How do you define design?
Design can mean many different things. At PepsiCo, we’re leveraging design to create meaningful and relevant brand experiences for our customers any time they interact with our portfolio of products. Our work covers each brand’s visual identity, from the product itself all the way to the marketing and merchandising activities that bring a brand to life across different platforms—music, sports, fashion, and so forth.
This applies not only to the current portfolio of products, but also to PepsiCo’s future portfolio. That’s where our work is really about innovation. I strongly believe that design and innovation are exactly the same thing. Design is more than the aesthetics and artifacts associated with products; it’s a strategic function that focuses on what people want and need and dream of, then crafts experiences across the full brand ecosystem that are meaningful and relevant for customers.
What does this look like on a day-to-day basis, at PepsiCo or elsewhere?
Design in this context relies on the prototyping process, which can create a lot of value inside organizations because it aligns the full organization around one idea. For instance, if I say “knife,” you are going to visualize a kind of knife. I’m going to visualize another knife, and if there were other people in the room, they would visualize many different kinds of knives. But if I design a knife right now, I align everybody around that knife. Let’s say that in the room there is a marketer who tells me the brand is not visible enough. There is an ergonomist who tells me the handle is not comfortable enough. There is a scientist who tells me the blade is not sharp enough. These are not mistakes. They’re not failures in the process. They’re how prototyping surfaces issues that don’t emerge in the abstract. That’s the power of design and prototyping.
When you put a prototype, something that is new and that nobody has ever seen before, in front of people, they get excited, right? There is the sparkle in the eye. I’ve seen it so many times in so many meetings. People talk and talk about things until somebody arrives with an object, a prototype, and then everybody gets excited. That’s how you unlock resources. You unlock sponsorship engagement. That’s extremely powerful and lets you move really fast. It’s how you speed up your innovation process and make the outcome more relevant to customers.
What do you need in order to make design thrive inside an organization?
Certain circumstances are necessary for design to thrive in enterprises. First of all, you need to bring in the right kind of design leaders. That’s where many organizations make mistakes.
If design is really about deeply understanding people and then strategizing around that, we need design leaders with broad skills. Corporate executives often don’t understand that there are different kinds of design: There is brand design. There is industrial design. There is interior design. There is UX and experience design. And there is innovation in strategy. So, you need a leader who can manage all the different phases of design in a very smart way—someone with a holistic vision.
Second, you need the right sponsorship from the top. The new design function and the new culture need to be protected by the CEO or by somebody at the executive level. Because any entity, any organization, tends to reject new culture.
Once you have that, then you need endorsements from a variety of different entities. It could be from other designers outside your organization. It could be from design magazines. It could be through awards. But you need that kind of external endorsement to validate for those inside the organization that you’re moving in the right direction.
Then you need to identify quick wins: those projects where you can show the value of design very quickly inside the organization. On the basis of this early success, you start to build processes that can enable the new culture and approach to be integrated inside the organization.
The process is really an evolution. I see it as five often-overlapping phases. The first one is denial: the organization sees no need for a new approach or new culture. But somebody with influence and power inside the organization—often it’s the CEO or somebody at executive level—understands that actually there is a need, so they hire a design leader who tries to introduce a new culture.
Then comes the second phase: hidden rejection. There may be acceptance at the top that the organization needs to embrace a new approach, but the full organization isn’t there yet. The design leader is moving forward in alignment with leadership and thinks that things are working well, but in reality they are not. In this phase, it’s easy to fail, and it’s easy for the company to reject the new approach.
The third phase is what I call the occasional leap of faith. As the design leader, you find a co-conspirator inside the organization who understands the value of what you’re doing. He may or may not understand deeply what design is about, but he understands that there is value there and decides to build something with you, to bet on you. That’s when you start to get your quick wins. The quick wins are so important because they exponentially build understanding about the value of design.
The fourth one is what I like to call the quest for confidence. This is when the company understands that there is value in this new design culture and tries to integrate it throughout the organization. The problem is that when you try to do something different, there is always inefficiency and risk. This is especially true if you do design in innovation: There is risk not just in a process but in the market, in the brand and product you’re going to launch. That’s when you need to build confidence in the organization.
But at the very base of innovation and entrepreneurship is risk. Methodologies like Six Sigma are all about reducing risk, but they are not effective for innovation because innovation by definition is risky. Design, on the other hand, can build confidence inside the organization in a variety of ways. It comes down to building innovation know-how within the organization, and gaining input and buy-in from across the organization and from your customer through the prototyping process. The more you prototype, the more you build confidence in the organization, and the more you know that what you’re doing is the right thing. This quest for confidence is extremely important because so many corporations today are paralyzed by their fear of making mistakes or failing.
The last phase is what I like to call holistic awareness, when everybody understands that the new culture, in this case design, makes sense for the organization. This is when design is not about designers anymore. It becomes universal, and it prompts everybody to modify their own approach to work—whether it’s marketing, manufacturing, or any other function—to embrace it.
What does a design team look like at PepsiCo?
You need the design function—senior leaders with teams under them—embedded inside the business organization. Or integrated into it, I should say, because we don’t want design to report to another function. We want design to be a peer of marketing and to drive innovation.
At the center, we have been developing the key pillars of the design functions. We have a very senior leader running industrial design, another one running brand design, another one running innovation and strategy. And we are building digital as well. They are the ones who are nurturing the design capability.
Our hiring process is tough because we’re not just looking for good designers. When you’re creating a new design organization, a new culture, you need to hire change agents and people who understand how to change the culture of design. This makes things extremely difficult because you have many, many designers who may be amazing at what they do, but they have no idea how to explain what they are doing to a business organization. Those kinds of designers are a luxury we can’t afford in this phase of the organization’s evolution. If you have designers who can’t influence change, you get that familiar situation with designers whining that the business organization doesn’t understand them and the business organizations saying the design community has no clue what we’re trying to do.
You need the shared language, the structure, and most of all the right people to create a true design culture. I’m really against those design or innovation firms that claim they can come in and teach you design thinking. The result of their expensive workshops is people who are not design experts will start to think that now they get design and can do it by themselves. That’s a disaster because you do need skills and experience.
How do you convince others that investing in design is worth it?
For many, many years I’ve been asked in my corporate life to define the return on investment of design. The objective variables obviously are at project level and then at brand level—top-line and bottom-line growth. That’s a no-brainer.
Then there are subjective variables that we really want to take into consideration. One is consumer engagement. You can measure it in a formal way or you can measure it in the way consumers talk about your products, which is easy to do today via social media. Another variable is brand equity, meaning the impact on the brand. It’s customer engagement, the way your customers interact with you, the way they talk to you.
The truth is, once you embed design across your organization and people start to experience it, they stop asking you what its ROI is because they start to see the impact across all those variables.
Can you talk about a key business outcome from your time at PepsiCo so far?
When I joined the company a little less than three years ago, I was able to build a very strong partnership with our business organization and with R&D. We’ve been leveraging design to understand what our customers need and want from fountains, coolers, and vending machines. Then we’ve been crafting—prototyping, really—to create the ideal portfolio as fast as possible and take it to market.
The Spire family of equipment, launched about one year ago, is the first output of Pepsi’s design-thinking approach. Spire is a series of fountains and vending machines that let you customize your drink: you choose the beverage and add flavors. It’s been well received by the market, and it’s helped us as a design organization to show what design is about. We launched a new series of products this year and there is much more in the pipeline, but Spire is probably the project I love the most.
What makes Spire significant is that it’s such a change for the industry. Usually it’s external partners and suppliers that do a lot of the work on equipment, but.with Spire, we said, let’s reset and let’s try to understand what makes up the portfolio of products we really want to offer. We rethought the architecture of the existing machines, but we also reimagined how we might build beverage, and eventually food, experiences in restaurants in the future.
We actually projected further out, to the fountain and the vending machine of 20 years from now. We wanted to understand where we could go and then step back pragmatically to deliver innovation in the short term, the middle term, and then the longer term as well.
You need to prove the point of design through activity, actions, and projects—it’s not just top-line and bottom-line returns. That will come. But it could be speed to market. It could be efficiency in the process. It could be employee engagement.
Are there any final thoughts you want to leave our readers with?
As designers—industrial designers, product designers, innovation designers—we are trained to understand all the different worlds of brand and business, R&D and technology, and especially people. We become experts of everything and experts of nothing. What we’re really good at is speaking the languages of all the different worlds, then connecting those worlds to our design tools and to our ability to prototype and visualize ideas. When done well, design becomes a cultural interpreter and facilitator across the entire organization.
Article Taken From: https://hbr.org/2015/08/pepsicos-chief-design-officer-on-creating-an-organization-where-design-can-thrive