A good corporate transformation story is hard to find. But over the past several years, IBM has managed to buck that trend - and they aren’t done yet.
IBM’s pivot from standalone, siloed business units to a cloud-first and AI strategy has been an enormous transformation. And according to Karel Vredenburg, it wouldn’t have been possible without embedding design thinking into the company culture - and innovating on the methodology to make it uniquely their own.
As Director, IBM Design and the head of IBM Studios Canada, Karel has introduced and taught IBM Design Thinking to hundreds of companies and practitioners around the world.
We sat down with him in prep for his talk during Intrapreneurship Conference Toronto to get his take on what design thinking is (and is not), how IBM Design Thinking is different, and how they use it to ensure IBM stays responsive and relevant - now and in the future.
What is the most exciting thing you're working on at the moment?
Right now, we’re focused on bringing all parts of the company together on how we approach and engage with clients. It’s a leg of our new transformation program, which started about 4 and a half years ago - I call it ‘putting design thinking on steroids’.
IBM was actually the first company in the world to introduce a company-wide design program, in 1956...that was before my time! Over the years there’s been focus on our design programs, but this most recent one is the most dramatic we’ve ever done.
We started by introducing a whole new approach to building a culture of design and design thinking across all of IBM, first with our product divisions and then with our business services, our technology services, and our sales teams.
They all orchestrate together to leverage our version of design thinking - we call it IBM Design Thinking - in the way that we interact inside the company and with clients. No matter what it is that we're talking about, we focus on driving innovation by assuming that everybody uses our version of design thinking, whether that's an innovation in product, whether that's an innovation in services design, whether that's an innovation in the way we actually approach the market. So the last leg of that, bringing it all together, is what I'm focused on this year.
So what is IBM design thinking? How is it different than generic design thinking?
When we started this program, we first looked around externally, to see what was the best out there, what people were doing. But it turned out that the best was already here.
We had acquired a company called Lombardi Software some 3 years before we started this whole program. Phil Gilbert, who headed Lombardi and is now my boss, had run a few startups and innovated on design thinking along the way, really further enhanced it. Phil was asked to take over the business unit his company had been acquired into - he took 44 products and simplified them down to 4 products, all the while increasing revenue. Not a bad track record! So we looked at what he was doing and how he approached design thinking, and adopted and further tailored it company wide.
The fundamentals are the same: empathy for users, very rapid Post-it Note exercises, developing ideas collaboratively with teams. The major differentiator is a focus on how this is embedded in a company, and how you actually get alignment.
You don't just have a design team over here that's doing design thinking, and maybe engineering and some business leaders occasionally involved as well. You make sure they orchestrate together, work closely together. All of the relevant disciplines know what their unique contribution is, and we lock that in and align that with the executive organization as well.
Design doesn’t lead it; in fact, we get the business side, management, to lead, so a vice president or a general manager has a role to play rather than just delegating everything to the teams doing design thinking.
When we first introduced this, we would have 3-4 product teams come together for a week to use our version of design thinking on their product, and then they would take these new methods back wherever they were in the world. Maybe a month or two after, we'd ask them: So, how's that going?
And they'd say: We love this stuff, it's absolutely amazing, except the people above us don't get it; we're off doing ethnographic observation to figure out what the problem is and how to go about solving it, but our executives are asking for the high-fidelity prototype of the solution and we don’t even know what the problem is yet! As a result, we launched 1-day workshops for all the executives in the company, beginning with our C-suite.
We’re constantly looking at core elements, like aligning the team on what their overall objectives are, something we call “Hills”. We really focus on making sure everybody is collaborating and iterating quickly, and understands that's expected, and we interlock that through what we call “Playback” reviews with all stakeholders. So it's some enhancements to the base; there's a little more detail than that, but that's the essence.
This transformation, was it a bumpy ride? Or was it fairly simple in terms of acceptance, but difficult because of the sheer scope of it?
It involved about 380 thousand employees, so it's been a fair challenge. But whenever we figured out ok, this is what we’ve got to fix, we had the leeway to make those changes.
We do quarterly pivot meetings with our team. You’d think that a company as large as IBM would have to be slow - well no, you don’t have to.
We look at things like: How are things proceeding? What have we learned in the last little while? What things have worked? What things have failed? And the things that have worked, we can amplify them; the things that weren't working, we can go and fix. We're given air cover, if you will, by our CEO and our board, to really do what's necessary.
Our hiring, for example. We decided we needed to hire a lot more designers, roughly a ratio of about 1:8 designers to engineers to get the right volume of designers with the right skills - which meant needing to hire 1-2 thousand designers.
So we put a dedicated team in place, went to every one of the top design schools around the world, and started hiring. We hired some 1600 designers through this initiative. But while we were doing that, we realized we were kind of light on user researchers, so ok, we've got to go and up that. And then at one point we looked up and said you know, our stuff looks amazing in Photoshop or Illustrator, but when we've actually implemented it it looks like crap - we need to amp up our hiring of front end devs. We changed our focus, and because we were doing this centrally across the company we were able to make those kinds of changes rapidly.
Are you now transformed as a company? How do you know when you’ve made it, so to speak?
IBM has been around for 104 years, so it's had to change pretty dramatically several times in its history. Everything that the IBM company does pretty well is changing, and markets are changing - cloud, analytics, mobile, social, AI - so we knew that we needed to be able to completely turn on a dime. Our CEO actually attributes the success of our transformation to our IBM design thinking methods.
But is that transformation completely done? Well no - but we've been able to move through it much faster.
I see it in our interactions with clients; I spend much of my time with clients, and the difference between what somebody else is doing or what we would have done in the past, compared to the way that we show up now, is huge. It's us now understanding deeply what they want rather than trying to sell them something, for example.
We've also formalized the education inside IBM using these methods, and we now have more than 90 thousand design thinkers that are certified. So we can measure how we're transforming using some of those kinds of metrics. It's definitely still ongoing.
What is the next phase for IBM, for this transformation process?
We're innovating all the time on the practices themselves. My own team, in fact, is looking into how we can use AI underneath all this.
We’re also trying to discern the essence of this approach: which things are the most powerful, and what are some of the holes still in it?
Everybody practices the fundamentals largely the same, but there are areas where I think we're somewhat complacent as an industry. We shouldn’t assume that everything Stanford’s d.school does is the be-all and end-all. We've already innovated a bunch on some of that, but I think there's lots more to do.
Also, as we design more of an AI world, we need to build in other methods to make sure we're actually guarding against biases and the like. There's not an automatic mechanism right now in generic design thinking. We also need to embrace, and designers in general need to embrace, the fact that technologies are changing so dramatically that visual design skills may not be as necessary when most of our world is going to be an ambient audio interface, for example. I think there's huge opportunity, and we as an overall design community have to step up to the challenge and collectively design the next phase.
I often get questions from people wondering what actually happens inside of these corporate labs - so what is happening in your Canadian labs?
We have 42 studios, as we call them, worldwide. We have development labs everywhere, but our studios have a set of criteria that need to be met in order to be a studio. The studio could include designers working on a client engagement, or on the design of a product, or on the design of an internal system, or they could be helping a team, say our HR organization, develop a better way of doing something. My role is mostly worldwide, but I also look after the 4 studios we have in Canada, and I see those as my little incubator to try new things.
I would also mention, in terms of corporate labs and incubators, that you need to think about the organizational structure and the physical structure of your company in terms of how you want to inject innovation.
You can’t just outsource innovation by buying space in an incubator, for example. You need to think through how to inject this stuff throughout the organization.
So we don't have a separate team that does all the innovation; we build it in, and believe that core product design teams, for example, need to be innovating their next release themselves. But yet, there are amplifiers in the system, labs and studios, to generate more of those ideas. I teach a digital EMBA class and I talk about this very thing, because these are the kind of topics that you need to consider as you're thinking about transforming a company. It's not as simple as just adding up separate items - we've got some designers, we’ve got a lab - you've got to think through those.
There's been a few articles - maybe they're just clickbait or folks wanting to grab attention - claiming that design thinking is a fad or doesn’t really work. Have you taken any of these critiques to heart, or do you think that they are off-base?
Interesting that you should say that, because my next blog post actually is on that topic.
I think these articles come from a combination of misunderstanding, honest authentic misunderstanding, and then a little bit of healthy clickbait, because everybody's trying to differentiate themselves.
One in particular I'm thinking of was a talk by Natasha Jen from Pentagram called Design Thinking Is Bullshit. It was basically a designer saying: You don't need everyone else to do this stuff, we designers, we know everything, just trust us, we've got the right intuition. I think that's all wrong, actually. You need to have designers, absolutely; but, our designers are more empowered to practice their craft when the rest of the company is using design thinking.
I believe in the t-shaped person, and I think the horizontal stroke of the t for every discipline, including design, needs to be knowing and doing design thinking.
I think, partly, designers and some design agencies are trying to reclaim some power that they may have had before, but I have no patience for that. I've seen the power of doing this stuff across disciplines. I should mention though, and I blog a fair bit about this, there are some major things that people do wrong when they introduce design thinking. I’ve spent time with clients who’ve hired designers, created a beautiful space where everything looks cool, they might even have invested in putting a bunch of their designers in a cool startup-type space - but they're not seeing the results.
I think a lot of people get the doing, the practice, of design thinking wrong as well; like, equating doing a workshop or using Post-it notes with doing design thinking. You can do design thinking without all of that. It's mostly a state of mind, it's the approach that you take to something.
And that comes back to what I was talking about earlier, about really embedding this into the culture. You can't delegate this out and think oh, ok, some innovations are going to happen over there. It doesn't work that way, in my experience.
