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Book Excerpt September 24, 2009, 5:00PM EST

Change By Design

In his new book, the CEO of design shop IDEO shows how even hospitals can transform the way they work by tapping frontline staff to engineer change

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Brown's firm helped Kaiser Permanente's staff boost time with patients Eric Millette

By Tim Brown

As the center of economic activity in the developed world shifts inexorably from industrial manufacturing to knowledge creation and service delivery, innovation has become nothing less than a survival strategy. It is, moreover, no longer limited to new physical products but includes new sorts of processes, services, interactions, entertainment forms, and ways of communicating and collaborating.

These are exactly the kinds of human-centered tasks that designers work on every day, and over time they have evolved a body of skills to help them do it. It is time for this type of thinking—design thinking—to migrate outward and upward into the highest levels of leadership. Business leaders, hospital administrators, university professors, and nongovernmental organizations (NGOs) need to integrate the methods of the designer, just as designers need to broaden their reach from the crafting of objects to the shaping of services, experiences, and organizations. Design, in short, has become too important to be left to designers.

When I speak to CEOs, the question they most often ask is: "How can I make my company more innovative?" They recognize that in today's fluid business environment, innovation is key to competitiveness, but they are aware of the difficulties in focusing their organizations around this goal. "How can we incorporate the designer's creative problem-solving skills into our larger strategic initiatives?" "How can we engage a greater percentage of our workforce in design thinking itself?"

Steelcase (SCS)'s Jim Hackett and A.G. Lafley of Procter & Gamble (PG) are among a growing number of enlightened business leaders who understand that a steady flow of innovative products rests upon an underlying culture of innovation. While they are excited by the challenge of designing new products, they are even more excited by the challenge of designing the organization itself.

Since Hackett became CEO, Steelcase has come to look like a very different company from the one that offered the world the first fireproof wastebasket back in 1914. Once technology and manufacturing capability drove most of its new-product development. Now the innovation process at Steelcase works outward from the perspective of human-centered design thinking. This new approach is evidenced by Workplace Futures, a unit that operates as a kind of internal think tank and includes anthropologists, industrial designers, and business strategists who conduct observations in the field to gain insights into the problems of Steelcase's actual and potential clients.

Tricks from the designer's toolkit—user observations, brainstorming, prototyping, storytelling, and scenario building—are invaluable in building an innovation capability, but taken by themselves they are rarely sufficient. Over time, and after countless experiences with organizations throughout the world, we have learned that innovation has to be coded into the DNA of a company if there is to be large-scale, long-term impact. All the workshops and brainstorming sessions in the world would not have transformed Procter & Gamble if then-CEO Lafley had not designated a chief innovation officer, increased the number of design managers by more than 500%, and established what he calls his innovation "gym," a place to train managers in the new design thinking.

Companies such as P&G and Steelcase that make products and manage brands have a head start when it comes to transforming their internal cultures because they already have designers, and even some design thinkers, on their payrolls. In service organizations, that base of talent may not exist, and the challenge is greater.

Health-care provider Kaiser Permanente is a case in point. In 2003, Kaiser set out to improve the overall quality of the health-care experience from the point of view of both patients and medical practitioners.

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