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THEPOWEROF
A tiny firm called IDEO redefined
good design by creating experiences,
not just products. Now it’s changing
the way companies innovate.
BY BRUCE NUSSBAUM
by timothy archibald
cover photogrphy

CEO Tim Brown (left)

Founder David Kelley
COVER STORY

THEPOWEROF
 peter dasilva (2)
MANAGED CHAOS IDEO’s brainstorming sessions
are wild, woolly—and fun. They can generate as
many as 100 ideas in an hour

IDEO redefined good

design by creating
experiences, not just
products. Now it’s
changing the way
companies innovate
BY BRUCE NUSSBAUM

DESIGN , 2004 | BusinessWeek | 3

COVER STORY
aiser permanente, the largest touch with their customers, ideo’s services are in growing de-

K
health maintenance organization in the mand. As the economy shifts from the economics of scale to
U.S., was developing a long-range growth the economics of choice and as mass markets fragment and
plan in 2003 that would attract more pa- brand loyalty disappears, it’s more important than ever for
tients and cut costs. Kaiser has hundreds corporations to improve the “consumer experience.” Yet after
of medical offices and hospitals and decades of market research and focus groups, corporations re-
thought it might have to replace many of alize that they still don’t really know their consumers—or how
them with expensive next-generation best to connect with them.
buildings. It hired ideo, the Palo Alto
(Calif.) design firm, for help. Kaiser execs
didn’t know it then, but they were about
to go on a fascinating journey of self-dis- Cool and Fast
covery. That’s because of ideo’s novel ap- enter ideo. the 350-person design firm has offices not
proach. For starters, Kaiser nurses, doctors, and facilities man- just in Palo Alto but also in San Francisco, Chicago, Boston,
agers teamed up with ideo’s social scientists, designers, London, and Munich. Office-furniture maker Steelcase Inc.
architects, and engineers and observed patients as they made owns a majority stake in the firm, which operates as an inde-
their way through their medical facilities. At times, they played pendent unit. By design industry standards, ideo is huge,
the role of patient themselves. though its $62 million in revenues in 2003 are puny by most
Together they came up with some surprising insights. corporate measures. But ideo’s impact on the corporate
ideo’s architects revealed that patients and family often be- world is far greater than the sum of its sales. It has a client list
came annoyed well before seeing a doctor because checking in that spans the globe, including Hewlett-Packard, at&t Wire-
was a nightmare and waiting rooms were uncomfortable. less Services, Nestlé, Vodafone, Samsung, nasa, and the bbc.
They also showed that Kaiser’s doctors and medical assistants More than half of the firm’s revenue comes from European
sat too far apart. ideo’s cognitive psychologists pointed out and Asian clients or work done overseas by U.S. corporations.
that people, especially the young, the old, and immigrants, ideo began in 1991 as a merger between David Kelley
visit doctors with a parent or friend, but that second person is Design, which created Apple Computer Inc.’s first mouse in
often not allowed to stay with the patient, leaving the afflict- 1982, and id Two, which designed the first laptop computer in
ed alienated and anxious. ideo’s sociologists explained that the same year. The Grid laptop is in the Museum of Modern
patients hated Kaiser’s examination rooms because they often Art in New York. Kelley went to Stanford University School of
had to wait alone for up to 20 minutes half-naked, with noth- Engineering in the mid-’70s and met Steven P. Jobs. Jobs later
ing to do, surrounded by threatening needles. ideo and introduced Kelley to the woman he married, Kc Branscomb,
Kaiser concluded that the patient experience can be awful former senior vice-president at Lotus Development Corp. and
even when people leave treated ceo of IntelliCorp Inc. id Two
and cured. was run by Bill Moggridge, a
What to do? After just seven well-known British interaction
weeks with ideo, Kaiser real- designer. Both founders still
ized its long-range growth plan manage ideo, along with ceo
didn’t require building lots of Tim Brown.
expensive new facilities. What it From its inception, ideo has
needed was to overhaul the pa- been a force in the world of
tient experience. Kaiser learned design. It has designed hun-
from ideo that seeking medical dreds of products and won
care is much like shopping—it more design awards over the
is a social experience shared past decade than any other
with others. So it needed to of- firm. In the roaring ’90s, ideo
fer more comfortable waiting was best known for designing
rooms and a lobby with clear user-friendly computers, pdas,
instructions on where to go; and other high-tech products
larger exam rooms, with space such as the Palm V, Polaroid’s
for three or more people and I-Zone cameras, the Steelcase
curtains for privacy, to make pa- Leap Chair, and Zinio inter-
tients comfortable; and special active magazine software. It
corridors for medical staffers to also designed the first no-
meet and increase their effi- squeeze, stand-up toothpaste
ciency. “ideo showed us that tube for Procter & Gamble Co.’s
we are designing human expe- Crest and the Oral-B tooth-
riences, not buildings,” says brushes for kids. Now, ideo is
Adam D. Nemer, medical opera- transferring its ability to create
tions services manager at CELLULAR SANITY AT&T consumer products into de-
Kaiser. “Its recommendations Wireless’ mMode platform signing consumer experiences
do not require big capital ex- was too hard to use until in services, from shopping and
penditures.” With corporations IDEO helped make it click banking to health care and
increasingly desperate to get in wireless communication.
 1. OBSERVATION
THIS IS THE IDEO WAY IDEO’s cognitive psychologists, anthropologists, and
sociologists team up with corporate clients to understand the
Five steps consumer experience. Some of IDEO’s techniques:
in the SHADOWING Observing people using products, shopping, going
process of to hospitals, taking the train, using their cells phones.
designing BEHAVIORAL MAPPING Photographing people within a space,
such as a hospital waiting room, over two or three days.
a better CONSUMER JOURNEY Keeping track of all the interactions a
consumer consumer has with a product, service, or space.
experience CAMERA JOURNALS Asking consumers to keep visual diaries
of their activities and impressions relating to a product.
EXTREME USER INTERVIEWS Talking to people who really
know—or know nothing—about a product or service, and
evaluating their experience using it.
STORYTELLING Prompting people to tell personal stories about
their consumer experiences.
UNFOCUS GROUPS Interviewing a diverse group of people: To
explore ideas about sandals, IDEO gathered an artist, a
bodybuilder, a podiatrist, and a shoe fetishist.

2. BRAINSTORMING 3. RAPID PROTOTYPING

An intense, idea-generating session analyzing data Mocking up working models helps everyone visualize possible
gathered by observing people. Each lasts no more than an solutions and speeds up decision-making and innovation.
hour. Rules of brainstorming are strict and are stenciled Some guidelines:
on the walls:
MOCK UP EVERYTHING It is possible to create models not only
DEFER JUDGMENT Don’t dismiss any ideas. of products but also of services such as health care and spaces
BUILD ON THE IDEAS OF OTHERS No “buts,” only “ands.” such as museum lobbies.
USE VIDEOGRAPHY Make short movies to depict the consumer
ENCOURAGE WILD IDEAS Embrace the most out-of-the-box
experience.
notions because they can be the key to solutions.
GO FAST Build mock-ups quickly and cheaply. Never waste time
GO FOR QUANTITY Aim for as many new ideas as possible. In a on complicated concepts.
good session, up to 100 ideas are generated in 60 minutes.
NO FRILLS Make prototypes that demonstrate a design idea
BE VISUAL Use yellow, red, and blue markers to write on big without sweating over the details.
30-inch by 25-inch Post-its that are put on a wall.
CREATE SCENARIOS Show how a variety of people use a
STAY FOCUSED ON THE TOPIC Always keep the discussion service in different ways and how various designs can meet their
on target. individual needs.
ONE CONVERSATION AT A TIME No interrupting, no BODYSTORM Delineate different types of consumers and act
dismissing, no disrespect, no rudeness. out their roles.

4. REFINING 5. IMPLEMENTATION
At this stage, IDEO narrows down the choices to a few Bring IDEO’s strong engineering, design, and social-science
possibilities. Here’s how it’s done: capabilities to bear when actually creating a product
or service.
BRAINSTORM in rapid fashion to weed out ideas and focus on
the remaining best options. TAP ALL RESOURCES Involve IDEO’s diverse workforce from
FOCUS PROTOTYPING on a few key ideas to arrive at an 40 countries to carry out the plans.
optimal solution to a problem. THE WORKFORCE Employees have advanced degrees in
ENGAGE THE CLIENT actively in the process of narrowing different kinds of engineering: mechanical, electrical,
the choices. biomedical, software, aerospace, and manufacturing. Many are
experts in materials science, computer-aided design, robotics,
BE DISCIPLINED and ruthless in making selections. computer science, movie special effects, molding, industrial
FOCUS on the outcome of the process—reaching the best interaction, graphic and Web information, fashion and
roberto carra

possible solution. automotive design, business, communications, linguistics,

GET AGREEMENT from all stakeholders. The more top-level sociology, ergonomics, cognitive psychology, biomechanics, art
executives who sign off on the solution, the better the chances therapy, ethnology, management consulting, statistics,
of success. medicine, and zoology.