Creating shared value through the responsible design of dynamic systems
Creating shared value through the responsible design of dynamic systems - Peter Hyer (Executive Director, IDEO)
It is an honor to be invited to this year’s Seoul Design International Forum.
In times like these, design is more valuable and important than ever. The complexity and uncertainty around us continues to accelerate at unprecedented speed. There are global racial tensions and reconing, interrogations of every aspect of our businesses, new wars, new political leaders, and of course the global pandemic that shifted everything around us—it has been a shock to the system, to all of our systems. How quickly and thoughtfully we can evolve our organizations in responsive and regenerative ways, the better we will be able to navigate these challenging times. In this presentation, I would like to introduce global design firm IDEO and then talk through large-scale system design cases by using a human-centered lens focused on the creation of shared value.
IDEO is a top global design firm, known for popularizing design thinking methodology and applying those methods to a wide range of challenges. Today we design so much more: products, services, systems, experiences, and ventures across virtually every domain and industry. As what we do expands, we’ve found that the way we describe our work must also expand.
Historically, we have used phrases like “design thinking” and “human-centered design” to describe our process: integrating the needs of people, the possibilities of technology, and the demands of business to come up with breakthrough ideas. We have helped organizations transform as they develop the capability to see the future, make it tangible, and confidently step into new ways of being. At the center of our evolving practice is owning our impact on cultural, environmental, ethical, and social systems.
Creating shared value means designing more responsibly. We believe in designing a future that’s worth building: a future that’s desirable, viable, feasible, and responsible. We approach this goal through in the context of three big shifts:
● From approaching sustainability as an afterthought to designing with regeneration as the default. It's time to create things that give back more than they take away. Regenerative design aspires to put life at the center of every decision and action. It works to find solutions and restore the health of individuals, communities, and the planet—all in the interest of more sustainable impact and growth.
● From just designing for people to designing with people. Inclusive design centers the expertise and lived experiences of those with underrepresented and marginalized identities. We design with, not for, communities and organizations, because they understand better than anyone the societal, economic, and environmental implications of our work, and they’re still impacted long after IDEO’s involvement. That is why we approach design with humility, bringing in those with expertise to guide our work.
● From designing individual solutions to systems and transformative thinking. Organization design and systems design are powered by partnership. We work with visionary leaders who believe that businesses, governments, and the communities they serve can be levers of change in the world. Whether it’s to replace disposable cups and plastic bags, or design a regenerative food system, we feel responsible for putting collaboration above competition. Bringing those parties together as a consortium can result in more impactful systemic change than any one group could accomplish on its own.
Design is Change: we believe every business, every organization, and every person has a role to play in addressing urgent, important work. We’re so excited to design the future in which we all want to live, and step into it together.
Here are three examples of how we put these principles into practice:
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1: Organizational transformation and capability building to enable a 120 year old company to create new value for itself, their customers and the planet.
For well over a decade, we’ve partnered with Ford Motor Company in the U.S., in the EU, and in China to help the organization bring to life a shared vision of the future of mobility.
Together we scaled new capabilities throughout the company by running proof-of-concept “beacon” projects. These projects explore new transformational areas of smart mobility that goes well beyond the automobile, as well as applying human-centered design to both existing and core product offerings.
To embed this new customer-centric mindset, we built a human-centered-design hub called D-Ford. This 400+ person organization within the organization has become a magnet for talent and is spread across six global locations: London, Shanghai, Melbourne, São Paulo, Palo Alto, and Detroit. But we also partnered to help create a learning and development platform and new talent systems to support these new ways of working. When we think about creating shared value we must design collaboratively with a wide range of stakeholders across the system, otherwise great ideas are left unrealized or key collaborators left out.
This capability in D-Ford has been able to achieve great things and prepare Ford for the future. The climate era that is now upon us, demands new offers and new ways of working. Ford’s commitment to serving the needs of people and the planet is what propelled the rethink of the F-150. The F150 has been the best-selling vehicle in the U.S. for over 40 years. Not just the best selling truck, but the best selling of all vehicles sold in the US! The F150 product line alone, not including Ford's other products, is upwards of a $40B dollar per year business. It was a high-stakes move, and one that represents a major turning point for the automaker: For the first time, its primary profit source would be electric. The new Lightning is still built Ford tough, but also built for the future.
Helping Ford transform into a design-led organization took a lot of trust and was built over time. But that is why we must think about change with a long term and collaborative view. Human-centered design is about understanding both behavior and the context and ecosystems around the behavior. When American truck buyers were asked if they were eager to trade their beloved and trusted gasoline powered workhorse for an electric vehicle, you can imagine conflicted answers. But instead we asked: ‘Would you like to be able to plug your jigsaw into your truck? How about taking a fully reclined snooze after a long day of fishing?’ Questions like these led to quick prototypes that ended up in Ford’s new, electrified F-150 truck, which has more outlets than the average apartment and can power your entire home. This was no small update. The way Ford reimagined the truck experience from powertrain to power nap is emblematic of how much customer-centricity is now embedded in Ford’s culture.
IDEO has been working with Ford for the last 15 years. But what I want to highlight here is two things, First how by helping Ford become a design-led organization enabled them to evolve and expand on their core offerings — and by doing so it has also helped them in becoming an advocate and exemplar in designing for the climate era.
Take Away: Putting human-centered design at the center of the organization can accelerate the transformation that every company must undertake at this moment, it can help deliver new offerings to new and existing audiences, and can even help companies address their environmental, social and governmental (ESG) aspirations.
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2: Creating shared value, building businesses while also tackling waste through a coalition of retail leaders.
Creating solutions that help tackle the World’s toughest challenges is not a solo endeavor. It requires coalition building—creating shared value by designing with and for stakeholders across the system. This next example is a collaboration with the world's largest retailers, partnering with start-up entrepreneurs and a circular venture partner to help eliminate plastic waste. As the innovation partner, IDEO helped launch a global search for breakthrough sustainable ideas that yielded more than 450 submissions from startups and entrepreneurs to reinvent the single-use plastic retail bag, with nine finalists entering a six-month accelerator.
In 2020, Closed Loop Partners, a circular-economy-focused investment firm and innovation center, convened the Consortium to Reinvent the Retail Bag with a group of America’s largest retail chains. The consortium was built for action, allowing winning startups to pilot their products and programs in the wilds of major retail. The multi-year collaboration shows what’s possible with unprecedented partnerships. Because a waste-free future needs to be designed by everyone.
For context on the problem. A hundred billion plastic bags are used in the U.S. every year, and less than 10% of them are recycled. Every year, plastic retail bags are among the top ten items found on beaches and waterways worldwide. That is a problem that humans are causing but we can also design the solution to address it.
The systemic challenges standing in the way of eliminating plastic waste require a bold new approach, and no single company can solve them alone. So Closed Loop Partners convened a group consisting of founding partners CVS Health, Target, and Walmart, along with 12 other leading retailers.
New alternatives ranged from biodegradable solutions to systems that kept reusable bags in rotation. IDEO teams not only facilitated collaboration between startups and sustainability leads from partner retailers, but also provided a boost of additional expertise from industrial, data, and business designers. In a matter of months, teams were able to launch prototypes in select CVS Health, Target, and Walmart stores in California and New Jersey.
Everyone involved in the consortium knew that replacing single-use plastic retail bags is a problem that won’t be solved quickly or easily. But the Beyond the Bag challenge helped them learn that designing for the policy and infrastructure of tomorrow requires tangible steps, taken together, today.
Take Away: The world's toughest challenges will require coalition building and partnerships to be catalytic. Being ecosystem first, means we aren’t just designing the end user experience, we need to design logistics, supply and demand, and make sure all parties are creating and capturing value. Running public pilots not only help us learn faster, and test value propositions in real time, but also we can engage with the communities we are serving to deepen engagement and build new partnerships.
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Part 3: Taking a platform-centric view enabled a South American conglomerate to transform education, healthcare, finance and retail by creating shared value.
Peru has a very long history of civilization tracing back to the 10th millennia BCE. The region is home to some of the world's richest biodiversity, from the tallest mountains in the Andes down to the cloud forests of the Amazon River Basin. Peru is also home to one of highest levels of informal employment in Latin America. In 2020, approximately 68% of the total employed population was in some form of informal job that offered no protection and in which workers paid no taxes. That percentage decreased over the previous decade but still remains one of the highest in Latin America. And yet, in the last decade, Peru also has one of the region's most prosperous economies with an average growth rate of about 6% and it has one of the world's fastest industrial growth rates.
For one Latin American CEO, it became clear that if families couldn’t thrive, there would be no future for business. That insight kicked off a decade of partnership with Intercorp, one of Peru’s largest conglomerates. Together, Intercorp and IDEO launched a new school system, a family-focused health care clinic, and digital-first financial services and retail experiences. These efforts required the formation of a new innovation team, adopting a customer-centered mindset across the organization's businesses and a deep digital transformation to better serve families as the pandemic forced remote transactions.
Carlos Rodríguez-Pastor, CEO of Intercorp, came to IDEO with an audacious goal: to address the most fundamental needs of his country’s people and grow his business at the same time. He’d been introduced to IDEO while attending business school in the U.S. and explained that he waited until he had a challenge that felt big enough to knock on our door. This partnership started with a project to design a school system to impact the Peruvian Middle class. Together we designed everything from the physical buildings, teacher training, pedagogy, business model, etc. Innova Schools has since scaled across 68 locations in Peru, Mexico, and Columbia serving over 55 thousand students. That project convinced Rodríguez-Pastor and his colleagues of the power of human-centered design at the system level.
After the success of Innova schools, IDEO and Intercorp partnered on building innovation capability within the company. Our blended teams launched an innovation hub to introduce new ways of working with the conglomerate’s 90,000 employees. And as we collaborated with Intercorp’s businesses in finance, retail, health care, and education, we learned more about how to serve the everyday needs of Peruvian families. Somewhere along the way, the ultimate design project became the organization itself.
This innovation hub, La Victoria Lab, is focused on transforming the organization by creating new ventures from scratch, transforming the ecosystem of Intercorp companies, inspiring business leaders, and exploring the recently possible.
And while Rodríguez-Pastor’s company has grown dramatically, he’s not one to rest on laurels. Instead, the company is becoming more ambitious: upskilling the country’s workforce through an online platform, and fulfilling its climate strategy by investing in Peru’s green economy. (The coastal nation is the world’s third most vulnerable to the effects of climate change.) While the pandemic dealt a blow to Peru’s economy, Intercorp remains steadfast in its commitment to supporting businesses that help the middle class thrive.
Take Away: The global, social, and environmental challenges we face create complexity and uncertainty at a scale never before seen. To thrive in this rapidly changing future, businesses need to be adaptive, resilient and agile. They need to quickly respond to the changing ecosystems and tackle large-scale systemic global problems collectively and responsibly. There is a lot out there about adopting agile practices and leveraging digital tools, but companies need to invest in both business and culture to address these shifts. I want to highlight here that transformation has talent at its core. Digital tools are helpful, but it’s people who make the difference. So think beyond just delivering digital products and services and invest in growing teams with these new capabilities and ways of working. HR is a key ally in rethinking and designing strategy, talent, culture, mindsets shifts, L&D, incentives, and career paths.
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To summarize, human-centered design helps us create useful products and services that resonate with customers. But creating useful products isn’t enough. We need to be designing with regeneration as the default, we need to focus on designing with communities and we need to lean into systems and transformative thinking to create shared value when designing for large-scale system challenges. These system challenges don’t exist in isolation. Designing with an ecosystem first lens, we can ensure that the solutions we develop meet the needs of our customers, the greater needs of our society and are responsible, equitable and regenerative. Thank You!
