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IDEO Product Development

Executive Summary IDEO is a design and innovation consulting firm founded in 1991 with the merger of ID Two, Matrix, and David Kelly Design whose, founder, David Kelly, became CEO. The resulting company had the ability to design, develop, and manufacture new products and thus pioneered the design version of concurrent engineering combining art and engineering to produce products that were both aesthetically pleasing and technically competent. IDEO established itself as a leader in the field and consistent recipient of industry awards. IDEOs culture could be described as eccentric, fun, creative, and innovative. The outside-thebox working styles and shifting of working groups help to keep thinkers fresh and constantly on their toes. In the early 1990s, the organization was flat to the point of creating occasional ambiguity for staff and management, but this was seen as providing fertile conditions for the generation of innovative thinking and ideas. By the late 1990s, IDEOs culture had become slightly more bureaucratic, to the chagrin of the executives and founders. IDEOs innovation process was also unique. Prototyping and brainstorming were both central to the product development process which followed several phases. Phase 0, the Understand/ Observe phase sought to develop a comprehensive understanding of the clients business and product feasibility. The closely related Phase I, Visualize/ Realize focused on choosing a product direction based on ideas, technologies, and market perceptions and culminated in a rough three-dimensional model of the product and a general idea of the manufacturing strategy that would be used. During Phase II, Evaluating/ Refining, the focus shifted to engineering and the team enhanced the design prototypes through testing functional prototypes. At the end of this phase the team had a functional model as well as a look alike design model. The team completed product design and verified the feasibility of

IDEO Product Development manufacturing during Phase III, Implement/ Detailed Engineering. In the final phase, Phase IV, Implement/ Manufacturing Liaison, the team ensured a smooth product release to manufacturing. In 1996, IDEO was hired to work on the design of Palm V for 3Com. Senior project leader Dennis Boyle was chosen to lead development for IDEO with the goal of creating a slim, more

sophisticated, colorful and sleek design that would appeal to customers emotions more than their desire for cutting edge technology. Phase 0 began at the end of 1996 and the Palm V was released to market in February 1999. In 1998, concurrent with the design of the Palm V, Jeff Hawkins and Donna Dubinsky from 3Com created a company called Handspring with the intent to create lower-cost, more user-friendly, and colorful PDAs with expansion ports and the ability to synchronize with personal computers. The company wanted to launch its first product, the Visor, in late 1999, before the holiday shopping season. Because of time pressures and cost goals, Handspring wanted to truncate the early phases of IDEOs development process and rely on market research that had already been conducted for the Palm V. Dennis Boyle was called in to submit a proposal for the project, although because of the close ties to the competitor Palm, details of the project would have to be kept relatively secret and he would have to develop the product nearly twice as quickly as the Palm V.

Analysis David Boyle must decide whether or not to put aside his companys tradition of spending substantial amounts of time and energy on the design phase of a product in order to rush the Visor PDA to market. Visor would meet Handsprings requirement of being less expensive than the Palm V and would have more potential for expanding functionality, but would lack the trade mark high-quality and well-researched design that had made IDEOs innovation legendary in the industry.

IDEO Product Development In many ways, the priorities of IDEO and Handspring were at odds with each other. IDEOs focus was on creating innovative, high-quality products that were successful and effective due to

thoughtful, creative design. The rigorous, customer-centered development, design, and refining stages, as well as the comprehensive use of creativity in the office and in team development underscore IDEOs commitment to creating the best design possible. Deadlines were not a primary concern, as the company had a good track record for delivering their world-class designs under tight schedules. Handspring, despite being consumer-focused and according to Hawkins, wanting to make this work well for the consumer, felt it unnecessary to engage in market research or time-intensive experimentation in a fundamental departure from IDEOs process. IDEO had worked long and hard to create a supportive culture for creativity and innovation, one that was continually rewarded with recognition for its cutting edge products and design. There was potential that their reputation could be damaged by taking on a product that has such tight cost and time constraints. Boyle knew that more development time would translate into a superior product but one which would not meet one of his clients primary requirements of time to market.

Evaluation of Alternatives Boyle has three alternatives for approaching the Visor project: he can decline the project, he can move forward with the project without a thorough Phase 0 and Phase I as requested by Handspring, or he can request additional time to complete the project using IDEOs established design process. The advantages of the first option are that IDEO would not risk being associated with a sub-par design. However, they would also lose the opportunity to spearhead an exciting new project and would lose the revenue associated with that project. Additionally, theres the possibility that declining to work on the

IDEO Product Development project would jeopardize the close relationship between the IDEO and Handspring teams and prevent future collaboration. Boyle also has the option of accepting Handsprings timeline and constraints and moving

forward with a modified product development process. The advantages of this alternative are that they would be satisfying one of their clients primary requirements. Also, the early release may help position Handspring as a leader in the PDA industry with opportunities for future product development. The main disadvantage to following this course of action is associating the IDEO brand with a possibly inferior product. Boyle already noted that that Visor would have to sacrifice style and settle on an inexpensive plastic housing, and on AAA batteries instead of the rechargeable lithium-ion battery found in the Palm V. The third alternative would be to ask Handspring management to delay the release so that more time could be spent indulging in experimentation and the early phases of IDEOs legendary development process. These processes were designed to encourage creativity and Boyle was confident that they could create a superior product under these conditions. The disadvantage of this option is missing the window for optimum market entry which could cut into profits or allow competitors time to gain control of the market.