Pantech Goes Back to the Drawing Board

The Korean cell-phone manufacturer is in trouble. But its collaboration with international students provided unexpected and valuable lessons

by Helen Walters

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Corporate collaborations with design schools are nothing new. As we've reported, big business is keen to hook into the free-spirited thinking of design students (see BusinessWeek.com, 3/19/07, "Art and Business: A Royal Combination," and BusinessWeek.com, 1/9/07, "GE Goes Back to School for Innovation"). The concepts and ideas that emerge from their unfettered creativity, unhampered by commercial realities and restraints, can be a truly invaluable resource—and give companies a first look at up-and-coming talent.

The colleges are happy to hire out their fresh young minds; the students are happy to have an invaluable, quasi-real world experience. In the case of the recent collaboration between South Korean cell-phone handset manufacturer Pantech and the California College of the Arts (CCA), however, the students walked away with an added insight into the reality of design in the business world, warts and all.

For its part, Pantech was also reminded of the need to keep one eye on its core business at all times: The semester-long project may have resulted in a series of interesting prototypes and new ways of thinking about mobile communications, but its conclusion also saw the company being put into a debt-rescheduling program by creditors. A $613 million rescue package was announced at the end of March. Chief Executive Officer and Co-President Sung-Kyu Lee resigned earlier this month.

No Bounce from Unforgiving Market

Pantech's disarray follows a three-year initiative to promote design as the backbone of the corporation (see BusinessWeek.com, 10/25/06, "Pantech's North American Offensive").

While its efforts met with enthusiasm in the design world—earning it prestigious prizes such as iF Design Awards—and the company has been actively seeking and promoting collaborations with an array of international design companies and schools, it has proven unable to capitalize on the buzz. The unforgiving handset market is nothing if not competitive, and hopes of a bounce-back from last year's second-quarter loss have been smashed.

So even as the students grappled with questions of the future of mobile communications, the project raised more basic questions about the role—and value—of design in business. It also neatly emphasized that a strong corporate design program is nothing without a strong corporation.

A Worthwhile Collaboration

Which is not to say that a company in hard times should abandon its design program or even slash all design school sponsorships. As Apple dramatically proved, design can be a pivotal element of a successful turnaround. And, especially in the trend-driven world of mobile communications, looking at what young people are thinking and how products fit into their lives is critical to future relevance.

Recognizing this, Pantech design group manager Seung Soo Yi insists that the CCA project was of great value to the company. "This type of cross-cultural cooperation is a new source of ideas and creative inspiration," he says, before admitting that the company's financial difficulties will certainly have an impact on its plans for continued collaborations. But, he promises: "Some of the ideas will be applied in some of our future phones."

For Yves Béhar, chair of industrial design at CCA—who has also worked with Pantech in his role as founder of the design firm fuseproject—the project was also a success, even if it merely exposed his students and the company to a new approach to cell-phone design. His advice to the senior studio class of CCA students (and 20 others from South Korea) was to avoid thinking about cell-phone design altogether, at least initially.

Integrating Life Into Design

Instead, Béhar advised them to focus on a concept he calls emotional networking. "Cell-phone design is so boring and repetitive," he says.