MEREDITH Strategy + Design

We design the places and spaces where people come together to do great work

How the physical workspace can affect success in product development

Three characteristics of leading performers

McKinsey recently reported on a survey of product development companies. The survey uncovered three characteristics of businesses with the best track records –

  1. They had a clear sense of project goals
  2. They nurtured a strong workplace-based project culture
  3. They maintained close contact with the client throughout the project

Each of these factors have an important underlying component of information communication. In our own work, we’ve found that the design of the physical workspace is a significant partner to the operational best practices for success. The McKinsey study reminds us, for example, that visually open and resource-rich environments can be significant contributors to the communications and cultures that lead to product development speed and innovation success.

Clear sense of project goals

A clear sense of project goals is essential to avoiding false starts and movement along unrewarding paths. Without a clear plan forward, the increasingly spare resources that rightly belong to an efficient and effective pursuit of solutions for the client are consumed in course correction. A design strategy, that is, is essential to achieving the objectives of the business strategy design.

McKinsey points to the importance of understanding goals and thinking through scope early in the project. The right start is certainly important, but we think that a sustained conversation about the project and its scope is also important, especially in the development of complex systems.

Companies seeking effectiveness in establishing team awareness of goals and maintaining team attention to scope should look at the places and spaces where the project work is done. A leading energy company seeking a rapid development of product ideas for their emerging entrepreneurial non-regulated businesses found that dedicated project rooms meant more effective team communications. As a result, the teams in these contexts more quickly contributed to market-leading innovations. These spaces provided the visual memory – posted images and documents – that streamlined operations and made orientation simpler, meetings more efficient, and scope correction unnecessary.

The McKinsey study confirms the importance of information access like this. Only 19% of team members in poor performing companies felt that they had the information they needed to dynamically and efficiently manage performance, cost, time and risk in their projects.

Workplace-based project culture

Interdisciplinary team work becomes much more successful when team members have a sense of shared purpose and values, and trust each other to perform excellently in the development of the project. We have found that the most successful companies understand that innovation is inherently social. They design a workspace as a key vehicle to developing a workplace culture that is itself highly social in nature.

For example, a now leading integrated communications company, making its way from formerly separate disciplines of advertising, planning, communications and media, declared that “work looks different, now.” This mantra was their declaration that market-leading innovation and creativity necessitated new operational and organizational models, and new ways of approaching clients and projects.

In order to achieve the cultural integration they needed, they developed a workplace with a counter-intuitive two-seats-for-every-employee concept. The primary “home-base” seats were in new-generation workstations in team clusters. The second seats were unassigned, and consisted of highly varied settings supportive of planned or spontaneous get-togethers for socialization, project work, idea development, progress reviews, etc. These open “social” environments gave the company a very rapid achievement of their new organizational model because people got to know each other easily, learning each others’ interests and coming to trust in each others’ skills and commitments.

Why does this matter? One of the key success factors uncovered in the McKinsey survey was that leading performers had knowledge of the skills and competencies of team members before they were selected to join a project. None of the project teams in the lower performing companies in their survey had knowledge of their fellow team members’ skill sets before their projects kicked off.

The workplace in our example also did away with the “entitlement” model of space assignment. The McKinsey study found that leading companies in product development minimized the distractions from the project that otherwise come from a focus on “job function.” We consistently find that “footprint status” metrics associated with title and function are among the great distractors in lagging companies.

Talking to the customer

We’ve periodically consulted over an extended period of time with both the winners and the losers in the realignment of the automotive industry that has been taking place. One of the factors we’ve tried to overcome with the underperformers is the sense that design is an ivory tower discipline. In these cases, studios have been closed environments where even exposure to other brands under the same roof is disallowed. Information about the customer and the state of the art in innovations that were attracting them was hard to find, and gained only through individual designer’s outside activities.

Proprietary knowledge, not-quite-ready-for-prime-time creations, and vendor integration all present challenges to more open environments for product design companies. Places and spaces, however, that assure the security of developments and the openness of teams yet allow the easy integration of the client in the process are relatively easy to achieve and are important components of leadership companies.

McKinsey’s study reflects other approaches to customer engagement, as well. The study showed that periodic contact to verify and validate customer preferences was a key and differentiating practice of leadership companies.

Where to go from here?

Conventional, functional descriptors of the spaces and places where creative work is done cannot lead to the kind of workplace that will support the culture and practices characterizing market-leading companies. Planning and design processes that shed corporate paradigms and develop a new spatial lexicon will yield a better understanding how people work and what works for these businesses. Workspace concepts generated in this way will deliver early and sustained success in the transformations that generate leadership.

The McKinsey survey confirms some general design principles and approaches –

  • Always consider designing information-rich dedicated team spaces, but especially when speed is essential and resources are spare. Access to knowledge, speed of communications, self-correcting conditions and project focus delivers differential performance results.
  • Innovation is achieved through an inherently social culture characterized by the open exchange of information and the integration of diverse disciplines. Assure that your workspace has a diversity of settings to support and sustain casual interactions among individuals. Accept that work looks different, now.
  • Invite your clients and customers into your workspace. Make places where they can be comfortable and want to linger, and where you can be comfortable that they and other outsiders who need to be part of the process are not inappropriately intruding.

We’ll come back to this later, to reflect more on research we’ve done on places for innovation and some of our recent work on the start-up phases of innovators.