This chapter is devoted to the struggle that companies face when deciding whether to hire external product development consultants, internal staff, or both. Because the best approach is “both,” the real issue is to understand what to expect from external consultants and internal employees. Although the internal-versus-external issues apply to consultants other than those who help with product development, the nature of our subject matter leads us to narrow our focus. Though product development requires integrated contribution from engineering, design, and marketing, at times in this discussion we focus even more narrowly to discuss industrial design in particular, because this component is still the least known to traditional business audiences in spite of increased interest in design.
Paul’s dilemma, shared earlier in this chapter, is one that managers in many companies face. We have seen companies struggle with the decision of who to hire, how to hire, where to hire. One midsized company spent significant resources looking for a manager of interaction design, a new position because there was only one industrial designer on staff. This company was shifting its resources toward the direct consumer purchase market, and it realized it needed to be more customer-focused. Design was a competency the company had always purchased through consultancies rather than developed internally. This new hire would get the chance to build the in-house team and to work with external consulting groups. The management hired a senior designer who had experience in consumer electronics. But the company did not quite understand how to integrate the new design focus with its existing skills and capabilities; nor did the firm even know what inputs were needed for design or what outputs to expect from it. For instance, the design manager was well-paid, but the company did not make the financial commitment to hire needed support staff. Nor did the design manager know how to work in the existing company culture of engineering and marketing; he was accustomed to working with design peers. As the newly hired design manager began to instill change into the existing culture, the engineering group resented the new approach and environment. The design manager alienated the marketing group by usurping their previously held responsibility of hiring and working with design firms; he requested that all design services, internal and external, be coordinated by him. As a result of the internal conflict, he ended up leaving his position, putting the company in the position it was in just three months earlier.
Another example we have seen is a company that chose to work with a well-recognized design consulting firm on a major product redesign. For some reason, the product (not technology) that the consultants designed just did not work well. The core product was designed with an integrated add-on feature. Most of the consumers would purchase the product with the add-on, but the company also had to compete with a core stand-alone product for trade show comparisons. The consulting firm designed the add-on element but did not create a look that would have made the combined product as elegant as the base, the product itself. This was a classic case of something lost in translation. A thorough brand analysis conducted for the company was not given to the consulting firm, so the new product did not create continuity with the look and feel of an existing product. in addition, the interface, which is so critical to the product’s use and acceptance, was also disconcerting in relation to the required performance of the device. Was it the fault of the consultancy or the company? It turned out to be the fault of both. The company did not properly articulate the product requirements. The marketing group that hired and directed the consultancy was hands-off from the technical and interaction requirements, and the engineering group didn’t deliver the correct details to the consultants. The consultants took what was given to them with little question or further research of their own to understand the full context of the product’s use. No department took responsibility for the whole project—only for “its” part.
These brief situations highlight some of the trade-offs of building in-house design groups and the proper use of external product consultants. Some companies have achieved this balance. Whirlpool creates in-house teams committed to becoming experts who can support the wide range of needs of a particular brand. At the same time, Whirlpool’s VP of Global Brands, Chuck Jones, has success-fully partnered with the best design consultancies in the world. This allows him to complement the internal knowledge and understanding of other internal organic capabilities with the awareness and methods of the best outside talent. Jones realizes that complacency is the danger of relying solely on in-house groups and that lack of continuity with the company and market is the inherent challenge with consulting groups. If blended properly, the strength of both can keep a company in the best state of innovation.
some companies exclusively hire external consulting groups to turn their technology into complete-product solutions. This is especially true of small companies that cannot afford the resources to hire an in-house staff. The first step in properly using consultants is to understand their capabilities and methods. To help with your understanding of product consultants, we describe what is arguably the most recognized product consultancy in the United States and possibly the world: IDEO.
Nussbaum’s Business Week cover story article also focused on IDEO, because it is clearly one of the most exciting product design firms in the world today. In the broader eyes of business, IDEO’s success has repositioned design consulting firms from being extraneous services companies to being core players in the innovation process. According to Nussbaum, IDEO and other similar consultancies combine a new approach to mining customer insights with a more effective integration of translating those insights into product criteria and product form. This process, if coordinated properly, strengthens a product’s position in the marketplace, clarifies its brand identity, satisfies the end customer and other stakeholders, and generates greater profit. It is the process of innovation as used by Dee Kapur, Chuck Jones, and Edith Harmon from Chapter 1, “The New Breed of Innovator.” If companies such as New Balance, Whirlpool, and Ford are using the process of innovation and are seeking to grow organically, why do they also work with consultants?
Organic growth does not mean that every aspect of expansion needs to happen from within. It does mean that growth needs to be consistent throughout product lines and that new directions need to be understood, embraced, and championed from within. Organic growth is not about who performs the work; it is about whether the growth in the company is consistent with its identity and abilities. sometimes new abilities need to be grafted on; the scenario at the beginning of this chapter illustrates the possible dilemmas when that happens.