Take a moment and look down at your shoes. Gaze, if you can, past the last of winter's salt stains and through the polish that seems to dull just seconds after you rub it in. Can you remember buying them? If so, you probably don't reflect back on the experience fondly. That's because the system by which customers buy shoes is flawed, broken, as unpleasant as visiting the dentist.
This is exactly what Minneapolis-based private equity investment firm Goldner Hawn realized in 2006, after it purchased Allen Edmonds, the venerable, if somewhat tired, maker of business shoes. Goldner Hawn wanted to expand Allen Edmonds's customer base beyond the 50-plus and pinstripes set; it wanted somebody who could solve the company's problems and discover the opportunities they couldn't see themselves. So Goldner Hawn turned to IDEO, a California-based design firm that's gained bona fide rock-star status on Wall Street in recent years.
The idea wasn't to scrap 85 years of history. "The brand was good," says IDEO's Bryan Walker, the 30-year-old social anthropology (Oxford) and human factors (Cornell) specialist who was put in charge of the account. "But it wasn't connecting enough with new consumers." And where other shoe companies (and shoppers) saw only the status quo, both IDEO and Goldner Hawn saw an opportunity. "We knew that there had been no real innovation in the way men's shoes are retailed for at least 100 years," says Mike Sweeney, Goldner Hawn's managing partner. "I can't think of another business that hasn't had meaningful innovation in 100 years and has survived."
Touring through the cluster of low-rise stucco buildings that make up IDEO's Palo Alto campus, it's hard to shake the sense you're moving through one giant trophy case. Just inside the glass-fronted lobby sits a display model of Steelcase's Leap (see 1 below), the bestselling task chair that won a much coveted Red Dot design award when it was launched eight years ago. Not far from that, a showcase enshrines the design evolution of another company triumph, the supersvelte housing for the Palm V personal organizer (2). A coaster bike (3) rests in the centre of the campus's verdant courtyard, and at the entrance to IDEO's machine shop, there's a poster featuring an early mock-up of the popular Swiffer CarpetFlick (4), an IDEO creation that's affectionately called "the Shagolator." Even in CEO Tim Brown's office, cans of Pringles Prints potato chips (5) and Oral-B Gripper toothbrushes (6) line the bookshelves.
Staffers at IDEO work on a project
The point of all this is not that it's merely IDEO's hall of fame, but that it's also a hall of fame for our own households. Whether you realize it or not, IDEO's work—from the first production computer mouse and first notebook computer to the cockpit and cabin of the Eclipse 500 corporate jet—is already a part of your (or, in the case of the jet, your CEO's) daily life.
The company's been around in one form or another since the early 1970s, but IDEO only broke into prime time in 1997, when ABC's Nightline asked the team to reinvent the shopping cart in just five days. "We're not actually experts in any given area," co-founder David Kelley told the show. "We're experts in how you design stuff. So we don't care if you bring us a toothbrush, a toothpaste tube, a tractor, a space shuttle, a chair. It's all the same to us—we want to figure out how to innovate by using our process."
Since then, IDEO has done rethinks for dozens of organizations. Missouri's DePaul Health Center asked the company to help refine its patient experience. For HBO, IDEO took on a project to consider the future of television. And through a commission from the Bank of America, the company created the bank's "Keep the Change" program, which rounds up everyday transactions on debit cards and transfers the difference to customers' savings accounts. (That program attracted 2.5 million customers and 700,000 new chequing accounts in its first year.)
What IDEO has done is to popularize a movement toward "human-centred design thinking." Along with this, it has introduced a slightly wacky, though much emulated, process for innovation that's pure gold to organizations in need of a creative advantage. With offices around the globe and $100 million (U.S.) in revenue last year, IDEO has shown that you don't need to count on luck or even genius for real breakthroughs. What you need is solid anthropology—human "empathy," if you want to get picky about it—and process. The right process, the company is betting, can solve any problem, from inventing the next Shagolator to fixing pressing social issues to—in the case of Allen Edmonds—remaking the way Wall Street buys its shoes.
Henry Ford's "If I had asked my customers what they wanted, they would have said a faster horse" line is gospel around IDEO. So, rather than sending out surveys to Allen Edmonds's customers or holding the usual worthless focus groups, Walker and his colleagues spent time with 25 men, "digging through their closets." Some of the men loved the Allen Edmonds brand; others owned a pair, but admitted they were a gift and had never been worn. Walker's team interviewed a fashionisto in London whose favourite shoes were a pair of gold-coloured Paul Smiths that caused blisters every time he wore them. Then there was the building superintendent in San Francisco who wore nothing but shin-high snow boots year-round. "Sometimes you need to find out who your customer is not so you can understand who he is," says Walker.
