Design Meets Business

Posted by Juho Hyvärinen

I had an honor to participate in a design seminar in Helsinki City Hall on Thursday 18.11. Although having lived my whole life in Helsinki I think this was the first time I actually visited the city hall inside. The surroundings were grand and in my opinion proper setting for afternoon of Finnish service Design discussion. The occasion was hosted by Director Antti Oksanen from AmCham (The American Chamber of Commerce in Finland). He kept a strict discipline regarding timetables and we were actually able to go through all of the cases in schedule.

The seminar had been put together by several different organizations and people. The stated goal was to help participants in issues regarding both design and intellectual property rights (IPR).  This was to be achieved with the help of several case studies ranging from Kekkilä, company specializing into growing mediums and mulches to Mendor, a manufacturer of a new kind of blood-glucose meter.

The first presentation was about Finnish service design company Creadesign. Creadesign has been around since 1981 and is specialized in helping customers to achieve their goals with the support of different forms of design. Presentation was done by Hannu Kähönen who is the CEO of company. His presentation was actually pretty useful. At least for SID students not familiar with Finnish terms for service design vocabulary.

Kähönen went through the evolution of design from industrial – mass production through artistic – unique to current situation where emphasis is heavily on service and intangible offering. There was actually slightly idealistic narrative about the whole presentation. Kähönen argued that life can be improved with the help of service design. This is not something that author of this thesis necessarily disputes however it is something that perhaps needs further discussion. If service design improves the competitiveness by adding to brand equity, position on market etc… Then yes it has an effect to at least somebody’s standard of living. However it is still quite a strong argument and needs further evidence. It is absolutely true however that service design offers solutions that can be used to help large masses. In Finland the development and implementation of reams with low floors are just one good example of that.

In much of what Kähönen said, was pretty close to theories discussed during SID 2011 course. He emphasized the meaning of positive user experience as the most important goal that service designers should strive to achieve. Also the comprehensive approach which is to include everybody and everything in the design process received mentions. The concluding slide had one phrase on it. The definition of design is Paluu Ihmiseen = Return to Human. I think that pretty well sums it up what the design is all about.

Next up was Case Kekkilä and opening words by their CEO Petri Alava. He spoke about the developing market where Kekkilä is operating creating a context for their evolving needs. In recent years Kekkilä has faced a challenge from foreign companies offering similar products with cheaper prices. Also example of sweden where retail chains are essentially in control of their suppliers has raised its ugly head in other countries where Kekkilä is operating.

Company has met these challenges head on by introducing service design methodology to their R & D processes. It was intriguing to hear how CEO’s message was in sync with some of the most essential co-creation principles. The development of new services is not going to work unless developers are familiar with the processes they are meant to develop. This is pretty basic stuff but it is unfortunately far away from reality in several companies. CEO shared the podium with an architect Ville Hara who had participated in development process. First thing they had done was to actually learn basics of gardening. After that visits to supplier facilities, industry meetings and Kekkilä’s retailers followed. The best joke of the night was told here; where do you go if you want to be alone? To K-Rauta…

Their first innovation was Garden Shed/Vihervaja (see picture above). It is derived straight from Kekkilä’s brand promise: “We will help you to create a versatile, easily maintained garden that reflects your personality”. It is an ambitious departure from their basic product line which has consisted essentially different kinds of dirt and fertilizers.

At the moment these new designs are not significant in terms of revenue and profit. But CEO saw benefits coming from other areas. Service Design processes have helped company to clarify their strategy. It has also lead to a conclusion that brand and strategy in order to be valid must be synchronized. Again, this is something that many companies are missing.

New products Kekkilä is developing will hopefully in time bring in bigger share of the revenue. This will then eventually fulfill another important goal which is to bring more balance into business by creating several revenue streams. Service design will also help Kekkilä to reach new markets and by innovation bring competitive advantage.

The last interesting part of the seminar was the presentation by Kristian Ranta, the CEO of Mendor. Mendor is relatively new Finnish company specializing in blood glucose-meters. Their trick is to take customer centric approach meaning that meter has been designed users in mind, not as a personal triumph for engineers. The result is discreet device not looking as a “traditional” medical device at all and which encompasses aesthetics, all-in-one and usability with earning logic not too dissimilar of what some of the much bigger Finnish companies are currently trying to achieve.

It was fascinating when Ranta talked about the early phases of their company. It really brought home some of the difficulties start-ups are facing. How to actually realize a good idea? How long does it take to develop something like this? Ranta didn’t go too much into specifics, but Mendor had actively hired people (Ex-Nokia for example) who have extensive experience of working in R & D and understand the process of turning ideas and prototypes into something real. Ranta also mentioned basic service design principles of iteration and user experience. The latter is something that manifests itself in the importance of good user manuals.

Perhaps it can be argued that Mendor blood glucose meters are good example of Nordic School approach to services. Company combines several resources in order to create a unique service to customers that is an answer to their needs. Physical artifact (meter) together with cloud based measurement program that keeps medical personnel aware of patients situations coupled with design that is both stylish and discreet create a service that is expected to get much more common in near future.

The earnings logic is based on recyclable needles and sample pads which users need to buy independently. The device itself is provided by local health authorities and is basically sold by Mendor with cost price.  Mendor does not engage in retail business only wholesale.  This is actually something that companies like Kone and Wärtsilä also do. Increasingly the profit is created with the help of service by first selling customer solutions like in Kone’s case management of people flows or in Wärtsilä’s case eco-friendliness and life-cycle management. After that, there is a global service infrastructure at hand to offer maintenance during the course of products lifecycle.

All in all this was a useful seminar to attend. What was refreshing was the level of practicability reached in above mentioned presentations. Having heard “a few” service design related presentations during last couple of years I must confess that some of them have had very little to do with reality. Therefore it was very useful to hear what was behind the decisions that Kekkilä and Mendor for example made when starting to pursuit their individual strategies.  This for me was the ultimate issue of this seminar.

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