IN DESIGN CREATIVITY ALONE IS OF LIMITED VALUE Heskett.pdf · IN DESIGN CREATIVITY ALONE IS OF...

Creating Prosperity:Talent Development and Cross-sector Collaboration in a Creative Economy.

The Bauhinia Foundation, Hong Kong, Sept. 1st, 2011

IN DESIGN CREATIVITY ALONE

IS OF LIMITED VALUE IS OF LIMITED VALUE

John HeskettChair Professor and Acting Dean,

School of Design, Hong Kong Polytechnic University

Economic ValueEconomic Value

Economic Value 1

• What links any commercial business of any kind, is the need to generate economic value, in other words: profit.

• It is an immutable law of business life: • It is an immutable law of business life:

No profit, no survival.

Economic Value 2

• The overwhelming majority of design work takes place in a business context.

• Therefore in any business, design must be • Therefore in any business, design must be judged by successful innovation and competitiveness.

• Designers must function as business professionals, not second-class artists.

Design as Art …

New York TimesMagazine

1 Dec. 2002

… or Art as Cosmetic Design

Design as Art

Form

ColourShapeTrendsTextureMeaning

Design as Art?

AestheticsStyling

Decoration

DesignTools

Meaning

Design as Professional Business Activity.

Toto Electronic

Toilet

Design as aComplexBusinessActivity

Industrial Design

Form Function Manufacturing Marketing

Design as a Complex Business Activity

AestheticsStyling

Decoration

DesignTools

ColourShapeTrendsTextureMeaning

UsePurpose

ErgonomicsEnvironmentLifestyle

MaterialsProcessDurabilityReliabilityMaterials

PricePosition

CompetitionDistributionBrand

InteractionHuman factorsUser-centredness

EngineeringEconomyRecycling

Strategic PlanningSystems designCultural research

Product ValueProduct Value

Product Value 1

• The most basic and obvious role of design is in creating a differentiated visual image.

• This function, however, can be purely superficial and short-term, without any long-superficial and short-term, without any long-term competitive perspective.

• Moreover, in some product sectors, form is no longer the determinant of value.

Which works best?

Which would you buy?Which would you buy?

Lies

Lies

Lies

Product Value

Product Innovation

Level of Innovation Value Means

Fundamental New value Original Creation

Radical Redefining value Enhanced Function

Incremental Adding value Feature

Imitation Appropriating value Adaptation

Process ValueProcess Value

Process Value 1

Change agentsDesign is implicitly about change, but change, like profit, is not an end in itself. It must be justified as a means by it’s content.

Post-Sales ValueValue derived from design through increased market share, cultural appeal in global markets, and brand share, cultural appeal in global markets, and brand building, rather than lower cost.

Process Value 2

Support FunctionsGenerating and developing concepts to support the needs of service-systems, such as catalogues and user-instructions. After-sales services can enhance the value of product, e.g. constant software upgrade and worldwide warranty as tools of product differentiation.

Process Value 3

Pre-productionSourcing alternative quality material and assuring the feasibility of manufacturing.

Risk ReductionMake critical changes before a single unit is actually manufactured, reducing need for change orders.manufactured, reducing need for change orders.

Case study 1. Guangzhou Echom Science & Technology Group Co., Ltd.

Echom was founded by an industrial designer and is located near Guangzhou Echom was founded by an industrial designer and is located near Guangzhou It specializes in research, development and manufacturing of plastic products and moulds.

The company mainly produces home appliance casings and automobile parts and is China’s largest in these fields.

In production of television cabinets it dominates the domestic market, having been leader for five successive years, with 7 million sets securing 33% of the market.

its early success was based on design, but soon marketing skills became essential. Then competence in distribution and logistics became necessary.

Case study 2 : Kinglong

The leading coach and bus manufacturer in China

• Annual production capacity of 30,000 vehicles

• In 2006 sold 23,291 coaches with sales revenue of US$9.2 million.

Process Comparison

Linear process vs. Integrated process

High possibility of decision change

Cost of development

Product Development

High

Decision changes.

Creativity Implementation

Vision Methodology

Copious ideas Focused project

Change Established knowledge

Inspiration Research in depth

Get decisions

right

Avoid changes

Low

Costs Minimum change

Desirable; Maximum Cost

Maximum changepossible; Minimum Cost

TimeConcept Market launch

Low possibility of

decision change

Inspiration Research in depth

Strategic Value

Strategic Value 1

Collaborators and SynthesizersDesign, when used strategically, interacts with a greater number of product creation stakeholders than any other function in an organization.

Innovation Collaborative approaches bring an increased likelihood of innovation. Ideas generated by collaborative efforts tend to meet innovation. Ideas generated by collaborative efforts tend to meet less resistance than those developed in isolation.

Shaping IdeasDesigners shape and provide meaning to innovative concepts, thereby lessening the potential negative impact of new technology on users.

Strategic Value 2

Future Scenarios & VisionariesCommunicating what “might be” rather then altering “what is”.

ResearchTechnology ImageMarketUsersUsers

Systems DesignInternally, systems design can bring order to administrative, sales and financial activities, making them more sustainable and profitable.

Externally it enables cooperation of multiple disciplines on more complex projects.

Strategic Value 3

Strategic Planning

Design contributions to:Profitability Market efficiency Creditability/Customer loyalty Market value in the stock market

User Value

Generic Value Chain as developed by McKinsey & Co.

- Source - Function - Integration - Warranty

Where is there any mention of users in all this?

Technology Product Manufacturing Marketing Distribution ServiceDesign

- Source

- Sophistication

- Patents

- Product/

Process

choices

- Function

- Physical

characteristics

- Aesthetics

- Quality

- Integration

- Raw materials

- Capacity

- Location

- Procurement

- Parts production

- Assembly

- Prices

- Advertising/

Promotion

- Sales force

- Package

- Brand

- Channels

- Integration

- Inventory

- Warehousing

- Transport

- Warranty

- Speed

-Captive/

independent

- Prices

From: Jay B. Barney. Gaining and Sustaining Competitive Advantage. Reading, MA: Addison Wesley, 1996,p.176.

Company/ Distributionchannel

Targeted Advertising

Design as Formgiver

Company/Designer channel

Retail sale

Targeted consumers

Advertising

AdvertisingDistribution

channelUsers

Company/

Design

Design as User-centred

User Scenarios

channel

Retail

Design

Concept Implementation Evaluation

The Context of Design

Perception

Brand

Potential

Techno-

Security

Profitability QualityImage IntegrityRecognition

Perception

Financial Institutions

Acceptable values

Interface

Perception

R&D

CultureLaw

Techno-logy Design

Patent Protection

Constraints

Acceptable values

CompatibilityLegal Structures

Fashion

Advert-ising

Purchase

Interface

Taste

Perception

Company Communication Market User

User Value

UsersValue is in the user’s mind and can be derived from personal history and memory.

Voice of the UserDesigners frequently represent the standpoint of users in the product creation phase.

Human FactorsDesigners have developed a range of tools and methods for use in understanding users:

Physical Human FactorsPerceptual Human FactorsSocial Human FactorsCultural Human FactorsEmotional Human Factors

User Value 2

Present Value/Future ValueTwo approaches to “economic value”: one is best utilization of existing resources (e.g. reduce cost, improve efficiency and effectiveness); another is enhancement of profitability (designer as visionary to articulate needs not realized by the user).

Actual need/latent needGiving users what they didn’t know they wanted or never thought Giving users what they didn’t know they wanted or never thought they could have. Role of coded and tacit knowledge.

Tangible/IntangibleTangible and intangible needs, or material and experiential needs, can be explored on several levels, such as functionality, profitability, social concern, cultural concern, sustainability.

Creating value

Markets do not exist,

they are created.they are created.

Brand Value

Brand and Reality

Friends of the Earth?

Brand and Reality

It is unlikely that a brand will be successful without a basis of quality in product and service. On the other hand, products and services can succeed on the basis of quality without a highly contrived brand identity.

Social Value

Social Value

Vienna Strassenbahn by Porsche Design

Cultural ValueCultural Value

Cultural Impact: UK telephone call boxes

Cultural Value

Political ValuePolitical Value

Danish national logo

Ministry of Foreign Affairs

Finance Ministry

State Identity - Denmark1

Foreign Affairs

Culture Ministry

Danish State Railways

Royal TheatreThe Royal Library

State Identity – Denmark 2

State Services 1: Hong Kong tax form

The EndThe End

E=mail: john.heskett72@yahoo.com