Design Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean [Hardcover]

Roberto Verganti (Author)

Book Description

Publication Date: August 3, 2009

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.

Editorial Reviews

Review

One of the Design Primers for Businesspeople. Eschewing the received wisdom that the customer is always right, Politecnico di Milano professor Verganti focuses on game-changing designs that up-end expectations and create entirely new markets... Verganti also includes a useful section on how executives can attempt to instigate their own programs of radical innovation. One of the Best Innovation and Design Books of 2009. - BusinessWeek, December 16, 2009

How should a company devise new meanings and create the designs to embody them? Mr. Verganti suggests that companies form relationships with "interpreters"—individuals and organizations looking at settings similar to the one in which the company's products would be used. For Mr. Verganti, it might be said, if life imitates art, corporate life should imitate the making of art. - The Wall Street Journal, October 9, 2009

If you follow Mr. Verganti’s advice, it may take a while, but your competition will be left wondering how it was you managed to redefine (and capture) their business”. - San Francisco Book Review, September 2009

Verganti … tells how design innovators add “unsolicited meaning” that consumers don’t even know they’re craving – and they create products people can’t live without. - BiZed, November-December 2009

One of the best books of the year is undoubtedly “Design-Driven Innovation”. In it Verganti attacks one of the central mysteries of innovation–how can a company successfully create a product that is a radical break from the past, and which shows the way to a new future? - John Caddell on The Customer Collective, August 12th 2009

Consumption-driven wealth and status are being replaced by identity, belonging, and a strong desire to contribute and do something “meaningful” rather than just acquire things. Roberto Verganti, in his new book, Design-Driven Innovation, argues that there is a “Third Way of Innovation,” driven by meaning, or to be more precise, by those cultural “interpreters” who have the ability to “make sense of things” and give existing things new meaning — and thus create new markets. - Design Mind, September 2009

From the Back Cover

Roberto Verganti’s fascinating analysis will stimulate all thoughtful business readers, students, and practitioners alike. This passionate and keenly observed book offers a valuable and provocative new view, and will be a fundamental reference for all those interested in design and determined to pursue innovation as a driving factor in their profession. -- Luca di Montezemolo, Chairman Ferrari S.p.A. and Fiat S.p.A.

Every manager interested in innovation should read this book. The perspectives it provides will make a crucial difference to managers in the twenty-first century. -- Marco Iansiti, David Sarnoff Professor of Business Administration, Harvard Business School; coauthor of The Keystone Advantage

Verganti shares powerful insights into both the process and value of design-driven innovation, to the benefit of business leaders and, ultimately, the customers we serve. -- Brian C. Walker, President and CEO, Herman Miller Inc.

Can design save the world? No, but it can definitely help make it better, especially if integrated within the systems that already have direct impact on the economy and on policy making. Roberto Verganti belongs to a small group of enthusiastic experts and interpreters that have set out to explain the culture of design to the powerful but unaware, so that they can appreciate its full potential. -- Paola Antonelli, Senior Curator, Architecture and Design, The Museum of Modern Art

See all Editorial Reviews

Product Details

• Hardcover: 288 pages
• Publisher: Harvard Business Press (August 3, 2009)
• Language: English
• ISBN-10: 1422124827
• ISBN-13: 978-1422124826
• Product Dimensions: 6.3 x 1.1 x 9.6 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (15 customer reviews)
• Amazon Best Sellers Rank: #108,546 in Books (See Top 100 in Books)
  • #29 in Books > Business & Investing > Marketing & Sales > Marketing > Product Management
  • #38 in Books > Business & Investing > Management & Leadership > Industrial

More About the Author

(More information on www.designdriveninnovation.com)

Roberto Verganti has pioneered research on how to create innovations that customers do not expect, but that they eventually love and make them passionate. In "Design-Driven Innovation" he has unveiled how leaders build an unbeatable and sustainable competitive advantage through innovations that do not come from the market but that create new markets. His research shows how executives and organizations can create a radically new vision, and take that vision to their customers. His cases and stories based on advanced applications, illustrates how to implement this strategy and process by leveraging the rich and multifaceted network of a firm outsiders - such as scientists, customers, suppliers, intermediaries, designers, artists.

Roberto is Professor of Management of Innovation at Politecnico di Milano, where he teaches in the School of Management and the School of Design, and where he directs MaDe In Lab, the laboratory for executive education on MAnagement of DEsign and INnovation. He has been a visiting scholar at the Harvard Business School twice and is visiting professor of Design Management at the Copenhagen Business School. Roberto serves on the Board of the EIASM - the European Institute for Advanced Studies in Management, that affiliates more than 40'000 management scientists from all over the world and all major European business schools. He also serves in the Editorial Board of the Journal of Product Innovation Management, in the Advisory Board of the Design Management Institute of Boston and in the Advisory Board of www.Innocrowding.com. His research on management of design and design clusters has been awarded the Compasso d'Oro (the most prestigious design award in Italy).

Roberto Verganti is also the founder and chairman of PROject Science (www.pro-jectscience.com), a consulting institute dedicated to help companies achieve strategic innovation and collaborates as an expert in innovation and design with Keystone Strategy, the consulting firm founded by Marco Iansiti of the Harvard Business School. He has served as an advisor, coach and executive educator to senior managers at a wide variety of manufacturing and service firms including Ferrari, Volvo, Ducati, Whirlpool, Indesit Company, Xerox, Kodak, Samsung, Hewlett-Packard, B&B Italia, Snaidero, Masco, B-Ticino, Barilla, Kraft, Nestle, Unilever, Rackitt-Benckiser, STMicroelectronics, Intuit, Microsoft, Ericsson, Solvay-Solexis, Corning, Bausch&Lomb, Pirelli, Astra-Zeneca, Pharmacia-Upjohn, Tetrapak, Sandvik-Coromant, Vodafone. He has also helped national and regional governments around the world to conceive design and innovation policies.

Roberto Verganti has issued more than 150 publications, that lay at the intersection between strategy, design and technology management, and investigate the challenges and processes of innovation in companies ranging from dominant players such as Microsoft and Vodafone to small and dynamic firms such as Alessi and Nintendo. Its publications, that have been acknowledged several international awards, include "Developing Products on Internet Time" published on Management Science, and "Innovating Through Design" and "Which Kind of Collaboration is Right for You", both published on the Harvard Business Review.

Most Helpful Customer Reviews

16 of 16 people found the following review helpful

5.0 out of 5 stars How to make the innovation process more innovative August 27, 2009

By Robert Morris HALL OF FAMETOP 100 REVIEWERVINE™ VOICE

Format:Hardcover

Does design drive innovation or does innovation drive design. The answer is "Yes." The success of each approach depends almost entirely on what Roberto Verganti characterizes as "radical research" and those who either conduct it or support those who do. In his introductory Letter to the Reader, Verganti explains that this is a book on management. More specifically, "it's about how to manage innovation that customers do not expect but eventually love. It shows how executives can realize an innovation strategy that leads to products and services that have a radical new meaning: those that convey a completely new reason for customers to buy them. Their meanings are so distinct from those that dominate the market that they might take people by surprise, but they are so inevitable that they convert people and make them passionate." Or what Ben McConnell and Jackie Huba describe as "customer evangelists."

Verganti calls this strategy "design-driven innovation" because design, in its etymological sense, means "making sense of things." Therefore, think of design-driven innovation as the R&D process for meanings. This book shows "how companies can manage this process to radically overturn dominant meanings in an industry before their competitors so and therefore rule the competitors." Throughout his lively narrative, Verganti responds to questions such as these:

1. How to innovate by making sense of things?

2. How to integrate design-driven innovation with an organization's strategy?

3. How to initiative and then sustain productive interplay between "technology-push" and design-driven innovation?

4. Why do some companies invest in design-driven innovation and others don't?

Note: Verganti's comments in response to this question will be of great value to readers now determining whether or not design-driven innovation is appropriate to their organization's needs, objectives, and resources.

5. What are "interpreters" and what is their role in the design-driven innovation process?

6. How to locate and then attract key interpreters?

7. How can an organization develop its own vision?

8. How to leverage the "seductive power" of the interpreters?

9. When establishing what Verganti calls the "Design-Driven Lab," where to begin?

10. What is the "key role" of an organization's senior managers and their influence on the organization's culture?

However those involved are identified (e.g. "interpreters") and their functions are defined, whatever a given organization's goals and resources may be, questions such as these suggest critically important issues that must be addressed by its business leaders. If I understand Verganti's core thesis, it is that the process by which to do that must itself be design-driven. That is to say, a competitive advantage can be achieved and then sustained only by innovative thinking about innovation. Only then can those who are involved "make sense" of what to do and how to do it for their customers.

Those who share my high regard for this book are urged to check out Mark Gottfredson and Herman Saenz's The Breakthrough Imperative: How the Best Managers Get Outstanding Results, Dean R. Spitzer's Transforming Performance Measurement: Rethinking the Way We Measure and Drive Organizational Success, and Enterprise Architecture as Strategy: Creating a Foundation for Business Execution co-authored by Jeanne W. Ross, Peter Weill, and David Robertson. HR Transformation: Building Human Resources From the Outside In co-authored by Dave Ulrich, Justin Allen, Wayne Brockbank, Jon Younger, and Mark Nyman.

8 of 8 people found the following review helpful

5.0 out of 5 stars The powerful advantage that comes from changing the meaning of a product August 19, 2009

By John Caddell

Format:Hardcover

One of the best books of the year is undoubtedly "Design-Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean," by Roberto Verganti. In it Verganti, a favorite of this blog, attacks one of the central mysteries of innovation-how can a company successfully create a product that is a radical break from the past, and which shows the way to a new future?

We've seen these products at work. The mobile phone is one. The personal computer is another. We know that you can't survey users to determine what these products will look like or what they should do. So how to create them (apart from cloning Steve Jobs, who seems to have a knack for the radical innovation)?

Most companies punt on this question and are satisfied to extend existing products into adjacent spaces, fix latent customer pain points, etc. These are fine tactics, but with the ease of imitating product features and the speed with which information and intelligence flows, extension is a less and less stable platform for growth (arguably, it is an unhealthy and unproductive basis for business - in Umair Haque's term, "thin value").

Besides, as Verganti points out, radical changes in meaning yield longer product life cycles and more profitability.

So what's the key to achieving this sort of innovation? Verganti writes that it is changing the meaning inherent in the product. The Wii changed the meaning of gaming from "passive immersion in a virtual world for young adults" to "active physical entertainment for everyone" (p.65). iPod/iTunes changed the meaning of a digital music player from a storage medium to a seamless platform for finding, buying, organizing, transporting and listening to music. The iPhone (not specifically discussed in the book) changed the meaning of a mobile phone from a voice device, with a few data applications attached, to a platform where data applications are the central focus of the product. The phone part is almost an afterthought! (I've noticed that iPhone customers are very tolerant of poor voice quality and dropped calls-deficiencies that would doom a plain mobile phone.)

In all the above cases, the changes of meaning opened up entire new markets, created hard-to-duplicate ecosystems and caused competitors to spend time and resources figuring out what the changes meant and how/whether to follow.

I highly recommend "Design-Driven Innovation."

12 of 14 people found the following review helpful

4.0 out of 5 stars Zen and the Art of Innovation August 18, 2009

By Jeffrey Phillips VINE™ VOICE

Format:Hardcover

Reading "Design-Driven" Innovation, one can only link this book to books that call on us to reflect on the larger context in which we live. Comparing this book to Zen and the Art of Motorcycle Maintenance or other books that investigate the larger context beyond the products and services is simply the only way to think about this book.

The author, Roberto Verganti, has a passion for innovation that is "design driven". His argument is that too often innovators and authors talk about, and write about, innovations that are technology driven or customer centered, which are important, but not truly insightful or disruptive. He seeks innovation based on the vision of the designer, which creates new context and new possibilities for innovation - instead of asking a customer what they want, Verganti's adherents will create a completely new proposal for the customers. His argument is that people buy products and services to satisfy utilitarian needs, but also to satisfy emotional and psychological needs as well, and if we can align our innovations to those deeper needs we can create more meaning, and create more value. Additionally, while product features and attributes can be easily copied, meaning cannot be copied as easily or as quickly, offering the firm that innovates with design and with meaning a significant advantage.

I've written on this subject before, and believe his premise wholeheartedly. As most consumers in the US, Western Europe and other developed countries have countless solutions to solve everyday problems, we move up a Maslow's hierarchy of solutions. At the most basic is the utilitarian solution, and then as that need is met we seek solutions that touch other emotional, cultural or psychological needs. How else can we explain the value of Philippe Starck's teakettle, when we can simply boil water in any pan in the kitchen? As simple needs are fulfilled, we seek solutions that address the deeper and more sophisticated needs that align to empathy and meaning.

This book will be read by many in the innovation space and then quickly shuttled off to the "interesting but impractical" shelf. Too many larger firms are very suspicious of trying to create meaning or offer their customers a new "proposal". Rather, they prefer to wait until someone has proven a market and then offer something very similar to what exists already. Verganti points out that executives who follow his methodology don't think "outside the box" they "immerse themselves outside the network". The necessary capabilities that Verganti suggests are important for Design Driven Innovation point out another difficulty for most firms. The three capabilities he says are necessary for design driven innovation are: building a network of relationships with key interpreters in a design discourse. By this he means that the organization and key executives are holding an ongoing dialogue with people who can suggest new proposals and interpret what new opportunities may exist. This would entail much more dialog, and much more qualitative discussion, than most firms are willing to create. Second, he suggests that another capability is to harness the unique proprietary assets that the firm has that can't be found elsewhere. In most firms, we've worked very assiduously to shave off any capability or feature that is unique and different, and we've all adopted the same methodologies, systems, processes and thinking models, so there is little differentiation between firms, and most larger firms would be hard pressed to identify their unique propositions and assets, much less organize them effectively. Third, the final capability is the ability to organize and make sense of what the external dialogue and discourse is telling you and combine that with unique capabilities and skills from inside the organization and create a unique, compelling vision. Most larger firms have little strategic vision and a difficult time communicating the vision and strategies that they do have.

This book hits the mark right on the head - true innovators will identify propositions and proposals so compelling that the customers could not have possibly asked for them. Much of that will be based on the company's dialog with the market, it's core knowledge and capabilities and its ability to empathize with the needs of its customers. This kind of innovation is "push" not "pull" and is based on compelling vision and design, creating meaning and empathy. Try saying that to your management team.

While Verganti sets up an innovation tableau that is completely correct and lays out the model for achieving that vision, I suspect that many firms are too operationally focused and too dependent on facts, numbers and "proof" to ever extend themselves to his vision of innovation. And that's too bad, because his vision is correct, and would ultimately be more valuable in the end, but most firms will stretch for his vision and settle for technology or customer driven innovation outcomes.