JETRO Spotlight Interview: Tom Kelley

Tom Kelley is an innovation expert, bestselling author and managing director of Palo Alto, California based design firm IDEO. IDEO has been at the forefront of design for 25 years, and was recently named as one of Business Week’s 20 most innovative companies in the world. The company has collaborated with leading Japanese companies on numerous projects.

Mr. Kelley has authored two books: 2001’s bestselling The Art of Innovation and The 10 Faces of Innovation, which is scheduled for release on October 17, 2005. Publisher Hayakawa Press produced a full-color special Japanese edition of The Art of Innovation, and has already begun work on the translation of The 10 Faces of Innovation.

Mr. Kelley has visited Japan more than 20 times and shared his knowledge and experience with JETRO during a conversation in September 2005.

JETRO: How exactly does IDEO to help companies innovate?

Tom Kelley (TK): What IDEO has done over the last 25 years is take the lessons we’ve learned in creating new products, and then extrapolate, go from the specific to the general, and apply those lessons to products, services, environments, and now to whole corporate cultures. So we’ve discovered what works in the world of innovation, and we’re trying to transfer that experience to our clients.

JETRO: Why would a company need IDEO help them innovate?

TK: What’s happened in recent years is that companies around the world have discovered that innovation is the key to the future, the lifeblood of the organization. And a lot of our client companies haven’t really focused on that; they’ve focused on cost reduction or taking variability out of things. So they’re now recognizing that they need organic growth, which is mostly about innovation, and they’re asking, “Who’s spent a lot of time in the space recently?” And IDEO seems to be in that space. Did you see that cover story called “Get Creative” in Business Week, where we were listed among the top 20 most innovative companies in the world?

JETRO: Not that piece specifically.

TK: It was really fun for us. Every other company on the list is a household name, like Sony or Starbucks or 3M. So it’s both fun and slightly amusing for us that little IDEO made this list of giant innovative corporations.

JETRO: So when you work with a client, how involved do you get? How much of a collaborative project is it?

TK: Well, two answers to that. In the old days, when our focus was more the design per se, it was considered perfectly acceptable for us to go away, and come up with the “right answer”, and present it to the client. If you’re designing a new cell phone and IDEO gives you the design, the part drawings, and the CAD databases, that was perfectly fine.

But in the current world, our clients want that learning as well. In fact, it was one of our Asian clients who said, “On this project, I want the net as well as the fish”, meaning he wanted to catch his own fish next time. And our current business is very much about that.

In fact, it’s kind of interesting that it was Japanese companies who were really the first to recognize this value explicitly. We had a client at Matsushita, who didn’t even pay us out of his research and development budget. Even at the time, he paid us out of his training budget. He thought the learning his people got was at least as valuable as the actual products.

JETRO: IDEO’s work with Matsushita really caught my eye. What can you tell us about your projects with them?

TK: This is among the earliest work we did in Japan. And I was ecstatic to be working with them, because when I was at business school in the mid-1980’s, Matsushita was considered the best managed company in the world. So they were the model that we all studied to see what works, and when they came to IDEO, I thought it was really fun.

They took a different tack than any other client in our history has taken, and I think they got good value from it. The guy, who’s now retired from Matsushita, wanted to get as much learning as possible from our relationship. So he placed different projects in our different offices. And this was quite difficult from a confidentiality standpoint, but we worked out a way where we placed Matsushita employees in different IDEO offices, one project in London, one in San Francisco, and one in Palo Alto. This was over a series of years; they weren’t simultaneous. London was first with vacuum cleaners, San Francisco did coffee makers, and we did steam irons in Palo Alto. So his staff lived and worked with us for six weeks, and soaked up the IDEO culture, and was able to take back the learning from that to the Matsushita research and development team. In the meantime, they also took back some design ideas, some design concepts that they could use.