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Amit Pande, OracleDeepa Bachu, Intuit

Nov 25, 2007User Friendly 2007, Beijing, China

Creating a culture of distributed design

innovation

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A few housekeeping notes

• Slides for this workshop will be available at http://www.slideshare.net/amitpande/

• Blog for continuing discussions on this topic – http://distributedinnovation.wordpress.com

• You should each have a file folder which contains• Slide handouts• Workshop design exercise• Additional reference material

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Workshop scheduleWorkshop overview and audience introductions 8:30 – 9:00

am Segment 1:Global trends and context of distributed design innovation

9:00 – 9:30 am

Session 2: Implications, challenges of distributed design innovation

9:30 – 10:00 am

BREAK 10:00 – 10:15- am

Session 3: Innovation framework: People, Process, Product

10:15 - 11:00 am

Group exercise: Create a solution for an opportunity in your marketplace using the Innovation framework

11:00 - 11:30 am

Analysis of group exercise – map and discuss solutions

11:30 am – 12:00 pm

Wrap-up and next steps 12:00 – 12:30 pm

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Workshop overview and format

• Work together to understand how to harness opportunities of distributed design innovation

• Specific focus on• Understanding distributed design innovation• Tapping new market needs• Emerging markets

• 3 segments in today’s workshop (About 1 hour each)• Context of globalization and Distributed Design Innovation• Understanding challenges of Distributed Design Innovation• Developing a framework for Distributed Design Innovation

• Hands on exercise

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Introductions

• About us• Who you are what you do• Your specific interest in this workshop • The one thing you seek to takeaway from

today

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Segment 1: Key global trends and context of Distributed Design Innovation

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Emerging markets driving global economy

• Fortune magazine states that one-third of GM’s global auto profits come from China, even though it has only 12 percent of the Chinese market

• China and India remain fastest growing telecom markets for a while  

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Technology creation getting more global

• R&D spending by Fortune 500 companies has increased significantly in emerging markets

• R&D spending goes beyond cost-based outsourcing – Focus on product design, product development and other value added activities

• …24 Chinese firms made it to Fortune Global 500 in 2007, so did 6 Indian firms.

Source: http://www.strategy-business.com/media/image/06405-ex_03.gif

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Technology footprint increasing in region

• 100 of the Fortune 500 companies have R&D facilities in India. Similar numbers have facilities in China

• In addition, many Asian tech companies growing exponentially

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Talent pool getting distributed

• By 2010, China and India combined will graduate 12 times the number of engineers, mathematicians, scientists and technicians as the US

• China and India have contributed the largest number of foreign students to North America for 7 years in a row

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Specifically, design talent getting global

• Asia continues to rise as a strategic design hub• 10 schools now in Asia in top 50 global design

schools• After success of Japan, Korea, Singapore –

China and India gradually creating design footprint

Source: Business Week - http://images.businessweek.com/ss/07/10/1005_dschools/source/1.htm

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Putting together these trends• Technology consumption is getting global and

fragmented• Millions of new end users in emerging markets• Strong demand for hardware, software and services • New platforms and new business models. E.g.: Mobile

payments• Technology production is getting distributed and global

• Talent pool of thousands of technologists, scientists, designers spread across key international locations

• Competition and opportunities are both global and local • Fortune 500 companies have captive centers in India, China• Small and local startups are creating new niche segments

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• Within this complex landscape, some companies are using distributed design innovation as a key competitive strategy and creating new market opportunities…

• Some examples• Nokia • Babajob.com • Apple

What do these trends mean for us?

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Nokia• 200 million sales

worldwide since its launch in 2003

• More than iPod, RAZR, Chocolate, PS2 in numbers

• Highest uptake in emerging markets

• Dust proof with flashlight

• No color display

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Babajob• Connects India’s elites to

the people who need jobs but lack the connections to find them

• Maids, cooks, chauffeurs, carpenters, other workers

• Job seekers advertise skills, employers advertise jobs and matches are made through social networks.

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Apple

Source: http://slideshare.net

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What’s common in these 3 stories?

• Apple – Breakthrough User experience, Industrial Design and good marketing

• Babajob – Specific and local business model for unmet user needs

• Nokia – Unique value added features for developing markets

• In all these cases, distributed design innovation was a key differentiator for market success…

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Segment 2: Understanding Distributed Design Innovation and its challenges

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A reality check on design innovation

• Despite the outliers mentioned earlier, many Fortune 500 companies and local start-ups focus only on cost advantages (‘outsourcing’)

• Engineering and design talent in emerging economies often focused on global (US/Europe centric) end user needs

• However, as emerging markets drive global business, engineers and designers in China/India are beginning to focus on improvements, and new product innovation

• Emerging (BRIC) market consumers seek relevant products and services – but not enough exist. Millions of unmet user needs remain.

• Imagine the market potential of innovations such as Skype or Facebook or Google Phone for emerging markets!!

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Points to consider• While innovation is easy in principle, it is difficult in practice• Most companies are either 500 lb gorillas or small fishes –

bound by size or available resources• Global multi-sourcing not easy – designers, software engineers,

product managers talent spread across locations • Product development approaches and existing products in one

location do not always work well in another• End user needs are very complex and sophisticated – users in

urban China or rural India have different needs/aspirations

• Dealing with different cultures, new end users, and working/thinking processes makes distributed design innovation difficult !!

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However, distributed design innovation presents unique opportunities• Rare opportunity to benefit from few untapped global markets

• All necessary conditions for the ‘Perfect Storm’• Large base of designers and technologists • Dynamic and rapidly growing local markets till 2030• Presence of large companies, consultancies, free wheeling talent

• However..• Above Ingredients in themselves not sufficient • Distributed innovation is fraught with risks and pitfalls• Need proven and simple structures and methods to

implement distributed design innovation in your organizations

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• Audience feedback on your main obstacles to distributed design innovation • Share stories in pairs

• Some sample innovation killers • People did not see it coming• Executive management tunnel visioning • Product was commoditized, undifferentiated• Did not understand the market or real consumer needs• Product was before it’s time• Product was a solution in search of a problem• Customer need was not clearly understood

Group brainstorming exercise

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Segment 3: Developing a framework for Distributed Design Innovation

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Framework for Distributed Design Innovation

People Process Product

IInnovation Framework

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Framework for Distributed Design Innovation

People Process Product

IInnovation Framework

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Framework for Distributed Design Innovation: People• People are the foundational basis of success in Distributed

Design Innovation activities • What to look for when hiring a distributed design team

• Leverage global pool of talent through local ecosystems• Few core skills - creative engineers, tech savvy designers,

thought leaders• Well rounded, passionate, pro-active individuals • Both out-of-box and in-the-box thinking• Motivated, engaged, who will fit socially in your organization • Individuals who want to understand the problem they’re solving• Diverse backgrounds and cultures, interests and experience• Those who savor surprises, emergence, and flexibility

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Framework for Distributed Design Innovation: People• How to engage and retain people in emerging markets

• Treat people as peers, not resources• Build trust, keep reinforcing trust• Balance face to face and virtual team work • Reward people meaningfully • Research shows that after 1 year, performance starts

dipping• Consider job rotation within innovation roles• Consider moving staff across offices

• Dedicate someone to care & nurturing of virtual team• Invest in engaging and inspiring workplaces

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Framework for Distributed Design Innovation: People

• Key roles within innovation – Your team should have a mix of skills• Understand problems worth solving for your business

• Observe and absorb customer requirements for new products • Feed forward and feed back with customers in the field

• Generate ideas that solve the problem• Brainstorm and create multiple ideas• Bring concepts from related worlds and competitors

• Build on the ideas• Experiment with technologies and platforms• Storyboard to make ideas tangible

• Realizing the ideas • Push through budget constraints and politics• Collaborate with other teams, customers and partners

• So, what are these people called? What do they look like?

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Framework for Distributed Design Innovation

People Process Product

IInnovation Framework

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Framework for Distributed Design Innovation: ProcessGreat ideas are the fountainhead of great

products…

• Create an environment for creative ideas • Encourage constructive dialogues and conflicts• Emphasize brainstorming and experimentation• Use triads – Design, Technology, Strategy• Focus on User Centered Design and Innovation

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Framework for Distributed Design Innovation: Process

User Centered Design is the cornerstone of any innovation activity

• Understanding user needs through in context participant observation, ethnographic field visits, in lab sessions

• Focus on early sketching, wireframes, quick prototypes• Iterate with users several times – measure and track issues• Focus on both Design and Usability aspects• Focus on often-ignored aspects of the product – login

screens, configurations and settings, button text, error messages

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Framework for Distributed Design Innovation: ProcessBut ideas are nothing without execution… • Organize your multi-location teams based on competency

and fit• Don’t do dead and lengthy documents • Use lightweight, flexible technology within your team

• Wikis, RSS feeds, light project management and reporting• Technology should be persistent

• Keep your tasks small and your timeline smaller• Meetings can be wasteful - respect alone time• Create a process so people know where they are• Regular check ins

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Framework for Distributed Design Innovation

People Process Product

IInnovation Framework

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Framework for Distributed Design Innovation: Product

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• What's the headline? What is the real unmet need you are solving?

•“Pay your bills on time, every time”• Ignore details early on

•Basecamp did not have charts, bar graphs• Give customers just enough features to address 1 or 2 key needs

•E.g.: Ward Cunningham’s original Wiki• Start with the User Interface first

•Focus on ignored usability aspects: admin screens, login screens, text simplicity

• If you optimize for everybody, it is great for nobody

•Housewives in Tokyo versus all the women in Japan

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Framework for Distributed Design Innovation: Product• Provide open forums to your customers• Consider new approaches – ‘Cloud computing’• Encourage experimentation ala Google Labs• Sign up early adopters ala the gaming industry • Get product out into the field and get quick

learnings• Iterate till you get it right! • Monetization can come later• Be open to changing your business model

• E.g. of Flickr began as a game called the Game Neverending

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Group exercise: Lets put these ideas to work!

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Distributed design innovation exercise

DESIGN BRIEF• You have to solve the problem of “getting bills

paid on time” for your local market• Exercise details are in your worksheet• Select the people, follow a process, create a

product• People – who would you choose within constraints.

Select from 12 people profiles. • Process – which design processes would you choose.

Select among several design processes. • Product – what would you finally build, how would you

phase it out

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Discussion on exercise

•What was our solution•What is your different solutions•Discuss differences/overlap

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Conclusions: Putting it all together

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How to stay in touch

• http://www.slideshare.net/amitpande/ or http://amitpande.com

• http://distributedinnovation.wordpress.com • Email us

• Amit.pande@oracle.com and pande.amit@gmail.com• Deepa_bachu@intuit.com

• Visit us at http://upabangalore.org