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The firm IDEO is a Greek word which means IDEOlogy and IDEOgram, where being innovative is their strategy established in 1991. And later in 1998, the firms merged with two companies “ID Two” and “Matrix Product” with the leadership from David Kelly as the Chief executive officer. Thus the organization is the 1st to change their process into “concurrent engineering” – a fusion of art and engineering to produce aesthetically pleasing products that were also technically competent. (Thomke & Nimgade, 2007, Pg2) IDEO is one of the world’s largest product innovation companies. An award winning and top 50 innovative company, it is the most successful product designing and development firm. (IDEO Inc, n.d)
IDEO has approximately 300 talented employees located in several countries chosen for their stimulating locations. The organization consists of a simple and flatland hierarchy with no titles and rank, but purely made up of project teams running rotational duties in different projects.
The merger in 1998 has brought the companies databases of clients under one umbrella which was beneficial for the growth of the business.
Although the company is located all over the world, they operate independently to seek business locally and the employees still exchange high volume of e-mails and ideas when required.
The firm adopts a multi-disciplinary and collective approach where team collaborates to encourage creativity, innovation and information sharing to develop breakthrough products. To achieve customer satisfaction, they are pro-active in anticipating and understanding the customer’s needs.
All the work is organized into temporary job assignments; hence there is no permanent job assignment or titles. (Thomke & Nimgade, 2007, Pg6)
Other than the flexibility of movement and time, the firm also allows employees to dress freely, making the workplace a relaxed environment. They are free to design their own workspace to reflect their own personalities. Staffs are also encouraged to leave their desk to walk around, especially during mental block to facilitate work progress. And due to the huge organization structure, the firm has diverse and experienced staffs that help ensure that the firm rarely encounters new problems.
Staffs are also cultivated to be optimistic and not be afraid of failure, but believe that failure will improve one self. Ideas generated are all treated without prejudice, even if it sounds absurd, as every idea bring them closer to completing the project they are working on. And in the event that the ideas were not utilized, they are archived for use in future projects.
To motivate employees, the management of IDEO does not rely solely on employee surveys, but also make the effort to study the workplace and interaction, with the aim of bringing the business into the next level.
The organization aim for perfection, sometime could lead to cost and time overrun compared to what was initially submitted to clients, hence regular meeting with clients enable them to be aware of the status.
In IDEO, the management is strict and demanding over the individual’s or group’s project: – project leads are required to attend meetings with planning and documentation. Employees with high performance are rewarded, like shares in its client venture capital base. Rewards are reviewed through the peer evaluations and only for challenging projects.
In IDEO, there are only 2 core groups of people in the entire organization with senior management team and assigned project groups. The senior management team is responsible for IDEO organization decision, policies, structure and process while the other group is to complete the assigned project. In every project assignment, one of the team members will be appointed as a project leader to lead the group. Therefore everyone is IDEO will have equal chance to perform and motivate themselves.
The most significant success for IDEO is its development process. Their philosophy focuses on 3 “Rs”: Rough, Rapid and Right. Employees are required to brain storm their ideas based on customers’ requirements and allow customers to visualize the idea. IDEO’s theory emphasizes on optimum work environment and processes as well as getting it right at the first time.
IDEO has five development process phases beginning from understanding its customer’s background to implementation to manufacturing. The table analyses IDEO phases and identify the impact to the different key point of its operations.
From business operation perspective, an organization needs to critically analyze how the key concerns affect its operation; they are Time, Rank, Quality, Delivery, Flexibility, Cost and Innovation as shown in Figure 1 (Slack et al, 2009, Pg.141) :
Phase 0 (Understand/Observe) & I (Visualize/Realize):
These are the most critical steps that IDEO focuses on. It is important that IDEO grabs hold of time to understand and observe its customers business background, behaviors, needs and requirements. In addition to visualizing potential solutions, they intensively collect feedbacks from clients to create a common understanding of the context of product usage and outline of manufacturing strategy. It has to focus on it cost, quality, flexibility and innovative on its culture.
Phase II (Evaluating/Refining):
After phase 0 and I, IDEO reaches the stage of evaluation and refinement of functioning prototypes, at the same time resolving technical problem the users might face. Again, speed, delivery and cost are the key concerns for this stage.
Phase III (Implement – Detailed Engineering) & IV (Implement – Manufacturing Liaison):
Finally, the ideas are fully developed and ready for implementation. More time is taken for the implementation to ensure products are manufactured correctly without any issues. The quality of output and timely delivery means success.
Dennis Boyle had just led his team at IDEO through the development of 3Com’s successful Palm V, and is now tasked to design the Visor, a competing product from Handspring against the Palm V. Boyle is perplexed that several factors does not bode well for the project.
First of all, the Visor project itself, is likely to affect the way and principle IDEO usually work, time to generate wholly new ideas would be a premium due to the tight deadline, therefore it might prompt IDEO to soften their approach on innovation and instead stick to the rigid ‘tried-and-tested’ methods, ultimately making concessions on the Visor design and functionality (E.g. casing material – plastic instead of anodized aluminum, power source – AAA batteries instead of lithium-ion).
Secondly, competing products might not encourage IDEO’s culture of knowledge sharing among employees and could even breed distrust, perhaps even friction between the teams of Palm and Visor project. In the worst case, it may even cause displeasure on the part of 3com should the Visor project manage to undermine 3com’s market share.
Most importantly however, is that the tight schedule might force his team to abandon many of the early development processes that are vital to developing a successful product, as it answers important questions like what consumers really need, which in turn enable IDEO to come up with innovative solutions. All this could be accomplished if only they have more time.
Now Boyle had to decide whether to accept the Visor project as it is, to decline, or to persuade the Handspring management to change its aggressive launch schedule.
PHASE 0 and I takes up the least cost but PHASE 0 determines the most important aspect; the feasibility of the project. PHASE 0 and I also serves to understand expectations from client and consumer, and also the behavior of consumers, which will give directions to where innovations are to be channeled.
The second important aspect is that it also determines the direction where the final product and its manufacturing methods are heading so all stakeholders are in tune, so as to reduce unnecessary risks or confusion which might surface in the later processes. All these however, are the most time consuming part of the whole development processes.
Going into the operations aspect, PHASE 0 and I are important as this is where the expectations (quality conformance) and features (quality design) are thought of, while PHASE III and IV are there to confirm the conformance and reliability of the final product.
PHASE 0 and I are long phases as it involves a lot of thinking and innovation, yet it is not really a vital component (other than feasibility studies) as part of delivery as IDEO have the flexibility of utilizing their database of past ideas (used or un-used) and Palm V experience to generate a product which can be pushed on to later phases and for implementation. It may be more risk free but the final product may not meet consumer expectations since most new innovations are created during these two phases.
Therefore, as Boyle is in familiar product territory, it is possible for him to accept as he can have the flexibility of reducing the time spent of PHASE 0 and I, using existing ideas database and the template product direction and manufacturing specifications, enabling them to fit into Handspring’s schedule, but this also mean that trade-offs may be in form of the potential of newer innovations and compromise on certain design issues like materials used. By not taking into consideration of consumer expectations, it is possible or unknown that the final product may or may not be a hit. If it does not, then it may dent IDEO’s reputation on quality design and conformance.
To Persuade for Extension:
Alternatively, Boyle can propose a changed schedule in favor of maintaining IDEO’s proven culture and tracking record, the full set of process will mean the expectations on both sides can be met, however this will not be in interest of Handspring as they will miss an opportunity to assert themselves on the market.
Lastly, Boyle can chose to decline the project citing the concerns above, however, he must take into consideration that Handspring can become another big client after 3Com if Visor is a success and IDEO will enhance its reputation as well as establishing itself as a leading designer in this area, which may lead to more business opportunities from existing and perhaps new entrants, or possibilities like integrating other technologies into it in future.
As an international organization for IDEO, Boyle should consider accepting the Visor project as it will boost their international reputation and also open their door to new opportunities, like integration into the phone market. As a product design company, IDEO need to establish themselves as trustable company where customer knew that their idea or design will not be use in their competitors. Thus, this can help IDEO to expand their customer base and establish their reputation.
Therefore, IDEO need to review to their organization culture, development process, organization and process flow management in terms of quality, speed, dependability, flexibility and cost plus going to customization process to attain customer satisfaction.
With IDEO acceptance of the Handspring project, they can perform as follow:
Looking into the future, Palm (3Com) has the choice to select another design company when they have new project, other design companies may hence erode IDEO’s market share. Rather than sticking to the idea of relying on loyal customer, IDEO should look into other opportunities to expand their business profile. By creating a strong reputation and branding, IDEO can position themselves better in the market and also with the successes on PDA, IDEO can explore into other markets like mobile phone.
With the acceptance of the Handspring project, IDEO have to alter their communication culture to include privacy of information among teams.
Due to the customer coming from the same industry, IDEO should provide customer with assurance that their ideas will not be use by other customers in the same industry. Therefore, IDEO need a set of rules and regulations to ensure that unique designs for that customer will not be copied in another project.
In order to meet the deadline besides working around the clock, IDEO should apply project management to crash the project in different phases of the development process with the cooperation of the entire supply chain from vendor, supplier and also project personnel.
From Palm project past experience, IDEO should need to apply risk management on the development process to cater to unforeseen circumstances like the glue issue (the only person whom is the expert in using the industrial glue left the company). Another key point is that IDEO must not overlook the OS agreement between Palm and Handspring.
IDEO should look into customizing the design sequences according to different kind of projects rather than going through the complete cycle. For example in Phase 0 and 1, IDEO can learn from their past experience and shorten the duration rather than following through the complete cycle. In some case like phase 3, flexibility is needed rather than sticking to the original plan.
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