Ideo Case Study

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Case Study Analysis: IDEO Product Development

The business model for IDEO began as an open-minded place to design, develop and manufacture new products. The last 20 years of proven product design driven by innovation has translated into profit margins for their clients and continuous refinement for IDEO’s process. IDEO pioneered “concurrent engineering” where design and engineering work together to produce aesthetically pleasing products that are also highly functional. This was different from many other similar companies that placed more emphasis on the industrial design than the engineering. IDEO’s strengths grew out of the ability to master this ability with high tech clients. Corporations came to IDEO because they had a proven system of developing the best products through using their key ingredients for innovative strategy.

IDEO was riding on the success of the Palm Pilot, which at the time had become the fastest selling computer product ever. This was a marketplace with which they were familiar, having worked on the Newton handheld earlier fro Apple. The Newton was an example of a disruptive technology, but the need for a truly portable handheld computer could not outweigh the shortcomings of the technology or the value proposition in the marketplace. Working on these types of projects reinforced IDEO’s stature in the industry for not only producing award winning products but also leading consumers in to new ways of interfacing with technology.

The skill abilities of team members within IDEO reflect the company’s doctrine of open innovation and the benefit of assembling those diverse teams. From their clients IDEO assimilates best practices and then integrates these practices back into their own business and process. By this methodology IDEO is continually evolving and refining their process. Since the process of design cannot be bottled and typically varies from one client to the next a model of continuous improvement keeps IDEO on the cutting edge. IDEO further enriches these teams by being very selective in their hiring practices of individuals coming into the firm and when new divisions of IDEO are launched. Applicants are narrowed down through a rigorous interviewing process consisting of several 1-hour interviews. If an applicant passes through this formality they are next thrown to the team for further scrutiny. This last phase is critical because in the end it is the team, the whole, which makes IDEO strong not the individual.

When the 2000 case was written, IDEO was in demand. They had the luxury of handpicking top clients they wanted to work with on projects. Even with this type of reputation and client selectivity, a successful product design must come from a partnership between the client and the firm. Kelley promoted and exploited the awards given the company and IDEO’s exemplary innovation practice to continue to evolve and elicit additional business. With regard to the article, “Choosing to Learn, Learning to Choose”, IDEO seeks out clients that can supplement their intellectual equity. IDEO does not agree to do work that involves only decorative or low transferable knowledge project development. They want to engage with clients that have the tough problems – the clients that are pushing technology and accepted norms. IDEO could definitely be called a “knowledge broker” the way they design and absorb knowledge on a regular basis as a part of their everyday business routine. They may gain knowledge from any client, but the better clients and those with unique and more challenging problems to solve, are actually better for business because IDEO’s team members will learn more collectively. Besides being better for knowledge acquisition, the company can use the notoriety of the client as advertising in the future.

The Palm V project with Hawkins and 3Com had been a very successful project, and primarily solved an engineering problem that tested the limitations at IDEO. The problem was how...
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