Can Design Save Management?

I wrote a short provocation for Convergence: Managing + Designing, which will take place in June 17-18, 2010. Here it is.

Youngjin Yoo

Temple University

Design, or design thinking, is becoming increasingly popular among management practitioners and scholars. Leading popular magazines like BusinessWeek and Fast Company regularly feature design as an important topic. Many leading business schools around the world incorporate some elements of design as a part of their curriculum. At the same time, leading design schools around world are challenging business schools by providing plausible alternatives to students and recruiters alike. A recent ranking by BusinesWeek shows a mixture of business schools and design schools. Design consulting firms like IDEO and Design Continuum are frequently called into do strategic and management consulting projects that used to be the exclusive tasks asked to management consulting firms. And, a quick scan of the shelves at the business section at local bookstores show titles like, Managing as Designing, Change by Design, Design-driven Innovation and Design of Business. Indeed, the first decade of the 21st century seems to be the decade of design. It is as if management found a panacea. And, that is design.

But, can design save management? In my presentation, I will explore this question from a historical perspective. It is undeniable that design and design thinking is having a positive impact on management practice and education. However, it is not clear if the current wave of design thinking will address the fundamental crisis that contemporary management is facing in this post-industrial economy.

The post World-War II economy saw the emergence two powerful economic forces. First, large multi-national firms have emerged as powerful economic actors that transcend the national boundaries. They control the direct access to the market and consumers, defined mostly based on physical products, acting either as final assemblers of parts or marketing and distribution channels. These firms grew in size and scope by exploiting the rapid developments in production, transportation and communication technologies (Chandler et al. 1999; Chandler Jr 1984). Their size and complexity are unparalleled. In order to manage the growing complexity, the paradigm of scientific management was developed (Teece 1993). A new class of economic actors,  ADDIN EN.CITE
<EndNote><Cite><Author>Chandler</Author><Year>1999</Year><RecNum>3293</RecNum><record><rec-number>3293</rec-number><foreign-keys><key
app="EN"
db-id="f00rva998fzwt2e0927xz5x4sr2dv9e2vra5">3293</key></foreign-keys><ref-type
name="Book">6</ref-type><contributors><authors><author>Chandler,
A. D.</author><author>Hagstrom,
P</author><author>Sölvell,
Ö</author></authors></contributors><titles><title>The
Dynamic Firm:  The Role of
Technology, Strategy, Organization, and Regions</title></titles><dates><year>1999</year></dates><pub-location>New
York, NY</pub-location><publisher>Oxford University
Press</publisher><urls></urls></record></Cite><Cite><Author>Chandler
Jr</Author><Year>1984</Year><RecNum>5730</RecNum><record><rec-number>5730</rec-number><foreign-keys><key
app=’EN’
db-id=’f00rva998fzwt2e0927xz5x4sr2dv9e2vra5′>5730</key></foreign-keys><ref-type
name=’Journal
Article’>17</ref-type><contributors><authors><author>Chandler
Jr, A</author></authors></contributors><titles><title>The
emergence of managerial capitalism</title><secondary-title>The
Business History
Review</secondary-title></titles><periodical><full-title>The
Business History
Review</full-title></periodical><dates><year>1984</year><pub-dates><date>Jan
1</date></pub-dates></dates><accession-num>16876322869684809580related:bC9dQjy-NOoJ</accession-num><label>p04874</label><urls><related-urls><url>http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?db=pubmed&amp;cmd=Retrieve&amp;dopt=AbstractPlus&amp;list_uids=16876322869684809580related:bC9dQjy-NOoJ</url></related-urls><pdf-urls><url>file://localhost/Users/yyoo/Documents/electronic%20papers/Papers/1984/Chandler%20Jr/The%20Business%20History%20Review%201984%20Chandler%20Jr.pdf</url></pdf-urls></urls><custom3>papers://59AEBB57-DC67-4B83-BEED-A15C62ED7905/Paper/p4874</custom3></record></Cite></EndNote&gt;
 ADDIN EN.CITE
<EndNote><Cite><Author>Teece</Author><Year>1993</Year><RecNum>5729</RecNum><record><rec-number>5729</rec-number><foreign-keys><key
app="EN" db-id="f00rva998fzwt2e0927xz5x4sr2dv9e2vra5">5729</key></foreign-keys><ref-type
name="Journal Article">17</ref-type><contributors><authors><author>Teece,
D</author></authors></contributors><titles><title>The
dynamics of industrial capitalism: perspectives on Alfred Chandler&apos;s
scale and scope</title><secondary-title>Journal of Economic
Literature</secondary-title></titles><periodical><full-title>Journal
of Economic
Literature</full-title></periodical><dates><year>1993</year><pub-dates><date>Jan
1</date></pub-dates></dates><accession-num>13513641950020124853related:tUDEVMEZirsJ</accession-num><label>p04872</label><urls><related-urls><url>http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?db=pubmed&amp;cmd=Retrieve&amp;dopt=AbstractPlus&amp;list_uids=13513641950020124853related:tUDEVMEZirsJ</url></related-urls><pdf-urls><url>file://localhost/Users/yyoo/Documents/electronic%20papers/Papers/1993/Teece/Journal%20of%20Economic%20Literature%201993%20Teece.pdf</url></pdf-urls></urls><custom3>papers://59AEBB57-DC67-4B83-BEED-A15C62ED7905/Paper/p4872</custom3></record></Cite></EndNote&gt;
professional managers, who are equipped with the tools of scientific management has emerged during this era. Contrary to the original form of capitalism that emerged as a consequence of industrial revolution and brought the separation of production and consumption, this managerial capitalism, brought the separation of management and production (Zuboff and Maxmin 2002). ADDIN EN.CITE
<EndNote><Cite><Author>Zuboff</Author><Year>2002</Year><RecNum>4781</RecNum><record><rec-number>4781</rec-number><foreign-keys><key
app="EN" db-id="f00rva998fzwt2e0927xz5x4sr2dv9e2vra5">4781</key></foreign-keys><ref-type
name="Book">6</ref-type><contributors><authors><author>Zuboff,
Shoshana</author><author>Maxmin, James</author></authors></contributors><titles><title>The
Support Economy</title></titles><dates><year>2002</year></dates><pub-location>New
York</pub-location><publisher>Viking</publisher><urls></urls></record></Cite></EndNote>

Second, financial firms, often represented as “Wall Street”, emerged as important economic and social actors. Initially, they act as aggregators of financial resources to help firms on the “main street” finance their capital investments. Over time, these financial firms developed increasingly elaborate and often exotic financial engineering tools to help firms gain access to financial resources. As a result, firms’ performance was solely measured by the financial metrics, and financial firms started to buy and sell firms, as if they were products, using these financial metrics. After leading the barrage of corporate M&A that we witnessed in the last decade of the past century, many of which were funded by the historically low interest rate, these financial firms invented new financial products that are solely designed to finance other financial activities. Thus, we have witnessed the emergence of financial capitalism that brought the separation of finance and production.

The evolution of capitalism thus can be seen as continuing pursuit of higher return on capital through a series of separations: production, management and finance. Each of these separations brought a new form of “leverage” that amplifies the potential return on investment. Yet, at the same time, they brought greater degree of complexity, unforeseen systemic risks, and alienation of labor and consumers alike.

Design thinking, as it is currently popularized with the emphasis on human-centered product and service design, deals only with the problems from the separation of production and consumption, leaving other and possibly far more serious challenges that today’s management is facing. Many of these challenges arose as a result of separations of management and finance from production. For example, design thinking has little to say about the recent financial crisis that raised many fundamental questions about the continuing viability of the current form of capitalism and the role of management schools. The demise of the Big Three is the result of institutionalized “scientific” management and toxic financial products as much as the lack of human-centered design in their products.

My concern is that the current obsession with the design thinking can have unintended harmful consequences on the future of management in the long run. As it is currently being applied, design is seen as a quick fix of profitability problems, new product developments, and consumer satisfactions, rather than dealing with more systemic and serious issues. Indeed, it might lead us to the emergence of new form of capitalism, design capitalism, where creativity is separated from production and consumption. Just as management was for the sake of management during the managerial capitalism, and finance was for the sake of finance during the financial capitalism, we may see the creativity for the sake of creativity in this new form of design capitalism. If that happens, instead of finding its panacea, management might have discovered the most powerful painkiller it has ever found. And, alas, that is design.

 ADDIN EN.REFLIST Chandler, A.D., Hagstrom, P., and Sölvell, Ö. The Dynamic Firm: The Role of Technology, Strategy, Organization, and Regions Oxford University Press, New York, NY, 1999.

Chandler Jr, A. “The emergence of managerial capitalism,” The Business History Review), Jan 1 1984.

Teece, D. “The dynamics of industrial capitalism: perspectives on Alfred Chandler’s scale and scope,” Journal of Economic Literature), Jan 1 1993.

Zuboff, S., and Maxmin, J. The Support Economy Viking, New York, 2002.


what BusinssWeek review on Nook missed

Yesterday, Barnes and Noble introduced its own e-book reader, Nook. Hardy Green wrote a review of Nook for BusinessWeek. At the end of the review, Green says:

“Still missing here is the paradigm-changing gadget, the book equivalent of Apple’s iPhone. In fact—although you can load a number of e-reader applications, including Kindle and Barnes & Noble apps, onto an iPhone or iPod, Apple is keeping mum on any plans to produce its own device. But with a touchscreen that utilizes the same technology as the iPhone and its Google Android platform, the nook may have Apple’s technoids thinking twice about entering the e-reader fray.

There still is probably space for that paradigm-shifting thing that is so terrific—so mind-bendingly lovely to fiddle with and to use for a variety of functions—that it actually expands the number of book readers. But at the moment, and for several years’ time, e-books have represented only around 1% of the shrinking book-reading public. Not only must that percentage rise, but also the overall number of book readers must increase—then we’ll know that e-book nirvana has arrived.”

Continue reading “what BusinssWeek review on Nook missed”

Reflection on Reshaping Boundary: Art, Design, and Management Workshop

Last two days were quite exciting. I was facilitating Reshaping Boundary Workshop, together with Lucy Kimbell who was the primary designer of the workshop. The idea was originally conceived by Fred Collopy as an on-going design inquiry of new way of new way of engaging design and management. While we were somewhat nervous the day before the workshop, it turned out to be better than anyone of us expected. Detailed design and careful preparation of materials and space paid off. What bound participants together, however, I believe was a certain sense of shared purpose, destiny, and urgency.

The idea behind the workshop was the movement between stakeholder experience and the invisible structure that generates that experience. The participants were given a persona of a stakeholder and asked to start from the reflection of their current image to the imagination of the future. The first day ended with a 2D sketch of the future experience and structure.

Continue reading “Reflection on Reshaping Boundary: Art, Design, and Management Workshop”

Digitalization in a post-professional world

I gave a very brief talk at Case Western Reserve University as a provocation at Reshaping Boundary: Art, Design, and Management workshop. Many of the ideas that I have discussed through my blog earlier.
Digitalization in a post-professional societyhttp://static.slidesharecdn.com/swf/ssplayer2.swf?doc=casedesignworkshop09-090925094742-phpapp02&stripped_title=digitalization-in-a-postprofessional-society-2066015

View more presentations from Youngjin Yoo.

re-imgainging as an act of design

As I am re-reading Designing Design for my class, I came to the following passage from the first chapter, What is Design?, of the book.

Today’s designers are beginning to realize that endless possibilities for design lie dormant not just in the new situations brought on by technology, but also in the common circumstances of our daily lives. Creation of novel things is not the only creativity. The sensibility that allows one to rediscover the unknown in the familiar is equally creative. We hold a great accumulation of culture in our own hands, yet we remain unaware of its value. The ability to make use of these cultural assets as a virgin resource is no less creative than the ability to produce something out of nothing. Beneath our feet lies a gigantic, untouched vein of ore. Just as simply donning sunglasses makes the world look fresher to us, there is an unlimited number of ways of looking at things, and most of them haven’t been discovered yet. To awaken and activate those new ways of perceiving things is to enrich our cognitive faculty, and this relates to the enrichment of the relationship between objects and human beings. Design is not the act of amazing an audience with the novelty of forms or materials; it is the originality that repeatedly extracts astounding ideas from the crevices of the very commonness of everyday life. Designers who have inherited the legacy of modernism and shoulder the new century have gradually begun to explore their consciousness of that fact.

Well said.

Reflect and re-imagine

Next week, I will be in Cleveland to work with my colleagues at Case and Lucy Kimbell to facilitate a workshop in which we work with several institutions in the University Circle area, reflecting on their past and re-imagining their future. It is a particularly exciting opportunity as these organizations collectively represent an idea of organizing in the industrial age and they are looking for ways in which they can re-design and re-discover themselves in this new digital era. At the turn of the last century, Cleveland was a hotbed of innovation and many of these institutions were born out of that particular socio-economic context. As the world moved beyond the industrial economy, however, the City of Cleveland has been struggling, along with other cities in the Rust Belt, to find its new meaning and relevance in this increasingly digitalized and post-industrial economy. As they city struggles, these institutions struggle as well. These organizations were built based on a particular cultural production and consumption regime that is no longer relevant in today’s economy. These institutions represent a collective expression of grand idealism and soaring optimism shared among the last century’s economic, cultural and societal entrepreneurs, who built the “New World.” Now, that new world has become an old world and those entrepreneurs were replaced with whom Max Weber called “Last Man” (Letzen Menschen) — “Specialist without spirit, sensualists without heart; this nullity imagines that it has attained a level of humanity (Menschentums) never before achieved”. The challenge upon us, then, is not just finding a relevance for these old institutions in this new day and age, but to discover sources of new entrepreneurial spirits that will fill the void that was created by decades of dominance by the specialists without spirit and sensualists without heart.

P.S. In thinking of this issue over the summer, I found a book by Kang, Sang-jung, “Power of Agony”, very powerful. The book was originally published in Japanese and I read it in Korean version. In this book, he is examining the changes in the current society through the lens of two authors who wrote at the turn of the last century, Natsume Soseki (a Japanese author) and Max Weber.

culture and visual thinking

When I teach system thinking, I start with an exercise in which students are given a blank sheet of paper and given a question, “what makes organizations fail?” In the US, when I do that, invariably students develop a bullet list. I use it as an opportunity to say that they should draw a picture showing the whole system and interrelationship among factors. This is a technique that I inherited from Fred Collopy and others and quite useful. That was until I used it here in Japan. Few weeks ago, in my first class here in Japan, I opened the session on system thinking with this usual exercise. There are 14 students in all. To my surprise, 4 students drew pictures. 3 of them were Japanese students. So, I was not sure what to do as my opening line is preempted. People who are in the teaching business know what I mean!

That whole experience however made me to think why that was the case. So, each time I met people here in Japan, I shared that experience. The responses are remarkably consistent. Most of them say that they are not surprised. They point out Japanese culture is so visual that it is too surprising to hear that students’ first instinctive reaction to the exercise was to draw. They point out Manga culture as one important element of such visual culture. Then, I began realizing that I am surrounded by strong visual cues no matter where I go. Here are some of those visual cues.

DSC_0215.JPGDSC_0218.JPGDSC_0017.JPGDSC_0065.JPG

DSC_0163.JPGDSC_0148.JPGDSC_0064.JPGDSC_0038.JPGDSC_0034.JPGDSC_0054.JPG

transformation of being and doing

Several years ago, Jeffrey Pfeffer and Robert Sutton wrote “The Knowing-Doing Gap”. The essence of their argument is that too often, organizations fool themselves by believing that knowing what to do is enough, without actually doing. They point out the fallacy of modern management practices and theories that are based on Cartesian separation of mind and body. This type of dualism led to the separation of white collar and blue collar workers, knowledge work and physical work, and office and factory. More fundamentally, I believe, such beliefs creates the chasm between management and work, as if management primarily involves knowing while work is primarily about doing.

However, I begin to believe that there is a third element that needs to be added here. That is Being. While closing the chasm between knowing and doing is critical, it is equally critical that organizations close the gap between doing and being. The idea here is that there is a inseparable binding between who we are and what we do. Yet, merely accumulating certain doing does not necessarily lead to the transformation of being. In other words, doing deals with the appearance of our actions, while being deals with the true essence of our agency in choosing those actions.

Here is an example. My wife does many things for me. Her doing is emitted from her being, not the way around. Even if someone does all that my wife does for me, that does not still make that person my wife. On the other hand, my wife can skip some of her doing, if she chooses to do so. That does not make her less of my wife. Therefore, being gives agency and freedom, while doing restricts and constraints. This kind of idea is also found in Christian teaching. The conversion process, being born-again, is relentless focusing on being, not doing; and, with that comes a sense of liberation and freedom. Ancient fathers taught us the inseparable duality of being and doing when the conversion is true and authentic.

As I think about the proliferation of design thinking in organizations, I begin to wonder whether what we are teaching to students and managers simply focus too much on doing (methods and tools). While I cannot emphasize enough the importance of such design-centric actions, I also wonder whether we are missing an even more important message that needs to be conveyed. That is, the organization who want to embrace design must focus on collective being of a design-centric organization, as much as it focuses on design thinking methods (as doing).