Different by Design

By Tiffany Sharples

Surgeon Daniel Palestrant was laid up for several months with a back injury when he realized that it often took years before new techniques developed by pioneering doctors filtered out to the rest of the medical world. Why not bring physicians together online and, even better, charge businesses for access to content from their conversations? But the idea alone wasn't enough to get his social network off the ground. He needed to package that idea in such a way that investors would buy it.

Instead of bringing in a conventional consultant to help him, Palestrant visited a loft in the Flatiron district of Manhattan. In a series of meetings there, Palestrant rattled off his ideas--an outpouring he likened to "intellectual bulimia"--while Elizabeth Pastor and Garry VanPatter, the team behind the firm Humantific, furiously drew and took notes. "He was really deep in the trees," Pastor says. The pair made sense of Palestrant's fuzzy ideas and turned them into huge, glossy posters with icons representing how the parts of his business fit together. Diagrams in hand, Palestrant went to venture-capital funds and returned with $40 million in start-up money.

That kind of response is generating more and more heat in the emerging field of transformation design--a hybrid of business consulting and industrial design. Firms like Humantific, whose founders are designers, apply the same process used in designing sleek MP3 players and ergonomic teakettles to unwieldy intangibles like cell-phone promotions and hospital organization, transforming their effectiveness. Along the way, the field is creating some unusual teamwork between designers and business people.

Ideo, the Palo Alto, Calif., design firm best known for creating the Palm V digital organizer, began its Transformation by Design department, one of the first in the country, under Peter Coughlan in 2002. Ron Volpe, customer vice president for supply chain at Kraft, turned to Ideo that year to help improve the relationship between Kraft and Safeway. Basic communication was not smooth, and there were some delays in getting products to market. Ideo gathered more than 80 employees from both firms, encouraging each side of the supply chain to weigh in. The changes that Ideo devised--new promotional displays, a scorecard that tracked exactly where the shipping pallets were and how fast trucks were being turned around--resulted in a 160% increase in revenue for Kraft and enabled it to cut time to market more than 75%.

The benefit of using a design approach as opposed to pure management consulting, advocates argue, is that it enables--or even requires--a team to invent new ways to solve problems. Jump Associates, based in San Mateo, Calif., recently collaborated with General Electric's executive-jet business. Jump managing associate Dev Patnaik walked the GE people through hangars and later sent them to a toy store; one brought back a model plane attached to a plastic landing strip. The executive, Patnaik recalls, said, "This is it--this is the problem with executive jets!" He then explained that the services jet owners expect at home aren't always available in the locations they fly to. GE now aims, metaphorically at least, to let its clients "take the tarmac with them."

For Palestrant, the transformation lingered long after the designers packed up their pencils. Two years later, he has more than 75 employees and likens the design experience to "shooting an aircraft off an aircraft carrier--taking someone from zero to 200 m.p.h. in less than a second."