Book Summary & Highlights: Design Driven Innovation By Roberto Verganti

Book Summary & Highlights: Design Driven Innovation By Roberto Verganti

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Pub Date: 2009

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Until now, the literature on innovation has focused either on radical innovation pushed by technology or incremental innovation pulled by the market. In Design-Driven Innovation: How to Compete by Radically Innovating the Meaning of Products, Roberto Verganti introduces a third strategy, a radical shift in perspective that introduces a bold new way of competing. Design-driven innovations do not come from the market; they create new markets. They don't push new technologies; they push new meanings.

It's about having a vision, and taking that vision to your customers. Think of game-changers like Nintendo's Wii or Apple's iPod. They overturned our understanding of what a video game means and how we listen to music. Customers had not asked for these new meanings, but once they experienced them, it was love at first sight.

But where does the vision come from? With fascinating examples from leading European and American companies, Verganti shows that for truly breakthrough products and services, we must look beyond customers and users to those he calls "interpreters" - the experts who deeply understand and shape the markets they work in.

Design-Driven Innovation offers a provocative new view of innovation thinking and practice.

About Author: Roberto Verganti

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Two major findings have characterized management literature in the past decades. 1. The first is that radical innovation, albeit risky, is one of the major sources of long-term competitive advantage. 2. The second finding is that people do not buy products but meanings. ...The common assumption, however, is that meanings are not a subject for innovation: they are a given. One must understand them but cannot innovate them... Innovation has therefore focused on two strategies: quantum leaps in product performance enabled by breakthrough technologies, and improved product solutions enabled by better analysis of users’ needs. The former is the domain of radical innovation pushed by technology, and the latter of incremental innovation pulled by the market.
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Artemide has followed a third strategy: design-driven innovation— that is, radical innovation of meaning. It has not provided people with an improved interpretation of what they already mean by, and expect from, a lamp: a more beautiful object. Rather, the company has proposed a different and unexpected meaning: a light that makes you feel better. This meaning, unsolicited, was what people were actually waiting for.

Proposals

And indeed, the first finding from my investigation is that radical innovation of meanings doesn’t come from user-centered approaches. If Nintendo had closely observed teenagers using existing game consoles, it probably would have improved traditional game controllers, enabling users to better immerse themselves in a virtual world, rather than redefining what a game console is. If Alessi had visited users in their homes to scrutinize how they pulled corks from a bottle, it would have created more-efficient tools, not objects of affection that a person buys twice—once for herself and once for her best friend. User-centered innovation does not question existing meanings but rather reinforces them, thanks to its powerful methods. These companies are instead making proposals, putting forward a vision. That is why I call this strategy design-driven: like radical innovation of technologies, it is a push strategy. These proposals, however, are not dreams without a foundation. They end up being what people were waiting for, once they see them. They often love them much more than products that companies have developed by scrutinizing users’ needs. These proposals are wellsprings for the creation of sustainable profit.

Interpreters

Firms that develop design-driven innovations step back from users and take a broader perspective. They explore how the context in which people live is evolving, both in sociocultural terms (how the reason people buy things is changing) and in technical terms (how technologies, products, and services are shaping that context). Most of all, these firms envision how this context of life could change for the better. The word could is not incidental. These firms are not simply following existing trends. They are making proposals with which they will modify the context. They are building scenarios that would perhaps never occur (or that would occur more slowly) if the firms did not deliver their unsolicited proposals. Their question, therefore, is, “How could people give meaning to things in this evolving life context?” When a company takes this broader perspective, it discovers that it is not alone in asking that question. Every company is surrounded by several agents (firms in other industries that target the same users, suppliers of new technologies, researchers, designers, and artists) who share its interests. Consider, for example, a food company that, instead of closely looking with a magnifying lens at how a person cuts cheese, asks, “What meanings could family members search for when they are home and are going to have dinner?” Other actors are investigating this same question: kitchen manufacturers, manufacturers of white goods, TV broadcasters, architects who design home interiors, food journalists, and food retailers. All are looking at the same people in the same life context: dinner with family at home at night. And all are conducting research on how those people could give meaning to things. They are, in other words, interpreters. Companies that produce design-driven innovations highly value their interactions with these interpreters. With them they exchange information on scenarios, test the robustness of their assumptions, and discuss their own visions. These companies understand that knowledge about meanings is diffused throughout their external environment; that they are immersed in a collective research laboratory where interpreters pursue their own investigations and are engaged in a continuous mutual dialogue

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The process of design-driven innovation therefore entails getting close to interpreters. It leverages their ability to understand and influence how people could give meaning to things. This process, described in detail in this book, consists of three actions. The first one is listening. It is the action of gaining access to knowledge about possible new product meanings by interacting with interpreters. Firms that listen better are those that develop privileged relationships with a distinguished group of key interpreters. These are not necessarily the most famous in the industry. Rather, successful firms first identify overlooked interpreters, usually in fields where competitors are not searching. Key interpreters are forward-looking researchers who are developing, often for their own purposes, unique visions about how meanings could evolve in the life context we want to investigate. Firms that realize design-driven innovations are better than their competitors at detecting, attracting, and interacting with key interpreters. The second action is interpreting. Its purpose is to allow a company to develop its unique proposal. It is the internal process through which the firm assesses the knowledge it gains by interacting with interpreters and then recombines and integrates this knowledge with its own proprietary insights, technologies, and assets. This process reflects the profound and precise dynamics of research rather than the speed of brainstorming. It implies sharing knowledge through exploratory experiments rather than extemporaneous creativity. It resembles the process of science and engineering (although it targets meanings rather than technologies) more than that of a creative agency. Its outcome is the development of a breakthrough meaning for a product family. The third action is addressing. Radical innovations of meanings, being unexpected, sometimes initially confuse people. To prepare the ground for groundbreaking proposals, firms leverage the seductive power of interpreters. By discussing and internalizing a firm’s novel vision, these interpreters inevitably change the life context (through the technologies they develop, the products and services they design, the artworks they create) in a way that makes the company’s proposal more meaningful and attractive when people see it.
Design-driven innovation is not about being creative. Rather, it is about setting a direction and investing in relational assets. And this is definitely a job for executives.
This theory implies that all objects communicate a message to people through five possible codes: paternal, maternal, childish, erotic, and birth/death.3