IDEO invented ‘human-centered design.’ Can it survive an AI world where everything looks the same?
IDEO, known for its human-centered design approach, is facing challenges as companies increasingly adopt design in-house and shift focus towards AI. The agency's revenue has declined significantly, prompting new CEO Mike Peng to rethink its value proposition by emphasizing teaching clients to design independently. As IDEO adapts to these changes, it also observes trends in global markets, particularly in China and Japan, where companies are navigating international expansion.
- ▪IDEO has seen a decline in revenue from $300 million to less than $100 million in four years.
- ▪Job postings in product design fell by 18% last year, with graphic design postings dropping by 57%.
- ▪Mike Peng aims to shift IDEO's focus from individual projects to teaching clients how to design their own products.
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Procter & Gamble’s standing toothpaste tubes. The Palm V personal digital assistant. Bank of America’s “Keep the Change” program. For decades, the innovative wares invented inside IDEO were considered the leading edge of product design. At the core was the idea of “design theory,” an approach to developing new products or services that puts customer needs, instead of business or engineering needs, first. The design agency, founded in 1991, eventually grew beyond pure product design to, for example, revamp Ford’s EV factories. Recommended Video But, in recent years, the storied design agency has faced a crisis. Companies brought design in-house, copying IDEO’s approach without needing to hire the agency. Executives pressured design teams to deliver results.
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