Contents Executive Summary 3 IDEO’s CULTURE & process 4
IDEO Culture 4
Design process 4 Work environment 4 Prototyping 5 Collaboration 5 Customer involvement 5
Innovation process 5 Brainstorming 5 Structure and methodology 6 HandSpring Project (Visor) 7
Visor Challenges 7
The Odds situation 8
Measuring R&D Performance 9
Measuring Visor’s Project Performance 9
Prototyping of Palm V 11
The Decision 12

Executive Summary
This case deals with IDEO company situation analysis. It starts with describing the IDEO corporation as an environment and the process that they use to perform the work. IDEO is a flat organization to an extreme. They have no hierarchy and discouraged formal titles, which is something that stressed more on the competiveness of the designers and engineers. They believed that prototyping is the key for the design process. They start with collaboration and brainstorming sessions in order to generate the most effective ideas and thoughts. They also have the customer involved with them in all the processes to keep him updated and aware of the steps that are taken. They have a 5 phase methodology to follow when starting a new project which are: Phase 0: Understand and observe, Phase 1: Visualize and realize, Phase 2:Evaluate and refine, Phase 3:Detailed Engineering and Phase 4: Manufacture. Theses five phase are explained more in the following pages
IDEO has just finished a great breakthrough in the palm industry. They created a new handheld PDA that worked with a lithium rechargeable battery. This product had a great customer acceptance and was a success, however it lacked a lot of features that are believed needed by the users.
The Visor project started with the intension to correct and modify all the mistakes that happened in the Palm V. they had the intention to add all the missing features that would be needed by the customers. The main challenge was that the owners company was pushing IDEO to skip some of the design processes in order to deliver by a certain time to be able to produce and supply the market before the holiday’s session.
Some evaluation techniques to evaluate the R&D projects were discussed as well. These methods were used to evaluate the Visor project
This paper is a situation analysis to prove weather IDEO should accept or reject the challenge. Do they have to go with the project by changing their processes to adapt to the tight schedule of the project? Some factors were discussed in details such as evaluating the IDEO processes and their applicability to every project. Also the threat of loosing the project to a competing firm as well as other factors. Also the reasons weather IDEO should reject the project were discussed such as the effect of neglecting some tasks on the final product delivered and other factors.
By analyzing the different factors we decide that IDEO should go with the project and accept to modify their work procedures to be able to deliver the product on time. They should inform the customer as well with the risk that they are taking to be able to deliver on time. The customer should be aware and accept those risks with the tight schedule that is proposed to IDEO.

IDEO’s CULTURE & process
IDEO Culture
IDEO’s culture could be described as eccentric, fun, creative, and innovative. The outside-the-box working styles and shifting of working groups help to keep thinkers fresh and constantly on their toes. In the early 90s it was innovative to the point of being ambiguous at times for staff and management, but this was seen as providing fertile conditions for the generation of innovative thinking and ideas. However, by the late 90s this culture had become slightly more bureaucratic, to the chagrin of the executives and founders. This is because the management itself is a creative and inspired group that is very comfortable with ambiguity. This is exemplified by founder David Kelley’s dismay when asked permission by employees to leave early or bring a spouse to a company event; he would much rather there was less hierarchy.
IDEO’s product creation process is unique in that it embraces the eccentricities of its corporate culture, and does so to increase the creativity and value of the designs it produces. Having a team together for only one project at a time, dispersing them and changing team formations for other projects, makes the input for new designs diversified and the thinking of the participants fresh. Healthy teams are extremely important for stimulating creativity, but once a team has been established for a long period of time, people can have the tendency to fall into patterns of thought or take on a set team role or persona, both of which can restrict their creative ability and flexibility of thought. The proof of the IDEO system’s effectiveness is in the long and distinguished list of awards the company has received over the years, and its reputation as an industry leader in innovative thought.
Design process
Work environment
IDEO was a flat organization to an extreme. All the work was organized into project teams, which formed for life of the project then disbanded. Motivation from peer pressure spurred employees to put in 50- to 60-hour weeks in creative endeavors.
The lack of hierarchy also avoided the problem of promoting designers and engineers into administrative positions and out of their first love: creating products.
IDEO’s culture and work environment reflected the importance that management attached to creating a democracy of ideas. Growing IDEO to 300 employees involved keeping each unit small. Thus, growing was achieved by budding out smaller design studios whenever one appeared to grow too large.
The employees were encouraged to design their own workspace to reflect their own personalities.
The company discouraged formal titles and did not mandate a dress code. Management encouraged employees to leave their desks and walk around, especially during mental blocks. Management rarely fired employees. Each employee was assessed through peer review sessions with peers chosen by the employee.
Prototyping
IDEO innovation philosophy is “If a picture is worth a thousand words, a prototype is worth ten thousand”.
Central to IDEO’s philosophy was the role of prototyping. Frequent prototyping served as the most important way for the company to communicate with the clients, marketers, experts, and end users. Prototypes ensured everyone was imagining the same design during discussions about a product. All IDEO offices had shops staffed by highly skilled machinists to rapidly produce both simple and sophisticated prototypes.
Rapid prototyping at IDEO followed the three “R’s”:” Rough, Rapid and Right”. The last R “Right” referred to building several models focused on getting specific aspects of a product right.
Collaboration
IDEO sought to generate as many ideas as possible early in the design process through almost daily brainstorming sessions. The entire process resembled a funnel with several ideas on top and three or four at the bottom.
Deep dive® approach would be used in the course of a project when progress appeared to come to a standstill, the team would focus intensively for an entire day to generate a large number of creative concepts, weed out weak ones and start prototyping based on the top handful solutions.
Customer involvement
The inherent inability to precisely predict the innovation process’ outcome, time and cost made it extremely important to keep clients involved. At the beginning of the project, IDEO would submit cost and time estimates to potential clients. As the project unfolded and designers came up with innovative ideas and concepts. Clients needed to be aware of those opportunities for further innovation and the cost and time involved.
Innovation process
Brainstorming
If prototyping was central to IDEO’s design process, brainstorming was central to its methodology. The company followed several principals of brainstorming: Stay focused on the topic, encourage wild ideas, defer judgment, build on others ideas, go for quantity.
Through a single project the project manager would hold several brain storming sessions or “brainstormers”. And no more than eight invitees attended these sessions.
Structure and methodology
IDEO’s product development followed several phases:
• Phase 0: Understand / observe
Understanding the client’s business and finding out the feasibility of the product.
• Phase 1: Visualize / realize
The team chooses a product direction based on ideas technologies, and market perceptions. By the end of phase 1, through close coordination with the client, the team would have rough three-dimensional models of a product.
• Phase 2: Evaluating / refining
The team enhances the designed prototypes through testing functional prototypes.
• Phase 3: Detailed Engineering
The team completes product design and verifies that the final product works and could be manufactured
• Phase 4: Manufacturing liaison
The team ensures smooth product release to manufacturing as the product moved from the shop floor to the client’s factory lines.

HandSpring Project (Visor)
The Palm V product was successful and acquired the consumer acceptance quickly. IDEO crafted a sleek, elegant device, half the thickness of the original in anodized aluminum housing. It now incorporates an internal lithium ion battery that recharges in the dock, and the side rails act as an open architecture to provide attachment for a variety of styluses, cases, and other add-ons. Its functionality was great providing its standard calendar, contact, and notepad functions.
Emerging of Handspring Company tacked another dimension of Palm devices. Although the great success of Palm V, yet, it still lack of some important aspects: * The cost is relatively high to penetrate different segment of the market * The size is relatively big * Lack of compatibility to a wide range of other devices and technology (pagers, Cell phone, GPS, MP3,..etc) – “ROM Cards” – Multi Function Slot
So, the technical motivation behind Handspring was to address the Palm’s inability to easily add functionality.
In light of above, Handspinrg was formed in 1998 with the intent to create lower-cost PDAs with expansion ports and the ability to synchronize with personal computers. They would also be more colorful and easier to use than previous PDAs
Visor Challenges
However, because of time pressures, low-cost goals, the company decided that market research would essentially not be needed for the development of its first project: the Visor
The Visor Project would also require the dedicated team from IDEO to keep the rest of IDEO not mention the rest of Silicon Valley, in the dark about the project. This would make for uncomfortable memories, especially during informal hallway conversations with colleagues, some of them still working on the Palm V Project. The main challenge was: to fulfill Handspring requirements, IDEO will sacrifice it’s tradition of spending substantial amounts of time and energy on the design phase of a product. Ignoring the ingrained culture

The Odds situation
The priorities of IDEO and Handspring were at odds with each other. IDEO’s focus was on creating innovative, high-quality products that were successful and effective due to thoughtful, creative design. The rigorous, customer-centered development, design, and refining stages, as well as the comprehensive use of creativity in the office and in team development underscore the commitment to creating the best design possible as the primary focus of IDEO teams. Deadlines were not a primary concern, as IDEO had a good track record for delivering their world-class designs under tight schedules. Handspring, however, despite being consumer focused and according to Hawkins, wanting to “make this work well for the consumer”, felt it unnecessary to engage in market research or time-intensive experimentation. This, by nature, makes it a different animal than IDEO due to the fact that the primary focus of the company is to introduce the predetermined product (while open to some cosmetic adjustments), as opposed to creating a product that has been determined to be desired by and useful to consumers.

Measuring R&D Performance
Although all companies recognize the importance of R&D for future success, they often struggle to assess the R&D performance. R&D faces to major challenges: The outcome of R&D activities cannot be quantified in advance, and the outcome of R&D activities may lag the output of the activities by a long time.
To overcome, these issues, R&D departments identify three means of measuring the success: * Operational controls: This relates to real time information allowing immediate reactions to complete the project successfully and efficiently. * Input measures: The amount of resources spend on the project (cost, personnel, and time) * Output measures: To evaluate quality of work done and to document lessons learned.
Measuring Visor’s Project Performance
As IDEO accepts the project, even though it will be short on time, it is expected to use its product development process to come out with the desired end product.
Accordingly, in each phase IDEO should have its performance indicators that measure real time information, budget control and planning in each phase, number of resources used and means of measuring their efficiency in each phase, and finally, quality measures to ensure the product meets certain standards Phase 0: Understand / Observe * Number of Brainstorming sessions: To ensure people spend time looking at options and creating a vision for the product. * Observation database: It is important to understand the current product. Accordingly, it should be distributed to different users for testing, and feedback should be gathered. * Resources Utilization Time: To ensure resources are assigned a time slot for each project they work on. * Time in Phase: To measure the actual time in the phase versus the planned time to ensure schedule is met. * Budget in phase: to measure actual budget versus planned budget to ensure project is in budget.
Phase 1: Visualize / Realize * Workforce diversity: To ensure people with different backgrounds are part of the team. This generates different points of view and leads to creativity and innovation. * Number of prototypes: It is important to have a diversity of prototypes in this phase to drive an innovation culture. * Client Engagement: It is important to get a thorough feedback from the customer at this stage to ensure the development is working in the right direction. It is also encouraged to have a prototype in each meeting. * Check Alternatives: When designing different prototypes, a mixture of each prototype could be used to come with a new prototype. It is important to search for cheaper implementation alternatives that meet the quality, and cut costs. * Time in Phase: To measure the actual time in the phase versus the planned time to ensure schedule is met. * Budget in phase: to measure actual budget versus planned budget to ensure project is in budget.

Phase 2: Evaluating / Refining * Create Accurate industrial models that map the prototype to be selected * Customer feedback: prototypes could be given to different users and their feedback should be gathered to select among prototypes. * Time in Phase: To measure the actual time in the phase versus the planned time to ensure schedule is met. * Budget in phase: to measure actual budget versus planned budget to ensure project is in budget.
Phase 3: Detailed Engineering * Ensure technical specs are met for each component * Ensure product meets government regulations * Technical documentation coverage: To ensure all technical requirements are specifically mentioned * Time in Phase: To measure the actual time in the phase versus the planned time to ensure schedule is met. * Budget in phase: to measure actual budget versus planned budget to ensure project is in budget.
Phase 4: Manufacturing liaison * Keep dedicated employees to gear-up for market release * Enhance processes to meet production demand * Supplier quality control: It is important to have quality control on procured components. A metric could be put to change supplier if the defects reach a certain percentage of the total supplied.

Prototyping of Palm V
Hawkins had a vision of having a simple yet high tech device, small in size that can be used to store addresses, phone numbers, and has a calendar and a to do list. He wanted the device to do this rapidly and efficiently.
IDEO planned to design a slim and sleek version of the palm pilot. IDEO team made a lot of brain storming sessions and when they attended client meetings, they had to have a different prototype with hem each time. IDEO also ensured a diversified team to work on the product development which made the product customizable to the taste of users. To ensure a thin product, IDEO’s design teams replaced traditional batteries with Lithium ones. IDEO came with about 25 prototypes and ensured the client was engaged in the selection process.

The Decision
Should IDEO accept the Visor Project on a dramatically reduced schedule?
Many facts support the affirmative answer: * For Handspring, catching the market – in Time- a lower-cost, less stylish device, it would have to be marketing its product to a different group of consumers than those who would buy a Palm Pilot V, ones who were more price sensitive, less concerned about design * 2 major phases of IDEO process could be easily eliminated: * Understand and observe (understanding everything about a new client and its business): the team members, for all intents and purposes, invented the market for the Palm Pilots and similar PDAs). Handspring owners were already indulged with IDEO previously for Palm V * Visualize and realize could also be simply shorten as the product platform is already available and used to a high extent * The product was already in mind, using the product development model more widely used in the mainstream industry (Do not start from zero) * The Target price is by far less than the current product of Palm V which mean the target segment of consumer would be less sophisticated in term of detailed requirements
Other issues could lead to another way forward (not to accept the visor on such reduced schedule): * Running counter to IDEO entrenched culture and process would result in a failure * Request more time for the development phase, emphasizing that IDEO’s job is to create great products, and the Visor could be one such great product if it were given the time it deserves. * The Palm V and the Visor are similar products in some ways, but are, in fact, different in fundamental ways that will affect the appeal for the target customers. Knowing who their target customers are in the first place will help them to design the product that their customers want (Not what asked for). So, market research would be needed
IDEO should try to persuade Handspring to postpone the schedule little bit by explaining the above facts.
But, if Handspring ignored the above facts, IDEO still able to go through and produce a good design within the target price as VERSION1