Double-Loop Design Management Model

20th DMI: Academic Design Management Conference Inflection Point: Design Research Meets Design Practice Boston, USA, 22-29 July 2016

Double-Loop Design Management Model Fabiane WOLFFa, Andréa CAPRAa, Flávia DUTRAa and Brigitte BORJA DE MOZOTAb a

b

UniRitter Laureate International Universities Honorary professor University Paris Ouest Nanterre the Author ‘b’ In this paper we propose and discuss insights on how companies and designers learn and mature their procedures, and absorb new ways of doing design. Based on Chris Argyris’s theoretical model (1976) on change management and on Claudia Acklin's absorption model (2013), we present insights for a new double-loop perspective of the design management practice and indicators. Keywords: Design Management Framework; Double-Loop Learning; Design Strategies

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Fabiane WOLFF, Andréa CAPRA, Flávia DUTRA and Brigitte BORJA DE MOZOTA

Introduction The constant search for models indicates the production of frameworks about design management and its insertion in companies. Although they are effective and interesting, many of these models focus on the subject itself. Clearly, to theoretical models, the enclosure is necessary and salutary, and it helps to focus and understand particularities. However, isolating the design management practice is found to be hard, and probably not helpful to its deeper comprehension. The environment, the company culture and its knowledge capital are, among others, key factors for the efficiency of the design management. When the implementation of these models in companies is discussed, the importance of the environment and organizational culture of the company emerge as standards for good design or as constraints or resistance to change. Learning, maturity and absorption of design knowledge are ways for understanding the impact of design practices on results such as innovation, brand, creative intelligence and business design indicators. Argyris (1976) defines learning as the detection and correction of error, and error as any feature of knowledge or of knowing that makes action ineffective. Considering that the absorption capacity and maturity are absolutely connected with the learning level of the companies, are they more mature because they absorb better? Or do companies absorb better because they are more mature? They can understand that something is wrong and not know what to do about it or, alternatively, they can learn with their mistake and improve every time, in a continuous learning process. After some years observing design management in companies, from its implementation to the increase of responsibilities, many situations provide insights on how those companies organized themselves to manage design and why some of them have such different structures to support it. Furthermore, how do companies learn design? What is left after the designers intervene in products or brands? In this paper, we propose and discuss insights on how companies and designers learn and mature their procedures, and how they absorb new ways of doing design. Based on Chris Argyris’s theoretical model on change management (1976) and on Claudia Acklin's absorption model (2013) we suggest insights for a new double-loop perspective of design management practice and indicators in which the learning, maturity and absorption of design knowledge seem to be antecedents of design and design management, in a continuous, endless process. Through the connection of our insights to theory, a framework is proposed.

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Double Loop Design Management

From the beginning As the insight to this paper started, we had some hours of sharing and discussing to reach consensus on how to present our ideas. It is not our purpose to present a rigid academic paper, but rather to explore ideas that kept coming in our researches as a way to contribute to the discussions in the context of design management. We hope, through our questions, to propose a new perspective on design management. In this paper, we understand design management (DM) as “the implementation of design as a formal program of activity within a corporation by communicating the relevance of design to long-term corporate goals and coordinating design resources at all levels of corporate activity to achieve the objectives of the corporation”, as defined by Borja de Mozota (2002; 2006). Also, the insertion of design management in the company happens with the approach, integration and intention of the managers through three dimensions - process, competencies and strategy (Wolff, Amaral, 2008). Process refers to the relationship between the design team and its environment. Competencies are about the way design is understood and done. Strategy is directly connected to management, team subordination and strategic controls. The figure below shows the preceding results of design management, reinforced by a single-loop learning process.

Figure 1 - Single-Loop Design Management Model. Source: compiled by the authors

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Fabiane WOLFF, Andréa CAPRA, Flávia DUTRA and Brigitte BORJA DE MOZOTA

Considering design management as a well discussed discipline, why is it so difficult to find a model that can evaluate different aspects when it comes to design management? To evaluate design management, many tools have been created with a focus on different results (Design Atlas, 2000; Borja de Mozota, 2002; Kretzschmar, 2003; DMSE, 2011). Isolating variables is an effective mechanism for generating models since they restrict the analysis, which improves the performance of the tool and leads to a better comprehension or metrics. As we seek a broader analysis of design management, we should understand how other factors, such as organizational learning, knowledge management, maturity and absorption, … act as the antecedents for the design management and how it can successfully lead to innovation, creative learning and ultimately impact on the performance of the company.

Design as a Double-Loop Management In order to broaden the concept, our first insight made us consider that design management is the central basis for our analysis in a double-loop learning process model. Therefore, considering design management as the core, this mapping of theories presents its different influences on performance, such as: (a) the designer as a central actor to project performance: their personal background (Dechamp; Szostak Tapon, 2009) and competencies (Borja de Mozota; Kim, 2006; Ruas et.al., 2005), and (b) the management of the company resources such as learning and absorption as important antecedents to design management. Thus, our first research question is how do designers and companies learn and absorb design and DM? The subject of organizational learning is very important for design and design management. When thinking of skills and resources in design, one can advance to the concept of learning and realize that, not only people learn, but so do companies (Argyris, 1991; Garvin, 1993). Garvin understands that “a learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights”. According to Wolff (2010) in design environment, learning can derive from the act of designing, from the experience accumulated along the years and the capacity that design has of generating, improving and innovating knowledge. It is perceived that more or less complex projects can initiate single or double-loop learning projects. Argyris and Schön (1978) proposed that organizations could learn in two different ways, as a single or a double loop, according to the processes they engaged and how the experiences derived from the learning process were used to promote action. In a simple, direct way, Argyris (1977) explains that when a company identifies and corrects 4

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errors with the objective to have the job done, they are using a singleloop learning process. On the other hand, when the company deeply investigates the causes of an error and then corrects it, seeking for a comprehension of what went wrong and what should be improved, there is a double-loop learning process. Design learning processes and how design is managed promote differentiation and design performance as an intellectual capital and intangible asset. Moreover, design management, as a core competence and organizational learning, will allow design processes such as strategic thinking to change the way companies think. This can be based on scenarios and metaphors in a management model that promotes the meeting of innovation with engineering. That has led us to another question: how much does a company learn from a design process? Or, what does a company or a designer absorb as design? The concept of absorption capacity arises from Cohen and Levinthal studies (1990), which define the absorption capacity as the ability of the company to recognize the value of new information, coming from external sources, to assimilate it and apply it for commercial purposes strategically, and based on innovation. Zahra and George (2002) progress the theory on the subject and present four dimensions of absorption capacity: acquisition, assimilation, transformation and exploitation of knowledge. Following the foundations of Cohen and Levinthal (1990) and Zahra and George (2002), Acklin (2014) states that the process of building the absorption capacity in design management can be developed from the use of design tools and external designers. When new design knowledge is acquired and absorbed, it has a potential absorption capacity, and when that knowledge is processed and exploited, the absorption capacity is performed. This transformation generates external advantages, competitive advantages and flexibility for the company. So design and the design management capability, as mentioned by Acklin (2011, p.2) is “a result of an organizational learning and absorption process rather than extracting specific single design capabilities from best practice”. According to Cohen and Levinthal (1990) organizations with higher levels of absorptive capacity tend to be more proactive, exploiting opportunities present in the environment, independently of the current performance. Alternatively, organizations that have a modest absorptive capacity tend to be reactive, searching for new alternatives in response to failure on some performance criterion that is not defined in terms of technical. Therefore, when it comes to design activities, having a modest absorptive capacity will very likely impact on the way design is oriented. In addition, having a higher level of absorptive capacity will probably leave the company more autonomous and self-manageable and, therefore, more mature. Nevertheless, do companies absorb better because they are more 5

Fabiane WOLFF, Andréa CAPRA, Flávia DUTRA and Brigitte BORJA DE MOZOTA

mature or are companies more mature because they absorb better? The concept of maturity has its origins in business and engineering, in order to seek a way to evaluate the quality management in companies. The first records are from 1970 and are present in maturity models that are still used in businesses today (Rosemann; Bruin, 2005; Cristofari Junior, 2008; Paula; Fogliatto, 2010; Tarhan; Turetken; Reijers, 2016). Maturity is seen as an indicator that companies seek to improve their practices, continuously enhancing the development of activities. Researchers have observed that 'mature companies' perform better in reducing changes in the scope of projects and in strongly defining processes that reduce the problems in their businesses. The Capability Maturity Model, developed around 1990, is considered the foundation to many maturity models used to measure this construct in companies. (Bouer; Carvalho, 2005; Rosemann; Bruin, 2005; Kerzner, 2006; Demir; Kocabas, 2010; Backlund; Chronéer; Sundqvist, 2014; Tarhan; Turetken; Reijers, 2016). Relating design and maturity some design maturity models (Best; Kootstra; Murphy, 2010; Whicher; Raulik-Murphy; Cawood, 2011; Gardien; Gilsing, 2013; Westcott et al.,2013) attest that companies oscillate between organizations “without design” or that use design aesthetics, and companies that use design as culture, that is, design is embedded in the strategic development of the company, measuring the impact and results of the business. Each author presents a distinct maturity model, but with similarities: some models are more focused on the development of design and others are more geared towards maturity in relation to design management. (Best; Kootstra; Murphy, 2010; Whicher; Raulik-Murphy; Cawood, 2011; Gardien; Gilsing, 2013; Westcott et al.,2013). Among all requirements for maturity in design, the documentation of projects and communications inside the design teams and inside the companies are very important aspects. Registering the process encourages learning and features an important step towards knowledge management. Nonaka and Takeuchi (1995) indicate the tacit and explicit knowledge as part of the process of the knowledge generation in the company through a spiral of exchange between what you can learn and know. The knowledge spiral suggested by the authors is quite familiar to design through the learning and absorption processes, since these flow and develop among what can be verbalized and what can be learned by observing what and how the others do it. This brings us back to learning and design management, completing the antecedents of design management in our model. Consequently, if we can imagine design and the design management work perfectly, what is the result? Our last insight points out to the results of a good double-loop design management that, among others, seems to be: creative intelligence, innovation, 6

Double Loop Design Management

brand, and design metrics. Many researchers indicates that good design and good design management generate innovation (Verganti, 2009, Tidd, Bessant, 2009), performance and competitive advantage (Guo, 2010; Mrazek et al., 2011; Hertenstein et al., 2005; 2006; Viladàs, 2011; Desbarats, 2006), as well as brand performance (Aaker, 1996) and creative intelligence (Nussbaum, 2013). Considering the insights and theory reviewed in this paper, we propose a model that seeks to go beyond a single loop, broadening design management into a double-loop experience. Based on the representation proposed by Argyris and Schön (1978), our model is presented below.

Figure 2 - Double-Loop Design Management Model. Source: compiled by the authors

The results obtained by the design implementation in a company and its proper management are displayed on the right side of the model. It is understood that when design management is properly done, the results obtained reinforce the process in a single-loop learning process, represented by the central red arrow. This first part of the model reflects what is well known in the research field of design management, as pointed out in the first part of this paper, and it represents the single-loop design management. On the left side, the design assumptions icon represents the design mindset, the policies and mental models of a company. The 7

Fabiane WOLFF, Andréa CAPRA, Flávia DUTRA and Brigitte BORJA DE MOZOTA

design assumptions, in this context, drive the way design management is done. As for the double-loop design management, the teal arrow shows how design results can be mediated and empowered through absorption and maturity. One can assume that, when companies understand their outcomes as knowledge, and learn from this process, they absorb new design skills and capabilities, therefore, becoming more mature and more capable to absorb, in a reinforcing loop, as proposed by Senge (1990). In addition, the double-loop design management process characterizes itself as a reinforcing loop, where one action improves the next and vice versa.

Final Considerations Once we started thinking about design management, studying theories and relating to our own background we might have encountered with more questions than answers. It is not easy to isolate what aspects influence or are influenced by design management. Probably, many other approaches could be added to our model. The goal of this paper is to start a discussion with the design management community, looking forward to broadening the discussion with colleagues with different knowledge and backgrounds. We understand design management as an endless process where aspects cannot be isolated. All sectors of a company are connected and when something changes every part is affected, for better or for worse. And with design it should be the same, as long as design is seen as embedded in a successful company. Models and frameworks are phenomena or representations of the reality. They could be drawn in many ways and carry all the restrictions a representation have. Our double-loop design management model is presented here as a first insight effort towards a broader comprehension of a rich area that grows as develops. Our contribution was to present the prototype of a new theoretical model. We pursued: (i) to understand the design management not only through the economic performance of the company, but also through the performance of design management processes to implement changes in organizational knowledge; (ii) to understand how the company learns and absorbs knowledge and (iii) they ways this can directly influence how companies manages design. Therefore, finally, we suggested a vision of design management as a continuous doubleloop, endless process. The antecedents and consequences pointed here are not definitive and the single truth. Although we can surely affirm that both the absorption and maturity have an important role and will affect design management, we know that other factors might influence as well. In addition, the consequences of a double-loop 8

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design management probably go beyond creative intelligence, performance, brand, and innovation. As an evolution to this model, we are already conducting deeper researches on how absorption happens in design teams and on how companies perceive their design maturity. The assumption is that, in an endless, double-loop design management process, both theories have a big impact on design management by themselves and also when running together. References Aaker, David A. Building strong brands. New York: Free Press, 1996. Argyris, C. Single-Loop and Double-Loop Models in Research on Decision Making. Administrative Science Quarterly. Vol. 21, No. 3 (Sep), 1976, pp. 363-375 Argyris, C. Teaching smart people how to learn. Harvard Business Review. May, 1991. Argyris C., Schon D.A. Organisational Learning. Addison Wesley, Reading, Massachusetts, 1978. Acklin, C. The absorption of design management capabilities in SMEs with little or no prior design experience. Paper presented at the Nordes 2011: Making Design Matter, Helsinki, Finland. 2011. Acklin, C. Design Management Absorption Model: A Framework to Describe and Measure the Absorption Process of Design Knowledge by SMEs with Little or no Prior Design Experience. Creativity and Innovation Management, Volume 22, Number 2, 2013. Backlund, F.; Chronéer, D.; Sundqvist, E. Project Management Maturity Models – A Critical Review. Procedia - Social and Behavioral Sciences, v. 119, p. 837–846, mar. 2014. Best, K.; Kootstra, G.; Murphy, D. Design Management and Business in Europe: A Closer Look. Design Management Review, p. 26–35, 2010. Borja de Mozota, Brigitte. Design and Competitive Edge: A model for design management excellence in European SMEs. Design Management Journal, 2002. Borja de Mozota, Brigitte. Design Management: using design to build brand value and corporate innovation. New York: Allworth Press and Design Management Institute, 2003. Borja de Mozota, Brigitte. The Four Powers of Design: A Value Model in Design Management. Design Management Review; Spring, 2006. Borja de Mozota, B.; Kim, B. Y. Managing Design as a Core Competency: Lessons from Korea. Design Management Review, Boston, v. 20, n. 2, p. 66 – 76, 2009. 9

Fabiane WOLFF, Andréa CAPRA, Flávia DUTRA and Brigitte BORJA DE MOZOTA

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Acknowledges

Special thanks to Bárbara Backes, Ivna Ravanello, Sílvia Costa and the Design Management Research Group.

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