By  on June 26, 2007

NEW YORK — Business executives' interest in design may start and end with the color green — as in the amount of money coming through the door — but designers can bolster a company's profitability just by sharing their ideology with The Powers That Be in the corner office.

The ever-increasing importance of design thinking was dissected during a panel Friday, "Design = The Bottom Line," at the Cooper-Hewitt National Design Museum here. IDEO's chief executive officer Tim Brown, one of the panelists, said, "Traditionally, most companies have used analyzed thinking, but now there are alternative ways of thinking. Design provides an alternative way of thinking. We need to combine analytical thinking with generative thinking."

In his opening remarks, the museum's director, Paul Warwick Thompson, noted how design's link to commerce is sometimes forgotten. In the 19th century, design museums were engines for thought and for commerce, he said. To that end, the Musée des Arts Décoratifs in Paris was designed deliberately to look like a department store and the first exhibition staged at the Victoria & Albert Museum in London was actually taken from a trade fair, "The Great Exhibition of the Works of Industry of All Nations," that was held in 1851. At that stage in the V&A's life, the British — however adept they were at manufacturing — were still worried about their French counterpart's stronghold on design, so the London museum was trying to up the stakes.

Brown, whose Palo Alto, Calif.-based firm created the first computer mouse and the first laptop, said design can be revolutionary, as evidenced by the iPod. In three or four weeks, IDEO will open its first New York office, which will be manned initially by a staff of 12, but will eventually have 40 or 50 employees. In addition to Palo Alto, the company has offices in San Francisco, Chicago, Boston, London, Munich and Shanghai, with employees working in 40 to 50 disciplines.

The panel, which also included Gael Towey, chief creative officer of Martha Stewart Living Omnimedia Inc., and Claudia Kotchka, vice president for design innovation and strategy at Procter & Gamble Co., was moderated by BusinessWeek's assistant managing editor Bruce Nussbaum. They discussed the need to break down "silos" that exist in most companies — where one department is too focused or too busy with its specialty to take the time to work with another to try to drum up more efficient and often profitable ways of working. Design schools also need to implement that type of cross-pollinated thinking in order to turn out well-rounded graduates who are better prepared for the workforce. Stanford University's d. school for design is a leader in that capacity, and Columbia University and California College of the Arts in San Francisco are making strides with collaborative teaching — something the Rhode Island School of Design and Brown University have done together for years, IDEO's ceo said.Keeping open the lines of communication with consumers or social media will only become more necessary in the years ahead, speakers said. The days of creating something and selling it to someone are drawing to a close. Shoppers want to be more involved with the process — a practice the music industry has already taken to and the film industry is catching onto, Brown said. Threadless.com, for example is an online company that accepts submissions for T-shirt designs and manufactures whichever ones consumers vote for. There is also a European company that is doing something similar with designs for fans, heaters and a variety of other products.

Disruptive as it may be, design, especially "really big design ideas," can connect the various segments of a business, Brown said. As private equity firms and hedge funds get more involved with creative businesses, the need to articulate what design can do to enhance a company's image and bottom line is key to getting executives engaged, Brown said.

Kotchka recalled going to talk to a P&G finance executive about design. She remembered how he asked, "Design? Isn't that the first thing we cut when we need money?" But showing him an OXO measuring cup, which does not need to be lifted to eye level to be read, was eye-opening for him, she said.

Towey illustrated how extensively design can permeate a company. This year alone Martha Stewart, a 700-person operation, will introduce 1,500 new products at Macy's. The company has worked closely with Macy's buyers to set up concept shops instead of merchandising items individually since customers don't shop that way, Towey said.

She said she could relate to Brown's insistence that design thinking requires inspiration, empathy and intuition — three factors that museum visitors are encouraged to explore in the IDEO Selects exhibition currently running at the Cooper-Hewitt. Being intuitive is essential to her role at Martha Stewart. "We don't get a lot of time with people. But some people can hear a sentence or a couple of sentences and know what she's thinking," Towey said. "Martha and I have known each other for over 20 years. There's a lot of faith and trust, but we don't always agree. Martha is a perfectionist in many ways. What she wants is the best of everything — and sometimes you can't have that.""And you're the one who tells her that?" Nussbaum laughed.

Giving executives the confidence needed to make design-related changes is part of IDEO's job as well. Brown is always more interested in companies that have real issues to deal with opposed to those who are sailing along, he said. Challenged brands are more inclined to try something new design-wise due to necessity, panelists agreed. While some organizations are decentralized enough that good things can happen by incorporating design thinking, Brown has found, "There is a very low chance of success when the ceo is not on board with design."

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