This year we made the decision to explore what it would mean for CIID to have a studio in the US. As part of this strategy we will be running a pop-up studio in New York and a feasibility study. With this initiative approaching quickly, my time is often spent thinking about what the vision should be? How will we create value? and what will the business model look like?
One thing I’ve recognised over the past few years of consulting is that the industry and society today is undergoing disruption. Technology as a tool to change our environment is growing exponentially and people’s expectations and needs are continually evolving. With patents expiring and new startups born everyday, corporations are on a perpetual treadmill to stay competitive and develop that golden product or service that will keep them at the forefront of their industry. In order to maintain loyal and engaged customers, companies need to go beyond what they’ve historically been good at and start innovating outside of their core business.
At CIID we believe design has an important role in transforming these challenges into opportunities that improve the everyday lives of people and help organisations reach their goals… and luckily we’re not the only ones who think this! Embedding design into business is definitely now recognised as a competitive advantage, and you can see this from a recent influx of new industry trends.
One of the most dominant trends is the ‘design firm acquisition’. Over the past two years, we have seen a series of design firms acquired by management consulting firms. The most recent being management consulting giant McKinsey buying the international design firm Lunar. Others include Accenture buying Fjord in 2013 and Capital One buying user experience agency Adaptive Path. These deals illustrate just how key design is to business today and how it is becoming a necessary competency for organisations to have. Design isn’t just about making pretty objects anymore, it’s a tool to tackle the complex social and business problems that society throws at us.
Although these cases highlight that design is more widely recognised as part of the corporate structure, there are still companies that struggle to use design thinking and methods to innovate. In most cases these companies aren’t naturally rooted in design and technology, and still operate with a classic innovation funnel that weeds out any ideas that don’t fit within their existing business model. In order to maintain growth and be innovative at the same time, these corporate barriers need to be broken down.
New models of corporate incubation do exist. One of the most interesting structures out there is provided by a company called Prehype. Prehype describes themselves as a venture development firm that focuses on building products and companies through collaboration with corporations and venture capitalists. The firm allows large companies to benefit from the energy and creativity of entrepreneurship without losing their organisational domain expertise and control.
Another inspiring example which is more closely tied to a specific corporation is The Unilever Foundry. The Foundry is the hub for Unilever’s engagements with technology innovators, and a way to fuel their R&D pipeline. Through the foundry, people and companies can access Unilever’s expertise through a number of initiatives. These include an open innovation platform, pilot projects and Unilever Ventures – a global venture capital arm that offers investment to companies that are strategically aligned with Unilever’s business and sustainability aims.
A final example is venture capital firm, Kleiner Perkins Caufield & Byers. With over 40 years of experience, KPCB helps businesses develop and bring their ideas to market. The differentiator of KPCB is they see design as a critical factor in launching a successful technology venture. When John Maeda was interviewed by Fast Company about why he joined KPCB, he stated:
“Well, it was the opportunity of the lifetime. It seems like right now more than ever technology needs design, and that’s in my mission to bring those two worlds together in the context of business”
Ultimately, corporations need to be exposed to an environment that supports experimentation and risk taking, and a model that quickly proves the business case of ideas and measures their value in new ways. As part of CIID’s New York strategy, this will be one of the things at the forefront of our exploration. What does such a model look like? and how would it operate? Inventing a new model to help companies innovate outside of their core business is no easy task – but CIID is extremely excited to start exploring the possibilities!