Sie sind auf Seite 1von 18

A Design-Based Model of Strategic Change

A DESIGN-BASED MODEL OF STRATEGIC CHANGE


Davide Ravasi, Gabriella Lojacono
Abstract
Past studies have emphasized the role played by product design and corporate identity
for defining and reinforcing a companys strategy. In recent years, however, the
dominance of strategic models focused on positioning within the industry structure or
on the endowment of resources has moved attention away from the design process and
its link with strategic renewal. In this paper, we analyze the relations between design
activities and strategic planning, building on the experience of companies like Bang &
Olufsen, Alessi, Zanussi and Oticon, whose attention towards product design is
witnessed both by their success on the market as well as numerous awards conferred.
After having briefly set out the theme in the context of the changes in the dominant
schools of thought in the strategy field, we shall propose a general conceptual
framework, supported by references from the cases studied.
JEL Classification Numbers: M30, M19

KEYWORDS: Design, Corporate identity, Innovation, Strategic renewal, New product


development

DAVIDE RAVASI. (Corresponding Author), SDA Bocconi - Bocconi University School of


Management, Strategic and Entrepreneurial Management Department, Via Bocconi 8, 20136 Milano. Tel:
+39-02-5836-2540 Fax: +39-02-5836-2530. E-mail: davide.ravasi@uni-bocconi.it.
GABRIELLA LOJACONO, SDA Bocconi - Bocconi University School of Management, Strategic and
Entrepreneurial Management Department, Via Bocconi 8, 20136 Milano. Tel: +39-02-5836-2541 Fax:
+39-02-5836-6892. E-mail: gabriella.lojacono@uni-bocconi.it.

A Design-Based Model of Strategic Change

1.INTRODUCTION
Oz Zanussi, a fridge that looks like an egg, Apple iMac, the first computer produced in
five different colours, and Nokia 3210, a mobile phone the external shell of which can
be changed as if it were a dolls dress: products like these, over recent years, have
demonstrated the importance of redefining concept and look in determining market
success. In these products, shape is not simply a question of style, but has become the
medium for pointing out a new way of understanding, designing and using them, and to
express an identity, which becomes the main link with the consumer. Companies such
as Nokia, Apple, Electrolux Zanussi, Philips, Sony and Bang & Olufsen, have either
built or reinforced excellent competitive positions through renewed attention to product
design and corporate identity.
Thanks to this attentive and co-ordinated management of product design and identity
design processes, these companies have carried out stylistic, functional and conceptual
innovations which have affirmed the uniqueness of the companies and that of their
products, and expanded the capacity to meet needs previously unmet both on a practical
and symbolic level. Products such as the small home appliances from Alessi-Philips, the
Nokia 3210 and 5110 mobile phones and the personal computers iMac and iBook, have
redefined the logic of competition and forced most competitors to change, at least in
part, their product and communication strategies.
The importance of the role played by design for defining and reinforcing a companys
strategy is certainly nothing new. Other researchers, in the more or less recent past, have
recognised the importance of product innovation for a companys success (e.g.. Lorenz,
1986; Walsh, Roy, Bruce and Potter, 1992; Thackera, 1997). The domination exercised
since mid 1980s by strategic analysis models focused on positioning within the industry
structure (e.g. Porter, 1980), however, had moved attention from the design process to
its contribution towards product differentiation. Also, with the notable exception of
Dumas and Mintzberg (1989), the various studies which over recent years have looked
at the theme of design as a strategic resource have rarely attempted to connect the
process of strategy formation with that of the design process. The majority of writers
concentrated instead on the effects of the latter, underlining how a careful management
of design activities could improve performance, quality, look and cost of the product
and therefore customer satisfaction (e.g.. Kotler and Rath, 1984).
In this paper, we will present an analysis of the relations between design activities and
strategic planning, based on evidence gathered during a study conducted into
companies, whose attention towards product design is witnessed both by their success
on the market as well as numerous awards conferred 1 . After having briefly set out the
1

The conceptual model presented in this paper is based on evidence collected in the course of a research
project jointly financed by Bocconi University and by the Ministry for University and Scientific
Research, termed Gestire il design in prospettiva strategica, and by a research grant of the Strategic and

A Design-Based Model of Strategic Change

theme in the context of the changes in the dominant schools of thought in the strategy
field, we shall propose a general conceptual framework, supported by references from
the cases studied. In the third and final section, we will discuss the implications of this
new strategic model in terms of company senior managements role in devising
strategies.
2. NEW STRATEGIC MODELS FOR NEW COMPETITIVE SCENARIOS
Over the last decade, some factors have led companies to renew their strategic models
and competitive thinking. The increased importance of intangible and expressive
aspects in consumers decisions (Belk, 1988; McCracken, 1988) and the extension of
fashion-related factors and trends into a growing number of industries (Peters, 1992;
Lawrence & Phillips, 2000) have rewarded those companies who, operating in
industries from drinks to air travel, food to IT, have dedicated special attention to the
aesthetic and symbolic aspects of their products or services (Schmitt and Simonson,
1997). In other industries, born on the boundaries between telecommunications, IT,
publishing and entertainment, the rapid evolution in technology and the intensification
of competitive dynamics, have rendered ever-less effective managerial models based on
planning and industry analysis (DAveni, 1994; Mintzberg, 1994; Chakravarthy, 1997).
The approach of strategic planning and industrial economics (e.g. Porter, 1980 and
1985), in fact, was based on an idea of competition as a battle for positioning, in which
competitors tried to build and defend their competitive advantage, anticipating their
opponents moves and setting up barriers of various kinds via economies of scale,
control of distribution channels or technological standards. However, over the last ten
years, the joint evolution of technology, lifestyles and consumer behaviour have made
this approach ever less appropriate for explaining competitive dynamics and guiding
management decisions. In a growing number of industries, the competition seemed
rather to follow a Schumpeterian type of logic, in which it is innovation in products,
services or production processes that determines competitive advantage. Schumpeterian
advantage, however, is by its very own nature ephemeral: destined to be rapidly
annulled by competitors imitation or innovation, or by the rapid changes going on in
the market. The sustainable nature of said advantage, therefore, is not based on the
erection of solid but rigid barriers, but on the companys own capacity to continually
renew its competitive strategy, getting to the point of eroding the very bases of its

Entrepreneurial Management Department of SDA Bocconi. The analyzed companies belong to traditional
(Alessi, Kartell, B&B Italia, Cassina, Flou), and high-tech industries (Nokia, Bang & Olufsen, Oticon,
Electrolux Zanussi, Apple). Research investigated both the way the design process is connected with the
process of strategy formation and how the outcome of the design process influenced the very rules of
competition. The authors acknowledge the helpful discussions with Antti Ainamo, Antonio Catalani,
Giovanni Comboni, Tore Kristensen, Majken Schultz and Lisbeth Svengren. However the authors must
must be considered the sole resposible for the ideas expressed in this paper.

A Design-Based Model of Strategic Change

current competitive advantage in order to build a future one, anticipating both customers
and competitors.
Recognition of the importance of this process of creative destruction (Schumpeter,
1934) for maintaining competitive advantage, has thus led to a redefinition of the
domain of strategic action. If a companys advantage is based on its capacity to
continually innovate its products, then the essence of the process of strategic change
becomes the continual renewal of the range of products and services offered to
customers (Brown and Eisenhardt, 1997). In the past the managements attention was
concentrated on the analysis of the variables (sales volumes, market share, price level,
etc.), which defined the companys position on the market and in the industry and had
an impact on manufacturing efficiency in terms of economies of scale and
training/learning curve. More recently, the recognition of the importance of a continuing
strategic renewal process brings forward the companys ability to manage the process of
innovation both on a product level and marketing policy. Ultimately, the companys
competitiveness resides on the possession of dynamic capabilities, which allow it to
develop distinctive competencies that support a process of continuous innovation
(Teece, Pisano and Shuen, 1997).
Furthermore, the impact of communication on the companys competitiveness
(Coda, 1991) becomes fundamental due to the increased importance of the symbolic
aspects of consumers choices. The fact that a growing number of products are
purchased more for the meaning attributed to them by the consumer or by other
referential groups rather for their function, shifts the field of competition onto elements
such as identity and company image. The latter depends on how everything the
company communicates directly, via advertising and corporate communication, and
indirectly via its products and the overall visual and architectonic aspects, is judged by
external constituents. The image of the company is therefore the result of a series of
decisions taken by members of the organisation, consciously or unconsciously, on the
basis of the perception that these people have of the companys values and objectives, in
other words its identity (Albert and Whetten, 1985). The management of a companys
identity therefore becomes an essential context in strategic decision making.

3. THE CO-EVOLUTION OF STRATEGIC DECISIONS AND DESIGN


PROCESSES
The experience of companies such as Apple and Philips suggests how to interpret in a
wide sense the design process and allows an expansion of strategic alternatives available
to a company. Via a careful management of design activities in the widest sense, the
company can shift the search for differentiating elements, and therefore the field of
competition, from the financial and functional level to an aesthetic, symbolic,

A Design-Based Model of Strategic Change

ergonomic and ecological one. Companies such as Philips or Electrolux - Zanussi are
examples of how a mindful management of the design process, and of all the options
this offers, can open new competitive opportunities in the search for advantages in
industries that are apparently mature or with consolidated positions. In a industry such
as that of small kitchen electrical goods, where for years shape, colour and materials
have been characterised by a basic neutrality, innovation in stylistic aspects has recently
become one of the main drivers of competition.
The second half of the 1990s saw the diffusion of new aesthetic standards in the world
of home appliances. The new trend saw many products lose their artificial appearance
(square shapes, white or metallic colours) and acquire a more natural shape (soft or
rounded outlines, curved shapes, pastel colours, shades varying from yellow, orange,
green or blue, soft or velvet textured finishes), a more friendly look, without sacrificing
reliability and functionality. The anthropomorphic and zoo-morphic shapes and the
imaginative names, helped the new products to have a personality that responded to
the growing need for affection and domesticity in the consumers relationship with the
machines.
The Philips-Alessi range of small home appliances (fruit juice squeezers, kettles,
toasters and coffee machines), the result of joint research between the Italian company
and the Dutch multinational, have been amongst those products that have interpreted
the new trends most quickly and efficiently, opening the way to a redefinition of the
aesthetic standards that Philips has progressively extended to its whole product range.
The introduction by Philips of products characterised by lively colours and soft and
rounded shapes such as the Bob kettle, with its spout and top shaped like a hen, or the
Sunrise toaster, have obliged competitors such as Whirlpool and Moulinex to alter the
aesthetic aspect of their products in order to follow Philips in the new competitive field.

The study of the recent experience of companies who have placed design at the centre
of their business and competitive strategies suggests, however, how the relation between
their business formula and competitive strategies is more complex and involves process
aspects and not just the content of the strategies. On the one hand, in fact, corporate
strategy forms a premise and guideline for managing design activities. On the other, it is
from these activities that derive those decisions in terms of product and advertising
which constitute the actual realisation of the strategy, intended as the sequence of
decisions and actions that impact on the companys competitiveness (Mintzberg, 1978).
The relation between design process and strategy formation seems therefore to function
on various levels, in a circular sense.
Design taken in its widest sense, not just as designing product components, but also
the visual and architectonic aspects of the company (Gorb, 1988; Olins, 1992) is an

A Design-Based Model of Strategic Change

activity which involves persons at various levels, both inside and outside the company.
In each product, and each campaign for re-defining visual identity or retail outlets, the
ideas of internal and external industrial designers, architects, graphic artists and
marketing people converge, as they all contribute to realising the project. The decisions
that these people take regarding the product or the companys image are guided in part
by what Herbert Simon (1996) calls decisional premises, the formulae via which people
represent the world surrounding them and interpret the problems they have to solve,
define the area of solutions and judge their appropriateness with respect to the
objectives to be achieved and their own system of values. Inside a company, these
decisional premises are influenced by the common definition of the companys basic
values, the field of operations chosen by same, the objectives it has set itself and the
elements upon which its competitive success depends. This group of elements has been
defined as strategic orientation (Coda, 1988), with reference to the senior
management, and company identity (Albert and Whetten, 1985), when it becomes
shared by the whole organisation. This profound identity is sometimes made explicit
and synthesised in a slogan, a company vision which summarises the strategic
orientation and acts as a guideline for decisions made by personnel at all levels (Collins
and Porras, 1996).
Summarise, communicate and consolidate the perception of the competitive context is
therefore a delicate task, since from the definition of this mission the content of decentralised decisions affecting the product depends and generates strategic alternatives,
and therefore in the final analysis the opportunities and directions for the companys
development. It is necessary to respond to contradictory needs of co-ordination and
coherence of activities around a strategic plan, on the one hand, and freedom and
creativity on the other. A definition that is too wide and generic risks not offering any
direction to design activities, which in turn risk being conducted along personal, casual
or extemporaneous routes, thus producing an inconsistent range of products and a
confusing image. Communication of basic strategy and the construction of a strong and
cohesive company image, on the other hand, can offer a framework for decision-making
and represent a unifying factor for qualifying a products development and advertising
policy. The reinforcement of corporate identity, for example, can serve to avoid that an
expansion or variation of the product range betrays the distinctive and recognisable
stylistic elements that are the bases of the companys success (Comboni and Molteni,
1994).
Bang & Olufsen is the only European company that produces a complete range
of audio-video products. The design of their products both stylistic and functional
has always been an element upon which the company has based its competitive success,
as is shown by the 18 products conserved at the Museum of Modern Art in New York
and the numerous national and international awards received. Recently, with a view to

A Design-Based Model of Strategic Change

meeting a bigger potential demand and increase sales volumes, the company has
expanded its range with simpler products at lower prices, aimed at a lower level of the
market. The marketing of a simpler and cheaper product under the same brand name,
however, risked confusing the perceived image of the company and its products. It was
important that the new line, nevertheless, had all the same basic elements and
distinctive characteristics of Bang & Olufsen products. This same consistency had to be
kept in all the corporate communication. Bang & Olufsen must have a unique identity
the top management told all staff If we start communicating in different voices even
if these are adapted and well-suited to the target groups we risk losing our credibility,
and thus confusing our image. This is really what we must avoid: that people buying
our upper-end products feels that the magic of owning Bang & Olufsen has
disappeared.
With the objective of re-focusing its design and advertising efforts on the
distinctive characteristics of the company and the products which have given it its
success over the years, the senior management promoted a Corporate Identity Seminar,
aimed at all staff at head quarters and branches, with a view to making them aware of
the issue of identity and image, and the need for consistency and constancy in the choice
of products and their advertising. An exhibition, The Curious Eye, was held to trace, via
the products, the slogans and the advertising, the history of the company and the
evolution of its identity. Ending up with a new company slogan, - Bang & Olufsen: the
unique combination of technological excellence and emotional appeal which served
to synthesise the values which will have to guide decision-making by personnel at all
levels, and at the same time being essential elements for corporate identity and
distinctive skills which have given it its historical success. The first result of the
companys efforts was the Beosound Century range (see figure 13), with which the
company targeted young consumers with limited spending power, with a product that
kept the same stylistic and functional identity as the products in the upper end of its
range.
The expression of a companys identity is always a delicate matter. An over precise and
objective definition, tied to the products characteristics, can be a limit to people
working on the process and thus restrict the alternatives generated and potential routes
for development. The strength of the vision which guided Bang & Olufsen in the mid
1990s, lay in its nature of being at the same time a synthesis of the profound skills that
the company had acquired over the years, in the development of technology and careful
regard to all those aspects (shape, materials, mechanical movements etc.) that contribute
to the consumers sensory and emotional experience, and the essential image elements
they perceive of the company, as was revealed by a survey carried out into the relevant
segments (Ravasi and Phillips, 1998). The words chosen to express the companys

A Design-Based Model of Strategic Change

identity therefore summed up the really distinctive properties it possessed and, in this
way, oriented design and advertising efforts towards what really made its value amongst
consumers grow compared to the competition. In other cases studied, a re-definition of a
companys identity and mission set in motion a process of strategic renewal which, in
re-focusing attention, offered new opportunities and widened the space for decisionmaking by product designers. In turn, the results of these efforts led to the development
of new and diverse skills which became part of the companies assets in terms of
identity and a qualifying factor for their image.
Oticon is a manufacturer of acoustic equipment. During the 1990s, following a
profound re-orientation of its strategies, Oticon introduced radical innovations in the
industry, both from the technological standpoint (automatic adjustment of amplification
intensity, digital amplification, etc.) and from the aesthetic standpoint (shapes, colours,
etc.) The renewal of the product range which has taken the company to a level of
absolute technological, competitive and profit excellence, was guided by a re-definition
of the companys mission which shifted attention away from performance and the
technological content of its products, towards the users quality of life, taken in the
widest sense. Instead of thinking of ourselves as a manufacturer who has to serve his
customers, we need to see ourselves as a service company offering a concrete product
said the new Chairman and CEO, Lars Kolind Oticon has to stop regarding itself as a
producer of acoustic equipment: our real mission is to help people with hearing
problems to live the life they would wish.
This new outlook has first and foremost re-oriented the process of new product
development. If in the past the emphasis was placed on engineering aspects, linked to
the development and refinement of the technological content (sound reproduction,
amplification intensity), since the early 1990s in Oticon psycho-acoustic research
carried out directly with patients has been pre-eminent. This research activity is aimed
at identifying the various ways that hearing problems are perceived, in terms of age,
work, lifestyle, etc. The development of revolutionary products such as Multifocus and
Digifocus, was guided by the intention of offering a product built according to users
needs, capable of adapting itself to changes in said needs. Shifting attention towards
users quality of life has, moreover, led the companys designers to bear in mind as well
the psychological aspects involved in using the device, traditionally considered as a
sign of handicap, and therefore a source of unease. Attention was, therefore, dedicated
also to the aesthetic aspect of the device, making its shape more appealing and
changing the flesh pink colour to opaque titanium, so as to change the perception of the
product. The new design leads it to be associated mentally with high-tech electronic
items, rather than medical prostheses, lightening the psychological burden on the
user. The PerSonic line, on the market since 1992 and soon becoming one of the

A Design-Based Model of Strategic Change

companys best sellers, even offered users the choice of a range of colours allowing the
device to match the colour of their hair. A year later, the Oticon 4 Kids line completely
revolutionised the range and colours in order to help children and young people accept
more calmly and with less severity their own handicap, by designing a more pleasing
and socially acceptable manifestation of same.
Strategic processes and design ones therefore seem to be connected in a circular
relationship, in which the companys identity is the fundamental nexus (see figure 1).
On the one hand, the roots of a companys identity lie in the many decisions which are
the daily business of planning and advertising, and the success (or lack thereof) of its
image and collection of skills that it has acquired over time. On the other, the
companys leadership is the protagonist of this identity, given that it expresses these
fundamental values with words and deeds, making the companys mission explicit and
defining areas for its future development.
Figure 1. The relation between design activities and strategy formation
Corporate
identity

Core
competencies

Decision
premises

Product and
corporate
design

Strategy as
vision

Corporate
image

Strategy as
collective
learning

Following this model, a fundamental step for changing strategy lies in the alteration of
the ways of interpreting which guide decision-making and how staff work (Hedberg
and Jnsson, 1977; Berg, 1988). The management of strategic changes, therefore,
consists first and foremost in focusing on or re-defining the elements that define a
companys identity and the essence of its products or services (Gioia and Chittipeddi,
1991; Gioia and Thomas, 1996; Ravasi and Phillips, 1998). In this process, design does
not represent only the result, but can become an important driver of change, when a

A Design-Based Model of Strategic Change

product or a visual identity re-definition are used to express the essence of the new
strategic course and the new brand positioning, better than a thousand words could.
In the white-goods industry the competition between the various manufacturers
has traditionally been conducted at the level of costs, with the result that white goods
have ever-more devalued styles. In the second half of the 1990s some companies,
including Electrolux Zanussi tried to renew the aesthetic aspect of their goods in order
to establish a precise brand image, on the basis of which they could look for a special
relationship with certain segments of the consumer market. The idea behind the OZ
fridge, in the words of Roberto Pezzetta, Director of the Industrial Design Centre
Zanussi in Pordenone, is to surpass the idea that white goods are just a necessity for
which space needs to be found. The Oz fridge is designed to redefine the relationship
between the goods and the consumer, making the former an item of furniture, to be
looked at and shown, to choose as a piece of furniture and not just as a machine for a
specific function. Oz therefore represents the first example of bio-design in the area of
large white goods: it breaks the normal style of the rectangular wardrobe-fridge and
the monotony of white, adopting a rounded shape, a two-valve shell coloured iceblue, which proposes to redefine the emotional relationship, before the functional one,
between man and machine.
During the period the Oz project was being developed, the Electrolux group,
having become world leader in the large home appliance industry after the acquisition
of companies such as Zanussi, White Consolidated and AEG, was busy restructuring all
the business activities of the groups major companies. The restructuring was aimed
both at a better logistic and production efficiency, and on focusing and co-ordinating
the brands and their corresponding product ranges, making the most of the skills of
each centre and following the concept of design families, based on the differences in
consumer lifestyles. The products marketed under the Electrolux brand, therefore, will
be destined towards offering intelligent products, ecological and ergonomic, to a
young consumer market, one that is evolved and in the medium/high social bracket.
AEG, will make the most of its reputation for technological excellence and will be
offered as an upper-niche brand, with a high-quality product. Lastly, Zanussi, will be
destined to offer products in the medium-medium/high price range, focusing on
innovation and design. Compared to the other two brands, however, Zanussi is less
well-known on the European market, but most of all has a less-clear image and a
heterogeneous positioning on the various domestic markets.
Despite sales figures not being anything outstanding, which was also the result of
choosing a retail channel not in line with the products characteristics, the Oz fridge
has nevertheless represented an important step in the development of the companys
positioning strategies. The principles of soft design and bio-design which lay behind

A Design-Based Model of Strategic Change

planning Oz, strongly underline conviviality at the expense of functionality, the natural
as opposed to the artificial, passion as opposed to reason, a warm relationship rather
than a cold one and the complexity of the technology, and contribute towards conveying
an image of Zanussi as a company capable of producing not just ordinary objects but
something extraordinary as well. Both inside and outside, therefore, Oz has
communicated in a clear and strong way what Zanussi wants to be from now onwards,
summarising in the most efficacious way, more than any advertising campaign could,
the essence of the product and brand strategy, the basic characteristics upon which
Zanussi wants to build its identity and its market image. Thanks to Oz declared
Giancarlo Zanella, brand manager Zanussi now all our retailers have clearly
understood how we intend to position ourselves, and at last we are getting to an
homogeneous positioning throughout Europe. As Roberto Pezzetta says, therefore, the
real benefit of an innovative project such as Oz is not to be looked for so much in terms
of sales volume, but more in terms of to what extent it represent a trampoline for
changing mentalities inside the company. Little is said about this, because the final
objective of the company is always to earn money. - explains Pezzetta - But there are
various ways to do so, and you cannot take for granted that the way we chose fifty years
ago is good forever. And this is just what projects like Oz wish to underline: watch out
people, we have to be ready to manage different ways of manufacturing too. Today our
output is millions of machines all the same, but maybe tomorrow it wont be like that:
consumers are becoming ever-more different, they have new awareness, desires and
emotions. An we have to prepare ourselves to make and sell products like this type as
well.

4. FROM FORMULATING STRATEGIES TO MANAGING RENEWAL


In the preceding section, we proposed an interpretation of strategic change as a
modification of how staff at all levels regard it. From this standpoint, starting up and
managing strategic change essentially means influencing the evolution of the system of
meanings shared which guide the decisions and actions of company staff; in other
words, managing the companys identity (Smirchich and Morgan, 1982; Gioia and
Chittipeddi, 1991). As various studies in the past have shown, (e.g. Mintzberg, 1979;
Burgelman, 1991), strategic change is only in part the fruit of aware management by top
personnel. Partly, strategic directions are the fruit of a learning and evolutionary process
set off by chance events or unrelated initiatives. The success of Nokia in the mobile
phone industry, for example, is partly linked to the somewhat chance discovery of a
wide segment of the market governed by fashion and trends, which pushed sales of the
2100 to sales volumes 50 times bigger than expected. The ability of Nokia was its
recognition of the reasons for this unexpected success and orientate itself, from then

A Design-Based Model of Strategic Change

onwards, towards development and advertising policies for its products via a
segmentation based on lifestyles (Pantzar and Ainamo, 2000). Other companies, such
as Oticon, Alessi or Bang & Olufsen, have even institutionalised this role of a motor for
change, encouraging designers and working groups, both internal and external, to
propose development initiatives, which the top management reserves the right to choose
between periodically. In this way, the role of design as one of the main driver of
strategic renewal becomes legitimised and embodied in organisational routines.
At Alessi, new products often originate from ideas proposed by independent
designers, either spontaneously or on specific inputs coming from the company. Invited
ideas sometimes refer to a new typology of products as it was recently the case
regarding jewellery (pendants, necklaces, ear rings, brooches, bracelets) or more
often to a re-styling of existing typologies as it is often the case with coffee makers,
condiment sets and trays. In this case, Alberto Alessi, co-owner, design manger and coordinator of all the development activities, provides the designers with some
dimensional and technical references because he already knows what products have
more potential and the minimum number of sets that can be presented.
While prompted ideas tend to follow deliberate strategies that build on the
existing product lines or consciously explore new product categories, thereafter,
spontaneous ideas often come from designers who have never worked for Alessi before
and develop their concepts with little connection to existing styles or typologies.
Nevertheless, some of these ideas have led to some of the milestones in Alessis
catalogue.
In 1998, Alessi was contacted by 350 new designers and everyone presented more than
one project. All the incoming ideas are evaluated and selected by Alberto Alessi. He
considers independent designers as a window on the world, as they provide the
company with a multiplicity of perspectives and points of view on emerging lifestyles
and local trends. The selection of ideas involves an evaluation of technical feasibility,
based on an estimate of the investments and the time schedule for the new project. After
this preliminary phase, a committee composed of Alberto Alessi himself, the marketing
director and the design assistant, evaluates the prototype on a variety of aspects that
include the aesthetic and emotional response that the product evokes, its self-expressive
capacity, its functionality and its price. These criteria help the committee to assess the
commercial potential of the product and its consistency with the Alessi brand. 14 of the
350 projects collected in 1998 have been developed and most of them will soon be put
on the market.
Even prompted ideas benefit from external inputs, as design briefs are prepared within
the framework of so-called meta-projects aimed at the definition of the social and
cultural scenario within which the designers will operate. These meta-projects are
sustained by workshops organised by Centro Studi Alessi, that involve a pool of external

A Design-Based Model of Strategic Change

designers and sociologists who periodically meet to discuss specific issues related to
evolution of habits, lifestyles and values. These meta-projects, therefore, imply the
generation of ideas through a sociological and semiotic exploration without following a
specific design route. Working within a meta-project goes beyond the realisation of
particular objects addressed to specific functional needs. Meta-projects, therefore,
define the symbolic and functional field within which to conduct a free experimentation
aimed at exploiting technical and artistic skills, on the one hand, and at exploring new
aesthetic solutions, for new tactile and emotional perceptions, on the other.
Companies such as Alessi and Oticon have recognised and incorporated in the
processes and structures that govern strategic change, the evolutionary nature of the
latter. In these companies, change is not so much the fruit of episodic operations, which
radically restructure competitive strategies, but rather the result of a constant renewal of
their product ranges, which sees a new family of products being brought out every year
alongside or replacing gradually those already on the market. This continual renewal is
the result of a process of continuing generation and selection of new projects, as shown
in figure 2.
Figure 2. Strategic change as an evolutionary process helped by design
Vision

Diffusion

Retention

Corporate
identity

Strategic course

Variation

Selection

Development
projects

In this process, internal and external designers represent the primary source of
variations, via the continual generation of development ideas for new products and
refinements to existing ones. It is in this phase that the creativity of the design groups
offers ideas for innovation and diversification, which the top management then has to

A Design-Based Model of Strategic Change

tie-in to a consistent strategic route with regard to the skills and identity of the company.
It is only in the selection phase, in fact, that the feasibility and utility of said projects
with respect to strategic objectives is evaluated. Not infrequently, however, just from
this phase of maximum openness to variations ideas come that lead to a change of
strategic direction and to explore new shapes or technologies and new kinds of products.
It is from this learning curve set off by these exploratory processes that it develops that,
over the course of time, the basic strategic orientation of the company is formed, the
result of a thought process which leads to reinforcing strong points and gradually
abandoning less profitable routes (Coda, 1989). It is at the end, when the results of this
retentive phase spread out and become a common asset, that the circle closes and this
shared identity becomes a framework for basing change on.
In this different way to interpret strategic change the top managements role
alters radically. The traditional managerial models, trusting in the capabilities and skill
of top management, gave them an absolutely central role in the process of formulating
strategies: top management had the task of gathering and processing information,
defining strategic plans, allocating available resources and controlling their efficient
use. These models were based on the conviction that top management could, more or
less easily, gather and process all information useful for defining company strategies.
The rest of the company was left to collect said information and carry out the orders
from above.
Interpreting strategic change as an evolutionary process, driven by a collection of
internal and external people, and not as a linear one, directed from the top, leads also to
profoundly review the role of top management. One of the main functions of top
management becomes the building and running of a context within which design
processes are carried out leading to alternative ideas for development. This means, on
the one hand, as we have seen in the example of Bang & Olufsen, making the
companys identity explicit, linking it to the companys skills and image, so as to
orientate the generation of new ideas that make the most of the companies distinctive
resources. On the other, it means managing relations with all external sources for ideas,
which contribute, as in the case of Alessi, to the start up and completion of development
plans. In both cases, the task is delicate because if on the one hand it is important that
internal and external designers are aware of the inexorable elements of the companys
identity, on the other, if, as we have seen, the limits that this imposes on coming up with
new ideas are too tight, any real renewal of the product line is precluded, as well as the
skills and the identity of the company itself.
Another fundamental function then concerns the choice of projects. In first place, it is
via project selection that the top management defines the relative weight of the activities
which affect the existing skills and image and those dedicated to exploring new routes
for development. It is in this phase that the top management can direct the routes of
development, both via the concrete realisation of the ideas submitted for its attention,

A Design-Based Model of Strategic Change

and via the strong message that its decisions send out internally and externally,
contributing to the affirmation and reinforcement of the companys identity.
5. CONCLUSIONS
The evolution of competitive dynamics in a growing number of industries has led (or in
some cases) brought back the top management to focus more on aspects such as product
innovation and the symbolic dimensions of company strategies. If the more traditional
schools of thought had somewhat neglected the importance of product design activities
as well as all the visual and architectonic dimensions of a company, the new strategic
models recognise the fundamental role that this plays in constructing a competitive
advantage and expanding the strategic alternatives available to it. Managing design
activities, therefore, becomes an absolutely critical issue, which needs to be tightly
linked to the companys strategic decisions.
Recognising the fundamentally disperse nature of the decisions which, having an impact
on the products design and its advertising, affect the companys strategic routes, takes
the activity of design management to the heart of the process of formulating strategies.
This, in turn, requires a substantial redefinition of the top managements role. In
traditional models the management was essentially given the role of analysing the
industry and the resources available, and formulating appropriate courses of action. In a
design-oriented company, on the other hand, the top management is required to (i)
create the organisational context and make the strategic plan known, within which the
new design would be developed, (ii) manage external relations (with training centres,
professional firms, suppliers, consumer associations, etc.) with those participating in the
design activities and (iii) select and rationalise product flow via which strategic renewal
was realised.
Through the creation and the management of the organisational and strategic context,
the top management orientates, without limiting or conditioning it, the process of
generating ideas internally and externally which periodically leads to innovations both
in conceptual and stylistic terms. Through its selection activities, the top management
ensures stylistic and marketing consistency for the product range, whose continual
renewal represents the essence of the companys strategy. This same definition of
company strategy is realised in the decisions that lead to the development of a coherent
product range both in aesthetic and functional terms, and in terms of the various
elements that make up the companys image.

A Design-Based Model of Strategic Change

BIBLIOGRAPHY
Albert, S. and D. A. Whetten (1985) Organizational Identity, Research in
Organizational Behavior, 7: 263-295
Alessi, A. (1999) La fabbrica dei sogni. Alessi dal 1921, Electa/Alessi
Ansoff, H.I. (1965) Corporate Strategy, Mc Graw Hill, New York
Belk R. (1988), Possession and the Extended Self, Journal of Consumer Research,
15 (1988): 139-168
Berg, P. O. (1985) Organization Change as a Symbolic Transformation Process, in P. J.
Frost, L. Moore, M. R. Louis, C. Lundberg, and J. Martin Organizational
Culture. Sage Publications, Beverly Hills, CA.
Brown, S. L. and K. M. Eisenhardt (1997), The Art of Continuous Change: Linking
Complexity Theory and Time-paced Evolution in Relentlessly Shifting
Organizations, Administrative Science Quarterly, 42, 1-34
Chakravarthy, B. (1997) A New Strategic Framework for Coping with Turbulence,
Sloan Management Review, winter, 69-82.
Coda, V. (1988) Lorientamento strategico dellimpresa, Utet, Torino
Coda, V. (1991) Comunicazione e Immagine nella Strategia dellImpresa, Torino:
Giappichelli
Collins, J. C. and J. I. Poras (1996) Building your Companys Vision. Harvard
Business Review, September-October, 65-77.
Comboni, G. and Molteni, F. (1994) Prodotto Moda e Isola Stilistica, Economia &
Management, 2: 20-29
Cooper, R. and Press, M. (1995) The Design Agenda A Guide to Successful Design
Management, John Wiley and Sons ltd.
DAveni, R. A. (1994), Hypercompetition, New York: The Free Press.
De Mozota, B.B. (1998) Structuring Strategic Design Management, Design
Management Journal, Spring.
Decastri, M. (1998) Visione strategica e innovazione organizzativa, Sviluppo &
Organizzazione, 168, 15-32.
Dumas A. and Mintzberg, H. (1989) Managing Design, Designing Management,
Design Management Journal: 37-43
Dutton, J. E. and J. M. Dukerich (1991) Keeping an Eye on the Mirror: Image and
Identity in Organizational Adaptation, Academy of Management Journal, 34:

A Design-Based Model of Strategic Change

517-554.
Gioia, D. A. and J. B. Thomas (1996) Identity, Image and Interpretation: Sense-making
during Strategic Change in Academia, Administrative Science Quarterly, 41:
370-403.
Gioia, D. A. and K. Chittipeddi (1991) Sense-making and Sense-giving in Strategic
Change Initiation, Strategic Management Journal, 12: 433-448.
Gorb, P. (1988) Design Talks. London: Design Council
Hedberg, B and S. Jnsson (1977) Strategy Formulation as a Discontinuous Process,
International Studies of Management and Organization, 7 (2): 89-109
Kotler, P. and Rath, G. A. (1984) Design: A Powerful but neglected Strategic Tool,
Journal of Business Strategy, 5 (2): 16-21.
Lawrence, T. and N. Phillips (2000), Understanding Cultural Industries, Journal of
Management Inquiry.
Lorenz, C. (1986) The Design Dimension, The New Competitive Weapon for Business,
Basil Blackwell
McCracken, G. (1988) Culture and Consumption New Approaches to the Symbolic of
Consumer Goods and Activities. Bloomington, IN: Indiana University Press.
Mintzberg, H. (1978) Patterns in Strategy Formation, Management Science, XXIV, 9
Mintzberg, H. (1994) The Rise and Fall of Strategic Planning, Prentice Hall.
Olins, W. (1992) Corporate Identity Making Business Strategy Visible Through
Design. New York: Thames and Hudson
Pantzar, M. and A. Ainamo (2000) Nokia - The Surprising Success of
Conservativeness, paper presented at the conference of the European Group for
Organization Studies, Helsinki, 2-4 luglio.
Peters, T. J. (1989) The Design Challenge, Design Management Journal, 8-13.
Peters, T. J. (1992), Liberation Management: Necessary Disorganization for the
Nanosecond Nineties, New York: Alfred A. Knopf.
Porter, M.E. (1980) Competitive Strategy. Techniques for Analyzing Industries and
Competition, The Free Press, New York
Porter, M.E. (1985) Competitive Advantage. Creating and Sustaining Superior
Performance, The Free Press, New York
Porter, M.E. (1996) What Is Strategy? Harvard Business Review, Nov.-Dec.
Ravasi, D. (1998) Governare linstabilit. Sviluppo & Organizzazione, 168, 91-112.

A Design-Based Model of Strategic Change

Ravasi, D. e N. Phillips (1998) Managing Corporate Identity in Symbol Intensive


Organizations, paper presented at the conference of the European Group for
Organization Studies, Maastricht 9-11 July.
Schmitt, B. and A. Simonson (1997), Marketing Aesthetics: The Strategic Management
of Brands, Identity and Image. New York, NY: Free Press, 1997
Schmitt, B. H. (1999) Experiential Marketing. How to Get Customers to Sense, Feel,
Think, Act and Relate to Your Company and Brands. New York, NY: The Free
Press.
Schumpeter, J. A. (1934), The Theory of Economic Development, Cambridge, MA:
Harvard University Press.
Simon, H. (1996) The Sciences of the Artificial. Cambridge, MA. The MIT Press
Smirchich, L. and G. Morgan (1982) Leadership: The Management of Meaning,
Journal of Applied Behavioural Science, 257-273:
Svengren L. (1997) Industrial Design as a Strategic Resource, The Design Journal,
Vol. 1
Teece, D. J., G. Pisano and A. Shuen (1997), Dynamic Capabilities and Strategic
Management, Strategic Management Journal, 18, 509-533
Thackara, J. (1997) Winners! How todays companies innovate by design. Aldershot:
Gower Publishing
Walsh V., Roy R., Bruce M., and Potter S. (1992) Winning by Design, Basil Blackwell