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 communication 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 science and HCI, systems engineering, electrical engineering, mechanical 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 corporation and developing a new model, a model in which these disciplines 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 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 consumer innovation internally. The main thing is that budgets and companies 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 proposal 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 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 allocated to support growth. When computers became a standard in business operations, companies invested inordinate amounts of human and technical resources to improve efficiency. During quality initiatives 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 initiatives was clear and the principles fairly easy for executives in companies to learn and adopt. Today, companies must invest in soft-quality initiatives to excite customers and integrate into their lives.