iinnovate episode 3: David Kelley, founder of IDEO



Matt and Julio – Episode 3: David Kelley, Founder of IDEO


Welcome to iinovate, a podcast about innovation and entrepreneurship with Julio Vasconcellos and Matt Wyndowe.


Hello everybody and welcome to our third episode.  Once again, thanks to everyone who has listened and especially to those who sent in comments.  In this episode, we are thrilled to feature David Kelley.  David founded the company that later become IDEO.  IDEO is a design company that has developed an almost cult-like following, and for some good reason.  They have designed such products as Apple’s first mouse, the first laptop computer, the Palm V, the Leap Chair, Eli Lily’s first insulin pen, and even the world’s first no-squeeze standup toothpaste tube.  IDEO has been heralded as one of the world’s most innovative companies.  Their client list includes Hewlett Packard, AT&T, Vodafone, the BBC, Samsung and NASA.  David himself has won numerous design and teaching awards, and he is one of the driving forces behind Stanford’s new design school, the d. school.  I hope you enjoy listening to the interview as much as we did recording.  The transcript will be up soon at iinovatecast.com, where you can also leave comments.  Thanks for listening.


Matt: We’re here at Stanford University with David Kelley.  David, welcome to the podcast.


David: Thanks, I’m glad to be here at Stanford University.


Matt: David, you once said that IDEO isn’t an expert at designing toothpaste tubes, cars, or medical devices, but you’re experts in the process of design.  Can you speak a little bit about the design process and what it entails?


David:  Yeah, so as a design consultancy, we run into companies where the people inside of the company have devoted their life to being an expert in their subject, whether it’s toothpaste or bicycles or nuclear reactors or the space shuttle, right?  So they have the kind of depth in their area.  But design by its nature, is this kind of broadening thing, this breadth kind of thing.  How do you look at the problem in a different way, which will come up with different answers than the expert, okay?  So, design process is a really way of going into a place where there are a lot of experts and still being able to extract innovative ideas, right?  And it is surprising that this is true, but it is true that that’s possible.  Like I always say a fish doesn’t know he’s wet.  Our process is to go in and try to understand the people that you’re designing for.  We call it user centre designer.  Empathy for people.  We try and look for a latent need, a need that’s not been expressed in some way.


Matt: So David let’s say you’ve got a new project which is design a cell phone for, let’s say Julio over here, and you have three minutes to do it.  How would you go through that process for that specific task?


David:  Well, what you do is you try to understand what’s really important to him.  Watch him use his existing cell phone, look when he has trouble, you know, when really he’s frustrated, listen when he’s saying profanities, that would be good.  Look when he’s having a really good time; look when he’s smiling.  And then try to design that moment or that experience to be better.  You first find out what he cares about; I mean, the analogy that I recently worked on is look at gas stations.  You watch somebody, and if you ask somebody, “Do you have any trouble pumping gas at the local gas?” they say no, no problem.  Then you watch them, right?  First they come up, they have trouble getting the car close enough to the thing, to the pump, I mean, and then cause it’s not clear, how long is it?  And then, my latest one is, they just changed where you have to enter the zip code, and I saw a lot of people leave without getting gas; they were too embarrassed to go inside because it says enter zip code, but it doesn’t say enter zip code and then enter key.  So, they put in their zip code, mine, 94301, and then they wait and nothing happens.  You look for those things.  Although people can’t tell ya, he’s not going to tell me what he really values in cell phones, right?  But you pretty soon can figure it out you know, and then you have to, from a business point of view, you have to, you have a raving, I can make a raving fan, you know, of Julio, but I can’t, I don’t know if that’s a big enough market.  From a business point of view, you’ve got to decide, okay, I mean, I can make a raving fan of one person, that’s not a business right?  But you do multiple people, and pretty soon you figure out what works for a large enough market to make him a raving fan.  Here’s my take.  I think if I could, you asked me, I’ve talked more than three minutes but, in three minutes I’d find some moment that made him very excited, I can make one moment.  You know, it doesn’t have to be, you don’t have to do everything well if you design this one moment that’s really wonderful, really cathartic.  So, if you had to do it fast, I’d look for that one moment that was gonna really make, other than the individual you were trying to please, you know, excited.


Matt: You mentioned before prototypes.  How would prototyping work into that?


David:  Well prototypes is the, you know, the expression ‘A picture is worth a thousand words.’  I think a prototype is worth about, you know, a million words.  If I make a videotape of what the future’s going to be like, when my idea, my idea for the d. school or my idea for a better night’s stay at a hotel, or my idea for pumping gas in a better way.  If I show you that prototype in some way, if I can quickly show you what I have in mind, you’ll help me.  And the prototype is really based on this kind of notion that humans are very good at telling you what’s wrong with your ideas, so if you put your idea out there quickly, earlier.  One of my buddies always says never go to a meeting without a prototype, and he always wins.  You think about a business situation where everybody comes into the room and they’re sitting around, and they’ve got their yellow pad and a pencil, and one guy brings a prototype of what they are going to talk about… who wins?  I mean, who’s the centre of that meeting?  Who gets the best feedback for that idea right?  Compared to the person who is telling you their idea, or even showing you or drawing you a picture of it.  The person with the prototype gets all this rich amount of feedback.  So the prototyping is really a way of getting the iterative nature of this design going, so somebody will tell you, and then you build another prototype, and build another prototype.  So, it’s the notion that you can’t have all the ideas yourself.  If you build a prototype, other people will help you.


Julio: You graduated from Carnegie Melon then went to work at Boeing and then eventually went to launch and grow one of the most innovative and influential companies in the world.  How did this transition happen from big business to entrepreneurship?


David:  I think you will see most people who are manic like me, you can trace it back to, you know, they had some like bad experience in their past and they’re trying to make up for it for the rest of their life, you know, like, some bully kicked sand in their face and now they’re Arnold Schwarzenegger’s body.  I mean, I think, a couple of things happened to me.  One was, I went to a pure analytical program – I was an electrical engineer at Carnegie Melon, and I didn’t do very well.  I felt like, you know, we all feel like we’re special, but I felt that I was more special, and I was average or below average, so I had to find something that I was put on Earth to do.  I knew it wasn’t electrical engineering, well, at least I hoped it wasn’t electrical engineering cause I was just going to be like, an electrical engineer that worked through the week in order to get to the weekend and water ski or whatever you do, right?  I could feel that was where I was going – I just felt like I had something more important to do than that.  That was one of the things, and so I was kind of, I was even teased by the professors some ways because I just didn’t, I wasn’t a good fit for that program.  And then when I got to Boeing, and later National Treasure and the big company, I really didn’t do well with, every relationship I have is basically a personal relationship, I don’t really have any business relationships, I only have personal relationships.  And so, when I got to Boeing, it was like I had a bunch of business relationships all of a sudden.  There were people I didn’t care about, I mean, everyday I was working with a bunch of people I didn’t, I wouldn’t have chosen to be with.  You know, like, I kind of vowed, I could see that I didn’t have to start a design company, but I had started a company where I was with my friends every day.  And I think I kind of didn’t grow up.  As a college kid, you’re with your buddies all the time, you know, by definition, kind of.  And I got to work and it wasn’t like that, so I wanted to replicate the working with friends kind of feeling, so IDEO was really started because – unhappy, not kind of, you know, work environment where I just loved being with the people.  And so I had to start that on my own. 


Matt: Did you have any big failures along the way?


David: Oh yeah, tons of failures.  Certainly product failures.  We had very few kind of organizational, your kind of organizational behavior kind of problems, except that in a very friendly place, how do you get rid of somebody who’s not performing?  I mean, in a friends-based system, how do you tell one of your friends that they got another job?  And we failed at that.  I mean, so they stayed a lot longer than would have been efficient to, but see, if I’m not a public company and growth is not a go, I’m just trying to have a good time – that was okay in our culture.  As far as products, we had tons of failures.  I mean, like one of the things that’s really nice about being in Silicon Valley is a failure is like a badge of honor, I mean, like, you talk about failures all the time and people hire you.  We said, look how much learning this guy had, look how bad he failed here, I bet you he’s really good now.  Which is the kind of, I don’t think all cultures have that kind of – but we do.  And so as many product failures, in fact, I love, you know, I tell the story of Monster Shoes which is a failure, and I even started a phone, the Enorme Phone Company, which just failed miserably, and you know, it’s like, and they’re actually better stories than some of the successes.


Matt: For an entrepreneur building a business, how would you advise them to structure their organization to encourage creativity and innovation?


David: Umm, well you know, there’s the conventional stuff and having it be flat and so forth, but the main thing is, the main thing is more subjective than I think is, which is if you want to be innovative you gotta use the full power of all the minds in the group.  In a group where the boss talks all the time, or in a higher operation where, like people suck up to the boss or the boss’s ideas are implemented more than the receptionist’s ideas, there’s a problem there.  If you want to use everybody’s, all the creativity of the whole place, and so getting to, you can measure this by the way, if you go and do an innovation audit, you can just keep track in meetings of who talks the most.  And in an innovative culture, everybody feels able to talk and will talk a lot.  In a non-innovative culture, the boss talks the whole time.  The offices are particularly bad, about status, you know, like who has the big office in the corner.  I suggest if you were a business owner, take the crummiest office in the place, then you’ll never have to deal with that.  If somebody comes in says they don’t like their office, say “will you trade with me?”


Matt: How important is workplace design in fostering creativity?


David: Technically, an officer of the largest furniture company in the U.S., Steelcase, so you know, I have a bias to this, but I think it’s more important that we take into account, I mean, Tom Peters, in one article he had written about us, said, I could tell about IDEO in the first five seconds I was in there that this was an innovative place.  And I think we as humans actually can tell whether a place is innovative.  Are the right things being encouraged?  You know, like brass columns and prissy furniture that you’re not allowed to sit on is probably not a conducive innovation, and high status for the people who have big offices is probably not, and anything that says that this place is precious and there are a lot of rules to follow, and the person in charge is probably watching you, you know, to see if you are following the rules, is probably not an innovative place.  So I think you can tell that.  Immediately you go into somebody’s house, and they you know, like, they have a living room where you’re not allowed to go in except when company’s there, that’s probably not a very innovative group whereas, you know… Like in our belief, you come into the d. school, anybody, I mean, you go in and start moving the furniture.  You, anybody can go in and start moving the furniture.  That says that your ideas can be heard by that group.  I dare you to go to somebody’s house or somebody’s company and start moving the furniture around, in their office, right?  Not going to work.  But, in d. school you can because that scene is a creative act; so I’d say that the only thing I can say about that is that I believe that space matters a lot and it should be considered a creative – everything should be done to the hilt.


Matt: For our listeners out there, in David’s office here we have a giant pair of scissors on the wall, a couple of white boards on the wall and one on the floor there, and what is that – Fantastic 4 running shoes?


David: Yeah that’s one of my favorite brands, it’s called the Bathing Ape – it’s a Japanese guy who makes tennis shoes.  They’re very weird wear.  In the buying experience, you have to kind of wait in line outside and there’s a bouncer and he only lets like one person in at a time and he’s built this whole thing around this brand, which is really cool.


Julio: One thing that we’ve been trying to do with our podcasts is ask the prior interviewee to ask a question for the next one we have.  So last week we interviewed Mark Leslie who was a founder of Veritas software and he asked you, “How do you institutionalize creativity?”


David: It’s pretty simple, you empower the people.  Everybody’s creative, I mean that, like, so I think the empowering people to think that they are creative, you think about the d. school, we’re not actually making you more creative, we’re just, kind of, raising your aptitude and your confidence around your ability to create right?  And so I think that it is all cultural.  The problem is it’s been trained out.  I think it’s inherently inhuman, there’s a guide book called, “Orbiting the Great Hairball” I think it was called.  Anyways, he goes into kindergarten classes and says how many people are artists?  In fact, how many people are creative?  They say everybody raises their hand.  Everybody in kindergarten does and they’re proud of it and they’re smiling, and they’re raising their arm and “Me, me, I’m creative, I’m an artist!”  And he goes each year, and by the fourth grade, there’s one girl in the back raising saying she’s an artist and everybody else is kind of looking at the floor embarrassed, in an embarrassed way.  Well, that’s really what’s going on right, is, you just got to unlock that and just got to give them permission and confidence, and not presume.  You’re starting to get ideas from places that people would before wouldn’t have ever come up with it.  So it’s kind of a, I hate to be sounding so Pollyanna positive, but I do think that you build a culture where others know that it’s, that instead of saying things negative, you, every time you think of something negative, you figure out how to improve, and take that insight that there was something wrong with, that you think was negative, and take that insight and think of that as an insight rather than stating that out loud and building on that, and come out with a better idea based on your insight about what was wrong with the other guy’s idea, and saying the positive solution to what was wrong with it.  That kind of culture just keeps making things happen in a very innovative way.  It’s a cultural change that’s no so easy.  That’s why it’s actually easier to start it from scratch than it is to change an existing negative culture to a positive culture.


Matt: David you mentioned how difficult it is to fire somebody if the choice was incorrect.  When you’re making hiring decisions, how do you make sure you’re hiring the right people?


David:  My solution to that problem is have a bunch of people buy in and take ownership and that thing.  So if I can get ten people at IDEO, we do a lot of taking people out to lunch and it’s a pretty tortuous process, though it’s friendly, just a lot of people a lot of time.  No, I’ve found that if there’s ten people in a company or a 500-person company and there’s ten people that have a stake, and you said, “Look, I think this guy’s gonna fit,” this person’s going to fit, then those ten people will make that person successful, or they’ll weed him out pretty fast if they’re not going to.  So I think it’s ownership of the other people, kind of bottoms up grass roots kind of thing, rather than the boss picks this person and they live or die, and they’re the boss’s experiment, and so everybody else is kind of like, trying to prove their boss wrong or you know, something like that.  Whereas if it’s kind of bottoms up and there are ten people in there, of their peers, that have kind of put their, you get it set up so that they’re on the line for whether that person is successful, they’ll make them successful.  So you’ve got the whole organization in fact making them successful rather than the whole organization trying to prove the boss wrong, that this person isn’t a good fit.  So, it’s again, getting everybody.


Julio: So for small business owners out there, how would you as a small business owner, encourage creativity in a small company?


David: You know, this isn’t going to sound like it’s great business advice but, my point of view about this stuff is for small businesses, figure out how to enjoy the process.  Like, enjoy every day.  You know like, I’m a big Italian fan.  You go to Italy and the guy who has the little laundry, or the guy who has the butcher shop or something, I don’t think they’re trying to optimize stock price or growth or that kind of stuff.  They’re trying to figure out “how am I going to enjoy every lunch for the rest of my life?”  That’s what they’re trying to figure out.  You’re not going to make as much money, but if you make a lot of money, what are you trying to do?  You’re making a lot of money so you can like have a good life?  Why not just start out trying to figure out how to have a good life?  So, my advice around small businesses, is, you know, maybe I’m too romantic about it but, I think the small business has the chance for business owners and the people who work there to kind of balance the, if we just, the thing is, we’ve got units for dollars.  We’ve got units for dollars, if you make a teeter-totter, you know, and you put dollars on one side and draw a heart on the other side, the balance between the heart and the dollars is the thing I’m always struggling with.  But, I believe we err on the side of the dollars because it’s measurable, there’s a unit, you know, euros, dollars, yen, whatever.  And on the other side, you know, self-fulfillment and emotionally wonderful life doesn’t have any units, you know.  If we had units for that, we’d be measuring it all the time and that would be, there would be more imbalance.  So I guess what I’m saying is I think small business owners have the chance to pump up the heart side of that teeter-totter and they should do that, which, if you’re filling out your _______ forms all the time, I’m not sure that that’s a notion for having a good time.


Julio: David thanks for being on the podcast. It’s been a pleasure.


David: Thank you guys, it was fun.