There is no understating the importance of design and innovation, which are central to the idea and the ideals of working for the benefit of all stakeholders
T he call for business to play a larger role in society is being heard around the world. In addition to corporate social responsibility initiatives and philanthropic efforts, companies are trying to incorporate social impact into their operations. The chief executives of 181 American companies recently signed a pledge with Business Roundtable, the nonprofit based in Washington DC, to run their companies "for the benefit of all stakeholders — customers, employees, suppliers, communities and shareholders." Delivering on this promise, however, depends on more than just good intentions. It demands innovation and design.
The challenges companies are grappling with today — sustainability, skilling, health and security among them — require widespread collaboration and experimentation. Design, a process of synthesising different ideas and preferences and motivating behavioural change, is crucial in this context. Successful design also inspires people far outside their industries. Apple's offerings, for example, motivated many companies to sharpen usability. The 'one laptop per child' idea had its difficulties but it revealed a commitment to reaching the world's poor and forced their peers to consider inclusion. The success of the product was limited, but the importance and urgency around the vision has grown as inequality has increased worldwide.
Companies and nonprofits embracing design can potentially impact more people than ever before. More than a billion people have moved out of extreme poverty since 1990, there is a global payments infrastructure in place, and cellphones are everywhere. 'Big data' exists for rich and poor alike today and the narrative of business as a force for good has gained traction. Design can deliver profit and impact in the following ways:
There is perhaps no better testament to the power of design than the rapid adoption of cellphones. The first generation of these phones were comically large and bulky, and the market for them could not have been expanded to current levels even with lower prices. A better understanding of the consumer, rapid experimentation, new business models, improved infrastructure and the overload of features in today's cellphones illustrates the power of innovation to transform a 'want' into a 'need'. Policymakers can create an enabling environment and incentives, but business leaders and social innovators must imagine and manifest consumer aspirations.
Ideas, even the very best ones, do not have an effect in a vacuum. Even where profit is not the central objective, innovation (in offerings as well as narratives) is required to drive behavioural change. The concept of Indian independence, for instance, existed for at least 50 years before Mahatma Gandhi. But it was not until the creation and widespread adoption of the spinning wheel and the narrative of self-sufficiency that the objective was realised. Many of the success stories of innovation in history and in technology reinforce this message — great design must increase inclusion.
The study of innovation tends to focus on identifying trends. However, several of these changes are felt and experienced before they can be precisely measured. For example, most people understand that many families today have two working parents, that fathers are choosing to take a more active role in parenting, and that there are same-sex couples raising children. Designers must serve as 'translators' — helping people cope with change, not merely describing it. This can start with simple and meaningful steps, like putting a diaper-changing station in the men's restroom.
The excitement about design can at times seem at odds with reality, as we have also become aware of its potential to harm. Algorithms control many aspects of our daily lives, our behaviour and preferences can be more easily tracked, and business models can be engineered to favour some parties at the expense of others. I believe all of these issues underscore the importance of understanding design well enough to raise the issues in time and make the necessary corrections.
My father, the late CK Prahalad [management expert and Padma Bhushan awardee], always emphasised that innovation is not just about ideas; it is also about ideals. The big success stories of business and social innovation in the past decade share a common thread — the willingness of the organisation to struggle with questions of fairness and equity. Apple had brilliant design but it could only deliver that special experience because it found a way to tap and compensate the efforts of hundreds of thousands of programmers outside its walls.
Muhammad Yunus, the Nobel Peace Prize winner, did not change banking because he discovered a new mathematical theorem. He began with deep empathy. An abiding concern for fairness will make the difference between the companies and countries that create opportunities and the ones that create and attract opportunists. Today, consumers are adding their voices and choosing to engage with businesses that align with their values. Your design will show them your values.
A portion of this piece was adapted by Ms Prahalad from an earlier submission: Thinkers 50 –Innovation@Work