2012

University of Canterbury: Operations Management

Muhammad Abubakar

[IDEO PRODUCT DEVELOPMENT]

This report is based on a case presented by Harvard Business School, titled IDEO Product Development. The goal of this report is to examine whether an engineering design company, IDEO, should request more time to complete a design for a Personal Data Assistant (PDA) that was to be called the Handspring Visor. This report concludes that IDEO should ask for more time to complete the Handspring Visor design.

Introduction IDEO is an innovative and design consulting firm founded in 1991. IDEO has been a successful example of what innovative process and design can accomplish. Its innovative Palm V PDA created a new direction for what PDAs should look like, while maintaining a functional simplicity. The Palm V is one of the many strings of highly successful innovative products the company designed. Business Environment IDEOs culture could be described as unconventional, exciting, creative, and innovative. The eccentric working styles and shifting of working groups helps keep the team members fresh and constantly excited. In the 90s, it got so innovative to the point of being ambiguous at times for the staff and management teams, but this was seen as providing fruitful conditions for the generation of innovative thinking and ideas. Process and Operations IDEOs product creation process is unique as it embraces the eccentricities of its business culture. This welcomed so as to increase the value and creativity of product ideas. Teams are formed for the life of a project and then disbanded. As a result, there were no permanent job assignments or job titles. Healthy teams are extremely important for stimulating creativity (Gino, Todorova, MironSpektor, & Argote, 2009), but once a team has been established for a long period of time, team members tend to fall into patterns of thought or role or persona, of which might restrict their creative ability and flexibility of thought (Latendresse, 2006). Current Situation Though the Palm V project is yet to be completed, a new company called Handspring was formed in 1998. With the help of IDEO, Handspring is intending to create a more colorful and easier to use palm-size computer. Handspring is intending to make the new Palm less expensive, smaller and fully compatible product that could easily add functionality. Issues However, because of time pressures, low-cost goals, and the fact that the founders were former executives of 3Com and Palm, the company decided that market research would not be essential for the development of its first project. Dennis Boyle was asked to design the competing product, though because of the ongoing relationship to the competitor Palm, Boyle's team will have to keep the rest of IDEO in the dark about the project and the product would have to be developed nearly twice as quickly as the Palm V. The problem facing Boyle was 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, which would be cheaper and have more potential for expanding functionality, but would lack the trademark high-quality and well-researched design that had made IDEO designs the front runners of innovation in the industry. In a way, it seems that the priorities of IDEO and Handspring were at odds with each other. IDEO focuses on research and creativity as such deadlines were of little concern to IDEO. On the other hand, Handspring was proposing a process which will challenge IDEOs operative routine with tight dateline. Boyle understands that IDEOs reputation could be damaged by taking on a product that has such tight cost and time constraints. He knows that Visor could be significantly better given that 1 IDEO Product Development | University of Canterbury: Operations Management

there were no development constraints. However, with the reputation of the firm on the line, one must take a long-term approach when having to choose between such difficult options. Choices Boyle could: Reject the offer to assist in the Handspring Visor product, but because so many of the Handspring team members have close links to IDEO, it could create bitterness or resentment between the teams. Alternatively, he could ask the management to delay the release so that more time could be spent designing it properly for the market it was intended for. This comes at the risk of missing out on the planned market entry timing Handspring demanded. Third option is to accept the development timelines and constraints. This means using the Palm Vs market research result to improve functionality that would make it a popular, useful, and competitive product.

Recommendations If Handspring were to produce the Visor, it would need to market it towards a different group of consumers than those who would buy a Palm V. The Visor consumers will be a group of people who not tech-savvy, less interested in design and are price sensitive. The Visor improved features, versatility (slot function), and colors would be the significant differentiators for these people. Some market research would have to be done to determine the relative value of these different components of the device for the consumers. The option of going forward with the Visor project with the Handspring constraints would essentially mean IDEOs development Stages 0 and I would be skipped. This is the process which IDEO uses to get to know their customers product, the company producing it and its history. In this situation, Handspring felt this was unnecessary because the team members invented the market for the Palm Pilots and similar PDAs. These initial phases of doing the background work would be skipped to develop a product that was already in mind, using the product development model more widely used in the mainstream industry. Given that IDEO was far from a mainstream design company, with such a unique culture and methodology that had proven itself to be successful again and again, it is understandable how much apprehension Boyle must have felt. IDEO has contradictory interests for the two projects, on its way to releasing a new innovative product; it cant afford to take away from the market share of its Palm Pilot V. However, if the Visor project is successful, it could have its name on another successful project. However, if the product is rushed to market before it is as good as it could be, it could fail with IDEOs name on it. My recommendation for Boyle is: Request more time for the development phase, stressing that IDEOs job is to create great products, and the Visor could be one such great product given there was no time constraints. Emphasize on the need for market research; the Palm V and the Visor are similar products in some ways, but are, in fact, different in fundamental ways that will affect the appeal for the target customers. Knowing who their target customers are in the first place will help them to design the product that their customers want. 2 IDEO Product Development | University of Canterbury: Operations Management

If Handspring declines the request to extend the roll-out deadline, Boyle should request that Handspring engage in whatever market research they are able to do before pushing ahead the design and production of the new device. This will contribute to a better product that is more tailored for the consumers who will want it, giving the Visor a better chance of success when it does enter the marketplace.

Handsprings management should be able to see that more market research and time for design means a better, stronger product for the market. This will make sales and customer retention more robust, as well as improve the reception from critics, setting a good precedent for the new company. The fact that the founders were senior executives and experienced professionals may have made it more difficult for them to believe that they didnt know something about the market. But considering that they were introducing a new product, and especially from a new company, a healthy amount of humility could save the team a substantial amount of time and money by helping them make better decisions that are more in alignment with the desires of their potential customers.

Reference Gino, F., Todorova, G., Miron-Spektor, E., & Argote, L. (2009). When and why prior task experience fosters team creativity. http://personal.stevens.edu/~ysakamot/creativity/group%20creativity.pdf#page=100 Latendresse, F. J. (2006). Individual and organizational characteristics that facilitate and Restrict boundary spanning of team leaders. Doctor of Education (Ed.D.), Bowling Green State University. Retrieved from http://etd.ohiolink.edu/sendpdf.cgi/Latendresse%20Frank%20J%20III.pdf?bgsu1151007725

Bibliography Thomke, S. and M. D. Askhok Nimgade (2007). IDEO Product Development. Harvard Business Review: 20p. Bean, J. (2010). IDEO Handspring Case Study Report. Retrieved from http://slideshare.net/JustinCBean/bean-justin-ideo-case-study6090 Shim, R. (2001). "Palm V to get pager functions." CNET News. 2012, Retrieved from http://news.cnet.com/Palm-V-to-get-pager-functions/2100-1040_3-273970.html Kokabian, Peji, Entrepreneurship Process: A Case Study on IDEO (April 8, 2008). Available at SSRN: http://ssrn.com/abstract=1595723 or http://dx.doi.org/10.2139/ssrn.1595723

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IDEO Product Development | University of Canterbury: Operations Management