They have big designs on China
Updated: 2012-07-06 07:48
By Su Zhou (China Daily)
Ideo's Richard Kelly says the company focuses not only on products but also on things behind them. Yong Kai / China Daily
US company is teaching Chinese firms to look at themselves and their products in a new light
In the lexicon of most Chinese designers, the word design simply means the creation or improvement of shapes and appearances, the result of which can often be called art. But in international design consultant Ideo's book, design means innovation combined with human desirability, business viability and technical feasibility.
One who knows something about the practical ramifications of that for industrial design is Yang Xingping, who was CEO of TCL Communication Technology Holdings Ltd from 2009 until 2010.
He told China Daily that Ideo had a role in TCL's fortunes, designing a series of TV sets that turned out to have a degree of success, and several of the designs won prestigious international awards.
However, the most significant impact of Ideo's work for TCL has been to build the company's innovative capability, enhance its user experience, build its brand and enable the company to look into the future of interactive media and entertainment.
Such cases are helping Ideo win over Chinese companies to the idea that design is not just about appearance, but has a bearing on a company's business model, its service, and, most importantly, its customers' experience.
Richard Kelly, managing director of Ideo Asia Pacific, based in Shanghai, says: "When most companies first come to us, generally they will say, 'Design a new bottle for me' because they come with questions such as 'How can I sell this bottle?' instead of 'What do my consumers need?'
"We can design a new bottle for you, and this is what we are good at, but when doing this we will think of more questions, such as 'What is the future of safe drinking water?'
"We are not only focusing on products; we are more curious about things behind products. We help our clients to figure out what kinds of values they can create for their consumers and which business model can achieve those values."
As a firm dedicated to helping clients look for ways to grow, Ideo is also on the look-out for market expansion. It has handled cases relating to China for more than 20 years, but it was only relatively recently that it set up shop in the country, opening an office in Shanghai in 2003.
In 2008 Kelly arrived in Shanghai, brought many designers from other countries and recruited designers locally.
"Although we have been dealing with cases from Chinese clients or targeting the Chinese market for many years, we cannot say we really understood China before we came here.
"As a human-centered firm, we are curious about the country with 1.3 billion people."
Yang, who is now CEO of naturedao.com, a stock market information provider based in Shanghai, also thinks that Ideo has a good opportunity to expand its business.
"At first Ideo encountered some challenges in China because of the different understanding of design. However, it is very exciting to see more and more companies are shifting their focus from product to service. The business model and user experience when they are moving from low-price and manufacturing to brand-building and overseas expansion will need help from organizations such as Ideo."
Ideo, which has a multitude of design accolades to its name, including once being ranked as the world's 15th most innovative company by business leaders in a survey by Boston Consulting Group, now has more than 30 clients in China, including The North Face, Siemens, Samsung, Fotile, Midea and Huawei.
Tony Wong, director of design of Ideo Shanghai, told the Chinese magazine Design that the company's development in China reflects changes in its client base. Before 2009 most clients in China were Chinese companies that were looking for solutions to challenges in the domestic market.
Between 2009 and last year only half the clients were Chinese companies focusing on the domestic market. Twenty-five percent were Chinese companies that wanted to compete on the world stage and the rest were multinationals that hoped to enhance their competitiveness in China.
However, Ideo has developed well in the past nine years, even if it plays its cards close to its chest and refuses to give details about particular cases or to divulge financial figures.
Kelly says that many clients who have presented an archetypal goal like designing a new bottle have walked away with a long-term plan focusing on strategic innovation.
"We (have) helped clients to figure out the possible business models of green energy in Africa or special skills they may need in Europe or the US."
Now Ideo is playing an increased role in its clients' businesses, which could make it a competitor with consulting firms such as McKinsey & Co.
"Consulting firms provide conclusions by data," Kelly says. "However, data is not insight ... data only represents now instead of the future. Sometimes what people tell you is not what they are doing; what they are doing is not what they are thinking; what they are thinking is not what they believe they will do.
"I am not saying market research doesn't work. We also do research but on extreme groups of people. Take the cell phone, for example. We will pay attention to those who have four cell phones and those who have none. They can offer different insights and inspiration."
Kelly says consideration was given to whether clients should "just get by and be incremental or focus on innovation". The conclusion was that innovation was crucial because "meeting the basic demands of consumers can only get you into the game, but never win the game".
A year ago a design magazine quoted the CEO of Ideo, Tim Brown, as saying that focusing on consulting was not the only path design firms could follow if they wanted to expand. That could be an effective way of making design more influential in business and management processes, but was not the only one.
Xie Dahuan, founder of the firm XL% Design, says design thinking distinguishes Ideo from commercial consultancies.
"Now many consulting firms are adding more people to take care of design and innovation, but I think Ideo is still ahead in some ways. Design helps Ideo to solve problems with more innovative ideas, while consulting firms solve problems by analysis."
However, Xie says it will be another five to 10 years before the Chinese market fully appreciates the importance of this.
"Over the past 10 years we have witnessed the fast growth of the design market in China in terms of quantity, not quality. Chinese companies do not treat design in the serious way that they do capital; good design is seen as icing on the cake, not as an essential ingredient."
In matters of design, uppermost in companies' considerations is how much money they have to pay, Xie says, which is to Ideo's disadvantage.
Kelly thinks the time is ripe for Ideo to expand its business in China, even though it faces many challenges.
"Change needs time. We cannot force them to become us; they should be themselves, better and better."
Letting clients "be themselves" includes giving them free rein with their ideas rather than leaving all the thinking to Ideo.
"We invite them to participate in our research and brainstorming, which usually inspires them to think," Kelly says.
"At the same time, we always encourage them to build their own innovation team, even though this could be our job."
For Ideo this is an important part of the business because "if the entrepreneurs in China become more innovative than before, it will be easier for us to expand our business here".
(China Daily 07/06/2012 page16)