstore looked like this, until Amazon came along and wondered if it could look like this. Now online booksellers command thirty percent of the retail market.

Have you seen the Amazon Kindle? Not satisfied to reinvent the bookstore, Amazon would like to reinvent the book itself. In fact a Kindle is not only a book but a bookstore and delivery method. It’s an example of what I call good design. It tries to reduce waste by eliminating the need for paper, printing and shipping. It dematerializes the tons of carbon that would normally go into our waste stream.

The question of what is good design has been batted around since the days of the Bauhaus. And it’s a question that’s never been satisfactorily answered. But I think it’s really pretty simple: good design is design that exhibits virtues. What virtues? Good old human virtues like:

  • Responsibility
  • Courage
  • Honesty
  • Substance
  • Curiosity
  • Thriftiness
  • Helpfulness
  • Wit

By contrast, bad design exhibits human vices like:

  • Selfishness
  • Fear
  • Deceit
  • Pettiness
  • Apathy
  • Wastefulness
  • Harmfulness
  • Stupidity

In other words, we want the same things from design that we want from our fellow human beings. Coincidentally, the ancient Greeks framed this ideal in the context of knowing, making and doing.

  • To know truth.
  • To make beauty.
  • To do good.

It’s an ideal that’s been missing in twentieth century management which has overvalued narrow short-term success and undervalued broad long-term success. The recent financial meltdown is, broadly speaking, the result of faulty design. We need to design a new management model that deliberately includes a moral dimension.

This is what we at Neutron call the fossil wall. It’s a typographical memorial to the great innovations of all time layered one on top of the other like sedimentary rock, starting from the invention of the grass down at the bottom up to mass communications in the middle all the way up to virtual networks and so on. Notice that the world’s biggest innovations are not products but whole platforms for progress. We put this here to remind ourselves to think big.

Of course we can keep applying design thinking to familiar things such as products, services and communications, and we should. But we can also move design up the ladder to a point of higher leverage. In a business context, let’s look at where we can gain the most leverage from design.

At the bottom of the ladder we have external communications, advertising, PR, identity design, web interaction and other outfacing message making. This is the trench warfare of innovation. Next up the ladder we have products and services. Product design is being worked heavily right now with great results, I might add, and service design is not far behind. Service design leads up to the next rung, customer experience. If success in business depends on what customers feel about our products, services and communications and our behaviours, then it makes sense to focus directly on designing the best possible experiences.

But what about brand ecosystems, the community of suppliers, partners, employees and shareholders who take part in building our brands? Can we restructure our relationships so that everyone who contributes to the brand gets something in return? And what about processes, the processes that drive execution? What about internal communications that build the the company’s culture? What about the strategic decisions that determine the company’s success? If a business is really a decision factory, doesn’t the design of those decisions determine their outcome? And what about organizational structure or the business model itself? And finally, what about the vision for the future of the company? Can we design it so that our company leaders are established as thought leaders?

You can see that as we move design up the ladder, its influence grows exponentially. If you want to have innovate, you’ve got to design. And if you want to keep innovating purposefully and predictably, you need a culture of innovation.

The Design Ladder

  • communication design
  • products and services
  • experiences
  • brand ecosystem
  • operational processes
  • internal communications
  • strategic decisions
  • organizational structure
  • business model
  • vision

If you want to keep innovating, you need a culture of innovation