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is an international design and innovation consultancy founded in Palo Alto, California, United States with other locations in San Francisco, Chicago, New York, Boston, London, Munich, Shanghai, Singapore, Mumbai, Seoul, and Tokyo.The company helps design products, services, environments, and digital experiences. Additionally, the company has become increasingly involved in management consulting and organizational design.
IDEO was formed in 1991 by a merger of four established design firms: David Kelley Design (founded by Stanford University professor David Kelley), London-based Moggridge Associates and San Francisco’s ID Two (both founded by British-born Bill Moggridge), and Matrix Product Design (founded by Mike Nuttall). Office-furniture maker Steelcase owned a majority stake in the firm, but began divesting its shares through a five-year management buy-back program in 2007. The founders of the predecessor companies are still involved in the firm. The current CEO is Tim Brown.
The firm employs over 550 people in the disciplines of human factors, mechanical, electrical and software engineering, industrial design, interaction design, and communication design. IDEO has worked on thousands of projects for a large number of clients in the consumer food and beverage, retail, computer, medical, furniture, toy, office, and automotive industries. Notable examples are Apple’s first mouse, Microsoft’s second mouse, the Palm V PDA, and Steelcase’s Leap chair. Major clients (as of 2004) included Procter & Gamble, PepsiCo, Microsoft, Eli Lily, Ford and Steelcase.
In 1999, the firm was the subject of the “Deep Dive” episode of ABC’s Nightline; they redesigned a shopping cart in five days. In 2001, IDEO‘s general manager Tom Kelley wrote The Art of Innovation, and in 2005, The Ten Faces of Innovation (both co-written with Jon Littman). IDEO‘s current CEO Tim Brown published a book on design thinking called Change By Design (co-written with Barry Katz).
IDEO was featured in Gary Hustwit’s 2009 design documentary Objectified.
IDEO has won more of the Business Week/IDSA (Industrial Design Excellence Award) than any other firm. IDEO has been ranked in the top 25 most innovative companies by BusinessWeek and does consulting work for the other 24 companies in the top 25.
Management and Organization
IDEO is a high-commitment management organization in that it consists of project teams, flat hierarchy, individual autonomy, creativity, socialization of recruits and engineer buy-in. As each component functions together as a system, this management style is critical to the success of IDEO. IDEO is a very flat organization that essentially functions around many teams. The organization is divided into “studios” to manage its growing size. Each studio operates independently and usually seeks business locally. However, studios are highly communicative and share members as needed. A studio head is appointed at each site and is responsible for managing a number of “hot teams”. He or she is essentially responsible for administrative duties, such as overseeing the profits and losses of the group. Hot teams consist of people from multiple disciplines who are passionate about a client’s project and choose to work together temporarily on that project. Each team elects a project leader based on his/her skills related to the project. It is considered “the most sought after position in the company, because the project leader generally gets to decide what the future of the product will become.” Just as the teams are temporary, the project leader’s position ends with the completion of the project. Therefore, employees who serve as project leaders on one project may serve under another leader on another project. This also means that there are no fixed titles or positions in the company. In conjunction with studios, people are organized into disciplines and there are “discipline leads”. Discipline leads are have strong reputations in their industries and serve as mentors to members of the organization in their related fields. Through a democratic process, only members of a particular studio make decisions for that studio. Studio heads, in a collaborative effort, make corporate decisions. With this structure, anyone is one step away from input by simply informing his/her studio head. The flat hierarchy and projects teams are key components of IDEO and more generally to high commitment organizations.
New-hires at IDEO often hold advanced degrees and have significant experience working in a specific field while also having many skills across a broad number of disciplines. Because Recruits are often taken from internship programs and employees are never hired as studio heads. This is similar to the notion of internal labor markets, where the organization seeks leadership internally. The decision is usually made through a unanimous agreement of members of the company. Employees are given competitive base compensations and a number of benefits. Additionally, employees have a profit-sharing bonus, which is based on a company’s profitability and the studios success. High-performing employees are rewarded by being given more challenging projects to lead and through more shares in its client venture capital base. This is an example of engineer buy-in as people are invested fiscally and personally into their work. It is unclear what incentives studio leaders receive.
IDEO works hard to ensure that people are happy to be at IDEO from the way they manage their employees to the environment and culture of IDEO. While employees say that it takes time to adjust to the lack of bureaucracy, that is how the organization believes people remain creative and motivated. Human relations school theory suggests that organizations function as social systems and people need to feel engaged and respected. IDEO does that through the tremendous amount of autonomy and freedom given to employees. Considering the democratic decision making process within studios and amongst studio heads, employees are consistently involved and have many opportunities to have their voices heard. Furthermore, employees are encouraged to take on responsibilities that they are passionate about: they choose the people they work with on projects, what projects they want to be on and also have the freedom to transfer between studios they would like to work in. IDEO strives to ensure that the working environment is comfortable and motivating for employees. With no dress code or formal titles, informality is encouraged. Kelley says to “Allow groups to break rules. Let them take an extra day of vacation, or wear jeans on Friday.” Also, employees are encouraged to design and personalize their workspaces. This socialization of the organization motivates people and fosters efficiency and is also crucial to high-commitment systems. Evidently, IDEO drives motivation from its employees using a natural management system where people can self-manage because “they are committed to the group, they seek out responsibility and they prefer jobs that require imagination…” The culture of IDEO is what motivates and drives its members to be successful.
Evaluations and Improvement
As an organization centered on innovation, IDEO is consistently looking for ways to improve itself. First, employees are given performance evaluations once a year. They must ask for feedback from people they have worked with over the past year and also evaluate themselves. Kelley comments “workers realize that they can fool their boss, but they can’t fool their fellow workers, so if they really want good feedback on what they’re good at and what they can improve it’s on their peers.” This emphasizes the commitment to the team and the personal investment one has in their work. Additionally, IDEO studied workplace interactions through suspended vIDEO cameras in order to optimize office design , which is similar to scientific management techniques used to figure out efficiency within the organization. They also reviewed completed projects and adopted methods used by their clients. Consistently evaluating and attempting to improve the management strategies within the organization have really contributed to IDEO’s success.
IDEO (pronounced “eye-dee-oh”) is an award-winning global design firm that takes a human-centered, design-based approach to helping organizations in the public and private sectors innovate and grow.
We identify new ways to serve and support people by uncovering latent needs, behaviors, and desires.
We envision new companies and brands, and we design the products, services, spaces, and interactive experiences that bring them to life.
We help organizations build creative culture and the internal systems required to sustain innovation and launch new ventures.
“Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” — Tim Brown, president and CEO
Thinking like a designer can transform the way organizations develop products, services, processes, and strategy. This approach, which IDEO calls design thinking, brings together what is desirable from a human point of view with what is technologically feasible and economically viable. It also allows people who aren’t trained as designers to use creative tools to address a vast range of challenges.
Design thinking is a deeply human process that taps into abilities we all have but get overlooked by more conventional problem-solving practices. It relies on our ability to be intuitive, to recognize patterns, to construct ideas that are emotionally meaningful as well as functional, and to express ourselves through means beyond words or symbols. Nobody wants to run an organization on feeling, intuition, and inspiration, but an over-reliance on the rational and the analytical can be just as risky. Design thinking provides an integrated third way.
The design thinking process is best thought of as a system of overlapping spaces rather than a sequence of orderly steps. There are three spaces to keep in mind: inspiration, ideation, and implementation. Inspiration is the problem or opportunity that motivates the search for solutions. Ideation is the process of generating, developing, and testing ideas. Implementation is the path that leads from the project stage into people’s lives.
Under this system, IDEO uses both analytical tools and generative techniques to help clients see how their new or existing operations could look in the future — and build road maps for getting there. Our methods include business model prototyping, data visualization, innovation strategy, organizational design, qualitative and quantitative research, and IP liberation.
All of IDEO’s work is done in consideration of the capabilities of our clients and the needs of their customers. As we iterate toward a final solution, we assess and reassess our designs. Our goal is to deliver appropriate, actionable, and tangible strategies. The result: new, innovative avenues for growth that are grounded in business viability and market desirability.