1 THE CHANGED ROLE OF DESIGN 1 February 2010 Provoke Design Oy/Ltd. Christian Aminoff, Timo Hänninen, Mikko Kämäräinen and Janne Loiske This report was commissioned by the Ministry of Employment and the Economy, as part of the Strategy for the Creative Economy. The feasibility study and its documentation were implemented by Provoke Design Oy/Ltd. Interpretations of interviews express the opinions of the authors. Any errors herein are solely due to the author.
2 Contents 1. Summary 3 2. TERMS AND CONCEPTS Open Innovation Design Thinking Crowdsourcing Co-creation Social Innovation Service Design 9 3. BACKGROUND METHODS Workshops Case studies Interviews Analysis and grouping of results CASE STUDIES A system for innovations in medical care Kaiser Permanente (HMO) Development of the business idea: Sermo 20 Event permit procedure, Helsinki: the user-oriented design of public 5.3. services Innovations of the supply chain in trade: Kraft and Safeway INTERVIEWS Experienced roles and change of design Difficulty of terms Role of design Internationality Service design Education and training Innovations Public sector 41 Relationship to economic success and the desired status as regards 6.9. enterprises Perception of time, and time window of future visions CONCLUSIONS Change Challenges Proposals: Promotion of the Sector Proposals: Education and training Proposals: Public sector Proposals: Enterprises Discussion 51 2 / 52
4 2. TERMS AND CONCEPTS A number of concepts and terms arose in the interviews. The contents of these are briefly described below. Many concepts still lack a generally accepted Finnish translation. In the interviews, the changing role of design was often associated with a more profound transition in innovation for example, rather than technological innovations, or in addition to them, the interviewees considered innovations in processes, organisations and operating models to be necessary. They associated design with abstract issues lying outside products: user-orientation and innovation methods. Design s role was viewed as one type of expertise among many, manifesting itself in the phenomena presented below for instance, as an interpreter of open innovation, between technology, marketing, users and various organisations Open Innovation Open innovation is a term coined by Professor Henry Chesbrough, who works at the Open Innovation Center, UC Berkeley. According to Chesbrough, open innovation involves the use of purposeful inflows and outflows of knowledge, in order to accelerate internal innovation and expand the markets for the external application of innovation. 1 As a result, companies have begun seeking other ways of increasing the efficiency and effectiveness of their innovation processes. For instance, this is being done through an active search for new technologies and ideas outside the firm. Another method involves cooperation with suppliers and competitors, in order to create customer value. An important area of this lies in the further development or out-licensing of ideas and technologies which do not fit in with the company s strategy. As an operating model, open innovation meets these challenges. Open innovation deals with research and development as an open system. Such a system defines what external knowledge should be utilised in the company's activities, and what internal knowledge should be outsourced. The opposite idea, closed innovation, limits the use of internal knowledge to inside the enterprise and eschews the use of external knowledge. Open innovation is distinct from the Open Source development model, which is based on cooperation and initiated and concluded by volunteers. 1 CHESBROUGH, H (2006), Open Innovation: Researching a New Paradigm 4 / 52
5 2.2. Design Thinking Design Thinking is a creative process or approach involving the search for new prospective solutions. Rather than focusing on the improvement of existing solutions, this approach analyses challenges and the potential for the discovery of new, user-oriented solutions meeting such challenges. Business schools tend to focus on inductive thinking (based on directly observable facts) and deductive thinking (logic and analysis, typically based on past evidence). Design schools emphasize abductive thinking imagining what could be possible. This new thinking approach helps us challenge assumed constraints and add to ideas, versus discouraging them. 2 A.G. Lafley CEO, Procter & Gamble Design Thinking is often described as the ability to combine empathy, creativity and rationality in order to meet user needs more effectively and to enable the success of emerging, new ideas. As such, Design Thinking is a creative process, based on constructing and synthesising ideas rather than de-constructing them. The diagram below presents a macro-level perspective on Design Thinking.??? Divergence Analysis Needs? Brainstorming Synthe sis Observation Solution Convergence A simplified presentation of Design Thinking Generally speaking, Design Thinking is more reminiscent of an approach or cultural way of thinking than a model or process see below. (A simplified model, based on the work of Tim Brown, Michael Barry, Sara L. Beckman et al.) 2 LAFLEY, A.G. (2008), The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation 5 / 52
6 In Design Thinking, since ideas are not evaluated or rejected during the early phases of brainstorming, fear of failure is eliminated and participation encouraged in the brainstorming and prototyping phases. Since it leads to creative solutions, lateral, outside-the-box thinking is encouraged during these processes. Organisational and management theories have viewed Design Thinking as forming part of the A/D/A (architecture/design/anthropology/) approach. Andrew Jones has stated that the A/D/A model is typical of innovative, human-oriented enterprises, where it has replaced more traditional M/E/P (mathematics/economics/psychology) models. Jones has analysed enterprises such as Southwest Airlines, Whole Foods, Starbucks and Google. 4 Design Thinking applies design methods to problem solving, including outside the field of industrial design itself. Such methods involve user-oriented design and the creation of new ideas, visual communications, synthesis and prototyping. But the issue to be resolved typically involves something other than a product it may be a service, or an organisational or social challenge. The term 'design thinking' has gained in popularity because it makes it easier for those outside the design industry to focus on the idea of design as a way of thinking about solving problems, a way of creating strategy by experiencing it rather than keeping it as an intellectual exercise, and a way of creating and capturing value. Design thinking is more than a methodology. Design is a cultural way of thinking. It's important to understand its power, commit to evolving your culture, even restructuring the company, resourcing and rewarding those who practice design thinking. You can no longer tolerate those who shut down design thinking. We have to get rid of the devil's advocates and experts who own their domain to the detriment of innovation. 5 David Burney Vice President of Brand Communications + Design, Red Hat 3 De BONO, E (1992), Serious creativity: using the power of lateral thinking to create new ideas. HarperBusiness 4 Dr JONES, A (2008), The Innovation Acid Test. Axminster: Triarchy Press 5 retrieved on 10 November / 52
7 2.3. Crowdsourcing Crowdsourcing refers to outsourcing the tasks of an enterprise to its customers. The customer is included in the processes, generating added value for the enterprise (and for him or herself). In most cases, the customer obtains only a modest financial reward from crowdsourcing. There are multiple Finnish translations for this term, which was originally coined by journalist Jeff Howe in Howe presented a new way of understanding how large crowds can be exceptionally productive and creative when given the opportunity to gather around something they find interesting. As an example, he cited the istock-photo, which has radically changed the way photographs are sold. Peer recognition, or granting the customer visibility in an environment meaningful to him or her, can be used as a means of motivation. Other such means include learning anew and having fun or the opportunity to participate in interesting activities on one s own initiative. Success depends on identifying people who are able to generate target-oriented results. Equality, fairness and trust between the participants must be maintained in crowd-sourcing projects. Such values, which create and preserve communality, can be maintained by following universally familiar rules. On the same basis as it forges trust among its customers, an enterprise must build public confidence in itself. Jeff Howe later described the crowdsourcing model as social behaviour: people gather together, either free of charge or for very modest compensation, to perform tasks which were previously carried out by employees. In some instances, a community constitutes a more efficient work force than a company.7 Crowdsourcing and the Open Source development model are distinguished from one another by the latter s basis in communality and its initiation and performance by volunteers. In crowdsourcing, the company itself outsources its tasks, thereby retaining the initiative whereas, in conventional outsourcing, tasks are carried out by actors or individuals not specified in advance. They may be amateurs or volunteers, or experts working in their free time. On the other hand, the task may be carried out by a company with which the orderer is not previously familiar. 6 HOWE, J, (2006), The Rise of Crowdsourcing. Wired magazine, June HOWE, J. (2008), Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business 7 / 52
8 2.4. Co-creation Co-creation is an active, creative and social process based on co-operation between producers and users. Value is increasingly generated through co-operation between enterprises and their customers rather than inside enterprises. In the most extreme form, N=1, meaning that the target group consists of an individual user. 8 The initiative is taken by an enterprise aiming at generating value for its customers. 9 Herein lies the difference with crowdsourcing, which is focussed on outsourcing an enterprise s tasks rather than on the value generated by product users. The co-creation matrix, Promise Corporation & LSE Enterprise. 8 PRAHALAD, C.K. and KRISHNAN, M.S. (2008), The New Age of Innovation: Driving Co-created Value Through Global Networks 9 Promise Corporation & LSE Enterprise, (2009), Co-creation: New pathways to value, An overview 8 / 52
9 2.5. Social Innovation Social innovation refers to reforms of regulative systems, policies, organisational structures and operating models improving society s economic and social performance, and its operational capacity, in both the public and private sectors. 10 Social innovation and society's structural ability to reinvent itself have major impacts on the longterm success of society and the national economy. Little research has been conducted on the inception of social innovations and their impacts on society, including on an international scale. The social innovation concept entered the language less than ten years ago, despite the fact that such innovations account for a huge share of services and their organisation, and of legislation and people's everyday activities. 11 Hannu Hämäläinen of Stakes gives the following example of social innovations in the field of social and health care: "A social innovation in the field of social and health care is a new idea resulting from the creative activity of an individual, a group, a community and/or a network. This idea generates added value in terms of the well-being of an individual or community, or with respect to health or a service system. 12 Hannu Hämäläinen, Director of Innovations, Stakes 2.6. Service Design Service design refers to service innovation, development and planning through design methods. The key objective of service design is the user-oriented planning of a service experience, so that the service meets both user needs and the business-related needs of the service provider. The building blocks of the customer's service experience are service touch-points, service moments and a service string or customer journey. 13 In service design, all service touch-points must be carefully considered target areas of the service. They must be designed so as to form a clear, consistent and coherent service experience. This is important, since customers pay attention to service touch-points in particular to all that they can feel and experience. Account should be taken of the fact that nobody's service experience as such can be designed and defined in advance, since meanings, values and expectations, which vary from person to person, are included in such experiences. Thus, designing a service experience refers to the creation of a suitable environment and tools for events and activities, so that the experience can be modified as desired nan_uudistumiskyky_ja_taloudellinen_menestys.htm, retrieved on 10 November retrieved on 10 November retrieved on 10 November KOIVISTO, M, (2007), Mitä on palvelumuotoilu? Muotoilun hyödyntäminen palvelujen suunnittelussa, TAIK (What is service design? Utilising design in service design, UIAH) 14 retrieved on 10 November / 52
10 3. BACKGROUND Design 2005! was a design policy programme, launched by the Government to promote business and its competitiveness through design. In 2004, the programme s follow-up group presented the following conclusions on the programme s implementation: on the whole, the implementation of the Design 2005! programme began on several fronts. The industrial design technology programme funded by Tekes and the research programme on industrial design funded by the Academy of Finland formed separate, unique entities. Their research subjects were relevant and they created a basis for the renewal of the design industry. The foresight project on education set down guidelines for the development of education. Promoting the internationalisation of design offices was considered a major future challenge. Expediting the design system s development will require investments in communications. The follow-up group was of the view that the design system had developed on a broad front. Key actors from outside the design community had been enlisted in the development of the design system. This led to more dynamic development while boosting confidence in design. Significant volume growth has been attained in a short period in the area of design research. A comparison with the international discussion on research demonstrated that the research problems posed in Finland were relevant and topical. The followup group considered the continuation of the development process already launched as 15 crucial. However, rapid changes have occurred in the concept of design and its operating environment since the implementation of the Design 2005! programme and the above-mentioned industrial design technology programme funded by Tekes in : MUOTO The concept of strategic design was earlier associated with putting an enterprise's strategy into practice through product-related design solutions and brand management. Now, a new concept, design thinking, has emerged alongside strategic design of this type. In design thinking, a design approach is used to solve challenges that are unrelated to products. Other changes to follow the implementation of the technology programme include the emergence of service design and the challenges posed by open innovation. Research by Virginia Acha, for example, relates open innovation to the application of design: Our analysis indicates that design includes the translation of understanding and expectations between organisations engaged in open innovation practices. The findings demonstrate that firms which actively undertake design activities in innovation and which use design to control the innovation process, are more likely also to pursue open innovation strategies. 16 Virginia Acha, SAARELA, LAPPI, TUUKKANEN, (2004), Muotoilu 2005! -ohjelman seurantaryhmän raportti The report of the follow-up group on the Design 2005! programme, in Finnish), Reports of the Ministry of Education 2004:11 16 ACHA, V, (2008), Open by Design: The Role of Design in Open Innovation. Department for Innovation, Universities & Skills, UK 10 / 52
11 Education and training in the field of design has also changed in the wake of the programme s implementation. Examples of this are provided by new Master's degrees, such as the Canadian Master of Design in Strategic Foresight and Innovation 17, or in the combination of courses in design with other subjects, as in Singapore where courses have been based on the Design Thinking agenda 18 or in Stanford s d.school which was established as early as Such courses are not aimed at providing an education in the traditional role of design i.e. creating new forms: We want the d.school to be a place for Stanford students and faculty in engineering, medicine, business, the humanities, and education to learn design thinking and work together to solve big problems in a human centred way. 20 This transition can also be seen in Finland. With the establishment of Aalto University, the concept of design will change more rapidly here too. Design s new roles are influenced by how well it is integrated into education in general and by how its various roles are emphasised within Aalto University: amongst the associated innovation workshops, the Design Factory focuses on product development, the Media Factory on the media sector and the Service Factory on services of high added value. At domestic level, Aalto University alone will not suffice the new roles of design must be promoted more widely: as early as 2006, a visionary group working on a research project funded by the Research Institute of the Finnish Economy (ETLA) proposed that design be more efficiently integrated into educational programmes in the fields of business management and technology. In addition, the quality of education and its international aspects should also be improved. 21 The Finnish design sector remains small and may contract further due to the recession. This sector comprises small actors, meeting demand for strategic design from a small number of enterprises. In 2007, enterprises in the Finnish design sector recorded combined annual net sales of EUR 122 million, industrial design accounting for EUR 47.3 million of this. 22 However, a challenge lies in the fact that statistics on this are insufficient and lack uniformity between different countries. According to the Finnish TOL 2008 standard industrial classification, enterprises in the industrial arts belong to the same category as industrial design, despite the fact that the activities of enterprises providing design services are entirely different to the industrial arts. In accounts of the changing role of design, foresight and the planning of new business activities based thereon are often mentioned. Other oft-mentioned subjects in this connection include the user-oriented design of private or public sector activities, as well as open innovation and social innovation. The change that began following the implementation of the technology programme is still underway. Reform is required of our innovation policy and educational systems. 17 Ontario College of Art & Design 18 University of Technology and Design, Singapore 19 The Hasso Plattner Institute of Design at Stanford University 20 retrieved on 25 November LINDSTRÖM, NYBERG, YLÄ-ANTTILA (2006), Ei vain muodon vuoksi Muotoilu on kilpailuetu, ETLA B ALANEN, A, (2009), Yritysten muotoilutoiminta: Omin voimin vai ostopalveluilla? (Design activities of companies: independently or contracting out?) Tieto & trendit 8/2009, / 52
12 Finland's national innovation strategy for 2008 also highlights demand- and user-orientation in all innovation activities. User-orientation is a central perspective in design. Correspondingly, the possibilities of applying this perspective and design tools outside the field of product development have been highlighted in the debate on design s changing role. In recent years, design has also developed rapidly as an innovation. Most notably, this has resulted in concepts such as strategic design, design management and design thinking. Innovation policy and support, as well as educational systems, have yet to catch up with these developments. 23 The above quotation is an excerpt from the document "Design as a driver of user-centred innovation", published by the European Commission in April The Commission organised a public hearing (535 respondents), the results of which clearly associate the role of design with innovation: 91 per cent of the responding organisations considered design highly important to the EU economy s future competitiveness; 96 per cent thought that initiatives in support of design should form an integral part of innovation policy in general; and 91 per cent believed that such initiatives should be taken at EU level, in addition to domestic and regional level. Some 74 % thought that design should be part of the EU's innovation policy. 24 A report on the OECD's innovation strategy will be published in the spring of This report is expected to discuss the changing nature of innovation, and design s contribution to this. A new role for design and new design expertise are required for innovation activities extending beyond technology and products. Non-technological, organisational and social innovation are increasingly in the spotlight. In recent years, the notion of innovation has broadened. In particular, interest has grown in non-technological forms of innovation for example organisational changes, marketing and design and their contribution to productivity growth. 25 This report was commissioned as part of the Strategy for the Creative Economy, from the Ministry of Employment and the Economy. This feasibility study set out to identify who new design concerns and its field of activity. The project constitutes a basic survey on the changed role of design, analysing the current status of this new role in Finland, the associated actors and their current roles and tasks. Data was collected through interviews and from literary sources. The aim was to uncover a set of descriptions of the new concept of design, and to chart this new field and its functional structures from the viewpoint of the sea-change occurring in the markets. Opinions on the roles of various actors and their tasks within the field of design were analysed with the help of interviews. The report outlines the meaning of the new concept of design from the viewpoint of industrial policy. 23 COMMISSION OF THE EUROPEAN COMMUNITIES (2009), Commission staff working document: Design as a driver of user-centred innovation. 24 Results of the public consultation on design as a driver of user-centred innovation (October 2009) OECD (2009), 2009 Interim Report on the OECD Innovation Strategy: AN AGENDA FOR POLICY ACTION ON INNOVATION 12 / 52
13 4. METHODS 4.1. Workshops The feasibility project was kicked off by a workshop "Muotoilun muuttuva rooli (the changing role of design)" on 7 September The seminar and workshop were organised through co-operation between the Ministry of Employment and the Economy, the Ministry of Education, Design Forum Finland and Creative Industries Finland. Group work on changes in the role of design, from the viewpoint of enterprises, education and training, formed the focus of the workshop. Over 50 experts in the field of design participated, representing educational institutions, organisations and enterprises. The following workshop discussions were chosen as themes for the interviews: What is the current role of design, will this role change in the forthcoming years? Will social innovations and open innovation processes affect the value chain of design? Can the design approach be applied in the creation of new businesses? Does the expertise of design professionals meet the needs of other areas of expertise? Can the scope of such expertise be extended? Do other areas of expertise have sufficient basic awareness of design? Can design support service development? Can the public sector play a role in supporting design? Another workshop was organised in Rovaniemi. Muuttuvat muotoilun kentät, Työpaja muotoilun edistämisestä (The changing fields of design: a workshop on promoting design) was organised on 28 September Fresh opinions were expressed on the current status of design in Finland and the preparation of Lapland's own design strategy was initiated. The University of Lapland was in charge of preparations for the workshop and it was jointly organised by the national Culture and Creative Industries network of the Regional Development Programme, the University of Lapland and Rovaniemi Design Week. Staff and students of the University of Lapland, approximately 40 people in total, participated. Divided into groups, the participants created five scenarios for the role of design in 2015: Education and training in the field of design have changed. Design as a function has clearly extended beyond product design. The designer is a DESIGN THINKER, an expert in perspectives and methods, not a creator of new forms. Service design has become a distinctive area in its own right. Design is part of everyday life. It is automatically a "must" in the activities of enterprises in Lapland Case studies Examples of the new role of design were collected for the feasibility study. In addition to the chosen themes, the case studies provided the basis for the interviews, and were used to stimulate discussion on the current status and the associated changes in Finland. These case studies are presented in Chapter 5 of this report Interviews In addition to those directly involved in design activities, persons responsible for, or involved in, the development of new businesses, product development, service business, marketing and general management were request to give an interview.