Innovative Culture and Innovative Competences - PepsiCo

Long Range Planning 43 (2010) 123e141 http://www.elsevier.com/locate/lrp

Collaborative Strategies in Design-intensive Industries: Knowledge Diversity and Innovation

Claudio Dell’Era and Roberto Verganti

Customers are paying increasing attention to product design, whether the aesthetic, symbolic or emotional meanings of products. Designers can support companies in exploring customers’ needs and the appropriate signs (such as form, colours, materials, etc) that give meaning to products. Managing collaborations with designers is therefore a critical issue for companies that operate in design-intensive industries. This paper analyses how a company may develop a proper collaborative strategy by identifying an effective portfolio of designers. It shows that companies that innovate collaborate with a broad range of external designers. Most important, innovativeness does not depend on diversity brought by an individual designer, but on diversity brought by the entire portfolio of designers of a firm. The implication is that companies should not focus only on the characteristics of single external parties when developing a collaborative innovation strategy, but, rather, manage carefully a balanced portfolio of collaborators. � 2009 Elsevier Ltd. All rights reserved.

Introduction Design is increasingly viewed as an important strategic asset, both in the business and academic arenas. This growing attention to design has led scholars and executives to investigate and under- stand the link between design and company performance.1 Several studies demonstrate the fact that consumers increasingly make brand choices on the basis of the aesthetic and symbolic value of

0024-6301/$ - see front matter � 2009 Elsevier Ltd. All rights reserved. doi:10.1016/j.lrp.2009.10.006

products and services.2 The role of the ‘‘look and feel’’ of people, places and things demonstrates that the aesthetic and symbolic dimensions of a product are increasingly relevant in many industries.3

As design becomes increasingly relevant, executives are looking for ways to improve their capa- bility to manage design processes and resources. A major challenge is how to identify the right tal- ent to participate in design processes. Many industries collaborate with external designers, to source fresh insights, creativity and knowledge.4 This perspective is in line with a general tendency towards open innovation and the development of business ecosystems, where companies recognise that most of the valuable knowledge for innovation resides outside their boundaries.5 To be innovative, therefore, requires finding ways of accessing that knowledge.6 Recent studies have underlined the importance of external designers in the innovation process to the point that some of them are con- sidered ‘‘superstars’’:7 Jacob Jensen and David Lewis for Bang & Olufsen, Michael Graves for Target, Philippe Starck for several furniture companies, as well as for Nike and Puma.8 Case studies includ- ing Alessi, Apple, Bang & Olufsen, Kartell, Philips, Sony and Swatch, demonstrate how designers are becoming key actors in terms of product innovation and strategic renewal.9 In the 1990s, Kartell’s strategy and economic results were revitalised by collaborations with designers such as Philippe Starck and Ron Arad. The Italian company revamped its brand image and introduced iconic prod- ucts such as Bookworm (a library designed by Ron Arad in 1994) and La Marie (a chair designed by Philippe Starck in 1999). The increasing relevance of design is also demonstrated by the corporate roles of designers in certain leading companies. In 1990, Nokia’s corporate strategy emphasised the relevance of design through the appointment of chief designer Frank Nuovo as vice-president for design.

However, the success of companies seems not necessarily related to the choice of a specific de- signer, but rather to the capability to identify and manage an articulated portfolio of designers (in- terpreted as a set of creative competencies accessed by companies). Alessi, a leading Italian kitchenware manufacturer, has a network of more than 200 external designers, indicating that its innovativeness cannot be traced to an individual external talent, but to the company’s capability in building such a complex portfolio. Similarly, single designers that work with Alessi seem not to provide an analogous value when working with other companies.10 Rather than an individual spark of creativity, the value of the contribution of each designer is hardly identifiable if not seen within the context of the knowledge sourced from the array of external collaborators. And vice versa, knowledge developed through the collaboration with a specific designer can be exploited in several projects (eventually developed with other designers). In other words, the value of a single collaboration benefits from externalities generated by other collaborations. The innovation litera- ture lacks an empirical analysis of the nature of designer portfolios and their impact on company innovation. The purpose of this article is to provide insights, through an empirical analysis, on ef- fective practices to manage the designer portfolio: which characteristics of designer portfolios allow companies to be more innovative? In particular, given that access to external designers is justified by the need to appropriate new knowledge, how can the diversity of designer portfolios affect innova- tion performance? Do parameters of diversity, such as number of designers in the portfolio, and their combined educational and cultural backgrounds, impact company innovation?

The value of a single collaboration benefits from externalities

generated by other collaborations

In the following section, we synthesise the literature’s main contributions concerning the role of creative resources in innovation processes. We also introduce our research questions. After describ- ing our research method, we present the empirical results. Finally, we discuss the principal mana- gerial implications, underlying limits and directions for future research.

124 Collaborative Strategies in Design-intensive Industries

Literature review The contribution of creative resources in the development of design-driven innovations is crucial, but largely unexplored. While technology management literature provides frameworks and tools that support companies in the identification and collaboration processes with key partners and technology suppliers, research about the collaboration with designers has still significant conun- drums.11 Although designers provide access to a particular type of knowledge d that on product languages and meanings d design in fact deals with the meanings ascribed to products and with the language that can be used to convey those meanings.12 Each product, alongside its functionality and performance, has a meaning, which is the deep reason why people buy it. This meaning is related to symbolic and emotional values; product signs and languages allow products to speak and convey precise meanings.13 The contribution of creative resources in the development of design-driven innovations is particularly crucial, but largely unexplored. While technology management literature provides frameworks and tools that support companies in the identification and collaboration pro- cesses with key partners and technology suppliers, research about the collaboration with designers can be improved.

In design-intensive industries, the diffusion and success of product signs and meanings are influ- enced by phenomena emerging in society and depend on interactions between several stakeholders: users, companies, products, media, cultural centres, schools and artists.14 Knowledge of the subtle and unexpressed dynamics of socio-cultural models, and therefore of product meanings, is distrib- uted and tacit, rather than codified in books or in sociological scenarios. Thanks to their capability to investigate user needs and the evolution of socio-cultural models, designers typically support companies in identifying and interpreting ‘‘weak signals’’ that have the potential to become future trends. In addition, thanks to their knowledge of technologies and processes, they propose new meanings by embedding their insights on the changing culture of consumers into new products. The involvement of designers in the innovation process is a channel through which a company can gain knowledge about its customers and their needs. Designers can interpret different cultures; they may in fact be regarded as cultural gatekeepers.

Internal designers, though familiar with the company’s approach and products, tend to become complacent and, in turn, less innovative.15 By contrast, external design consultants tend to provide fresh and more innovative concepts. Recent studies on the role of gatekeepers in the introduction of technological innovations demonstrate that lone inventors are the real sources of technological breakthrough.16 The opportunity to collaborate with companies on different categories of products (i.e., chairs, kitchens, sofas, lamps, etc.) and in different industries allows designers to transfer lan- guages from one sector to another.17 In fact, product signs and languages are not industry-specific. The nature of product languages and their abstractions favour the transfer of a language from one product typology to another or from one industry to another. From a managerial perspective, this property implies great innovative and creative stimulus. There are many examples of how product languages have moved across industries. For example, Alessi’s product line ‘‘Family Follows Fiction’’ launched in 1993 uses similar materials and colours as several products developed by Kar- tell in the 1990s and Apple’s iMac introduced in 1998. By capturing, recombining and integrating knowledge about socio-cultural models and product semantics in different social and industry set- tings, designers act as brokers of design language and creators of breakthrough product meanings. The designer must translate abstract knowledge into ideas and concepts. Unfortunately, obstacles can arise as design language is not well understood in a theoretical sense. How human needs can be translated into products and then interpreted by users has not been formalised.18 However, styl- ing elements can be used to accentuate a product’s performance or to make sure that original qual- ities are noticed. Product signs are connected to specific meanings according to the culture in which people live.19 Designers of different nationalities can provide different viewpoints and support com- panies in the interpretation of product meanings to match the social and cultural needs of people in different countries. Just like technology brokers, designers are able to transfer product languages and meanings across industries, exploiting their connections and networks.20

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Building a network requires maximising the proportion of bridges (i.e., non-redundant contacts) to total contacts in the network.21 In fact, a company’s innovation is significantly affected by the diversity of its direct contacts. Several studies on networks suggest that a company’s portfolio of partners may be as influential as the dyadic characteristics of those alliances.22 A lack of redundancy in a network allows the company to acquire new capabilities (interpreted as a proxy for innova- tion).23 Scientists who maintained contacts with colleagues that operate outside their areas of expertise performed better.24 The recognition of the relationship between diversity and innovative- ness has stimulated some academics and practitioners to search for factors to activate creative pro- cesses in individuals and teams.25 The debate about the relationship between diversity and competitive advantage is characterised by different perspectives.26 Diversity in terms of ethnicity, age, gender, personality and educational background promotes creativity and problem-solving capabilities.27 Diverse project teams should collectively manage a wider range of knowledge. Diverse teams will benefit from a variety of perspectives in a way that homogeneous teams will not, and will thus be able to make better collective decisions and produce more creative work.28 In collaborating with heterogeneous partners, a company cannot only increase its recombination possibilities, but can recognise opportunities ahead of competitors. Collaboration with heterogeneous partners may lead to constructive conflict, increasing a company’s problemsolving capabilities and approaching new opportunities through new frameworks.29 Exposure to heterogeneous knowledge should improve managers’ innovation performance; the variety of knowledge to which a manager is exposed has a positive impact on both overall managerial performance and on innovation performance.30 In this sense, creative leaps can be interpreted as a connection between two or more disparate ideas within a unique concept.31 Recent studies describe a curvilinear relationship between diversity and innovation. Diversity stimulates elaboration and enhances performance up to a point, beyond which more no longer benefits performance and might even be detrimental (i.e., an inverted, U-shaped curve).32

Diverse project teams should collectively manage a wider range of

knowledge

We hypothesise that the knowledge diversity in the portfolio of creative collaborators increases the innovation of design-intensive companies. In order to investigate knowledge diversity, we con- sider designers’ backgrounds and careers. In the first case, we analyse the country of origin and the educational background. In the second case, we point out the variety of projects in a given industry and the number of industries in which the designer operates.

Research method This paper focuses on the Italian furniture industry for several reasons. First, furniture companies develop numerous innovations. The furniture sector is a basic industry in most industrialised coun- tries. According to the European Association of Furniture Manufacturers, it represents between 2 per cent and 4 per cent of the production value of the manufacturing sector, around 2 per cent of the GDP and 2.2 per cent of the total European workforce. The furniture industry is one of the largest manufacturing industries in the EU with total turnover of V120bn in 2005. As a labour-intensive industry, it employs around 1.4m people. Germany is the largest furniture- producing country, representing more than 27 per cent of total EU production, followed by Italy (21.6 per cent), France (13.5 per cent) and the UK (10.4 per cent). Italy is one of the leading furniture-producing countries in the world. Until 2002, Italy was the top world exporter (18.6 per cent in 1984, 17.7 per cent in 1994 and 14.8 per cent in 2004). Italian manufacturers exported $11.34bn worth of furniture in 2004.

126 Collaborative Strategies in Design-intensive Industries

This paper relies on Webmobili (an internet spin-off of Federmobili, the Italian Association of Furniture Manufacturers). The internet database (www.webmobili.it) developed by Webmobili is particularly well-suited for our research objectives. It contains more than 19,000 products, divided into 16 subsectors. It is considered a good representation of the Italian furniture industry’s offerings because it features data about every company using an industrial structure. All the products in the Webmobili database are on the market, and each listing includes the name of the product, pro- ducer, designer, production year, materials, price range and awards. According to the Webmobili experts, we have identified the furniture subsectors that show medium-high levels of innovation (in terms of new products launched per year): lamps, tables, chairs and sofas.33 In particular, the lighting subsector is considered one of most innovative and dynamic. At the time of sample selec- tion (January 2006), the Webmobili database contained 575 lamps, 906 tables, 982 chairs and 1,571 sofas. For each typology, we consider products developed in the last 16 years (1990-2005) in order to identify recent phenomena among companies with at least five products in the database. In this way, we obtained a final sample composed of 1,792 products developed by 98 companies through 658 different collaborations.

Analysing designer portfolios In order to discuss different collaborative strategies, we propose a model to analyse the designer port- folios (for further detail, see Appendix). We define the Osmosis dimension as the percentage of prod- ucts developed by a company in collaboration with external designers. The Balanced Breadth measures the numerousness of collaborations with external designers and verifies whether a company prefers to develop the great part of its product portfolio in collaboration with a few designers or to exploit a broad range of creative resources equally. As previously mentioned, the socio-cultural context has a funda- mental impact on the companies and the designers.34 Even though nationality only partially influences the socio-cultural frameworks adopted by designers, we define the Foreign Background dimension as the percentage of products developed in collaboration with foreign designers.35 After collecting data on the educational background of each designer, we analysed the composition of the designer portfolio of each company. We classified each designer according to the following categories of educational degree: industrial design (product design, communication design, service design), architecture, engi- neering, high school and other. Considering designers to be brokers of languages (an interpretation that is very close to the concepts of boundary-spanners or cultural intermediaries), we believe that experiences in different industries or across several categories of products can be valuable aspects of a designer’s innovative capabilities.36 Industry Brokering is defined as the percentage of products developed in collaboration with ‘‘cross-industrial’’ designers. Finally, the Subsector Brokering dimen- sion represents the average number of sub-sectors in which designers who collaborate with a company operate.37 Table 1 synthetically reports the descriptive statistics for the six dimensions described.

We provide a brief example to clarify the meaning and application of the six designer portfolio dimensions. Moroso is one of the leading Italian upholstery companies. Between 1990 and 2005, Moroso collaborated with 16 different designers, developing 92 new products (see Figure 1). The

Table 1. Descriptive statistics regarding designer portfolio dimensions

Designer Portfolio Dimension N Min Max Mean Std. Dev.

Osmosis 98 0.0% 100.0% 79.6% 32.8%

Balanced Breadth 98 0.000 1.000 0.344 0.250

Foreign Background 91 0.0% 100.0% 22.8% 27.6%

Educational Background 98 0.000 0.909 0.493 0.285

Industry Brokering 98 0.0% 100.0% 53.4% 32.6%

Subsector Brokering 98 0.000 4.000 1.843 0.973

Long Range Planning, vol 43 2010 127

Figure 1. Moroso’s designer portfolio

Osmosis (94.6 per cent) is particularly high because only five were internally developed by the Moroso Design Centre. Patricia Urquiola and Enrico Franzolini represent the key designers: the for- mer developed 23 products and the latter 18, consequently the Balanced Breadth is low (0.166). The Foreign Background is particularly high (55.4 per cent) because more than half of the product port- folio was developed in collaboration with foreign designers. Moroso collaborated with creative re- sources from different educational backgrounds showing a high level of Educational Background (0.826): 40.2 per cent of the product portfolio was created with industrial designers; 39.1 per cent with architects; 14.2 per cent with designers who had a high school degree; and 6.5 per cent with designers of a different educational background. More than half of the product portfolio was developed in collaboration with ‘‘cross-industrial’’ designers (Industry Brokering ¼ 58.7 per cent). Finally, the Subsector Brokering is particularly high (2.736) because designers who collaborate with Moroso operate in an average of two to three subsectors.

Identifying innovative companies In order to analyse the innovativeness of each company, we examined the ‘‘Compasso d’Oro Award’’, the most prestigious honour for design, products, research and merit. The award, estab- lished in 1954, is adjudicated by the ADI (Association for Industrial Design) and is assigned to products that are considered particularly innovative. It includes a pre-selection process managed by the Permanent Design Observatory, where a panel of design language experts (critics, historians, journalists, designers, architects and professors) collect information, evaluates it and select the best

128 Collaborative Strategies in Design-intensive Industries

products. The jury is international, consisting of more than five members randomly selected from a pool of qualified researchers and experts from several industries. We divided our sample into two groups of companies: innovators and imitators. Some 21 manufacturers (21.4 per cent) are ‘‘Inno- vators’’ because they have received (or have been selected for) at least one ‘‘Compasso d’Oro Award’’, while 77 companies (78.6 per cent) are ‘‘Imitators’’. Some innovators have received just one prize, while others have received several. For example, Artemide has received four ‘‘Compasso d’Oro Awards’’ and has been shortlisted three times. Kartell has won one and has been shortlisted five times.38 We believe that prizewinning products exploit the accumulated knowledge developed through the collaboration with several designers in several previous projects. For this reason, we consider the awards to be best associated with the companies rather than with specific products and, consequently, specific collaborations.

Results As mentioned, this article aims to analyse the relationships between the characteristics of a designer portfolio that contribute to knowledge diversity and company innovation. We adopt the t test to compare the means for two groups of cases. More specifically, we split our sample into innovators and imitators in order to identify the distinctive characteristics of creative collaborators.

Table 2 shows that innovators are characterised by Osmosis to a significantly greater extent than others. Innovators tend to rely on external designers to a greater extent than their competitors. A large part of their product portfolio is developed in collaboration with external designers. In this way, they can access knowledge about different socio-cultural contexts and maintain a fresh prod- uct offering. Innovators such as B&B Italia, Cassina, Edra, Flos, Kartell and Zanotta have developed the entire product portfolio in collaboration with external designers.

The bubble plot in Figure 2 underlines the differences between innovators and imitators. Each bubble reflects the number of awards received by each company and its Osmosis value. More spe- cifically, we group the companies into five sets according to the percentage of products developed in collaboration with external designers: (0-20), (20-40), (40-60), (60-80) and (80-100). The radius of each bubble is proportional to the number of companies, with black bubbles representing innovators and grey bubbles representing imitators. Except for Luceplan, innovators show values higher than 60 per cent. In spite of several imitators also exhibiting elevated values of Osmosis, Figure 2 demonstrates that innovators are concentrated in a small region, relative to imitators. Collaboration with external designers can be considered necessary for innovation, but at the same time it is not sufficient. In other words, Figure 2 underlines the notion that elevated values of Osmosis have to be connected with other characteristics of the designer portfolio.

Even more interesting is the figure concerning Balanced Breadth. Innovative manufacturers in- teract with several creative resources, tending to exploit the contribution of each equally. The

Table 2. Designer portfolios - t test: Innovators vs. Imitators

Innovators Imitators T df

N 21 77

Osmosis 90.5% 76.6% �2.528* 69.328 Balanced Breadth 0.457 0.313 �2.973** 46.119 Foreign Backgrounda 45.7% 16.0% �4.847*** 89.000 Educational Background 0.716 0.432 �6.059*** 59.291 Industry Brokering 61.9% 51.1% �1.857 59.030 Subsector Brokering 2.234 1.736 �2.115* 96.000

*p < 0,05; **p < 0,01; ***p < 0,001. a Including 70 imitators; 7 companies also have divisions outside of Italy.

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Figure 2. Osmosis e Innovators vs Imitators [radius is proportional to the number of companies]

average number of external designers belonging to innovators’ portfolios is impressively higher than that of the imitators’ portfolios (11.9 vs 4.4). For example, innovators such as Artemide, Driade, FontanaArte, Magis and Moroso collaborate with more than 15 freelance designers. Also, consid- ering the ratio between the number of external designers and number of products, innovators’ values are significantly higher than imitators’ metrics. As mentioned in the Appendix, we have con- sidered the contribution of the Gini dispersion index in the definition of Balanced Breadth. This is used to verify whether a company prefers to develop the majority of its product portfolio in col- laboration with a few designers or to engage with a broad range of creative resources. Table 2 shows that innovators’ Balanced Breadth is significantly higher than that of imitators (0.457 vs 0.313).

Besides Osmosis and Balanced Breadth, the relationship between knowledge diversity of creative collaborators and company innovation is analysed in terms of Foreign Background, Educational Background, Subsector Brokering and Industry Brokering (see Table 2). Innovators tend to develop about half of their product portfolio in collaboration with foreign designers (45.7 per cent), while imitators show significantly lower values (16 per cent) for the Foreign Background metric. The empirical results show a curvilinear relationship between innovation and the percentage of products developed in collaboration with foreign designers. The bubble plot for Foreign Background in Figure 3 shows an inverted U-shaped curve: 42.6 per cent of innovators belong to the central set

Figure 3. Foreign Background e Innovators vs Imitators [radius is proportional to the number of companies]

130 Collaborative Strategies in Design-intensive Industries

(40-60 per cent). Knowledge exchange driven by creative resources from different countries allows innovators to access new semantic contexts and to propose innovations in product sign and mean- ing. Innovators collaborate with designers from 5.3 different nations, whereas imitators have a cor- responding value of 1. For example, Edra collaborates with designers from several nations: Fernando Campana and Humberto Campana from Brazil, Karim Rashid from Egypt, Ross Love- grove from Wales, Christophe Pillet from France, Maarten Van Severen from Belgium, Peter Traag from Netherlands and Steven Blaess from Australia.

Furthermore, innovators who collaborate with creative resources are associated with greater heterogeneity in educational backgrounds. Figure 4 shows a bubble plot obtained by grouping companies into five sets according to Educational Background (0.0-0.2), (0.2-0.4), (0.4-0.6), (0.6-0.8), (0.8-1.0). Except in isolated cases, innovators show values higher than 0.6. In spite of certain imitators showing elevated values for Educational Background, they are equally distributed. By contrast, innovators are concentrated on the right side of the graph. Again, collaborations with designers of different educational backgrounds can be considered a necessary but not sufficient condition of innovation.

Innovators’ product portfolios are mainly developed in collaboration with architects (44.9 per cent), while imitators prefer to engage with knowledge, approaches and methods from industrial designers (52.4 per cent). It is also interesting to note that innovators design 5.7 per cent of their products in collaboration with engineers, while this is rare among imitators (see Table 3).

In spite of innovators having higher values of Industry Brokering when compared with imitators (61.9 per cent vs 51.1 per cent), this difference is not statistically significant. Figure 5 shows a bubble plot obtained by grouping the companies into five sets according to their Industry Brokering values: (0-20 per cent), (20-40), (40-60), (60-80) and (80-100). Similarly to Foreign Background also Industry Brokering shows an inverted U-shaped: innovators are concentrated in a central set d 47.6 per cent of innovators belongs to the (60-80) group. Few innovative companies, such as Driade, Flos and FontanaArte develop more than 80 per cent of their products in collaboration with designers who operate across several industries. At the same time, other innovators, such as B&B Italia, Foscarini and Luceplan, show values lower than 40 per cent. Future research could explore this further by analysing whether specific industries can significantly contribute to furniture manufacturers in terms of brokering new signs and languages.

Finally, while innovators collaborate with designers who tend to operate in more than two sub- sectors (2.234), imitators show significantly lower values (1.736) of Subsector Brokering. In this way, innovative companies increase the capability to move signs and languages from one product

Figure 4. Educational Background e Innovators vs Imitators [radius is proportional to the number of companies]

Long Range Planning, vol 43 2010 131

Table 3. Educational Background - t test: Innovators vs Imitators

Innovators Imitators T df

N 21 77

% of products developed with designers

who have a degree in industrial design

31.1% 52.4% 3.891*** 63.819

% of products developed with designers

who have a degree in architecture

44.9% 32.6% �2.064* 43.913

% of products developed with designers

who have a degree in engineering

5.7% 0.1% �2.136* 20.099

% of products developed with designers

who have a high school diploma

12.3% 9.3% �0.742 96.000

% of products developed with designers

who have some other educational background

6.0% 5.6% �0.131 96.000

*p < 0,05; **p < 0,01; ***p < 0,001.

typology to another. For example, Kartell collaborates with creative resources that tend to operate in more than three subsectors: Antonio Citterio, Philippe Starck and Vico Magistretti designed lamps, chairs, tables and sofas between 1990 and 2005.

Discussion As previously mentioned, the development of semantic innovations is strictly influenced by the ability to access and interpret knowledge of socio-cultural phenomena that is typically dispersed and tacit. Designers, interpreted as gatekeepers of new knowledge and brokers of languages, can support companies in the identification and interpretation of product languages that can match so- cial and cultural needs. Results summarised in Table 2 provide interesting guidelines for managers that operate in design-intensive industries showing statistically significant differences between designer portfolios developed by innovators and imitators.

Table 2 (concerning the Osmosis dimension) shows that innovators tend to rely on external de- signers. Moreover, in spite of some innovators’ portfolios being characterised by historical relation- ships with specific designers (e.g B&B Italia with Antonio Citterio, Kartell with Philippe Starck), their collaborative strategy requires a broad range of partners in order to guarantee the freshness

Figure 5. Industry Brokering e Innovators vs Imitators [radius is proportional to the number of companies]

132 Collaborative Strategies in Design-intensive Industries

and innovation of their products (see Table 2, concerning the Balanced Breadth dimension). We suggest that they rely on ‘‘parallel sourcing’’, which mitigates the problems associated with periods of low creativity among certain designers. External designers are not always better than internal professionals. For example, Luceplan and Horm have been awarded the ‘‘Compasso d’Oro’’ for their products developed by inhouse designers. At the same time, it is difficult to be innovative without developing external collaborations that continuously refresh the approaches and methods adopted in the new product development. In other words, collaborations with external designers allow for the accumulation of knowledge that can be exploited in the development of new products both with the same collaborator and with other external collaborators, but also with inhouse designers. The breadth of the designer portfolio does not compromise the company’s identity, but instead allows a company to connect and compare several approaches in order to develop a unique vision. As Giorgio Busnelli, CEO of B&B Italia, commented on the role of Antonio Citterio, a historic collaborator:

‘‘In 1994, Antonio Citterio became a reference point for B&B Italia. Before that moment, we had a product catalogue with several souls. Nowadays we have a shared and defined product identity where projects of different designers can harmoniously cohabit.’’39

The knowledge diversity demonstrated by elevated values of Foreign Background, Educational Background, Industry Brokering and Subsector Brokering in the innovators’ designer portfolios allows companies to collect, compare and synthesise several perspectives in original products and visions. The designer portfolios of innovators are particularly international in comparison with those of imitators (see Table 2, concerning the Foreign Background dimension). Collaboration with foreign designers can allow innovators to capture stimuli and emerging phenomena in a socio-cultural context far from their territorial boundaries, and can help develop innovative product signs and languages. Richard Sapper (Germany) with Artemide and Magis, Ross Lovegrove (Wales) with Edra and Luceplan, Ron Arad (Israel) with Kartell and Moroso, Patricia Urquiola (Spain) with Moroso, Philippe Starck (France) with Cassina, Driade, Flos and Kartell are just some examples of collaborations between Italian companies and foreign designers able to generate products recog- nised with the ‘‘Compasso d’Oro’’. According to Philippe Starck:

‘‘When a project is presented to Claudio Luti of Kartell, to Enrico Astori of Driade, to Piero Gandini of Flos, to Umberto Cassina of Cassina . they love the project, they love it with a passion. When a prototype is taken to Alberto Alessi, he thinks it is Christmas. It is a splendid gift. I have never heard an Italian publisher say ‘this will make a lot of money’.’’40

Table 3 underlines the fact that architects play a central role in innovators’ strategy. This may be explained by their forward-looking capability. As argued by Verganti (2006), architects are trained to design in a broad sense: they design buildings considering the connection between the history of the urban context and the lifestyles emerging in the local environment, and they pay attention to the social environment in which the buildings will be situated. They tend to take a step back from clients’ requests and adopt a broader perspective . In contrast with imitators, innovators also engage with engineers, a type of education that is not typically user-centred. The tendency to collaborate with designers from different backgrounds is demonstrated by Patrizia Moroso, art director of Mo- roso, in the following way:

‘‘In the design field, it’s necessary to build and adopt a clear vision, it’s necessary to go down a logical path. I’m attracted by the ‘borderline’ school of thought. Ron Arad was mainly an artist, Iosa Ghini was more famous as a comic book illustrator than as a designer. This tendency to work at the boundaries and continuously renew is one of my prerogatives and one of the critical success factors of Moroso.’’41

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Product languages may encounter barriers in moving across different socio-cultural worlds, but they can move across different industries more fluently and easily than technologies. Products that exist in the same context influence one another: from furniture to lamps, to telephones to com- puters. In spite of the differences between innovators and imitators, the Industry Brokering charac- teristic is not statistically significant. Innovators also exhibit a tendency to search for intriguing and divergent stimuli through collaboration with designers who operate beyond the furniture industry. One possible explanation of our results is the fact that an important criteria in identifying key in- terpreters is to seek out actors who can act as brokers of languages. In spite of not belonging to the furniture industry, they can provide interpretations that are relevant for people in the same walks of life. The more companies identify bridges to worlds that are relevant to users but unusual for com- petitors, the more they can propose novel solutions. It is likely that only designers who operate in specific industries can provide this opportunity to furniture companies. For example, consumer electronics companies (TV, stereo, hi-fi, etc.) or appliance manufacturers (white goods, kitchen- ware, etc.) can be more synergistic than automotive, clothing or shoe companies because they op- erate in the same context of use and life. The empirical results for the Subsector Brokering characteristic demonstrate that innovators prefer to collaborate with designers who create different typologies of furniture products in order to exploit their capabilities to move signs and languages from one typology to another. Designers act similarly to technology brokers in moving languages and meanings between subsectors.42

Designers act similarly to technology brokers in moving languages and

meanings between subsectors

The analysis of 21 innovators suggests the interpretation of the six designer portfolio dimensions as two complementary subsets that promote different activities: high levels of Osmosis and Balanced Breadth give the company exposure to new knowledge, while Foreign Background, Educational Back- ground, Industry Brokering and Subsector Brokering measure the heterogeneity of design competen- cies, approaches and methods that a company can exploit. Considering the six dimensions as managerial levers, the empirical results underline the fact that the strategies of collaborative inno- vation are based on the adoption of two complementary levers: one (belonging to the first subset) that allows the company to access new knowledge and the other (belonging to the second subset) that allows the company to transform new knowledge into original product signs and meanings. For example, Horm and Luceplan base their strategy of collaborative innovation on the develop- ment of broad designer portfolios that are heterogeneous in terms of educational background (fo- cusing on Balanced Breadth and Educational Background), while other innovators collaborate intensively with external designers (Osmosis), intercepting heterogeneous design approaches and methods by mixing other levers in different ways (for example Foscarini and B&B Italia strongly focus on Subsector Brokering).

Rather than focusing on project-level collaboration with a specific designer, this paper provides an empirical analysis about the impact of the overall portfolio of collaborations that companies use in different projects in the context of innovation. In fact, the capability to build valuable creative networks over time is a critical asset in design-intensive industries: the knowledge developed through specific collaborations can be exploited in other projects, and even in collaboration with other designers. This cumulative asset can also be used to enter new markets and improve the busi- ness model. For example, Alessi collaborates with more than 200 designers in a network built over decades. In recent years, Alessi has started to exploit its creative asset directly by supporting other companies to scout for appropriate designers. For example, the ‘‘Fresh Surfer’’ toilet-cleaning flush- ing soap produced by Henkel (the German manufacturer of laundry, cosmetics and homecare

134 Collaborative Strategies in Design-intensive Industries

products) has been designed by Miriam Mirri, a designer who has also developed several products in collaboration with Alessi. The company considers it particularly appropriate to interpret the design languages of a product such as the ‘‘Fresh Surfer’’.43 As mentioned, company innovation is significantly affected by the diversity of its direct contacts. Thus, the number of creative collab- orators is relevant to the extent that it increases the probability of network diversity. The interaction with creative resources of different backgrounds and experiences enables the acquisition of new capabilities and interpretative models. The collaboration with heterogeneous designers can increase both the capability to recombine existing design languages in original ways, but above all helps anticipate the emergence of new design languages. Discussions regarding product concepts and needs become much more articulated, moving from utilitarian features to emotional and cultural meanings. A single interpretation cannot provide a complete view of how people give meaning to a specific product. Consequently, innovative companies in design-intensive industries have to use several different interpreters to combine insights and stimuli, and they must do this across several different categories. Several technology management studies have demonstrated that, in many cases, the novel recombination of existing knowledge can introduce innovation. This kind of approach is facilitated by actors that link different communities and people.44 In contrast with technological knowledge, languages are more dependent on culture and less on industry. Meanings are embedded into cultures because they can evolve and change within a given context and may run up against barriers to moving across different socio-cultural worlds, such as between different countries. At the same time, companies that compete globally cannot rely on local creative resources alone. The combination and hybridisation of local peculiarities with stimuli from other cultures can lead to original solutions and new vision. Razzaghi and Ramirez (2006) stress the importance of culture in product development, claiming that culturally-orientated products create stronger bonds with users.

The empirical results show a curvilinear relationship between innovation and knowledge diver- sity in specific dimensions (Foreign Background and Industry Brokering). To develop a designer portfolio composed of more than 60 per cent foreign collaborators and of more than 80 per cent cross-industrial designers decreases company innovation (see Figures 3 and 5). The collabora- tion with few Italian designers specialised in the furniture industry is particularly crucial to be in- novative; in other words the collaboration with only foreign designers that operate in several industries imply worst performance. One explanation may be the loss of sensibility toward the Ital- ian furniture market. High levels of Foreign Background and Industry Brokering introduce heteroge- neity able to threaten a fundamental value of design-driven companies such as product identity.45

Innovators mitigate this negative effect mixing projects developed with foreign and Italian designers, with cross-industrial and specialised creative resources. This kind of relationship is not evident for Educational Background and Subsector Brokering, probably because these two characteristics do not imply the disadvantage previously described: they do not compromise the capability to comprehend the nuances of the Italian furniture industry.

Conclusions The innovation of product signs and meanings requires a dispersed and tacit knowledge of socio- cultural trends and emerging societal phenomena. This knowledge should enrich collaborative efforts and rely on creative resources. Designers play an important role in helping companies to access, interpret and exploit knowledge of emerging socio-cultural models and latent market needs. We have demonstrated that innovators and their competitors build completely different designer portfolios. Consistent with the emerging approaches to innovation such as the connect-and- develop paradigm or open innovation, innovators in design-intensive industries collaborate with several external designers.46 Through collaborations with international designers in particular, they are able to access new semantic contexts and enrich the knowledge concerning socio-cultural phenomena. Our analysis of the educational backgrounds of creative professionals shows that innovators mix different approaches and mindsets in order to design unique and original products.

Long Range Planning, vol 43 2010 135

Through their forward-looking capability, architects play a critical role in collaborating with inno- vators. Creative resources support innovative companies not only in the identification and interpre- tation of emerging trends, but also in the implementation of new aesthetic solutions that match the evolution of socio-cultural contexts. In this sense, innovators exploit the capability of creative re- sources to move product signs and languages from one subsector to another. In order to connect technical solutions and design languages adopted in projects about different product typologies, in- novators collaborate with designers who operate across several subsectors. From a managerial per- spective, this paper provides a detailed description of the designer portfolios used by innovative companies. Identifying multiple interpreters with different backgrounds and from several countries is an insufficient condition for innovation. To attract this kind of creative resource, a company has to act as an interpreter, actively exchanging knowledge with design professionals. In other words, companies have to develop a reputation for being an avant-garde interpreter of social and cultural phenomena, as well as the technological capabilities that allow them to set free the designers’ creativity.

‘‘I believe that Italy, or more specifically Northern Italy, is the centre of the design world, and above all because of the manufacturing culture; there is no other place in the world where you can find such a vast array of craftsmen and manufacturers for all intents and purposes who truly appreciate the value of design .’’47

[Ron Arad, designer]

The knowledge diversity developed through the collaboration with designers of different back- grounds and experiences has to be interpreted as a cumulative asset. The identification, selection and attraction of key creative collaborators, even before competitors, requires significant invest- ment. These activities are crucial for companies in design-intensive industries. They allow a creative asset to grow over time and this can be exploited by the company in several ways: the knowledge developed through a specific collaboration typically remains ‘‘stuck’’ to the company and can con- sequently be used in other projects. In other words, knowledge collected through the collaboration with French, cross-industrial architects can be reinterpreted and used in projects developed by inhouse furniture engineers. The relationships developed with creative talents represent a distinc- tive asset with the opportunity to enter into a new business (the role of Alessi in the development of the ‘‘Fresh Surfer’’ for example). The capabilities necessary to identify and select key designers require a deep knowledge of the domain of innovation. Our research shows therefore that inno- vativeness does not depend on diversity brought by an individual designer, but on diversity brought by the entire portfolio of designers of a company. In other words, the value of a single collaboration benefits from externalities generated by other collaborations. The bottom line impli- cation is that companies should not focus only on the characteristics of single external parties when developing a collaborative innovation strategy, but, rather, manage carefully a balanced portfolio of collaborators.

However, our research does have some limitations. The Webmobili database does not contain all products offered by Italian furniture manufacturers and the prestigious ‘‘Compasso d’Oro Award’’ represents just one prize in the design field. Specific dimensions can show reverse causal- ity: for example innovators can have more financial resources and for this reason they can collab- orate with several and international designers. This paper has introduced a set of research questions that should receive further attention. It will be necessary to verify the external validity of our conclusions, as our data refer only to the Italian furniture industry. For example, although Italian furniture companies develop several products in collaboration with external designers, com- panies in other countries may tend to develop products using inhouse designers alone. Moreover, the central role of architects in comparison with industrial designers is probably typical of Italian companies. However, Italian innovators are successful at the international level. Consequently, the empirical evidence in this paper may offer interesting ideas for companies in other countries. In

136 Collaborative Strategies in Design-intensive Industries

spite of the contribution of designers (and of creative collaborators in general) being particularly relevant in other industries, it remains unclear whether similar results may also be evident in other domains. We would encourage further research, including the application of Social Networks Analysis (SNA) to describe the relationships between the two sets of nodes, namely companies and designers.

Acknowledgement The authors would like to acknowledge the managers of Webmobili, Ultimo Politi, Lara Bezzecchi and Gianluca Cislaghi and other researchers at the Politecnico di Milano (in particular Alessio Marchesi), whose contributions were tireless and invaluable during the research process. Naturally, any mistakes or omissions are the sole responsibility of the authors. Financial support from the FIRB fund ‘‘ART DECO - Adaptive InfRasTructures for DECentralized Organisations’’ is also grate- fully acknowledged.

Appendix. Analysing designer portfolios We define ‘‘collaboration’’ as the relationship between a company and a designer. Each collabora- tion is characterised by the number of products developed by the same group of actors. Products developed by ‘‘Designer A’’ and products developed by ‘‘Designer A’’ and ‘‘Designer B’’ within the same company are considered to be two different collaborations. Using the Webmobili database, we were able to access a preliminary set of data regarding collaborations between each company and a group of designers. We retrieved the names of designers who have collaborated with each com- pany, the total number of designers who have collaborated with each company, the number of products developed by each designer in collaboration with each company and the total number of products developed by each company. Through secondary resources (internet and design librar- ies), we enriched the initial database by adding new information about each collaboration. We re- trieved the nationality of each designer,48 the types of relationships with companies, whether ‘‘inhouse designer’’ or ‘‘external designer’’, the industries in which he or she developed products, whether ‘‘only furniture’’ or ‘‘multiple industries’’ and the educational background.

Osmosis

Description

Long Range Plan

Percentage of products developed by a company in collaboration with ‘‘external’’ designers

Note

e

Example

Alias develops products only in collaboration with external designers (Osmosis ¼ 100 per cent), while 81.5 per cent of Berloni’s products have been designed by the in-house research centre

(Osmosis ¼ 18.5 per cent)

Balanced Breadth

Description

Multiplication of the ratio between the number of collaborations with external designers developed

by each company and the number of products developed through these collaborations and the Gini

dispersion index. It indicates whether a company prefers to develop the majority of its product

portfolio in collaboration with a few designers or to engage with a broad range of creative resources.

Balanced Breadth ¼ kE NE �G ¼ kE

NE � kE

kE�1ð1� PkE

i¼1ð nE;i NE Þ2Þ,

where kE represents the number of collaborations with external designers developed by a company;

NE the total number of products developed with external designers, and nE,i represents the number

of products developed through the external collaboration i

Note

A first version of the Breadth dimension was calculated as the ratio between the number of col-

laborations with external designers developed by each company and the number of products de-

veloped through these collaborations. However, some companies, even those involved in many

different collaborations, prefer to exploit only few of them. For this reason, we refined the first

ning, vol 43 2010 137

138

version by multiplying it by the Gini dispersion index. This verifies whether a company prefers to

develop the great part of its product portfolio in collaboration with a few designers or to exploit

a broad range of creative resources equally.

Example

Horm shows a particularly high value of Balanced Breadth (0,844) because in the period 1990e2005

they developed eight products in collaboration with seven different external designers (one designer

developed two products, while the remaining six designers completed one each)

Foreign Background

Description

Percentage of products developed in collaboration with foreign designers

Note

In Foreign Background we excluded seven companies that also have subsidiaries outside of Italy

Example

Driade exhibits a particularly high value of Foreign Background (85 per cent) because in the period

1990-2005 it developed 34 products in collaboration with foreign designers (the total number of

products launched in the period 1990-2005 was 40)

Educational Background

Description

The Gini dispersion index pertains to the following categories of educational degree obtained by

designers who collaborate with each company: industrial design (product design, communication

design, service design), architecture, engineering, high school and other:

Educational Background ¼ 5 4 �ð1�

P5 j¼1ð

nj N Þ2Þ,

where nj represents the number of products developed by a company in collaboration with de-

signers of educational background j (j goes from 1 to 5: industrial design, architecture, engineering,

high school and other) and N the total number of products.

Note

e

Example

Cassina shows the highest value for Educational Background (0,909): 18.2 per cent of the products

were developed with industrial designers, 40.9 per cent with architects, 4.5 per cent with engineers,

13.6 per cent with collaborators that have obtained a high school diploma and 22.7 per cent with

partners that have different educational backgrounds. By contrast, many companies (e.g., Acam

Biesse, Essepi, Ommag, etc.) collaborate only with industrial designers.

Industry Brokering

Description

Percentage of products developed in collaboration with ‘‘cross-industrial’’ designers (designers who

work beyond just the furniture industry)

Note

e

Example

95. per cent of Varaschin’s products were developed in collaboration with designers who work

beyond the furniture industry, while Marchetti Casa prefers to focus its collaborations with

furniture designers: only 3.3 per cent of its products were developed with ‘‘cross-industrial’’

designers

Subsector Brokering

Description

Average number of sub-sectors (Lamps, Tables, Chairs and Sofas) in which designers who col-

laborate with a company have experience

Sub-Sector Brokering ¼ PkE

i¼1 ðcE;i�nE;iÞ NE

,

where cE,i represents the number of subsectors (Lamps, Tables, Chairs and Sofas) in which the

external designer of collaboration i operates.

Note

Subsector Brokering for those companies that develop products only with internal designers is equal

to 0

Example

B&B Italia exhibits a particularly high value of Subsector Brokering (3,200) collaborating with 14

external designers: two of whom operate in all subsectors, three in three subsectors, five in two

subsectors and four only in a single subsector. The top two designers developed 40 products in

collaboration with B&B Italia during the period 1990-2005 (61.5 per cent of the entire product

portfolio).

Collaborative Strategies in Design-intensive Industries

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Biographies Claudio Dell’Era is a research assistant in the department of management, economics and industrial engineering of

Politecnico di Milano, where he is also a contract professor of innovation management and lecturer in design

management and project management. He finished his PhD in Management, Economics and Industrial

Engineering in 2007. He has published in international journals, such as the Journal of Product Innovation

Management, International Journal of Innovation Management and European Journal of Innovation Management.

Claudio Dell’Era’s paper investigating the development of new services in turbulent environments won the Best

Paper Award at the EIASM (European Institute for Advanced Studies in Management) International Product

Development Management Conference in 2004. E-mail: [email protected]

Roberto Verganti is professor of management of innovation at the Politecnico di Milano, where he also serves as the

director of MaDe In Lab, the laboratory for education in management of design and innovation. He is also

chairman of PROject Science, a consulting institute focusing on strategic innovation, a visiting professor of design

management at the Copenhagen Business School and adjunct professor of design innovation at the University of

Vaasa, Finland. He has published more than 100 papers, including 35 papers in international journals (such as the

Journal of Product Innovation Management, Management Science and Harvard Business Review) and seven books. He

was awarded the ‘‘Compasso d’Oro’’ in 2001 for the Italian Design System research project for which he served as

a member of the Scientific Organising Committee. His most recent book is Design-Driven Innovation, published in

August 2009 by Harvard Business Press. E-mail: [email protected]

Long Range Planning, vol 43 2010 141