Introducing and Embedding Design Thinking at Diageo

Diageo is the world's leading premium drinks business, operating in 180 markets in 80 countries, with over 28,000 employees. Its portfolio of brands includes Guinness, Johnnie Walker, Smirnoff, and Baileys. In 2006 the Diageo executive committee worked out that design was playing too marginal a role in the company, so it decided to appoint a global design director and build an internal design function. As the design director recalls, “I think where the intervention as a senior board level came was things like the [brand name] redesign which was really badly done when there was no internal team, people didn't understand how to manage design.” This early appointment investment by the Diageo executive led to enduring support of the design director and his team. Indeed, the design director emerged as an important figure, not in terms of skills (the actual product design is mainly undertaken by external agencies), but as the person capable of promoting design's value to the various business units inside the company. This made a big difference between successful and unsuccessful introductions of design at a strategic level in the different business units. In the words of the design director:

We have got a big influencing job here to do, to find our sponsor, to persuade, to help people understand. And if we only talk to people on the financial level, then we're completely missing the boat. Of course, we have to talk the language of business, and finance, and return on investment…but it is also our job as leaders of design within organizations to help people understand the thinking behind it.

These early investments and ongoing attention to the nature of senior management roles have borne fruit. Currently, design is used to inform strategic choices concerning branding and positioning of products. A good example of this lies with the redesign of the Johnnie Walker label, as part of the wider relaunch of the brand. This being a very iconic brand and a luxury product, the project was quite risky. However, the project was eventually very successful thanks to strong leadership, which drove through the new design. According to the company, “The unveiling of the new Johnnie Walker Blue Label bottle was the relaunch of an icon. The design speaks to the rarity and authentic luxury credentials behind the ultimate expression of Johnnie Walker, fueling global net sales growth of 27 percent.” (Diageo Annual Review, 2012).

Too Much CEO Control Can Hamper the Strategic Embodiment of Design Thinking

The CEO of company C, a medium-sized enterprise, attended a design conference and mused over how the showcased SME design-led brands had become so successful, with loyal customers and large revenues. How could he propel design's role within his own company, get the product design more customer-focused, and see that link directly to financial performance? This event pushed him into action: he recruited a number of new designers and rapidly involved them in several projects. However, while his support was always solid, his engagement with the design team was often too direct. He constantly looked over the shoulders of his design team, checking and telling them what to do. In the end, this hindered the design team not only in getting their job done, but in developing a capacity to take greater responsibility and influence strategic decisions. Coupled with this was the firm's overreliance on customer feedback. Indeed, this reflected a lack of trust in design's capacity to propose something new to the market. This is summed up neatly in a quote from the commercial director. Talking about an unprofitable product, he said, “The internal designers have reworked it, probably eight or nine times, and customers have always come back with: no, we don't want to change it So we have tried redesigning it lots of times and none of them have come to fruition, so it's a complete waste of time.” Heavy interference from the CEO, twinned with an overresponsiveness to customer feedback, really hampers what designers can do and what design thinking can deliver.

We can see complexities and contrasts in the way roles influence the embodiment of design thinking in the firm over time. At Diageo (as well as at Virgin Atlantic and Herman Miller—see further examples), senior managers not only support design but trust what design can achieve and what designers could do. Such trust might come from the company history (as is the case with Herman Miller), from the leader's belief that design and innovation can make a positive difference (such as Virgin Atlantic), or from the design director's influencing efforts (see Diageo). In other cases, the CEO himself can simply espouse the embodiment of design thinking. Such is the case with Trunki, a small but leading company in children's travel equipment. Here, the founder of the company, whose background is in industrial design, played a crucial and positive role to embed design and design thinking: “Being the CEO with design training, it's all about problem solving and looking at things differently. Why do we do things that way? Is there a better way of doing it? So that thinking has been applied across the business rather than just in the product.” Compare this with those companies where support is ad hoc and lacks continuity, or where the design director acts as a mere technical specialist, or where support and control from the CEO ends up stifling the creative potential of the design function.

Virgin Atlantic's Upper-Class Suite

Airline Virgin Atlantic is well known for its innovativeness and use of design. But what is not so well known is the way its organizational practices shape and influence design projects and, ultimately, how design thinking permeates the organization. The design of the upper-class suite is a good example of this. In the early stages of the project, the company developed a concept briefing—how to create a flat bed to provide customers with a better flight experience. However, rather than focusing down on this clear, albeit narrow, brief, designers and marketers collaborated to open up and broaden the initial idea. This led to a more customer- and benefit-oriented concept: how do we create a space for customers and all their needs? Designers refined the brief through customer ethnographic practices, directly observing customers' in-flight behaviors. The head of Design stated, “It wasn't necessarily asking people what they want; it's about looking at someone and seeing how they behave, seeing the things that irritate them, not necessarily asking them, because often they don't know what they want, until you show them what they could have.”

As the director of Brand and Customer Experience recalls, “perhaps some of our competitors have concentrated on: how do you get a seat to go flat so the customer can sleep? This was more about: how do we create the space for the customer for all of their needs?” The decision to focus on such a broader question enabled the company to formulate a much broader brief, which then led to the involvement of key internal people and customers, and to questioning existing offerings. In so doing, Virgin Atlantic adopted a more holistic view of service design, and connected organizational practices—in this case, how stakeholders are involved in the design and development process—with design thinking. Eventually, the project was very successful, as it created a suite that other airlines have since copied.

Design as a Service

Like many other companies, the CEO of company C and his senior management team realized that design thinking seemed to be driving higher levels of brand recognition and customer loyalty of many of their competitors. Therefore, they decided to make some changes and proudly established a new separate corporate design function. However, despite leadership support and good intentions, the design team really struggled to be appreciated within the company. Designers' work was often treated in a dismissive way, and designers were given orders by other functions. As the design director explained, “Other units say, ‘I tell you what I want and you need to organize it for me.’” Design managers felt frustrated and saw themselves fulfill an almost passive role vis-à-vis the marketing function, unable to influence tightly defined briefs. One design manager stated, “In many projects, we are a service industry. In many cases, I don't think our projects are breakthrough or really exciting consumers because they've been…restricted at the very beginning.” So while internal staff perceived the company as adopting a “cowboy culture,” its approach to design and product development was actually risk averse, heavily relying on consumer feedback obtained through surveys and focus groups.

The two vignettes presented above show how practices that support collaboration across functions, particularly allowing questioning and shaping of the design brief, are fundamental in introducing design thinking. We also learn that the way organizations engage with customers can influence design's strategic role. Organizations, such as Virgin Atlantic, observe and shadow customers, rather than involve them in formal surveys or focus groups.

Finally, how do you measure and evaluate design thinking and do such practices influence the strategic embodiment of design? Again, we see contrasting practices with diverse outcomes. At company A, for example, great emphasis was placed on quantitative data to formally measure the input of design, particularly at the beginning of the NPD process. Also, various development stages were tightly defined up front in terms of both functions' involvement and budgets. Financial rewards were given to project leaders depending on how many ideas passed selection gates. Requests for formal evidence and the introduction of performance measures happened much later at Virgin Atlantic, Gripple (see below), and Herman Miller. For example, at Herman Miller performance is measured only on the completion of projects during learning reviews. Indeed, our research shows that if practices are in place to constantly assess and challenge the value of design, its impact is likely to be negligible. A design consultant said, “The worst thing is when that trust disappears or is not there, and so you become constantly questioning the values, the expertise, the knowledge, and the drivers of the other people, and that's hell, you know.” Practices that seek to constantly measure and justify design seem to marginalize design's strategic contribution. Putting practices in place to catch design out and devalue its worth can end up as a self-fulfilling prophecy.

Herman Miller's SAYL® chair

As a well-established leading producer of interior furnishings, Herman Miller has created several iconic designs, such as the Eames lounge chair, Action Office, and the Aeron chair. Such a record, coupled with strong organizational values (quality, ergonomics, and environmental sustainability) and a clearly recognizable brand may suggest strong investments in internal design units. On the contrary, when it comes to design, Herman Miller relies almost entirely on collaboration with external agencies. Also, while most companies in the industry commission design through marketing departments in response to what they consider market opportunities, Herman Miller is more exploratory: The director of finance stated, “Find a few really good designers…then trust them We kind of go: ‘Well, here's a problem to solve. Send it out to the designers and see what they bring back.’” In addition, many ideas arrive unsolicited from design consultancies. External designers are even given the freedom to challenge briefs—say they don't like them, suggest alternatives. The company's success does not rely on tight specifications and controls, but on an open and deep appreciation of design thinking, positive attitude toward risk, and capacity to select and work with external designers, and to execute projects.

At the same time, a structured and transparent process is in place. The director of Insight and Exploration stated: “There's a level of thoughtfulness that is going into both product design as well as the application of the brand presence. So we aren't doing things randomly; we're doing things very, very deliberately.” Three distinguishing features characterize the design and development process at Herman Miller:

1. Senior management goes through an extensive vetting procedure before engaging with an external design firm. Successful collaborators become trusted partners and are often kept on the roster for a long time.
2. While the company has a documented design process, from insight and exploration through to launch, iteration and experimentation are defining aspects of Hermann Miller's design thinking. As the senior VP of Global Marketing stated, “A fair amount of variation is tolerated given the difference in things that we might be developing or designing.”
3. Business cases and financials are developed organically over the duration of the project, rather than determined at the beginning of the process. As the finance director argued:

[Let's say that] we want a designer to go do a chair that does this. We could probably give him some financial information, like, hey, the material cost needs to come in around here, and the volume is…[but] now you're starting to constrain the designer too much and put him in a box What [we] are really doing is: [we] start out with kind of a theory and guesses and estimates, and [we] are trying to eliminate all of those that you can as you go through the process, toward a business proposal.

The SAYL® chair, designed by Yves Béhar of the studio Fuseproject, is a good example of such design practices. Initially, Herman Miller identified the need to enter a low-price market, aiming to create an office chair that could retail at $300 to $400. This was a substantially lower price than its other products in that category. The challenge was to design a low-cost chair while not compromising on the company values. Herman Miller sent out a brief to several design agencies expecting good but pretty standard responses. Yves Béhar reacted. He had worked with the company before but had never designed a chair. He came back with a response to the brief with a visually provocative and higher-performance product at that same price point. Herman Miller's openness and trust in its external designers meant that this latter option was eventually chosen, despite the external designer's lack of experience with the product category. The result was the SAYL® chair, a product that is performing well, hitting margin targets, and seeing soaring sales in Asia and the United States.

The Challenge of Overcoming Cultural Barriers

Company B adopted a typical design process, which goes as follows: Developers work on a concept from definition of requirements to implementation; there is little interaction with customers; the new product is launched. Following disappointing results and poor customer feedback, fresh thinking about innovation finally emerged and a new design function was established. This sounds straightforward enough, but while positive results were achieved, cultural barriers have proved to be a major headache. As a design officer lamented: “It's where you have designers and design working with people who are not design literate, who are uncomfortable with the design process. That's where things go wrong.” Similarly to company A, lack of awareness of the role and value of design and difficulties in interactions among functional groups proved to be major obstacles to embedding a design way of thinking at this company too. A design officer stated: “[The challenge] is getting an organization that is not historically design-led to understand: what are the benefits of that? And that is a massive challenge.” Indeed, in most of its projects, the company preferred to use known and tested processes rather than developing new ones that involved the design unit. In this case, stubbornness around maintaining the status quo through existing processes prevented the introduction of new ways of working.

Things have progressed, but this has meant hard work in developing a different attitude toward failure and a more iterative way of working. As the digital director argued:

I think there's a growing acceptance within the company that if we are going to take this kind of design-led approach, we need to get used to failing sometimes And if there is a failure, typically it's only remembered for a few weeks, because what designers do very, very quickly is move on from it; either learn from it quite quickly, or get the next thing out there and iterate it very quickly.

Here, changes in the physical work environment were also important in the way design worked. Traditionally, offices were structured as cubicles or with people sitting next to each other along pretty standard, long tables. According to the head of Design:

Very noncreative, noninnovative, noncollaborative, no wall space to write and draft and create and design—there's none of that. We have ripped out flooring and designed and developed a new floor—a new way of working It's just very different than the rest of the floors. And so, that in a lot of ways is driving the cultural change.

Changes in the work environment parallel changes to the structure and dynamics of the project team:

We [now] have an agile work environment If we're going to start a new project, we'll assign a designer, a business analyst, an operations person or a technology person, and a program manager or account manager, and put all of them at one table…and they're solely responsible for that product. Instead of multiple meetings throughout the building, they all work very closely together.

Embedding design thinking as a strategic perspective relies on a culture that takes risks, trusts its designers (whether internal or external), and, importantly, tolerates failure. Another good example is midsize manufacturing company Gripple, where we found substantial freedom to explore ideas and learn from failure. The special product manager said: “We don't see failure on the path of a project as a bad thing…[In fact] fear of failure actually means that you're not actually going to take a design to the extreme.”

Our cases have shown that risk aversion and fear of failure can easily relegate design to a simple “service” role, and therefore inhibit the introduction of design thinking. How you formalize processes is also tricky: while Virgin Atlantic, Herman Miller, and Diageo all have established and structured routines and processes in place, they worked out how to develop sufficient flexibility to accommodate specific aspects of a project. In company B, subtle but key changes in processes and the work environment were necessary to start embedding a new way of working around design thinking.

Practical Implications

It is not easy to embed design thinking in an organization. Stubborn adherence to existing processes and routines, conflicts among organizational functions, overreliance on customer feedback, fear of failure, and lack of senior management appreciation of design can often form barriers hard to overcome. However, there are several actions that can be taken to strategically embed design thinking:

1. Design can help spark the first connection with the customer, and hence strengthen the brand. To do this, a deep understanding of customers' often hidden needs, rather than a response to narrowly defined briefs, should initiate the design process. Such understanding can be gained through observation, shadowing, creating “personas,” and adopting other design approaches and tools. These are more effective than investigating explicit customer needs. The process should be user focused (i.e., creating value for customers), rather than user driven (constantly reacting to customer preference changes). A clear example is the Virgin Atlantic's creation of the upper-class suite.
2. Briefs should be developed through collaboration between multiple functional groups (e.g., marketing, engineering, design), with room left for making changes over time. As we have seen in both Virgin Atlantic and Herman Miller, briefs were reworked to broaden their scope and address wider problems: How can we enhance in-flight customer experience? And how can we create an affordable but comfortable and environmentally sustainable chair? Importantly, having wider briefs does not mean lack of discipline and overly autonomous designers coming up with unsellable products. Instead, they enable NPD teams to question existing offerings and develop innovative solutions.
3. Design investments should not be limited to simply recruiting good designers or partnering with successful design agencies. It is important to create an environment for design to flourish and to establish real trust between top management and designers. Both aims require strong senior management sponsorship and sufficient appreciation of what design can do. We can learn from novel practices at Diageo, for example. The design director introduced an annual event where senior management reviews all the design work of the year, and to which external design consultants are invited. This event has two positive effects: further promoting the appreciation of design in the company and spurring competition among design agencies.
4. The work environment may need altering if design thinking is to be successfully embedded. For example, as at company B, novel and unusual office layouts can kick-start greater interaction among functions and support the work of project teams.
5. Managers should gather evidence of design successes (and failures). This triggers learning but also enhances design's position in an organization. Such evidence may be internal or external, as in the case of benchmarking exercises. However, be warned that while performance measurement can play a very positive role, it should not be undertaken too early in the development process as innovation may be stifled. This can be a real differentiating factor between those companies that successfully elevate design thinking to a strategic role and those that do not.
6. Managers should identify the diversity of roles that designers can fulfill. Designers often start their careers as technical specialists with functional expertise. But for strategic design thinking to work, they have to be able to join cross-functional teams and act as influencers who champion design. They have to be capable of using and understanding different languages and perspectives and be fully aware of commercial considerations. Having gained a high level of trust and positioning, they can also play leading roles in which they get increasingly involved in articulating concepts and future scenarios.

Finally, how far are you prepared to go? Some organizations are capable of deeply embedding and elevating design to a way of thinking and operating, rather than keeping it simply as a perspective in development. Fundamentally, what sets some companies apart from others is their holistic approach toward design and their culture more broadly, rather than the skill set of individual designers or the position of the design unit in the company hierarchy. As Virgin Atlantic's head of design stated:

What you are embedding is the important bit. Are you embedding design and the design team? Or are you embedding a point of view?…You're only as good as the culture in which you sit So it's not the quality necessarily of the designers, the design team, it's the quality of…the organization as a whole.