In an earlier post, I outlined some of the fundamental aspects of design thinking and how it supported the new venture realization process. For the following three articles, I want to look at the famous (and possibly infamous) IDEO Shopping Cart design video to answer one question – Are the lessons derived from this archival document still relevant?
This post will look at diversity and how the video depicts it, and some ways to view this representation. In the following posts, I will look at the efficacy of their “deep dive” techniques, followed by IDEO’s take on innovative culture.
As an introduction, I have been showing this video in classes on and off since its initial production in 1999. The IDEO shopping cart video premiered as an episode of ABC Nightline in 1999. To demonstrate their unique innovation process, they decided to design a grocery store shopping cart that addresses specific issues experienced by grocery store owners and shoppers. The show concentrated on two major themes, the design process, and the IDEO culture, enabling sustained innovation. The video followed a multi-disciplinary design team as they moved from initial on-the-ground observation in grocery stores and secondary market research to their unique form of brainstorming, prototyping efforts, and soliciting customer feedback. Following the team for five days, the narrative weaves in and out from the design process activities to a tour of IDEO’s environment and cultural artifacts.
As an educator who studies innovation’s cognitive and behavioral dynamics, the video’s two themes present valuable lessons to discuss further and explore. I have facilitated dozens of classroom discussions about the details of the design process and the organizational practices that enable innovative behaviors and outcomes.
Today there are many definitions of design thinking. But, like every significant construct, there is plenty of disagreement about how to best place it within the scope of creative and innovative thought processes. A good starting definition covering much ground is “a human-centered innovation process that emphasizes observation, collaboration, fast learning, visualization of ideas, rapid concept prototyping, and concurrent business analysis” (Lockwood, 2009).
Design thinking is a systematic approach to solving significant problems. It begins with a “human-centered” discovery process, followed by experimental and iterative cycles of solution design, testing, and refinement. From a cognitive science perspective, the structured nature of design thinking allows problem solvers to investigate an effective solution without being thwarted by their own biases and behaviors that impede innovation. In addition, design thinking emphasizes deep empathetic customer engagement to facilitate the co-creation of optional solutions.
Now, let me take you to the start of the video and how it introduces and sets up the video’s premise.
Lesson One – This is not your 2022 diversity
In the 15 minute version (the one I use in class), the video starts – “9 in the morning day one and these people have a deadline to meet.” After briefly highlighting some of their successful and failed product designs circa the late 1990s, Dave Kelley positions IDEO’s design approach. “We are not actually experts at any given area. We are kinda experts in the process on how you design stuff. “
From this initial preamble, we meet the team assigned to bring the design of the shopping cart into the 21st century. The group described as “eclectic” are individuals who derive their ideas from a diverse range of sources. The narrator introduces the core team with disparate backgrounds in engineering, psychology, architecture, marketing, linguistics, and biology. Therefore, the message focuses on disciplinary background and domain expertise only. In the 20 seconds of the video, the narrative does not mention gender, ethnicity, or other forms of diversity. And one of the first learning opportunities presents itself. Circa 2020 and onwards, student discussions focus on the apparent lack of diversity in the video. I have found it essential to bring up this deficit before showing the video. One particular program has requested that we not show the video. This 20 seconds of video has led to hours of class discussion.
So let’s double click on this. As a starting point, I want to reflect on my experience with organization innovation in the mid to late 1990s. Briefly, I was conducting a study on the cognitive-behavioral drivers of organizational innovation. As part of the study, a behavioral model was designed and tested, based on comparing behaviors and organizational practices of firms with high versus lower rates of innovation. I identified several behavioral characteristics across four categories – advocative, collaborative, inquisitive, and goal-directed. One of the behaviors that stood out as strongly correlated with innovation outcomes as part of the inquisitive category – “search for and incorporate diverse points of view.”
The research studies associated with this work led to several applications in most prominent technology companies, like AT&T Bell Labs, Becton Dickinson, and General Instrument. We found several organizational practices that fostered employee inquisitiveness during interviews with company leaders, scientists and engineers, and product development teams. Across the board, we found these highly innovative companies had established programs that promote continuous information from multiple sources, both internal & external to the organization. Standard programs included technical forums & speaker programs, extensive linkages to universities, and formal monitoring of outside technological advances.
Then there was “diversity” training. Almost every organization visited in the late 1990s had diversity training. The focus is on gender diversity only and the human resource departments as the facilitator. The explicit goal of the training activities is to develop the skills necessary to treat everyone with equal respect. The implicit objective was to reduce instances of sexual harassment in the workplace leading to expensive lawsuits and negative publicity. The content made this clear, a discussion of legal regulations and company policies, along with a case study highlighting a spectrum of behaviors with associated consequences. The message was clear; bad behavior is not acceptable in this company. So follow the guidelines or else.
If you look at the history of diversity training at this time, very few programs focused on inclusivity and equity as a moral imperative. With notable exceptions like IBM and Xerox (Anand and Winters, 2008), the focus continued to be on compliance first, and then maybe an inclusive culture. Anand and Winters report that you begin to see a shift away from compliance and more towards respecting people’s differences in the later 1990s. At this time, most organizations deemed diversity training tangential to core business objectives. This circumstance tracked with what I was seeing during this period.
None of these companies communicated any relationship between embracing diversity and organizational innovation and performance in our research discussions. There were no conversations about how diverse perspectives can lead to disruptive ideas. In our meetings with participants, no one seemed to take this training seriously and found it a waste of time. At the time, I felt this was a missed opportunity. These organizations gathered some of the brightest and most creative people globally and provided them with a list of dos and don’ts. Leadership could easily have framed the training differently, demonstrating how embracing a diverse and inclusive workplace would positively impact both individuals and the organization.
One can surmise that IDEO was grappling with these issues like many firms at the time. The core team has six members in the video, four men and two women. [Note: A patent for the design filed on 12/10/1999 included Peter Skillman, the IDEO engineer, the lead author, and five other men.]
IDEO seemed to nod to gender as part of their “eclectic” mix for the video, with no explicit representation of ethnicity, race, or age. But, again, this may reflect a sign of the times, reflecting what David Thomas and Robin Ely call the “discrimination – and – fairness paradigm.” Their HBR article (1996) defines this paradigm as looking at diversity through the lens of equal opportunity, fair treatment, and compliance. In other words, making sure that the composition of the workforce reflects more closely that of society. While this is not an excuse, it reflects the common thinking among many companies during this period.
Additionally, there was a good deal of discussion about the representation of women in the technical fields. In reports by the National Science Foundation, women represented only 28% of employed scientists and engineers in 2010, up from 23% in 1993. The discrepancy between genders in the STEM fields continued as part of an ongoing discussion in the U.S. in 1999. I was associate dean of undergraduate students for Columbia Engineering at the time. We were very focused on increasing the number of women enrolled in our engineering and applied sciences programs, which was around 25%. In the U.S., the women engineers were hovering around 13%, up from 9% in 1993. Today, women hold only 15% of engineering jobs, still one of the most underrepresented STEM fields.
The data is quite discouraging if you add women of color into the picture. As of 2020, women of color hold 12% of the tech positions in the U.S. Women who identify as Asian or Pacific Islander hold 7%, Black or African American hold 3%. Women who identify as Latina or Hispanic have 2% of all tech positions in the U.S. Women who identify as white hold 13% of all tech jobs in the U.S.
IDEO was very much part of the Silicon Valley environment. If you zoom on Silicon Valley, gender and ethnicity representation was woeful. In a 2014 U.S. Equal Employment Opportunity Commission special report, investigators looked at the participation rates by gender and race, comparing the tech industry with all U.S. industries, emphasizing Silicon Valley. Overall participation rates of whites, Asian Americans, and males in U.S. high tech industries were disproportionally higher, especially in the Silicon Valley geographic area. African Americans and Hispanics were under-represented nationwide in the high-tech sector compared with the private sector. African Americans and Hispanics were significantly under-represented in the high-tech industry in the Silicon Valley geographic area. Additionally, women lagged behind men in leadership positions and technology jobs, as Technicians and Professionals, in the high tech sector. These gender differences were predominantly evident in the high-tech industry of Santa Clara County.
Lessons from Research & Application
Now, here we are in 2022. A growing wave of research and practice indicates a relationship between diversity and organizational performance.
McKinsey has been writing a series of research reports about diversity, dating back to 2015. Their latest 2020 series report engaged 1000 large companies across 15 countries. The information pulls no punches as it finds slow progress in building diverse representation in participating firms. However, a positive trend demonstrates that lasting cultural change is possible with a systemic, business-led focus on inclusion. Due to the longitudinal nature of the McKinsey research, they can correlate progress in expanding gender and ethnic diversity in senior leadership and key performance indicators. Companies that have made the most progress – fast movers” in developing representation and radically creating an inclusive culture have outperformed the “laggards” substantially in terms of profitability growth against national industry averages.
In today’s top organizations, leadership agrees that diversity drives innovation. For example, in a recent Forbes Insights Report (2011), survey responses of 331 senior leadership strongly agreed that a diverse set of experiences, perspectives, and backgrounds is crucial to innovation. Moreover, these leaders see the value of encouraging different perspectives and ideas that lead to new products and business innovation. But, of course, the one problem in a study like this is that we don’t know how leadership was defining or measuring innovation in their respective industries.
As has been the case for many years, it is challenging to find studies directly measuring innovation performance. One of the best innovation performance measures identified in my earlier studies was the revenue or profitability generated from new products over three years. 3M was the first company to popularize this innovation metric. Many firms have since adopted it over the past couple of decades. A 2018 BCG report investigated the relationship between diverse leadership teams and this innovation metric. BCG found a strong and statistically significant correlation between the diversity of management teams and overall innovation revenue. Companies that reported above-average diversity on their management teams also reported innovation revenue that was 19 percentage points higher than that of companies with below-average leadership diversity—45% of total revenue versus just 26%.
In a recent study investigating the relationships among diversity, inclusive practices, specific organizational characteristics, and innovation, the researchers examined several aspects of various industries across the UAE. The authors developed a model to investigate the direct and indirect relationships of three exogenous constructs: workforce diversity, inclusion practices, and organizational characteristics with one endogenous construct of organizational innovation.
I liked several aspects of this study. First, they collected both inherent and acquired diversity characteristics. This study’s inherent level of diversity includes age, gender, ethnicity, disability, and native language. Secondary level diversity information had marital status, parental status, religious beliefs, and work background.
The second construct, inclusion practices, collected information on work arrangements that facilitate the inclusion of diverse employees in the organization without any discrimination. The inclusion practices investigated included fairness, belongingness, uniqueness, and a diversity climate. The authors define fairness as the employees’ perception of the organization’s fairness in management policies, interpersonal treatment, and equitable distribution of opportunities. Belongingness manifests as acceptance by the group and the sense of connection with its members. Next, the study defines uniqueness as an individual’s perception of a differentiated understanding of self. Finally, diversity climate is the inclusion of people from diverse backgrounds and how their contributions are valued.
The third central construct was labeled organizational characteristics. Here the researchers limited (and I think rightfully so) industry classification, corporate type (public, private, not-for-profit), and firm size by the number of employees.
The study investigates how the three constructs influence organizational innovativeness. Respondents rated how their respective firms implemented new or significantly improved products, processes, or business practices in a survey.
Over two weeks, 511 surveys across 13 different industry classifications. The investigators found a significant and robust correlation between inherent diversity and organizational innovativeness. There was no meaningful relationship between the second level of diversity (acquired) and innovativeness. The direct impact of inclusion practices on organizational innovativeness is significant across all variables. Fairness and belongingness have the greatest influence. Organizational characteristics played an insignificant role in this study.
While the study has its limitations, especially a sample all from the same region, it demonstrates the role that primary or inherent diversity, along with the integration of inclusive practices, has on an organization’s capacity to innovate and adapt to a changing marketplace.
As industries grapple with how to improve representation, create more inclusive cultures, and capitalize on its impact on performance, the sciences have been investigating the relationship between diversity and such outcomes as creativity and innovation.
In “How Diversity Makes Us Smarter” (updated from Scientific American), the late Columbia Business School Professor Katherine Philips makes it clear how “diversity jolts us into cognitive action in ways that homogeneity simply does not.” There is little doubt from cognitive studies that diverse perspectives broaden viewpoints on issues and can readily lead to new ways of solving problems. Similar to what I noted in my earlier innovation studies, soliciting multiple views leads to novel, flexible thinking, a key to innovation.
Professor Phillips noted several studies demonstrating how such factors as gender and ethnicity created what she calls informational diversity. She argues, “when people are brought together to solve problems in groups, they bring different information, opinions, and perspectives.” In one study, Dezso & Ross (2012) found a relationship between the size and gender of leadership and its impact on financial performance, including a metric, “innovation intensity,” measured as a ratio of R&D expenses to assets. This study found that companies with more significant numbers of women in senior positions prioritized innovation, leading to more substantial financial gains.
When you consider how we view diversity today, the IDEO video does not directly serve our needs as educators or students of innovation. However, as an educator, I think that one can use the video’s portrayal to facilitate a robust discussion with the suitable preamble.
My students clearly state that embracing diversity is the right thing, period. However, whenever someone brings up the importance of associating diversity with performance outcomes, many find this conversation frustrating and wrongheaded (and this is business school). Well, I am much older now since my earlier innovation studies. Still, my views have not changed in that organizations should embrace diversity, equity, and inclusion as both a moral imperative and a good business strategy. If you don’t embrace diversity with this attitude, you won’t achieve an innovative culture and performance outcomes.
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