Content uploaded by Gunnar Prause
Author content
All content in this area was uploaded by Gunnar Prause on Feb 24, 2017
Content may be subject to copyright.
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
How to Integrate Design Management Concepts into SME?
-
Experiences from the South Baltic Sea Region
Gunnar Prause, Professor
Wismar University / Tallinn University of Technology
Philipp-Müller-Str. 14 Wismar Germany
Tel: +49 178 280 4882 E-mail: gunnar.prause@hs-wismar.de
Achim Hack, Professor
Wismar University / Faculty of Design
Philipp-Müller-Str. 14 Wismar Germany
Tel: +49 3841 7537 289 E-mail: achim.hack@hs-wismar.de
Laima Maknyte, Researcher
Wismar University / Wismar Business School
Philipp-Müller-Str. 14 Wismar Germany
Tel: +49 3841 7537 634 E-mail: laima.maknyte@hs-wismar.de
Sub Theme: Entrepreneurship, Innovation and Social Responsibility.
Objectives: Design Management is a high-ranked topic on the entrepreneurial agenda, but the
proposed concepts for implementing SME – suitable design management concepts are often too
academic and abstract. In this respect, the discussed solutions appear to go beyond the needs of
entrepreneurs and SMEs. Therefore, in summer 2011 the EU has approved the project
DesignSHIP with partners from Poland, Germany and Sweden in order to develop and test a
cross-border design management training programme for SMEs in terms of the needs of
entrepreneurs.
Theoretical Background/Previous Practice: Design Thinking (Brown 2008, Brown and Wyatt
2010), Open Innovation (Bartl 2008, 2010) and Design Management (Lüdgens and Piller 2010) are
well known topical and powerful concepts focusing on entrepreneurship, innovation and design,
especially in the context of an inter-cultural environment like it is in the South Baltic Sea Region.
Unfortunately, when it comes to the implementation of SME-suitable design management
concepts, few success stories can be located. Within the DesignSHIP, new ideas and concepts are
developed and tested to facilitate the realisation of new SME-oriented design management
concepts by integrating cross-sectoral and inter-cultural groups of academics, graduates and
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
entrepreneurs operating in the design sector as well as to generate sustainable design
management concepts for SMEs aimed at knowledge transfer and exchange of good practices.
Approach/Methods: In a series of trainings across the Southern Baltic Sea, there has been
developed, tested and improved a new SME-oriented design management concept based on open
innovation and design thinking approaches in cross-sectoral and inter-cultural groups of
academics, graduates and entrepreneurs. The project work follows the evolutionary approach that
is supported by semi-structured interviews, qualitative and quantitative surveys and expert
assessments. The presented results are based on summary reports of the empirical activities.
Results/Insights: The paper presents the first results of the DesignSHIP project by highlighting
the expectations and needs of entrepreneurs concerning the SME-oriented design management
concepts and implications how to develop sustainable design management skills and structures
inside SMEs in order to induce innovation and growing entrepreneurship.
Implications: Currently, design management enjoys growing importance on the entrepreneurial
agenda, but most approaches and concepts are oriented on large-scale companies. When it
comes to realistic and feasible design management concepts for entrepreneurs it is evident that
special SME-suitable implementation concepts are hardly to find. This is especially the case in an
inter-cultural environment. The research activities and results of the DesignSHIP project will bring
out SME-suitable design management concepts which are tested and oriented according to the
needs of entrepreneurs.
Keywords: Entrepreneurship, Design Management, Inter-cultural Innovation, Open Innovation,
Cross-sectoral Innovation.
Abstract
Innovation is the key driving factor for the economic grow and social wealth. Innovative products
and services emerge more often as a result of cross-sectoral combination of technologies, design
and business models. Already Joseph Schumpeter emphasised the importance of innovation for
entrepreneurial activities by incessantly revolutionising economic structures in order to get better or
more effective processes and products. His famously words concerning “creative destruction”
stressed already the close links between entrepreneurship, innovation and design.
In the meantime, Design Thinking, Open Innovation and Design Management are high-ranked
topics on the entrepreneurial agenda, since they are representing broadly recognised key driving
factors for economic grow and social wealth. Innovation emerges often as a result of cross-sectoral
and cross-cultural combinations of technologies, design and business models. However, the
proposed concepts for implementing design management are often too academic and abstract and
do not take into account the special needs of entrepreneurs.
In order to improve the situation the European Union approved in summer 2011 within the frame of
the South Baltic Programme the INTERREG IVA project DesignSHIP involving four partners from
Poland, Germany and Sweden represented by science park, scientific organisation, universities
and non-profit organisation acting in design sector. The project is led by the Gdynia Innovation
Centre in Poland.
The overall idea of the project is to facilitate the realisation of new SME-oriented design
management concepts by integrating cross-sectoral and inter-cultural groups of academics,
graduates and entrepreneurs operating in the design sector and to develop sustainable design
management concepts for SMEs aimed at knowledge transfer and exchange of good practices. In
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
a series of trainings across the Southern Baltic Sea involving cross-sectoral and inter-cultural
groups of academics, graduates and entrepreneurs, there has been developed, tested and
improved a new SME-oriented design management approach based on open innovation and
design thinking concepts. The project work follows the evolutionary approach that is supported by
semi-structured interviews, qualitative and quantitative surveys and expert assessments. The
results are based on summary reports of the empirical activities.
The paper presents the first results of the DesignSHIP project by highlighting the expectations and
needs of entrepreneurs concerning a SME-suitable design management concepts and implications
how to develop sustainable design management skills and structures in SMEs in order to induce
innovation and growing entrepreneurship.
1. Introduction
In recent years cross-sectoral discussions on innovation are gaining importance in the context of
entrepreneurship. Especially an integral innovation approach of design and technology is
considered as a key driving factor for the economic grow and competitive advantage (Lüttgens and
Piller, 2010). One important argument for combining design and technology activities in product
development can be found in the fact that clients perceive products as a bundle of properties,
where design emotionally attracts and influences the clients, whereas technology generates
satisfaction during the later usage of the product. This approach already explains that it is
necessary to follow an integral concept of design and technology in innovation in order to raise
customer satisfaction and avoid customer disappointment, since the design-caused quick
emotional effect of a product concept will be successful on the market only if the technology is able
to affirm rationally the emotional expectations by positive experiences during the product life time
(Wood et al., 2011).
When it comes to the assessment of the new design management concepts, two studies reveal the
economic success of design-oriented innovation strategies. In the first study, new car models were
analysed in the German market between 1978 and 2006, where for each model launched the
impact of new innovative design features on sales figures has been investigated. By assessing
“design newness” and technical innovations of new models it was possible to prove that both
design and technical innovation are drivers for sales, but the temporal impact of design and
technology differs. Whereas design innovations enjoy an immediate impact on sales, which last
over the whole product life cycle, technical innovations deploy their influence with delay and the
impact fades out over the product life cycle (Talke et al., 2009).
In a second study, the Spanish and Italian home equipment companies have been investigated,
and it turned out that a strong integration of dedicated design activities into the R&D process
shows a significant positive impact on the business success, which stresses that the impact of
design on business success is not a random success, it is a result of a systematic process (Chiva
and Alegre, 2009). The results of Chiva and Alegre also unveil that higher R&D expenses alone
are not sufficient for business success. More important are design management skills, open
innovation concepts and integration of design and R&D processes. Hence, the development of
design management skills can contribute to the success of new product development and
company success.
By building upon past and recent trends and multifunctional deployment of design management
within enterprises, design management has been perceived as very narrow and specific or very
comprehensive phenomenon. Since the present paper examines the integration of design
management into enterprises activities and its role for its performance, i.e. the strategic
perspective, design management implies a business strategy for corporates. Broadly, design
management can be understand as all methods, means and tools referring to planning, realisation
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
and controlling of the effective use of design to achieve business objectives, where design
management is perceived as holistic process extending across all design fields aimed to create a
homogeneous image of an enterprise (Kortwig, 1997: 17-19). Definitions of design management in
similar fashion are to be found in numerous other writings, where design management is conceived
as a series of organisational and managerial skills and practices to optimise the design process
(Chiva and Alegre, 2009: 426; Koostra et al., 2009: 9). Consequently, design management has
been narrowed down to the design field and its impact on diverse business practices. By echoing
several studies, design has been deployed to enhance business performance (Chiva and Alegre,
2009; Tether, 2005), to determine design clout on the economic outputs of corporates
(Kretzschmar, 2003; Grzecznowska, 2005), to manage and accelerate innovations (Dickson et al.,
1995; Verganti, 2006; Brown, 2008; Koostra et al., 2009; EU Commission Staff Working Document,
2009) or to gain competitive advantage (Borja de Mozota, 2003).
By bearing on respective thematic literature, it can be stated that within design management array,
design has been perceived and dealt with in a myriad of ways. However, it is obvious that within
design management discourses, design has been considered as a construct used to deduce or
justify respective practices. By contrast, the paper reasons that a different approach should be
employed. It is argued there that design management should be regarded as a manifold process
incorporating design, technology and business-related processes and complemented by design
thinking, open innovation and innovation management concepts as currently popular topics on
business agendas.
Therefore, the key objective of the present paper is to develop and validate design management
concept that, in turn, enables to design solid scenarios for the design management concept
integration into the business activities of enterprises and evaluate the contribution of the design
management concept to the business performance, especially in the face of increasing
competition, when enterprises are searching for new tools and techniques to deploy for their
business and development strategies.
2. Theoretical background
Theoretical background is based on five central approaches, such as the resource-based view
(RBV), design thinking, innovation management, open innovation and sustainable
entrepreneurship.
Following Wernerfelt, the resource-based view provides the perception of corporates as a broader
set of resources from a strategic perspective, i.e. a basis to address key issues when generating
the corporation’s strategy. Regarding the specification of the resource itself, Wernerfelt
understands by a resource anything that can contribute to a strength or weakness of a given
corporation (Wernerfelt, 1984: 172). Barney takes this a step further and provides a more detailed
notion of the resources of a firm. Accordingly, to the potential resources of a particular firm he
allocates all assets, capabilities, organisational processes, firm attributes, information, knowledge
etc., i. e. all potential that, in turn, when controlled by this firm allows it to recognise and implement
strategies that improve the firm’s efficiency and efficacy (Barney, 1991: 101). A clearer notion of
resources can be generated by confronting the perceptions of resources and capabilities, as
outlined by Amit and Schoemaker. By drawing on their observations, capabilities refer to a firm’s
capacity to deploy resources by incorporating organisational processes and are generated by a
firm to provide enhanced productivity of its resources as well as a strategic flexibility and protection
for its final product or service. Moreover, in contrast to resources, capabilities are based on
developing, carrying, and exchanging information through the firm’s human capital (Amit and
Schoemaker, 1993: 35). Regarding differentiation of resources, academic research has provided
with diverse classifications of resources. The paper builds upon the classification shown in figure 1.
Capabilities, like resources, can be differentiated as well.
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
As emphasised by Wernerfelt, resources can generate profits to a specific firm (Wernerfelt, 1984:
172). With regard to competitive advantage, Barney differentiates between competitive advantage
and sustained competitive advantage, where the former emerges when a firm is implementing a
value leading towards a strategy that cannot simultaneously be implemented by any current or
potential competitor. The latter one implies the same attributes as the former one, but in contrast to
this presupposes that a particular current or potential competitor is unable to duplicate the benefits
of this particular strategy implemented by a firm (Barney, 1991: 102). What is of essential
importance in this context is the identification of resources that carry with them potential to
generate competitive and sustained competitive advantage. Following Barney, the focus should be
concentrated on strategically crucial resources that are valuable, rare, imperfectly imitable and
non-substitutable. Provided that a given firm possesses such resources, it is therefore able to
develop resource-based advantages that can be sustained over time (Barney, 1991: 105-106). The
general resource-based view is shown in the figure below.
Figure 1: The Resource-Based View
Source: own draft; based on Barney, 1991 and Amit & Schoemaker, 1993.
The concept of design thinking is crucial for enterprises as well, especially, for their business
strategies formulation and the performance. Similarly as the resource-based view, the design
thinking approach can accelerate the life and performance of the enterprise. As formulated by
Boland and Collopy, design thinking is reflected in management methods and organisational
structures and processes as well as is at the core of effective strategy development, organisational
change and constraint-sensitive problem solving (Boland and Collopy, 2004:17). Similar
observations have been made by a series of scholars (Brown, 2004:22 and 2008:4; Dunne and
Martin, 2007:512; Martin, 2005: 6; Best, 2011:17).
The reasoning behind the increasing design thinking in business and academic circles is that
design thinking contributes to more innovations, better differentiation of brands, faster launch of
products and services on the market as well as improved solutions to social problems (Brown and
Wyatt, 2010: 32). Similarly, as stressed by Buchanan, design thinking has surprising implications
for innovation (1992: 10). What is important in this context is the fact that during the design
processes there is an essential need to consider not only the form and function, but to take into
account distributions channels and other aspects as well, i.e. to bear in mind the whole system
(Brown and Wyatt, 2010: 32).
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
In terms of design thinking as an approach applied in practice, it points to the core of the design
process. From the conceptual point of view design thinking can be regarded as a process, a
system of interfaces or intertwined processes. The scholars distinguish between three of them:
inspiration (1), ideation (2) and implementation (3) (Brown and Wyatt, 2010: 33; Brown, 2008:4).
The design thinking concept, as developed by Brown, is depicted below.
Figure 2: Design thinking concept
Source: own draft; based on Brown, 2008: 5.
Innovation management is usually associated with processes. As coined by Schmitt-Grohe (1972),
these processes incorporate three key phases: idea generation (1), idea analysis (2) and idea
implementation (3) (1972: 52). On the basis of these observations, Benkenstein (1998) has
proposed the following innovation management concept, so-called innovation funnel. By drawing in
his observations, the innovation management model includes four stages: idea generation (1),
research, development and conception (2), product and market test (3) and implementation (4)
(see figure 3).
Figure 3: Innovation management model
Source: own draft; based on Benkenstein, 1998: 700.
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
Following Bartl (2008), open innovation is referred to the concept, which underscores the way of
going beyond the corporate boundaries, i.e. an active strategic deployment of environmental clout
or external factors of influence to increase its own innovation potential. Crucial determinants of
such concept are the shift from the industrial society to the network-based knowledge and
communication society. As a result, innovation occurs and ideas are generated in such a society
through the interactive creation of value. Additionally, open innovation encompasses such
manifestations as to be open for the knowledge of the other, generation of the knowledge as a joint
action as well as the share of the knowledge with the other. Besides, an important role for the
phenomenon open innovations plays the customer. In the course of innovation management, there
was generated a new role model of the customer when developing new products or offering new
services. In this sense, open innovation emerges also when the customer is involved into the
process of generation. Therefore, it is vital to adapt to customers needs and requirements as well
as wishes in the customer goods markets. Furthermore, it is essential to integrate the customer
into the entrepreneurship innovation-related activities as a new external knowledge and ideas
source (2008: 3-4).
Sustainable entrepreneurship is a relative new concept, which can be distinguished from economic
and social entrepreneurship by stressing the efficiency and effectiveness in an inter-generational
economic consideration for the future (Young and Tilley, 2006: 402). Thus, sustainable
entrepreneurship is in line with entrepreneurs heading for profit and improving environmental
sustainability and social conditions, i.e. considering the long-term economic and business
consequences of new venture opportunities (Cohen and Winn, 2007: 35). One important problem
of the on-going discussions about sustainable entrepreneurship is that the existing concepts are
rather oriented on the needs and the situation of larger companies than on reality of the SME
sector. When it comes to the implementation of sustainable entrepreneurship concepts, Gerlach
(2003) proposes three strategies to reach sustainability in the context of entrepreneurship based
on sufficiency, efficiency and consistency (Gerlach, 2003). However, strategies for sustainable
entrepreneurship are not restricted to products, processes and materials. There is also a need for
new business models in order to act competitive with sustainable products. New business models,
i.e. sustainable business models, can deliver business advantages for sustainable products in
marketing even with higher prices which will be illustrated by the following case study.
To keep in line with the sustainability in business, the Sustainable Design Centre in Berlin is a think
tank on sustainable solutions. One interesting sustainable design object is a multiple useable
teapot warmer that is built in small series and consists of high quality steel parts that are only stuck
together. Compared to ordinary product, the price of the sustainable teapot warmer is higher.
Hence, a new business model has to be marketed together with the product in order to support the
marketing strategies. In this respect, the interested client will buy with the product the option to give
back the teapot warmer after a certain time for a fixed price back to the producer in a comparable
way like return bottles. Due to the high quality of the material and the stick-together technology of
the product the producer is able to renovate the return parts and sell them again to the next client
with the same business model. Therefore, this particular product integrating design and technology
along with its specific business model results in a sustainable product that enjoys a multiple
product lifetime and becomes competitive compared to traditional products that are bought and
trashed after usage (Feucht, 2012).
Taking a closer look at theoretical concepts and approaches under scrutiny, these tend to interface
at the respective points or to address same or similar questions from the corporates perspective.
For instance, interdisciplinary nature, idea generation and implementation (Brown, 2008;
Benkenstein, 1998), a broader view on the enterprise (internal and external factors), needs for
solving problems, intertwined and on-going process from the fields of design, technology or
innovation, and business, the sustainability factor etc. have been located in particular discourses
regarding these concepts. However, what is at issue here is whether and how these introduced
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
concepts and approaches elucidate and underpin the design management concept presented in
the following.
3. Design Management Concept
To begin with, the design management process starts with the specific needs. More specifically, in
this particular context, it can be referred to specific triggers that can induce the design
management process. Based on the specific enterprise-dependant situation, possible triggers can
be specific problem the enterprise faces, for instance, dissatisfying business performance,
increased competition on the market, decreased financial profits, needs to launch new product or
service etc., or a more broadly defined problem, such as search for new opportunities for the
enterprise, to maximise the benefits, to develop a new business strategy or a new way the
enterprise is seeking to pursue. Broadly defined problems can be a result of changed
environmental conditions, for example, new environmental regulations, changed customers and
users behaviour etc. To recall the observations by Boland and Collopy on design thinking
approach, it can accelerate effective strategy development, to undertake organisational change or
just to solve any existing problem (Boland and Collopy, 2004: 17). By echoing Brown, the design
management process can be induced as a result to react on something, either it would be the
market, consumers or something else (Brown, 2008: 4). Therefore, this particular process, which
can be generally labelled as problem formulation can be referred to in this particular context as the
stage 0 (see figure 4). Brown and Wyatt define this process as the first stage of the design thinking
concept, namely, inspiration space. The inspiration space implies the problem or opportunity that
motivates people to search for solutions (Brown and Wyatt, 2010: 33), whereas Benkenstein labels
it as idea generation phase (Benkenstein, 1998: 698).
Afterwards, the design management process turns to the analysis, which, in this particular context,
encompasses the first and, to a certain extent, the second stage (stage 1 and stage 2). To be more
precise, at the core of the respective analysis are the resources and capabilities as well as
environmental clout or external factors of influence. Afterwards, the results gathered from the first
stage are subject to the further examination on the second stage (see figure 4). In order to
understand and follow this perspective, there is a need to consult the resource-based view.
As coined in several treatises (Rasche, 1994; Barney, 1991; Crook et al., 2008), the resource-
based view facilitates the development of a strategy for a firm. By echoing Peteraf, the momentous
potential of the approach prevails in applying it for corporate strategy, issues referring to the scope
of the firm as well as for single business strategy (Peteraf, 1993: 187). In this light, it is reasonable
to start the generation of a particular forthcoming business strategy by, first, identifying relevant
resources. This process shapes the first stage of the design management process (figure 4). The
point here is that an enterprise should strategically start with its internal analysis, i.e. recognise
design management-relevant resources residing in design, technology and business fields, that, in
turn, should meet four fundamental requirements, as determined by Barney (Barney, 1991: 105-
106). The reasoning behind the idea to enhance the resource bundle by bringing in the fields of
technology and business is that an enterprise as a complex and multilayer structure is equipped
with resources that can be allocated to the fields of design, business and technology. Although
there has been much discussion within the research discourses over the differentiation of
resources in terms of types (Wernerfelt, 1984; Barney, 1991; Grant, 1991; Amit and Schoemaker,
1993; Hoopes et al., 2003), the paper offers a different perspective on the typology of potential
resources. With regard to design management, the paper argues for classifying particular
resources into three respective groups: creative (1), business (2) and technological (3) resources.
Accordingly, all resources that fall within the scope of design and, respectively, business and
technology will be located to the particular type of resources. What creative, business and
technological resources can be identified is subject to a given enterprise, to a particular context
etc. A key implication in this regard provide Crook et al. arguing that despite what type of a
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
resource has been identified, resources do relate positively to performance regardless whether it is
referred to resources in manufacturing versus service firms, diversified versus undiversified firms,
and large versus small firms. The key argument is here that the link between performance and
strategic resources is essential and relatively constant in numerous contexts (Crook et al., 2008:
1050-1052).
To optimise the concept of design management, the paper argues that the resource base should
be enhanced by respective capabilities. An important issue in this particular context is the notion
that capabilities are frequently developed in functional arrays, for instance, brand management and
marketing or when combining physical, human and technological resources at the corporate level
(Amit and Schoemaker, 1993: 35). Moreover, since within the RBV literature there emerged a
distinction between resources and capabilities and their distinct role, capabilities do underpin the
resource base (stage 1). Besides, the incorporation of capabilities appears to be necessary, since
by echoing observations generated in the previous section, capabilities are of vital importance, as
they reveal a firm’s capacity to deploy resources identified. Similarly, as in case of resources, it
was decided here to narrow down the typology of capabilities to the three groups: creative (1),
business (2) and technological (3). To underline, each type of capabilities implies a capacity
mixture of people and practices to enact these respective capabilities (Hoopes et al., 2003: 890).
To exemplify, creative capabilities might imply designers and creative-based practices or even
design department within a firm. Consequently, these capabilities individually or together can be
valuable for their own or increase the value of resources. Within business capabilities, there can be
mentioned, for instance, marketing, managerial, organisational, controlling etc. capabilities. Finally,
product innovations or specific manufacturing practices can be ascribed to technological
capabilities.
To complete the stage 1 of the design management process, it is inevitable to not restrict it to the
internal analysis of a given enterprise (identification of resources and capabilities). By contrast, it is
emphasised here that environmental conditions do have respective impact on the identification
process of resources and capabilities. This statement is justified as follows. It might be accurate to
underline that a successful performance of a firm is determined by the industry structure in which
the firm is operating, and strategic behaviour of the firm (conduct) within this industry as well
(Meffert and Burmann, 2002: 38). In addition, following Porter, a sustained performance of a firm
derives from relevant competitive advantages gained due to appropriate positioning of this firm in
attractive industries (Porter, 1996: 61). As a result, a firm’s performance is significantly subject to
external factors, i.e. opportunities and threats the firm faces with in its competitive environment,
thus generating an outside-in or, respectively, external perspective. By drawing on these
observations, it is argued here that the focus should be on both internal analysis of the enterprises
strengths and weaknesses as well as external analysis of opportunities and threats. From the
strategic point of view, essential in this context is the recognition of both perspectives, since both of
them follow the same path, namely, to realise competitive advantages of a given firm (Möhlenbruch
and von Wichert, 2007: 2). Beyond this, as emphasised by Meffert, what resources tend to be
economically relevant it is the market that decides (Meffert, 2004: 297). By drawing on Wernerfelt,
it is worth to recall the duality between markets and resources (Wernerfelt, 1995: 172). Besides,
when recalling the concepts of design thinking, open innovation and innovation management, an
essential role for the identification of external factors of influence do play customers and users,
thus facilitating and accelerating the design management process. As has been pointed out by
scholars, it is vital to consider and adapt to customers needs and requirements when solving
existing problems or searching for new opportunities (Brown, 2004, 2008; Best, 2011; Benkenstein,
1998; Bartl, 2008). In this light, by incorporating and combining both internal (resources and
capabilities) and external (environment, markets, consumers, customers, users etc.) perspectives
to a particular enterprise, both approaches enable to generate a solid and balanced stage 1.
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
Turning now to the stage 2, particular resources and capabilities should be recognised as a whole,
coherent and consistent. It should be treated as a complexity. Of particular importance is in this
regard the interplay and mutual complementation of each bundle of resources and capabilities. To
recall the previous statements, stage 2 entails an analysis that has been started on stage 1.
Besides, the stage 2 can refer to the analysis of the first results gathered during the first stage. To
compare with other relevant concepts and approaches adapted here, the design thinking concept
refers in this case to the ideation stage, whereas the innovation management model incorporates
the conception and testing phases. However, also the stages or phases have been labelled
differently in different context, when compared to the stage 2, as proposed here, all these appear
to yield sound and similar reference potential. More precisely, in this particular case, it is the
interplay phase meant. It was labelled in a broader sense, since it may imply the interplay of
diverse resources, capabilities and external factors. For instance, human capital, when designer,
engineer and economist are working together (or are involved into the analysis process, stage 2)
on the same problem solution or a new perspective / opportunity. In other cases, the interplay may
refer to tangible or intangible resources, capabilities, when developing a new product or a service,
respectively. On the contrast, in design thinking discourses, similar processes have been labelled
as the ideation phase, i.e. phase starting after having observed and done specific case-based
research. During such ideation phase, there are addressed such processes as, for example, going
through a process of synthesis in which the first results are distilled, or multiplication of the options,
generation od alternative choices and visions (Brown and Wyatt, 2010: 34). Finally, in the classical
innovation management model, similar processes may expand over two stages, i.e. research,
development and conception stage as well as product and market test stage, since they both are
dedicated to examination of either the idea generated or the first prototype developed.
(Benkenstein, 1998: 699).
In response to the observations gathered from the respective concepts and approaches, three
particular realms have been conceptualised at stage 2: creative, business and technological realm.
In concrete terms, within each realm, there meet, by drawing on Barney’s observations (1991), all
assets, capabilities, organisational processes, firm attributes, information, knowledge that can be
ascribed to this particular array. In this light, it is argued that the consistent, coherent, balanced
and manifold interplay of three arrays can result in a stage 3, which is called in this respect the
implementation stage. Hence, the interplay can result in diverse outcomes. Essential here is
therefore what problem or idea formulation was undertaken on stage 1. If, for instance, on stage 0
there was articulated the need for changes in a product or service or the response to launch a new
product or service, then the result on stage 3 could be the changed or new product or service,
respectively. In this particular context, there can be three possible results: product or service (1),
solid business strategy for an enterprise (2) and emergence of a brand (3) thus paving the way for
the future development and contributing to the performance of the particular enterprise (see stage
3). As a result, based on the initial situation, the outcomes of the interplay process can be either
very specific or very broad. Similar observations have been located in design thinking and
innovation management concepts. By echoing Brown and Wyatt, in the implementation space the
ideas generated are turned into actual products and services that, in turn, are accordingly tested,
iterated and refined (Brown and Wyatt, 2010: 35). Similarly proposition has been made by
Benkenstein, since the scholar points out that implementation stage deals with the placement of
particular products or services on the market (Benkenstein, 1998: 700). As it is apparent from the
comparison, both observations from Brown and Wyatt as well as Benkenstein do reveal nearly the
same reference base.
To finalise the perception of design management in this particular context, on the basis of the
design management concept proposed (see figure 4), design management can be defined as a
coherent and manifold development process of an enterprise, whereby all strategically essential
methods, means and tools from the creative, business and technological realm are accumulated
and deployed effectively. Similarly, but in other words, design management refers to the process
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
that starts with the problem / target or idea formulation, then turns to the resources, capabilities
and external factors identification and analysis phase, which results in the following interplay phase
with the analysis at the core, and is rounded out by the implementation stage with the results that
reflect the formulations made within the first stage, whereby design management process reveals
the capability to contribute to the competitive and, in turn, sustained competitive advantage.
Advantages of the design management concept can be articulated in the following way. First, the
design management concept enables its flexible application. When scrutinising the concept, it has
been frequently advocated that the concept is oriented on enterprises despite their size, industry in
which they are operating and other preconditions. Second, the concept has unveiled the interface
between diverse approaches and concepts adapted here. Finally, it underpins the idea of design
management as a coherent and manifold process, thus simplifying the generation of a business
strategy.
Figure 4: The design management concept
Source: own draft; based on the concepts adapted.
4. Methods
In the phase of the research process aimed at designing solid scenarios for the design
management concept integration into the business activities of an enterprise and evaluating its
contribution to the business performance, the paper has pursued a manifold research path,
whereby diverse research methods have been combined with the respective research approach
and research tool. Five techniques were employed in exploring the objectives of the present paper:
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
Research types: analytical, qualitative, empirical, practice-based
Research approach: qualitative
Research methods: descriptive and qualitative – case studies, semi-structured interviews,
expert assessments, workshop presentations and observations
Research tools: modified design management concept
Research scope: 2 training sessions in Wismar (April 2012) and Gdynia (July 2012).
The reasoning behind the selection of the following techniques in the research process is
elaborated in the following.
Regarding the research types, the paper has chosen analytical, qualitative, empirical and practice-
based way, since during the research process the facts and empirical evidence gathered were
appropriately analysed and subject to a critical assessment. Since there were used qualitative
research methods that were applied during the DesignSHIP project implementation stage, the
research process may be regarded as qualitative and practice-based. Empirical is the research
conducted in a way, since the research process was built upon regional / local case studies (real-
life scenarios), observations, assessments and other types of evidence gathered in the frame of
the DesignSHIP project. As a result, at the core of the research process is the qualitative research
approach. To underpin these statements, qualitative research approach has been frequently
utilised for the research purposes within academic design management research and related
discourses, e.g. Borja de Mozota, 1990; 2006; Hart, 1989 and a series of studies conducted by the
Design Management Institute (DMI), USA.
Similarly as in case of the research approach, design management related academic writings
usually deploy a case study, for example, studies conducted by the DMI, or Borja de Mozota, 2006.
In terms of the research methods utilised in this paper, the paper follows descriptive and qualitative
research methods, a case study being as a point of departure within the research process. In this
light, the EU cross-border project “DesignSHIP – Integration of Students, Graduates and SME’s in
terms of Industrial Design Management” within the South Baltic Cross-border Co-operation
Programme 2007-2013 serves as a case study for the present research purpose. Additionally,
during the implementation phase of this project there were utilised regional / local case studies
referred to as the real-life scenarios, semi-structured interviews, expert assessments, workshop
presentations and observations. The body of empirical evidence resulted from the application of
the respective methods was gathered within the time frame from April to July 2012, thus generating
quite short-term research scope. Finally, the design management concept introduced in the
previous section was applied as a research tool. It may be stated, however, that the concept in
question was slightly modified, since it has been utilised within the DesignSHIP project for the
educational and training purposes. The modifications will be discussed after having introduced the
case study more in-depth.
The INTERREG IVA project DesignSHIP was approved by the European Union in summer 2011
as a response to the need to integrate young current and future professionals, start-ups and SMEs
into the design management-related discourses, i.e. to exchange and transfer the knowledge of
implementing design management concepts and skills gained into the business activities. Besides,
it was argued that the deployment of design management techniques and tools in the South Baltic
Sea Region (SBSR) is distributed very uneven. While some SBSR regions take a leading position
in the field of design management, others do lack sound design management-related knowledge
and good command or capabilities of utilising it for specific purposes. Therefore, the DesignSHIP
project that has been launched last year should serve as a solid breeding ground to tackle these
particular irregularities prevailing in the region and to explore how design management can meet
the challenges and bottlenecks faced in terms of business performance, increased competition etc.
as well as to boost the competitiveness, economic and social innovations in the SBSR leading to
more sustainable development. The objectives set will be implemented in the course of
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
interdisciplinary education and labour trainings, knowledge transfer and exchange of best practices
among young students, young professionals, start-ups and SMEs from the fields of design,
technology and business through stimulating the design management concepts in the SBSR. As a
result, the DesignSHIP project may be regarded and labelled as a laboratory to test and employ
the sound design management concepts as well as to strengthen the regional competence and
potential in the field of design management.
In this light, the design management concept, as proposed in chapter 3, has been introduced and
applied in the DesignSHIP project. Since it has been planned to employ the concept for education
and training purposes during the training sessions, the concept was subject to some adaptions.
The training session in Wismar has made the use of the adapted concept for the first time.
Respectively, in order “to practice” design management, the design management concept has
been prepared for the training sessions to be employed as a process, which passes through three
respective arrays of design, technology and business, whereby the process itself has been labelled
as a design management consultation carried out by five diverse interdisciplinary groups consisting
of graduates, young professionals and representatives of start-ups and SMEs. The interdisciplinary
nature of each consultation group is ensured in a sense, since each group is mixed of designers,
engineers and economists. The consultation groups are counselled and coached by experts and
professionals from the fields of design, technology and business. The applied design management
concept or, in other words, the design management consultation starts with an analysis of three
arrays of a particular enterprise and results in a generation of the enterprise development concept
encompassing the fields of design, technology and business. Regarding the time frame, the design
management consultation is limited to 3-4 days. For the design management consultation, there
are utilised regional or local case studies. More specifically, design management consultation is
undertaken for an enterprise from the location where the training session is undertaken.
Consequently, each design management consultation yields different results in respect to a given
situation. In project implementation-related discourse, the particular design management
consultation embraces workshops, interim and final participants presentations of enterprise
development concepts and their evaluation, expert observations and assessments. In such a way,
the design management consultation ensures the education and training of participants. What
results design management consultations and, respectively, the design management concept
yielded in Wismar and Gdynia is discussed in the following chapter.
5. Findings
Although the training sessions within the DesignSHIP project have been implemented in Wismar
and Gdynia, a special focus in the present paper has been laid on the findings from the first
training session. Nevertheless, the results gained from the second training session in Gdynia are
discussed too. However, the scope of the results is limited due the fact that the last training
session in 2012, which takes places in Stockholm, will be carried out as continuation of the second
one. As a result, the second training session enabled to analyse and evaluate only first
observations. The findings are presented in relation to the effects of the training sessions on the
four key determinants:
(1) Applied design management concept
(2) Participants of the training sessions
(3) A given enterprise
(4) Perceptions towards design management.
Training session in Wismar
(1) Applied design management concept
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
The implementation of the design management concept in Wismar, i.e. undertaken consultation in
terms of design management by single groups resulted in generating essential conditions and a
basis for the future development of a given enterprise (including all possible outcomes, i.e.
products, business strategy of a given enterprise and emergence of a brand). It may be stated,
however, that the development of a given enterprise was concentrated more towards the aim of
how the enterprise may evolve into a brand. Here, it was argued that the design management
process results into a brand in an optimal way (see figure 4). This perspective has been focused
on as a response to the working approach adapted. More specifically, the starting point of the
analysis of the involved enterprise was the marketing (outside-in perspective) and management
(inside-out perspective) relevant aspects, i.e. the perception of a given enterprise with its products,
management and business structures internally and externally. At the core of the design
management process were addressed objectives, such as how a given enterprise might be
transferred into a brand and what possible feasible way should it pursue etc. Bearing in mind these
observations, the working approach in Wismar was to solve the enterprise marketing and
management-related objectives with a strategy of design process, i.e. to take into consideration the
enterprise as a complex system, as a unity (here, in parallel with the design thinking approach, as
introduced by Brown, 2008) and to scrutinise it with the design tools. In this sense, the working
approach adopted in Wismar refers to “designing the management process”, whereby design is
considered as a significant creative factor of all three fields that incorporates design-immanent,
technological and business structures. In this respect, the working process was split among and
implemented by the five interdisciplinary design management consultation groups. Analytical
phases were undertaken by employing the so-called checklists (described in the following).
Afterwards, the results gathered from the analysis phases contributed to the problem formulation,
whereby each particular design management consultation group arrived at a different enterprise-
oriented problem formulation. Hence, different problem formulations led to different results, which
are reflected in the group presentations (compliance with the design management concept, figure
4). Moreover, since there was followed the design-oriented working approach, the group work was
controlled in relation to the specific situation, i.e. the objective was not clearly defined, and the
groups controlled their work mutually. In other words, due to the interim presentations of the design
management consultation teams in plenum, the teams were able to reflect upon and criticise
constructively each other achievements. Besides, the interim presentations and internal feedback
rounds from group members with diverse disciplinary background within the groups enabled to
crystallise and articulate the problem more precisely. The final presentations resulted in scenarios
or directions proposed for the involved enterprise. These proposed solutions, as discussed below,
were supported through internal feedbacks from the experts following the group work and giving
feedbacks, thus acting as coaches for the internal feedback rounds. In order to ensure the
multidisciplinary character, the expert team was interdisciplinary as well, ranging from designers to
economists and managers. As a result, this revolutionary approach led to the following findings.
In terms of the implementation stage (figure 4), there were consolidated perceptions that a brand
involves much more than only the field of design. Concentration of the focus nearly only on design
may negatively affect business practices. By echoing the observations of experts, the designer,
economist and engineer should work together for a specific purpose as well as to represent an
enterprise as a complex structure. Besides, by combining structures from the design, technology
and business field, an enterprise may be perceived as a consistent and coherent entity.
Nevertheless, this last observation may be subject to criticism, as nearly in many SMEs, it is the
manager who takes almost all decisions, either they would be design or technology-related. It may
be stated, however, that there is no doubt about more similar limitations. But turning back from this
excursus, by deploying the design management concept that passes through all stages and
integrates the creative, technological and business realm, it is possible to trace the directions of an
enterprise to become a brand. In other words, brand functions only with solid technology (high
product or service quality), enterprise structures and professional appearance or perception
externally.
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
Furthermore, the design management concept, as it is apparent from the training session and the
conducted design management consultation, implies a consistent and coherent, non-hierarchical
and multidisciplinary interplay of design, technology and business. As a result, the undertaken
design management consultations clearly contributed to the facilitation of interdisciplinary teams.
To be more precise, respective design management consultations demonstrated how does the
bringing together designers, engineers and economists function and can be utilised efficiently. The
interdisciplinary groups were sensitised to reflect upon and recognise that a designer, an engineer
and an economist do possess a different working approach, a different way of thinking and speaks
specific different language. Hence, the design management consultations by the interdisciplinary
teams made a contribution to understand them that there is no common language when working
on a specific problem, project, product development etc., but there is an essential need to find a
common communication basis. Consequently, of a significant importance has been to recognise
the differences of the other and to make them useful for own process implementation. These
implications can be underpinned by the observations from participants and experts. As has been
pointed out, an important implication of close dovetailing of the design, technology and business
realm is the communication within an enterprise, i.e. cooperation and communication as well as
mutual interdependence patterns between designer, engineer and manager.
Finally, the design management consultations (in total 5), as carried out by five consultant groups,
worked out in Wismar a list of measures for possible development scenarios of a given enterprise,
which, in turn, can employ them in order to develop and become successfully marketed in a way
that appears permanently profitable. The key clue is that there have been involved multidisciplinary
teams into the design management process. A significant excursus might be made here when
echoing some topical academic writings and papers. As pointed out by Kotler and Rath, a common
mistake of the firm’s management is to bring designers into the development process to late or to
bring the wrong type of designer (Kotler and Rath, 1993: 19). Similar propositions can be found in
writings of Brown (2008) and Ott (2005) underscoring that neglect of the coherent, consistent and
simultaneous interplay of the creative, business and technological realm may jeopardise enterprise
business performance what, in turns, impedes concrete performance gains. By bringing the
designer, following Kotler and Rath (1993), not in the first stage when the idea generation process
occurs, but in stage when the product (problem etc.) development process is carried out, can have
several implications. To exemplify, it is mostly hard to change the design-related attributes, such as
the logo, the enterprise name or its marketing activities when the enterprise is operating on the
market, as reflected upon by experts on the basis of the enterprise analysis.
(2) Participants of the training session
Clear implications have been drawn up in relation to the participants of the training session in
Wismar. Based on the expert evaluations and observations, the working approach adapted
resulted in several advantages. Although the time frame for the design management consultation
for a given enterprise was quite limited, the participants managed to solve to key objectives.
First, participants were able to undertake both fast and in-depth analysis of the enterprise
structures (management, marketing etc.) within three realms of design, technology and business.
An important aid in this particular case was the so-called checklists. To give more detailed
information, each of the checklists was comprised of questions, statements etc. that pinpoint
particular resources, capabilities and external factors of influence (e.g. consumers, market
environment etc.) of an enterprise that may to reside in all three fields. Consequently, each design
management consultant or, in other words, participant dealing with the analysis of the involved
SME, was provided with three checklists. These resources, capabilities and external factors of
influence located in the respective checklist served as a trigger to start the analysis. On the basis
of the checklists and from the analysis it was apparent that the most apparent and tangible field
was the design one. The rationale behind this observation may be that the design reflects not only
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
the decisions made by the decision maker of the given enterprise. On the contrary, design
witnesses both, decision of the management, the product and the communication of the enterprise.
Second, the design management consultations, as implemented by the participants, resulted into
draft proposals / agendas / scenarios that, in turn, may serve as a trigger for the new orientation or
direction of the enterprise. To underline, the key result was to provide the enterprise with the new
possible directions towards the design management strategy, i.e. towards the interplay of the three
fields of design, technology and business. In such a manner, the participants showed a way the
enterprise should pursue.
Third, participants gained the insight that the processes, which may lead to the external and
internal appearance of an enterprise or its business strategy, are directly interrelated. For this
special observation, there is a need to dovetail these three arrays and work more jointly. It is worth
mentioning that this unveiled aspect witnesses the sustainable character of the design
management concept. To justify, the insights gained are of long-term importance for the
participants, since as potential future managers they would have command of how working
interdisciplinary is necessary. Besides, the tacit knowledge gathered during the design
management consultations to follow the cross-sectoral working approach would be profitable.
Generally, the design management concept deployed indicated that it is possible to work on with
specific tasks or to work out respective guidelines for business development solutions within the
frame of three days, to get familiar with an enterprise they will deal with, to increase the knowledge
of design management as an consistent, coherent and multidisciplinary process as well as to
familiarise with the fields in which they do not possess any specific knowledge.
(3) A given enterprise
From this particular perspective, it can be argued from the analysis of the data that the design
management concept, as applied during the training session, yielded some fundamental results
and insights for the enterprise. To begin with, the design management concept applied to the
particular enterprise can be considered as a feasible framework to go through for the enterprise.
As a result of the design management consultations, the enterprise decided to deploy some of the
most feasible agendas and scenarios for its future development. To exemplify, one of the design
management consultations brought out that the enterprise has to rethink its current stakeholders
and target groups. Based on these insights, as proposed by the consultation group, the enterprise
has took already the first steps and generated a strategy to approach the new defined target
groups. Moreover, the decision makers of the SME became aware about the problems they really
face. As articulated in the results of the design management consultations that were reflected in
the participants presentations, the enterprise was sensitised to change the way of thinking and
handling. It was clearly stated that the changes have to be undertaken within the area of
management, its internal and external appearance as well as the product itself. However, more
precise observations on what implications the approach adapted did generate for the enterprise,
was only feasible to reveal after the training session in Wismar, i.e. after the SME has reflected
upon the proposed solutions etc. By drawing on the results from the semi-structured interview with
the representatives of the enterprise after few months behind the training session, there results
may be articulated more precisely. By echoing the most significant points, the participation in the
training session and the employment of the enterprise as a regional case study was initiated due to
the bottlenecks faced and unused potential for improvements. After the training session, all
proposals made by the consultation groups were actively scrutinised. As a result, there were
chosen the most optimal and feasible scenarios. First of all, these ones were subject to the SWOT
analysis, which is considered to be at the core of the management process of the enterprise.
Consequently, the enterprise stuck to some of the ideas generated. To compare, before the
participation in the design management process, the representatives of the enterprise were aware
of the main determinants, i.e. functionality of the product and its end users. Afterwards, they
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
started to perceive the enterprise as a whole process, a general planning process of the enterprise
performance as well as how it is perceived externally.
To summarise, the focus has been placed on two key issues. First one refers to the fact that the
SME in question started to reflect upon how it can communicate externally, i.e. which direction
does it want to pursue, who does it want to approach and which message should be used in such a
case. As a result of reflections, the focus has been laid on the fact not to concentrate on the end
target group, but to address manifold target groups. The reasoning behind this approach was the
same language multiple target groups share as well as very precise marketing strategies and
measures to be undertaken. Besides, this approach facilitated the way of contacting potential
stakeholders, since due to the local network the SME is able to address the stakeholders directly,
i.e. to take the advantages of the value chain, thus saving expenses and time, otherwise needed to
contact potential stakeholders directly. Beyond this, the SME started to reflect on the key
questions, such as what should be the message it wants to communicate, how to communicate, in
what sense has the product to be changed according to the needs and demands of the identified
target groups. As a result, it may be argued that the management process affects the design
process, since based on the management decisions, there are needed product changes that, in
turn, are to be traced back to the design-immanent aspects. Additionally, after having identified the
new target groups, the SME has to reconsider the marketing strategies and the appearance
externally, for instance, to change flyers, advertisement material etc. Hence, the employment of the
SME as a case study during the training session in Wismar induced it to conduct professional
target group analysis.
The second key issue refers to the product itself the SME has marketed. Consequently, the SME
managers realised what product do they sell actually. To justify, there was articulated some
confusions by the design management consultation groups what product is dealt with. In this case,
not clearly specified and communicated product was one of the problem formulations addressed by
the participants groups. To summarise the main implications for the SME, it can be built on the
observations expressed by the SME managers. By echoing them, the inputs of the consultation
groups were more efficiently the more strategically oriented were the proposed solutions. On the
basis of these strategic scenarios the SME was able to distil the essentials.
(4) Perceptions towards design management
Taking a closer look at the expert assessments and observations made within the scope of the
research, it may be argued that there were gathered more in-depth understanding of design
management. However, to underline, there were located different perceptions on the design
management as a concept among experts. After distilling the data gathered, the general finding
that was made pointed to the fact that among the experts from the management or business-led
disciplines, there prevails the perception of design management as a management of the design
process. To exemplify, design management was conceived as the use of methods in order to
develop an idea that is needed for innovations, and encompasses such processes as start of
innovation, problem solution and beginning of the solution (expert with economic background).
Besides, again, there was underscored the need to involve the designer into the process from the
beginning and keep involved him through the whole innovation process. In this light, the
observations gathered, it may be stated, do significantly correlate with the design thinking concept
and the reflections articulated by Brown. In other two cases, where there were interviewed experts
from management and economics disciplines, the findings were similar. Whereas one interviewer
considered design management as a part of marketing mix / product management, the other
correlated it with the business space that interacts with the design realm. The need for
management of the design process was perceived in a similar way as in the management-led
discourses. By echoing the interviewers, design management provides the designer with
structures, frames and spaces in order to design good products. Besides, design management is
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
employed by the company either to solve existing problems, boost business performance and
profit, or create a good value of the products / services for the customers. An important role of the
designer is to familiarise the company with the command how to use the technological resources
efficiently. Hence, designer is essential in terms of ergonomics. An important perspective on
design management was that in terms of product, design management refers to design of the
public relations of the company, or is closely related to the corporate identity and the vision of the
company.
Training session in Gdynia
As has been previously mentioned, the training session in Gdynia has provided so far vague
insights, since the results will be finalised and articulated during the last training session of this
year. However, some of the findings were generated here on the basis on observations and interim
presentations. To underline, the findings from Gdynia have not been split into the diverse groups of
findings as in case of Wismar, since there have been covered so far just some of the aspects.
Therefore, it is not possible to employ the allocation to the key determinants, as has been made in
presenting the results from Wismar.
Although the training session in Gdynia followed the same general procedure, i.e. working with
interdisciplinary teams, employing a regional enterprise as a case study and distilling the interim
presentations in order to arrive at solutions at the end of the process, there were adapted some
different methods. One of the main findings in this respect appears the different approach applied,
when compared with the working approach utilised in Wismar. More specifically, in order to
implement the design management process in Gdynia, the point for departure was the precisely
defined design-related problems. In contrast to Wismar, where there was used one defined
objective, there have been articulated five design-related problems for each individual design
management consultation group in Gdynia. Besides, particular enterprise-based problems were
defined by the given enterprise itself and distributed to the design management consultation
groups (participants). Afterwards, the design management consultation groups were provided with
the brief of the enterprise, which served for the working process as guideline.
With respect to these observations, it may be stated that, in contrast to Wismar approach, the
Gdynia training session was built upon managing the design process, particularly, using the
management process, methods and techniques (e.g., structures, double diamond etc.) in order to
solve the design-immanent problems (in this particular case, product or product line changes etc.).
Hence, the focus has been laid on how to improve the particular product and product design. One
of the main outcomes so far in Gdynia was to reveal to what extent the design process can be
structured. One of the reasons behind this implication might be that the working approach evolved
and was implemented by the specialists from the economics and management. Similarly, as
observed in case of perception on design management, experts or professionals with economic or
management background tend to focus more on the management aspects and utilise design within
the management processes and structures.
6. Discussion
Perceiving design management provides the terrain for manifold dispute. What and how design
management can be reflected on and employed is highly dependant on the perspective from which
it is dealt with: design, technology and economics or business-oriented view. The training session
in Wismar revealed, however, that although there are mushrooming diverse interpretations of
design management in academic and professional field, bearing in mind the findings from the
research scope, the contribution of design management to the problem solutions, marketing
strategies, search for new opportunities etc. is inevitable.
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
The design management working approach applied in Wismar yielded advantages for both
participants and the enterprise. To underline, as pointed out by the experts, the design
management concept facilitated the process of unveiling potential solutions that possess deep
strategic foundation and went far behind the existing strategic solutions of the involved SME.
Besides, even within the short-term, the participants were able to generate solid strategic design
management-related solutions.
In this light, the concept appears to be very flexible and useful in a multiple way. By building upon
the proposed design management concept it is possible to familiarise the participants and the
enterprise with the knowledge in design management. Especially on organisational level, it is an
essential insight. How it was observed in Wismar, enterprises lacking knowledge in design
management are “locked” in their structures, activities and perceptions. After having got this
particular knowledge, enterprises are induced to initiate the rethinking process, i.e. to reconsider
and reflect on their practices. Hence, the utilisation of the design management-related knowledge
may imply generation of new development strategies, new or renewed marketing strategies, to
help understand that designer, engineer and manager do communicate in a different way, thus
increasing the awareness about the need of their cooperation. In other words, the interface of
design, technology and business brought together into the design management concept and the
interplay of these three realms facilitate the interaction and learning process within the enterprise
by using the central competences of the different professions. As a result of the intensive and
consistent interface and interplay of three arrays, there may be minimised time and expenditures in
all processes of the enterprise what, in turn, facilitates and accelerates the decision-making
processes. Hence, all development processes can be implemented more efficiently as well as
difficulties and misunderstandings avoided in cross-sectoral projects. In this sense, the interplay
will not only imply reduced costs but also increase the quality of internal enterprise-based
processes, projects, products or services and the perception of the enterprise in the public realm.
Finally, the interplay contributes to the generation of innovative solutions, as it was witnessed
during the training session in Wismar. On the basis of the cross-sectoral approach, there emerged
new ideas and possible solutions for the existing problems from the design, technology and
business perspective, thus increasing the potential to innovate. As a result, design management
knowledge and the utilisation of the particular design management concept enable enterprises to
build capability in terms of launching new products or services or even making specific
modifications to them according to the proposed solutions, to determine key success factors, to
define business opportunities as well as enhance control over the business activities of the
enterprise ranging from designing to marketing, i.e. to get new insights into all the processes of the
enterprise, its structure, behaviour and, finally, the visual and emotional result to the customers.
What may be stated as the main clue is that design management process and the knowledge got
change not only perspective and perception of the actual situation, but also and more important,
induce to react, thus changing the behaviour patterns of the enterprise.
7. Implications and further research
In exploring design management and its role for SMEs, the paper has argued for the consistent
and coherent interdisciplinary design management concept. The analysis of findings shows that
the design management concept and its application may provide a breeding ground for enterprises
in terms of performance, competition, innovation, appearance etc. The utilised design management
approach appears to be flexible and multifunctional, as has been justified through the analytical
phases. Nevertheless, the research so far implies several shortcomings. First, since the application
of the proposed design management concept was employed more for education and training
purposes, there is a need to examine its implications on the SME sector more intensively. This
research objective might be accomplished due to an in-depth analysis of a series of case studies
and their comparison. By bearing on this proposition, the lack of the finalised data from interviews,
observations and expert assessments from the second training session has significantly reduced
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
the comparison possibility in this particular research. A more intensive comparison of case studies
from Wismar and Gdynia can be realised only in the next future after having finalised the started
training session in Stockholm. Besides, after having articulated the results from the training session
in Gdynia, combined and compared them in Stockholm, it is possible to validate the design
management concept, since from the results gathered it will be apparent if the concept has
functioned through the whole training and education phase. In this sense, the concept proposed
could be efficiently utilised not only for education and training purposes in terms of design
management, but, and more important, to be deployed in enterprises as a complex consultation
approach.
8. References
Amit, R. and Schoemaker, P. J. H. (1993) ‘Strategic Assets and Organisational Rent’, Strategic
Management Journal, vol. 14, no. 1, January, pp. 33-46.
Barney, J. (1991) ‘Firm Resources and Sustained Competitive Advantage’, Journal of
Management, vol. 17, no. 1, pp. 99-120.
Bartl, M. (2008) White Paper: Open Innovation!, [Online] pp. 1-9,
Available: http://hyve.de/cms/upload/f_1599_WhitePaper_OpenInnovation.pdf [15 Jun 2012].
Bartl, M. (2010) ‘Open Innovation. Der offene Umgang mit Wissen verändert das
Innovationsmangement’, Open Journal of Knowledge Management [Electronic], no. 1,
Available: http://www.community-of-knowledge.de/kategorie/open-journal/ [15 May 2012].
Benkenstein, M. (1998) ‘Besonderheiten des Innovationsmanagements in
Dienstleistungsunternehmen’, in M. Bruhn and H. Meffert (ed.) Handbuch
Dienstleistungsmanagement, Gabler: Wiesbaden, pp. 689-703.
Best, K. (2011) What can Design Bring to Strategy? Designing Thinking as a Tool for Innovation
and Change, Inholland University of Applied Research in Rotterdam, pp. 1-47.
Boland JR., J. and Collopy, F. (2004) ‘Design Matters for Management’, in J. JR. Boland and F.
Collopy (ed.) Managing as Designing, Stanford Business Books: California, pp. 3-18.
Borja de Mozota, B. (1990) ‘Design as a Strategic Management Tool’, in M. Oakley (ed.) The
Handbook of Design Management, Basil Blackwell: Oxford, pp. 73-84.
Borja de Mozota, B. (2003) ‘Design and competitive edge: A model for design management
excellence in European SMEs’, Design Management Journal Academic Review, no. 2, The Design
Management Institute, pp. 88-103.
Borja de Mozota, B. (2006) ‘The Four Powers of Design: A Value Model in Design Management’,
Design Management Review, vol. 17, no. 2, The Design Management Institute, pp. 44-53.
Brown, T. (2004) ‘IDEO’s Design Mindset’, Rotman Management. The Alumni Magazine of the
Rotman School of Management, Business Design, Winter 2004, pp. 22-23.
Brown, T. (2008) ‘Design Thinking’, Harvard Business Review, June, pp. 1-10.
Brown, T. and Wyatt, J. (2010) ‘Design Thinking for Social Innovation’, Stanford Social Innovation
Review, Winter 2010, pp. 31-35.
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
Buchanan, R. (1992) ‘Wicked Problems in Design Thinking’, Design Issues, vol. 8, no. 2, pp. 5-21.
Chiva, R. and Alegre, J. (2009) ‘Investment in Design and Firm Performance: The Mediating Role
of Design Management’, Journal of Product Innovation Management, vol. 26, pp. 424-440.
Cohen. B. and Winn, M. I. (2007) ‘Market imperfections, opportunity, and sustainable
entrepreneurship’, Journal of Business Venturing, vol. 22, no.1, pp. 29-49.
Commission Stuff Working Document: Design as a driver of user-centred innovation (2009),
Commission of the European Communities, Brussels, pp. 1-69.
Crook, T. R., Ketchen Jr., D. J., Combs, J. G. and Todd, S. Y. (2008) ‘Strategic Resources and
Performance: A meta-analysis’, Strategic Management Journal, vol. 29, pp. 1141-1154.
Dickson, P., Schneider, W., Lawrence, P. and Hytry, R. (1995) ‘Managing Design in Small High
Growth Companies’, Journal of Product Innovation Management, vol. 12, no. 5, pp. 406-415.
Dune, D. and Martin, R. (2006) ‘Design Thinking and How It Will Change Management Education:
An Interview Discussion’, Academy of Management Learning & Education, vol. 5, no. 4, pp. 512-
523.
Feucht, S. (2012) ‘Ecology and Design’, Symposium "Innovatsioonifaktor disain, Tallinn [May
2012].
Gerlach, A. (2003). ‘Sustainable entrepreneurship and innovation’, in University of Leads, The
2003 Corporate Social Responsibility and Environmental Management Conference, 30th June –
1st July 2003, Leads: UK, pp. 101-110.
Grant, R. M. (1991) ‘The Resource-Based Theory of Competitive Advantage: Implications for
Strategy Formulation’, California Management Review, vol. 33, no. 3, pp. 114-135.
Grzecznowska, A. (2005) ‘Design Impact on the Economic Output of Enterprises and their
Competitive Position’, Presented at the Design Research, Industries and a New Interface for
Competitive Conference, 22-24 September, University of Art and Design, Helsinki, pp. 1-7.
Hart, S. Service, L. and Baker, M. J. (1989) ‘Design Orientation and Market Success’, Design
Studies, vol. 10, no. 2, April, pp. 103-108.
Hoopes, D. G., Madsen, T. L. and Walker, G. (2003) ‘Guest editors’ introduction to the special
issue: why is there a resource-based view? Toward a theory of competitive heterogeneity’,
Strategic Management Journal, vol. 24, no. 10, pp. 889-902.
Koostra, Gerd L. (2009) The Incorporation of Design Management in Today’s Business Practices:
An Analysis of Design Management Practices in Europe, Design Management Europe: ADMIRE,
pp. 1-63.
Kotler, P. and Rath, G. A. (1993) ‘Design: A Powerful but Neglected Strategic Tool’, Journal of
Business Strategy, vol. 5, no. 2, pp. 16-21.
Kretzschmar, A. (2003) ‘The Economic Effects of Design’, National Agency for Enterprise and
Housing Copenhagen, pp. 1-34.
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
Lüttgens, D. and Piller, F. (2010) Design als Wettbewerbsfaktor: Gutes Design ist kein Zufall,
sondern das Resultat eines systematischen Managementprozesses, [Online],
Available: http://www.die-erfinder.com/innovationsstrategie/design-als-wettbewerbsfaktor-gutes-
design-ist-kein-zufall-sondern-das-resultat- [25 Jun 2012].
Martin, R. (2005) ‘Embedding Design into Business’, Rotman Magazine, Fall 2005, pp. 1-7.
Meffert, H. (2004) ‘Identitätsorientierter Ansatz der Markenführung – Eine entscheidungsorientierte
Perspektive’, in M. Bruhn (ed.) Handbuch Markenführung, Gabler: Wiesbaden, pp. 293-320.
Meffert, H. and Burmann, C. (2002) ‘Theoretisches Grundkonzept der identitätsorientierten
Markenführung’, in H. Meffert, C. Burmann and M. Koers (ed.) Markenmanagement: Grundfragen
der identitätsorientierten Markenführung. Mit Best Practice-Fallstudien, Gabler: Wiesbaden, pp. 36-
72.
Meffert, H., Burmann, C. and Koers, M. (2002) ‘Stellenwert und Gegenstand des
Markenmanagement’, in H. Meffert, C. Burmann and M. Koers (ed.) Markenmanagement:
Grundfragen der identitätsorientierten Markenführung. Mit Best Practice-Fallstudien, Gabler:
Wiesbaden, pp. 3-15.
Meier-Kortwig, H. J. (1997) Design Management als Beratungsangebot, German Design Council:
Cologne.
Möhlenbruch, D. and von Wichert, G. (2007) Ressourcen- und Kernkompetenzen-Management,
Halle an der Saale, pp. 1-8.
Ott, G. (2005) ‘Design Management als Strategisches Tool zur Unternehmensentwicklung’, in J.
Reese (ed.) Der Ingenieur und seine Designer: Entwurf technischer Produkte im Spannungsfeld
zwischen Konstruktion und Design, Springer, München, pp. 129-141.
Peteraf, M. A. (1993) ‘The Cornerstones of Competitive Advantage: A Resource-Base View’,
Strategic Management Journal, vol. 14, no. 3, pp. 179-191.
Porter, M. E. (1996) ‘What is Strategy’, Harvard Business Review, vol. 6, pp. 61-78.
Rasche, Ch. (1994) Wettbewerbsvorteile durch Kernkompetenzen – Ein ressourcenorientierter
Ansatz, Wiesbaden.
Schmitt-Grohe, J. (1972) Produktinnovation. Verfahren und Organisation der Neuproduktplanung,
Wiesbaden.
Talke, K., Salomo, S., Wieringa, J. and Lutz, A. (2009) ‘What about Design Newness?
Investigating the Relevance of a Neglected Dimension of Product Innovativeness’, The Journal of
Product Innovation Management, vol. 26, no. 6, pp. 601-615.
Tether, B. (2005) Think piece on the Role of Design in Business Performance, DTI: London.
Verganti, R. (2006) ‘Innovating Through Design’, Harvard Business Review, pp. 1-9.
Wernerfelt, B. (1984) ‘A Resource-Based View of the Firm’, Strategic Management Journal, vol. 5,
pp. 171-180.
11th International Entrepreneurship Forum Kuala Lumpur, Malaysia, 4-6 September, 2012
Wernerfelt, B. (1995) ‘The Resource-Based View of the Firm: Ten Years After’, Strategic
Management Journal, vol. 16, no. 3, pp. 171-174.
Wood, B., Whiting, M. and Stocks, D. (2011) How Design Thinking can Enrich Business and
Marketing Innovation, [Online], Available: http://www.innovationmanagement.se/2011/12/26/how-
design-thinking-can-enrich-business-and-marketing-innovation/ [25 Jun 2012].
Young, W. and Tilley, F. (2006) ‘Can business move beyond efficiency? The shift toward efficiency
and equity in the corporate sustainability debate’, Business Strategy and the Environment, vol. 15,
no. 6, pp. 402-415.
Acknowledgements
We would like to express our gratitude to our interviewers and experts as well as representatives of
the involved enterprises for their assistance as well as valuable comments and suggestions in
writing this paper.
