Brandi M. Pearce and Sara Winterstorm Värlander from Stanford University Center for Work, Technology and Organization visited the Design & Co-Innovation Center (DCC) based at the SAP AppHaus in Heidelberg.
For their study they aimed to get insights into the use of Design Thinking practices and space in establishing cross-organizational partnerships such as the co-innovation projects that are embedded in the DCC.
In the interview, together with Pamela Hinds, lead investigator from Stanford overseeing the partnership with SAP, the researchers share their thoughts.
Stanford University and SAP have been maintaining a global and dynamic partnership, created to achieve innovation. Through this partnership SAP’s business is being extended to investigation and academic research. Which factors contribute to the success of this kind of partnership?
- Hinds: Probably the most important factor is having the goals for the effort aligned. They must not necessarily be the same, but everybody needs to be clear about the value they are getting out of it. Crossing between business and academics is interesting as the goals may differ. But to the extent that we still can find ways to collaborate and to be clear about the research questions that we are exploring, we are able to work across those differences. Apart from that, another factor is meeting halfway to ensure that the learning is transferred early enough into the organization. This will be useful for the organization and allows us from the academic side to continue to do deeper and deeper research, so that we can publish scholarly work.
What are the benefits of such cross-organizational partnerships?
- Hinds: From an academic standpoint I like my research to have impact, to be current and of value to organizations. By having this kind of partnerships I can make sure that the work we are doing and the questions we are asking are current, so that there is more value coming from our work instead of something that is only of academic interest.
From the industry perspective one of the things we bring is objectivity. We have worked with a lot of different companies and often can bring a broader, outside perspective and ask maybe different questions because we have seen what other organizations are doing or where they are struggling. Bringing theory to a problem provides a more principled way of understanding what is going on and why things are happening the way that they are. So we might be able to observe, for example, that certain groups are less enamored with the AppHaus than others. Is it based on the nature of the work they are doing, is it based on personality, or leadership? Understanding why that is happening is really beneficial to the organizations because then they can work on the right things to make improvements.
Stanford University and the Hasso-Plattner-Institute (HPI) have also been maintaining a research partnership since 2008. The joint program focuses on the design thinking method of innovation, which has been successfully taught at both institutions. Design Thinking is based on the belief that innovation is driven by three forces: business, technology, and people. According to you, what is the connection of these principles to the AppHaus and the DCC?
- Värlander: When we visited the Design & Co-Innovation Center (DCC) we saw that interdisciplinarity is at the core of Design Thinking by looking at the composition of the DCC team. There are clearly many benefits into interdisciplinarity, but there are also challenges. What is really important to be aware of is that people with different backgrounds have different professional values and ways of working. So it is necessary to implement Design Thinking with caution and awareness. On the other hand, it is a good tool to bridge the challenges as it provides people with a common language and a common method around which they can work. That is also what we saw at the DCC team.
Design Thinking is concerned with projects, people, and space. Since 2011, SAP has launched several AppHauses. How does the AppHaus in Heidelberg differ from its counterparts? Does space inspire creativity or what makes a space productive, creative, living, and fascinating?
- Värlander: We see that the AppHauses share some characteristics, like the open space, flexible furniture on wheels, social areas, lots of whiteboards, but they are also different in many aspects. Varying factors are the individual workspaces, number of workspaces, number of project rooms, and the types of furniture. The DCC space in Heidelberg is really different from what we have seen in the other AppHauses with its style. But your question is also if space inspires creativity. There are no studies out there that are looking at the impact alone of space on creativity. It is really challenging to measure, as there are many factors that can impact creativity. In our previous studies we have seen that what really seems to matter for what a team perceives as a creative environment is the input in the actual design process of the space. In terms of the DCC a clearly distinguishing factor from the other AppHauses is that the DCC team has been involved in the design process. That seems to create a very strong sense of identity with the place as well as a strong commitment to the goals of the DCC and to the team. What is also very different with the DCC space is that it is external customer facing, while other AppHauses do not seem to have that idea behind it in the same way.
- Pearce: One of the unique features of the DCC Heidelberg is that you have created a space designed specifically for customer work. The question that is still under investigation is how and if this kind of space and the Design Thinking methods changes the nature of the engagement between SAP and its customers and if so is it significantly different and does it lead to different outcomes than other types of SAP customer engagements?
Design Thinking has been advocated by several governments, like Singapore, Finland, UK, and Germany, to name a few. The methodology has been implemented at all levels of organizations from startups to multi-national corporations for less than a decade now. How do you see this Design Thinking implementation both in the USA and globally?
- Hinds: In general I believe that the concept of Design Thinking applies everywhere since it is a philosophy about how to approach design, very much based on ideas of really understanding user needs, working in an interdisciplinary way, remaining divergent in order to increase the problem and solution spaces, and so forth. Interesting to me though is that the specific practices that work in different cultures vary. It has been fascinating to find that iterative prototyping seems to improve creative outcomes for teams in the US, but it can decrease creativity in teams from China. We have been trying to find out why that particular practice is not transferable, and we think it has a lot to do with feedback. Broadly speaking the way that we think about feedback in the West and the effect that it has on us is very different than the way people think about feedback in the East. Feedback is an important and integral part of the iterative prototyping process. Another thing that seems to really matter is a concept called creative self-efficacy, which is the extent to which people believe that they can be creative. Any practices that undermine people’s sense of creative self-efficacy can reduce their creative output. It has something to do with whether the practices support or reduce people’s or team’s confidence which seems to affect their ability to be creative. So the practices themselves, the rules for brainstorming, how that actually looks, probably need to change depending upon the cultural context in which you are operating. In China, for example, effective brainstorming does not necessarily look exactly the way it does in the Silicon Valley and probably in Germany as well.
Should the methodology of Design Thinking be tailored to the context or culture in which it is applied?
- Pearce: For us to really understand Design Thinking as a practice we want to begin to understand some of the underlying mechanisms that drive different types of outcomes. For example: Does Design Thinking change the nature of the way in which people engage with one another? If so, how and is it consistent across different cultures and professional groups in how people experience different aspects of the design thinking practice, including the open-office space, the process of rapid iteration, brainstorming, etc. Thus, by developing a deeper understanding of the underlying mechanisms that drive Design Thinking allow organizations to understand what aspects of the practice need to remain consistent and what elements may need to be adaptated or iterated upon to meet the needs of the people, organization, or culture in which it is embedded.
From your experience, how are innovation practices embedded in the DCC?
- Värlander: In terms of Design Thinking practices I think about space, process, and people. We definitely see that all of these constituents are emplaced in the DCC. First in terms of the space: You had a very flexible and open work environment that seems to be a very suitable workspace for Design Thinking practices, prototyping, and iteration, not necessarily with other types of work practices. In terms of the processes we also got to experience the Design Thinking process when we witnessed a customer workshop. What we got to learn is that there seems to be a clear focus on end-user needs and on the interaction with those end-users in the process. This is very visible in the DCC team’s engagement with the customers. When it comes to people we have learned that the team is very energetic and social. The team members were hired with a T-shape in mind, for a combination of domain expertise, but also social skills. They have a very broad experience and come from different backgrounds in design. But also social skills are really important, so they had to have good communication skills, to be flexible etc. I think that all these three really incarnate the DCC, at least from our experiences during the week we were there.
Innovation is supposed to meet human needs. How important is innovation in benefiting society? In what way does Design Thinking help to deliver efficient solutions to society?
- Hinds: From my perspective, Design Thinking is fundamentally about meeting real human needs, and understanding core important needs of individuals or groups of society. Design Thinking enables us to provide products, services, processes that will meet these profound human needs rather than creating technology for needs that are not there and driving the purchase of these products or services through sales and marketing. I actually think that society really benefits in general. We also see Design Thinking used quite a bit directly on societal problems, from improving education, to reducing poverty, and addressing environmental issues. Complex issues are brought to the surface and some of those challenges are reconciled through an open exploratory kind of process. I think there is tremendous potential to come up with solutions that we would not otherwise come up with and that are more effective.
What is the benefit of co-innovation?
- Pearce: One of the interesting things that we discovered when we were at the DCC is that co-innovation as a term has different meanings to different people. I would say that the definition that seemed to have the most traction defined co-innovation as the process through which SAP and its customers identify new opportunities to build and innovate products bases on end-user needs. These types of inter-organizational partnerships create the potential for firms to leverage each other’s resources, competencies, and networks to build new products or services collectively that they may not be able to achieve independently. The word ‘potential’, however, is important because we know there are barriers to independent activity between firms, such as a lack of trust for example, that may impact the ability to execute and achieve the objectives of the partnership. In our previous research with SAP, we found that Design Thinking practices applied in different cultures and contexts can be experienced differently. Thus, an interesting question that surfaced from our time at the DCC and that we hope to explore further is to better understand if and how Design Thinking practices are experienced at the client interface between SAP and its customers. What we understood during our time with you was that people internally in the DCC, as well as clients outside of the DCC, perceive that there is something about the use of the space and the Design Thinking methods that helps to foster and facilitate a different kind of engagement with one another, a more collaborative and trusting engagement; that it creates access to networks and resources, and that the process allows for solutions that are of higher quality as they are based on end-user needs. One customer said, the co-innovation process at the DCC acted as a catalyst for changing the nature of their organization’s relationship with SAP. Currently, this understanding is based on a small sample of interviews and observations, and we would really like to understand more deeply if Design Thinking as a practice can change the nature and relationship between SAP and its customers and if so, what are the underlying mechanisms that facilitate this change.
Design Thinking has been prominent in the recent years. Will Design Thinking establish a Culture of Innovation, or is there the risk of Design Thinking becoming stagnant and failing in the end? What would be the evolution of it?
- Pearce: As with any management tool, there is always the risk that if we do not understand the mechanisms that drive the outcome, then we may begin to apply the tool or the practice in contexts or circumstances where it may not lead to the outcomes we expect. So perhaps, in some ways, the next frontier for innovation from my perspective is to really understand the underlying mechanisms of Design Thinking, how it is applied and experienced in different environments, such as the co-innovation context in which it is being applied at the intersection between an organization and its customers or partners. I think in the DCC in many ways you are really on the frontier of thinking about this new model and creating a new platform and strategy for innovation between organizational entities.
- Hinds: I would hope that we would see an evolution of these practices, hopefully improvements. Actually one of the things that we are already starting to see is a lot more rapid experimentation. That’s something we did not see 10 years ago. If Design Thinking is going to continue to stay alive as a set of practices, it is going to need to evolve as the world around us evolves.
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