HIBT Lab! IDEO: David Kelley

It wasn’t unusual for David Kelley to take calls from Steve Jobs in the middle of the night. This came with the territory, as David worked on designing dozens of products for Apple over the years – including their first computer mouse back in 1980. Since then, David and his firm, IDEO, have helped all sorts of companies design new products. David also led the founding of Stanford’s d.school, where students learn to use design principles to solve complex problems. This week on How I Built This Lab, David shares stories from some of the most notable projects of his career. He discusses how diverse perspectives and backgrounds help teams generate new ideas, and explains how organizations can use design thinking to transform culture and foster innovation. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

  Our presenting sponsor today is Anthropic, the team behind Claude. Every founder on this show started with a hard question. Not the marketing plan, the 2 a.m. kind. Is this idea any good? Am I the one to build it? Should I quit my job? Anthropic got built the same way. A public benefit corporation founded on one hard question. How do we make sure AI goes well for people? So they asked over 100,000 people their hopes and their fears and are publishing what they find, even the uncomfortable parts. Me? I've got my own hard question about AI. Here it is. If everyone has access to something that can help them write the business plan,

• 0:46Guy Raz?

  build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from U.S. Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't.

• 1:32Guy Raz?

  Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems. But here's the thing. Path A, you keep going like that. End of the year, you're sorting through statements, trying to figure out what went where. You've left hundreds, maybe thousands on the table in rewards you never earned, money that could have gone back into the business. Path B, you pause and get The US Bank Triple Cash Rewards Visa Business Card.

• 2:14Guy Raz?

  Now you're earning 3% cash back on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association pursuant to a license from Visa USA Inc. Some restrictions apply. If you travel often, you'll want to hear about this unprecedented offer.

• 2:58Guy Raz?

  For the first time ever, new Delta SkyMiles Reserve American Express Card members can earn two Delta Comfort round trip flights for travel within the 48 contiguous US states, Puerto Rico, or the US Virgin Islands. Plus, you can earn 50,000 bonus miles towards your next getaway. And who doesn't appreciate an elevated airport experience? Delta SkyMiles Reserve Card members get access to the Delta Sky Club, your pre-flight oasis to recharge with 15 visits and four one-time guest passes each medallion year when flying Delta together. That's up to $950 in annual value.

• 3:40Guy Raz?

  Value estimate based on $50 per visit rate to purchase additional visits or bring a guest to the Delta Sky Club. Make every trip feel more rewarding with the card that upgrades your travel. Apply today at delta.com/cardsocial. Offer ends November 4, 2026. Minimum spending requirements and terms apply. Flights are fulfilled as flight certificates valid for Delta Comfort or Delta Maine to select domestic destinations. Book 21-plus days in advance. Up to $80 per person and taxes and fees apply. Other restrictions apply. When I pull up to a gas pump to fill my car, I'm not thinking about chemistry or engineering. I'm thinking about getting in, filling up, and getting on with my day.

• 4:23Guy Raz?

  And it reminds me a little bit of the founders I talked to on this show, because the best ones obsess over things their customers will never see. Tiny details, invisible improvements, relentless iteration. And not because anyone's watching, but because it makes the product better. That's what the mobile brand does. It engineers fuel the same way great founders engineer their products. Mobile Supreme Plus Premium Gas helps keep engines three times cleaner, which can mean better performance and improved gas mileage. It's for people who care about what's under the hood, even if they never see it. Three times cleaner compared to mobile regular gas in port fuel-injected engines. Actual results may vary.

• 5:07Guy Raz?

  Visit mobili fuels.com for details.

• 5:12Guy Raz?

  Hello and welcome to How I Built This Lab. I'm Guy Raz. So back in the late 1970s, David Kelly founded a product design firm. He helped Steve Jobs design the first Apple computer mouse. And eventually, David would merge his design firm with two others to create IDEO. IDEO went on to design thousands of products, everything from Nerf footballs that always fly in a spiral, to toothbrushes with squishy handles, to the interface inside the Ford F-150. But today, IDEO mainly helps companies design their culture and establish a design-forward mindset to trigger innovation.

• 5:55Guy Raz?

  David Kelly isn't just a founder of IDEO, but also the founder of the Design School at Stanford. And to say he's a legendary figure in the world of design is almost an understatement. His work has influenced everything from how designers think about user experience to how companies think about hierarchy. And his first job out of college? As an engineer at Boeing in the early 1970s, working on a particularly important part of Boeing's 747 aircraft.

• 6:27Speaker 01

  I was in what's called the passenger payloads group. That means the interior. And you're a big company, you break it down even further. So I'm in lights and signs. Well, the sign that I had responsible for happens to be one we all know well, which was the lavatory occupied sign.

• 6:45Guy Raz?

  Lavatory occupied. You helped design that sign?

• 6:49Speaker 01

  Yep. It's a milestone in aviation history.

• 6:52Guy Raz?

  It is. I was just on an airplane. I just flew back from France to the US. And thankfully, there was that lavatory occupied sign. So you were part of that group that like, you know, you switch that knob and then boom.

• 7:02Speaker 01

  Boom.

• 7:03Guy Raz?

  That sign lights up.

• 7:04Speaker 01

  Yeah, you betcha. Important.

• 7:06Guy Raz?

  How long did it take to design the lavatory occupied sign?

• 7:09Speaker 01

  You know, it was a long time. Years would be the answer to the question, really. But that's because of the variation in anything. You know, if you notice, it's not exactly the same in each airplane. And so that's because the lavatory is in a different place and the door opens on a different side or all that stuff. So you spend all your time doing variations of the original design, right? So every time they move a seat on the plane, the drawings for that plane has to be completely redone. This is a big drawing, right? Planes are huge. Anyway, so they move a seat back. Well, then the Boeing engineers have to redesign that whole plane. So it's a lot of work. So it's a very detail oriented job.

• 7:52Speaker 01

  You know, not the kind of job for a kid coming out of a Carnegie Mellon thinking he's going to be designing airplanes, right?

• 7:58Guy Raz?

  Yeah. But still, I mean, pretty important part of the passenger experience, knowing when the lavatory is occupied or free. You know, you have this really promising career as an engineer at Boeing, working on the lavatory sign. It's kind of a cool project. And this would have been your life as an engineer, working for big companies. But there was a decision you made in the late 70s to go to Stanford, to go back to school and to study product design, which was really, I guess, it was a turning point for you. I mean, this was a huge pivotal change in your career trajectory. Why did you make that decision?

• 8:32Speaker 01

  Oh, man, that's an understatement. What a change for me. So I'm an engineer and I don't really know what's going to happen. Am I just going to be in corporate America for the rest of my life and, you know, use my big personality to move up through management? Or, you know, is that what I'm going to do? But a friend in a carpool convinced me to go to Stanford. He said, "You are perfect for the Stanford career." And he kept bugging me. My grades weren't that good, so I didn't know that I could get into Stanford. So anyway, he convinced me to apply to Stanford. And I have to tell you, since that moment, I feel like I'm the luckiest guy on earth. You know, I'm doing, it sounds weird, but I'm doing exactly what I was put on earth to do, which is this brand of design that Stanford

• 9:16Speaker 01

  taught then and that I continue to teach now around being sensitive to humans and caring about business and caring about technology all at the same time.

• 9:28Guy Raz?

  Yeah. So you get your degree, your master's degree at Stanford, and you decide to basically create a design firm, which originally was called David Kelly Design or later become IDEO. But help me understand what it was you were going to do. You were going to design physical products, help people design physical products? That was the business initially?

• 9:47Speaker 01

  Yes. Well, the Stanford, the Stanford program was called product design, for one thing. But at that time, design was a lot about aesthetics. You know, people had all kinds of ideas about, when you said the word "design," they were thinking, you know, well, you're a fashion designer or, you know. And so we had this kind of worldview of design as an aesthetic thing. And still, a big part of design is aesthetics, but that was what people thought that only was that. And so the Stanford program was more about creativity and more about understanding people and what's meaningful to them. But it was still all around products. That's really what it was all about. So we were lucky, you know, we

• 10:30Speaker 01

  got early involved in Apple and did the first mouse for them and many other products.

• 10:35Guy Raz?

  Yeah. Let me ask you about that, because that's kind of a, not kind of, it turned into a huge deal. 1980. I think was when you first started to work with Steve Jobs and you would go on to

• 10:44Speaker 01

  Yes.

• 10:44Guy Raz?

  design the first mouse for Apple, which Apple was not a player in 1980. So how did you meet him? Did he come to you or?

• 10:54Speaker 01

  There was a guy in the Stanford program before me who ended up at Apple. It's a guy named Jerry Manock. And Jerry was the only design person in the company, which it seems hard to imagine at Apple now.

• 11:06Guy Raz?

  Yeah.

• 11:06Speaker 01

  But anyway, sometime in 79, he came and found me and said, I got this big client I can't keep up with. Would you come down and help me? Because he had the same point of view about design methodology that he had learned at Stanford, that I had learned at Stanford about the way you go about, you know, making prototypes and understanding people and, you know, being comfortable in a place of not knowing where you're going, which is hard to do. So I went down with him and met Steve. And we ended up doing like 50 products for him and Steve became a close friend and, you know, introduced me to my wife and couldn't have been closer to him. It was really that initial connection to Apple for IDEO, it was called David Kelly

• 11:49Speaker 01

  Design at the time, that drove us, right? You know, normally if you're a small company, you have a problem with not having enough work or having too much work because you're so small. But we had so many projects from Apple that we really kept going, so.

• 12:04Guy Raz?

  That must have been a big turning point because it turns out that that Apple mouse became an iconic product and there you were. You had designed it.

• 12:13Speaker 01

  Yeah, and everybody wanted whoever designed the Apple stuff, not just the mouse, but the other things we did for them. And so we ended up doing the first laptop and the first portable defibrillator. And so it was a great time because you had this new knowledge about what would make people fans of your products.

• 12:30Guy Raz?

  Yeah. I want to talk to you about Steve Jobs as a case study for a moment because this was still early days in the David Kelly march to where you are today. And Steve Jobs was also a design guy, right? I mean, he was not an engineer. He was not a coder, a programmer. His genius was marketing and also he had a great I, right? He knew what he liked and he knew what he didn't like, but he wasn't sitting there like at an architect's table with drafts of buildings. He knew what he liked and he actually knew how to sell it. So when you, what do you remember about those early days designing that mouse? Would he call you and say, no, I don't like that, or it needs to be like this? Or what, was he already that intense at that time?

• 13:14Speaker 01

  You betcha. Both of us were single and I'd get a call at 3 o'clock in the morning and he'd say to me, you know, I think those screws on the inside should be CAD plated rather than copper plated. I mean, he's very intense, but I have to say, everyone would tell you who was a designer of any kind, that in their career, they did their best work for Steve. He was the world's best client because he cared so much. I mean, most of the time you're delivering something, a prototype or a product, and everybody's excited about the thing they're doing, but they're not so sensitive to the kind of nuance that we've just been wrestling with. And so it was really fulfilling to have somebody who cared to

• 13:58Speaker 01

  the level, he might have cared that much about the software and the hardware and the everything else, but certainly with respect to the design. And sometimes, you know, it wasn't that fun that he didn't like what you did, but he cared so much and you went back and iterated and did it better. And you and he both knew it was better by the time that we were done with the product and ready for release.

• 14:19Guy Raz?

  That's the nicest way of saying he was a pain in the ass, what you just said. It was the nicest way of saying that. How, how did he know he was right? This is interesting because I, you are a designer, you had studied design, you would go on to design this mouse with him. How did he know when he was right and when you were right?

• 14:40Speaker 01

  He was a pain in the ass, yes, but I mean, he was an exceptional human. And he had a sixth sense of what people really wanted. So he would do things like, you know, we don't need a disk drive in this product, or we don't need a fan in this product. And he got those from really understanding people. And we didn't have to do as much work at digging deep because Steve had a sense of it. And he turned out to be right so often that we were more than willing to follow him. But in 2007, the iPhone was announced and I had cancer. I had throat cancer at the time and I was home.

• 15:17Guy Raz?

  Yeah.

• 15:20Speaker 01

  Steve showed up on that day and gave me my own iPhone.

• 15:24Guy Raz?

  Wow.

• 15:25Speaker 01

  You know, that's not the kind of person that you wanna

• 15:32Speaker 01

  call a pain in the ass, you know?

• 15:34Guy Raz?

  In, only in the best, most loving kind of way?

• 15:38Speaker 01

  Yes, absolutely.

• 15:40Guy Raz?

  Right?

• 15:40Speaker 01

  Yes, you know, I get a bit emotional about it. Um, some days you came home thinking he had just praised you and you felt like a million bucks.

• 15:50Guy Raz?

  Yeah.

• 15:51Speaker 01

  And sometimes he had told you, that was terrible, you know? I'm not paying you for that work, you know? Go back and do better. And you felt terrible, but you always felt great in the end.

• 16:02Guy Raz?

  Yeah. I'm curious about, I mean, this kind of leads me to this question about design approach. And I ask about this because I'm just, I love this. And anyone listening should just do a web search for the, I think, enorme telephone or enorm telephone, E N O R M E.

• 16:18Speaker 01

  Yes.

• 16:19Guy Raz?

  And

• 16:19Speaker 01

  Enorme.

• 16:20Guy Raz?

  Enorme. This is a telephone that is now at the Museum of Modern Art in New York because it is so beautiful and iconic. And there's a telephone that you designed. And it is, it's like a Mondrian painting. I wish I had that phone. You can't get them anymore. Tell me about designing this phone.

• 16:38Speaker 01

  First, I have a few in my garage.

• 16:39Guy Raz?

  Oh, good. Can you send me one?

• 16:41Speaker 01

  Yeah, sure, sure, sure.

• 16:42Guy Raz?

  Okay, great.

• 16:44Speaker 01

  They probably don't plug in. But anyway, I had this friend named Eteris Satzus, who was a famous Italian architect. And if you were a designer, you were always in Italy and in love with Italian design. That's just the way it was in those days. I mean, you'd look at the cars from that era, for instance. But anyway, Eteri and I both had our own little practices like this. You know, I had David Kelly design and he had Satzus's Sochiati. And we're thinking, you know, we're not making very much money. We're discharging people a little bit. So let's do our own products. And so that's what it was. It was a joint venture between Eteri and I. And we just said, you know, Italian design, California technology. How can you go wrong?

• 17:23Guy Raz?

  Yeah.

• 17:23Speaker 01

  But neither of us were much of a business person. And so we designed this phone and had him produce. But it just, as beautiful as it was, it appealed to designers and so it sold to designers, but it wasn't functional enough to be a big hit because AT&T was giving away phones, had about the same feature set as this. So it was on the cover of every magazine and I now still have two cards, lifetime membership to MoMA New York.

• 17:47Guy Raz?

  Wow.

• 17:48Speaker 01

  Because, because, did you know that? That's an interesting story. If you have something in the permanent collection, you get a-

• 17:54Guy Raz?

  You get a lifetime card.

• 17:55Speaker 01

  Lifetime card.

• 17:56Guy Raz?

  Free admission. I'm going to New York with you next time.

• 17:58Speaker 01

  Absolutely.

• 17:59Guy Raz?

  No, I'm going to New York with, free admission.

• 18:00Speaker 01

  Absolutely. But anyways, we did the wrong product, but it was a blast to work with Eturi and to, and to come up with a product that was so well received by the design world, basically.

• 18:15Guy Raz?

  And sometimes it's, that's what it's about. It's about just pushing the boundaries. You would eventually, and did, work on many practical products that, that people use and, and eventually David Kelly Design became IDEO. You merged with two friends, Bill Mogrige and, and Mike Nuttall in, in the early 90s and, and that became IDEO. And for people who aren't familiar with IDEO, it is, my description of it would be a collection of the smartest, quirkiest, weirdest people that you could just bring into a room. Like, you hired, and I think to, to this day it still does, but you hired psychologists, biologists, people who dropped out of medical school, marketing experts, MBAs, engineers, anthropologists,

• 18:58Guy Raz?

  and you would basically bring them into IDEO and say, you know, this company needs to figure out a design for a new toothbrush. Let's figure it out.

• 19:07Speaker 01

  The main thing we did was we make ideas tangible, right? So you're a company and you're thinking you might want to, you know, to do a new toothbrush, as you say. What are the possibilities and what would make a toothbrush better? What's the new to the world idea around toothbrush? Well, if you want to do that, you have to have a whole bunch of different kinds of people. It says a lot for diversity of all kinds of things, thought, experience. And so by bringing those kinds of people in, we'd come up with new to- The world ideas in a routine way. It's hard to say innovation in a routine way, but that's the way it felt.

• 19:46Guy Raz?

  I mean, you literally did. IDEO did literally invent the squishy handle on the toothbrush that we all are familiar with today. If we don't use an electric, if you use the regular.

• 19:57Speaker 01

  Long time ago.

• 19:58Guy Raz?

  Right, that was, you guys designed that. That squishy part on the handle of the toothbrush.

• 20:04Speaker 01

  And I'm not trying to be arrogant, but thousands and thousands of other things. You have four or 500 projects going in a year. You know, you work across all kinds of different domains and industries, and in some ways, that's what makes you better. One of the tools that a designer has is that they have had a broad experience. And you can apply something that seems pretty straightforward as a methodology in doing things in one industry and bring it to another industry and look like a genius. And all you're doing is doing it the way that other people do it.

• 20:37Guy Raz?

  We have to take a very short break, but we'll be right back with David Kelly, the founder of IDEO and Stanford's Design School. You're listening to How I Built This Lab.

• 20:50Guy Raz?

  Does your team want a website that looks and feels handcrafted but is still fast to ship? Well, Framer is built exactly for that. With Framer, you design on a visual canvas with responsive layouts, hosting, and a CMS built in, so the work is production-ready from day one. And you can get it done with help from Framer's AI agents. Framer is the AI website builder that helps creators, teams, and businesses ship production-ready sites faster than ever while getting every detail right. Prompt, inspect, edit, and publish in one place at a whole new pace. AI agents and humans work together. The agents bring speed and scale,

• 21:34Guy Raz?

  and people bring taste, judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on. NetSuite Next surfaces insights

• 22:19Guy Raz?

  exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is also reshaping how people and teams work together, and that shift is already underway. That's why NetSuite wants to put a new, expert-created business guide in your hands today. It's called "Aligning for the Agentic Era: How AI is Changing Everyday Work." And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it.

• 23:02Guy Raz?

  If your revenues are at least in the seven figures, get NetSuite's free business guide, "Aligning for the Agentic Era: How AI is Changing Everyday Work", at netsuite.com/built. The guide is free to you at netsuite.com/built. netsuite.com/built. Stripe is built for whatever comes next because the pace of change has never been faster than it is right now. New business models, new currencies, and new expectations for speed, reliability, and scale. Stripe builds financial infrastructure that helps businesses start, grow, and operate globally. From payments and billing to fraud protection and cross-border payouts,

• 23:46Guy Raz?

  Stripe is built to support the new pace of commerce. They're trusted by the companies building at the frontier, from 86% of the Forbes AI 50 to global leaders like Salesforce and OpenAI. In fact, more than 1.6% of global GDP flows through Stripe, with Stripe's users processing a combined $1.9 trillion last year. So if you're already thinking about what's next for your business, see what's possible at stripe.com.

• 24:29Guy Raz?

  Hey, welcome back to How I Built This Lab. I'm Guy Raz, and I'm talking with David Kelly, founder of IDEO, the design firm known for hundreds, if not thousands, of the products you interact with every single day. So David, I want to ask you about, there was a, and anybody listening to this should check it out, there's a Nightline segment, it was a long segment, it was like 20-minute long segment, that was broadcast in 1999 about IDEO. And basically, Nightline came to IDEO and said to you guys, hey, we want you to design a better shopping cart. Here's your five-day project. We're just going to follow you in the design thinking sprint. And if you watch it, it's amazing, because this is the late 90s, and the things you

• 25:11Guy Raz?

  were doing are very common today in companies, particularly creative companies, but they were radical. It was like, no hierarchy, project managers, right? For example, that would run small teams, design sprints where people would gather around and just throw out a bunch of ideas, and then like, Post-it pads on the wall, and sketches, and then people would put little Post-it pads on different sketches that they thought would work, and then they would go to the next iteration. And how did you begin operating that way? I mean, did it just kind of evolve that way? Or was it a very kind of prescribed, well-thought-out process for how you wanted people in your team to think about design?

• 25:50Speaker 01

  Well, one of the bases of where we start is that we believe that everybody's wildly creative, so we involve everybody. I mean, sometimes the receptionists would come up with the best ideas. So if you believe that the boss is going to have the best ideas, I mean, if you look at a lot of companies and measure what's going on, the boss is speaking more often than anybody else. We try to get everybody to be on an equal plane with respect to innovation. And so, in there came the notion of what a guy named Bob McKim called need finding, which was the human-centered design part, where you try to understand what people care about. But as far as in the actual process, it really was

• 26:34Speaker 01

  A place of valuing everybody. And so there was no hierarchy. I mean, I'm actually embarrassed when you watch that thing. I speak out pretty strongly against, you know, corporate America's approach to this.

• 26:47Guy Raz?

  It's great.

• 26:48Speaker 01

  I'm a little embarrassing.

• 26:49Guy Raz?

  But it's great because, you know, you were basically setting the template for what would eventually happen, which is today, you know, the hierarchy really is flat in much of corporate America.

• 27:00Speaker 01

  It is.

• 27:00Guy Raz?

  And that was, it really is. And that was a radical idea in the 90s. You had people just out of college who were asserting their positions or viewpoints or ideas, and the most senior people were debating them and then going back and forth. And that was very different. I mean, when I started in, you know, in the workforce in the, in the mid 90s, you kind of, as a young person, you kept quiet. That was the way to behave.

• 27:24Speaker 01

  Yes. If you look at companies today that were innovative in that way, at least companies that were our clients in that way, it is a testament to the fact, I believe, that a mindset around design, or what we call design thinking, inherently allows you to come up with ideas and more ideas. It doesn't mean that you're going to be great at picking which the right ones are, but design makes these ideas tangible. When we were building things, we were building prototypes and showing them to people and having the people who were the experts tell us what was wrong with them. Then we'd go back in our little shop and improve upon it, right?

• 28:03Speaker 01

  And so that notion of iterative prototyping, making something tangible and then, then improving it and improving it, is really what was going on there, which would achieve real change. So, so often, we found that being in a place of not knowing is a good place to be until you get to the big idea. Patience to wait for the big idea is just not inherent. Well, it's inherent in the design kind of way of being, but it's not inherent in corporate America because you look smart if you have the answer early on.

• 28:40Guy Raz?

  Yeah.

• 28:40Speaker 01

  Right?

• 28:42Guy Raz?

  So David, let me ask you about the process of how you kind of solved problems for clients. So you have a client and they come to you and they say, we want to design a new, let's say, traveler coffee mug. Help us understand how you would organize the teams to tackle that problem. You would assign, what, like five people or 10 people on that project? A project manager and then what?

• 29:05Speaker 01

  Yeah, so at the beginning of a project, you have to kind of understand the roles that are going to be played. I mean, we design alongside of the client and alongside of the potential user. It's not like IDEO comes up with a big idea and then kind of jams it down your throat or expects that it's going to be the right thing the first time. So we work with the internal people, the manufacturing people. But the team is made up of people that are going to make the whole thing tangible. The people who can build the prototypes, the people who can take it to manufacture, the people who can be really insightful about showing ideas for the prototype to many different people and many different kinds of people. And from that can glean what's meaningful to them.

• 29:50Speaker 01

  Like in the start, I don't want to put my two cents on it. What's the most important thing? Maybe keeping the thing warm is the most important thing in a coffee mug. And maybe that it fits somewhere. Or maybe that I can rinse it out and use it for something else later in the day. Or, you know, I got no idea what's going to be the big idea that we're going to come up with. And so you need a diverse team of people who can both get to the place of a real innovation and the people who can make it tangible and manufacturable and real.

• 30:25Guy Raz?

  But even things like, like you mentioned, lots of things you designed. And of course, we're just mentioning a tiny number of them. But then I don't know if it's a Nerf brand, but a Nerf like football that you have wings on it so that it would always throw a spiral.

• 30:37Speaker 01

  Yeah, that's a funny thing. So we started out, it was inspired by, you know, Charlie Brown, how you know, how Lucy would, who would take the football away when Charlie Brown tried to kick it, right? And so what we were trying to design was a stand, so you didn't need Lucy holding it for Nerf football. A stand that, you could kick it, but it wouldn't get in the way of the flight of the ball, right? So in the process of, of trying to design that, we came up with something better, which was a way to make the ball always spiral. And so, really happens a lot in design where you think you're working on one thing, but the real innovation is adjacent to that, and you pivot to the place where the real innovation is.

• 31:20Speaker 01

  And that's what happened in this case, and it's happened 100 times. You know, now we had a football that you always throw a spiral, which is a hell of a bigger deal than a stand.

• 31:30Guy Raz?

  Yeah. So I'm wondering about something. I've seen you describe the designer's mindset as one that embraces empathy, and optimism, and iteration, and creativity, and ambiguity. Now, on this show, and I built this, we talk about the entrepreneur's mindset, because I think it applies to anybody, no matter what they're doing, whether they're starting a business, or whether they work inside of a larger company. But the idea that you can be entrepreneurial at any stage, right, where whatever you do is crucial, right? Because that, that's what generates ideas. Is design thinking, based on your understanding of it, and how you define it, is that a framework that anybody can adopt?

• 32:08Speaker 01

  I think so. I think, you know, it's synonymous with being a good entrepreneur. You know, I have to say, I'm overly taken by this, but I really do think that it's just taking a human-centered approach to innovation works on all cases. I mean, think about failures and successes of entrepreneurs have a lot to do with, did they really have a deep understanding of the user, and of the business, and of the technology? I mean, all those things require insight, a deeper understanding than the next guy. Otherwise, you don't have a product that's competitive.

• 32:44Guy Raz?

  Yeah. How do you, I mean, you've said that you believe that everybody is creative, and I agree with you on that, that creativity isn't some like magical thing that you're touched by the hand of the gods, or whatever, that only some people have. I agree with you that everybody can access it, but, but how? How do you believe that people can access creativity?

• 33:05Speaker 01

  It's really interesting that the world has tried to put people in those categories. Ad agencies in particular have like a creative group and an administrative group, you know, which I think does us a disservice. And so what we tend to do, which we try to convince companies to do, this is the management of companies and ourselves, is to convince people that they have that inherent creativity is what we call guided mastery. If you can take the people in your group and lead them through a series of small successes, that's the only way we've seen it happen, so that people who doubt their creativity or the team in general has some small successes. You just set it up that way. It's easy to do.

• 33:49Speaker 01

  And they start to say, oh, my God, my team is creative, or, oh, I am creative. And you just see such a transformation where they just have more stick-to-it-iveness, they work harder, everything seems to happen. Now, the best thing that can happen, of course, is if senior management buys into this. So we do a lot of leadership transformation projects in order to get people to the point that they'll allow this kind of guided mastery stuff to happen. But it's just the way it's done, is all I can say, is letting them feel what it feels like to be a little bit successful, and then you keep going. And eventually, you know, people get to the point where they think of themselves creative,

• 34:34Speaker 01

  and then they build a muscle that is a tool and a creative muscle, and then they use that for the rest of their career. It's amazing to watch.

• 34:42Guy Raz?

  Yeah, I mean, say you are a company now, and you want to encourage innovative thinking, right? Let's say Procter and Gamble, okay? And Procter and Gamble does a lot of innovative stuff, right? But there are products that are created by these scrappy startups that will go on to, you know?

• 34:58Speaker 01

  Kill them.

• 34:59Guy Raz?

  Kill them, right? And so you're Procter and Gamble, and you say, or you're Marriott, and you say, you know, we don't want another Airbnb to come up. We want to be the innovators. But you've got a massive company, you've got thousands of employees, and there's bureaucracy, and there's HR, and there's all kinds of, you know, just levels and layers of... Processes, but you've got a leader and they really want to cut through that. It strikes me that part of that is people need permission to fail. So how do you help companies develop a culture where they do allow people to spend a lot of time on something that may not actually ever see the light of day?

• 35:38Speaker 01

  You're absolutely right. That's a real insight in what's going on in our lives every day as we try to engage with companies. And the real answer is that you just have to have cultural change. And our way of doing that is to first try to get as much leadership buy-in as possible, but then just start doing tangible things. But you have to have a place where people feel like when they walk across the threshold, they can act differently. So how do you make it feel like you're allowed to be a little different? And so the kind of projects, these strategy projects, or whatever you want to call them,

• 36:20Speaker 01

  you allow people to experiment with those and you end up with some kind of prototype, whether it's a service or a system. And it's just intoxicating on some level that this thing could exist in the world, that it makes you feel positive about the future when you see somebody paint that picture in a certain way. And so we win people over by making them excited about the future with our ideas. And then they want to be a part of the team. And pretty soon, people say, oh, how did that group do that so fast? I want to be a part of that group.

• 37:02Guy Raz?

  We're going to take a quick break, but when we come back, more with IDEO founder and designer David Kelly. You're listening to How I Built This Lab.

• 37:13Speaker 02

  Football is back and PrizePicks is bringing out their best offer yet. New users who sign up will get $150 in lineups if you win your first $5 lineup. That's right, if you win your first $5 lineup, you'll get $150 in lineups. On PrizePicks, you simply pick two to six players, pick more or less on their stat projections, and submit your lineup. Then sweat it out as you watch your picks play out live. It's the best way to get more locked in on game day. Make all the picks you want this football season, all in the same app. And now PrizePicks is available nationwide. So what are you waiting for? Lock in for kickoff because everyone and everything is on PrizePicks. What you on?

• 37:58Speaker 03

  Download the PrizePicks app today and use code WONDERY, that's code WONDERY, to get $150 instantly in lineups if you win your first $5 lineup. PrizePicks, run your game.

• 38:10Speaker 04

  Must be present in certain states. Visit PrizePicks.com. Restrictions and details. Confidence. It's listening to your gut. It's moving forward even when the path ahead is unclear. For nearly 160 years, Pacific Life has helped people keep their promises, building confidence for generations. Whether you're confident in your financial future or just beginning to envision it, we're here to help. Ask a financial professional how. Pacific Life, the power of a promise. Pacific Life Insurance Company, Omaha, Nebraska, and in New York. Pacific Life and Annuity, Phoenix, Arizona.

• 38:52Guy Raz?

  Hey, welcome back to How I Built This Lab. My guest today is David Kelly. He's the founder of IDEO, the design firm responsible for many of the most innovative products there are in the world today. He's also the founder of Stanford's Design School. So David, today IDEO doesn't design products so much as it helps companies design things like culture and strategy and way of working. How does a mission-focused organization, let's say a nonprofit, that advocates for the protection of the environment, for example, how do they make the space to think in an innovative way when so much of their time and effort has to be focused on mission?

• 39:34Guy Raz?

  You know, this is a particular challenge in nonprofits because nonprofits are usually thinly staffed, they are, you know, people that are not highly paid, they have to fulfill this mission, and that is their north star. But they also have to be innovative and creative in the way they think about things. So how do you sort of counsel leaders to create the space and time to just do this, even when you're not accomplishing the main goal or the mission?

• 39:59Speaker 01

  Yeah, it's a good point. There's just something about getting somebody enthusiastic about an idea. And so it doesn't take a lot of space or a lot of resources. Another way to look at it is they have a serious task to do, and if we can come in and generate a little fun around coming up with new ideas, they respond very well to that. I've seen it happen so many times that even though they have a serious mission, if you can get a bunch of really inspiring people together, them and from our side, and come up with some pretty interesting ideas that could result in improvement or an exciting

• 40:41Speaker 01

  project that they could do, you know, they'll find a way, they'll find the time, that build that small idea into something big, and we'll help them. I mean, maybe that's why you need a consultant at some of the times.

• 40:52Guy Raz?

  Yeah. So David, I want to ask you about, what is a typical, like, challenge or pain point that a company comes to you with and says, hey, we're stuck, help us fix it? What is that pain point or problem that you find more often than others?

• 41:07Speaker 01

  You know, you give me a chance to talk about my favorites, but one of the best examples, I think, to answer your question is there's a company in Peru called Intercorp. And Intercorp is run by a really lovely man named Carlos Rodriguez Pastor, who's very, you know, he's a very successful businessman. And early on, in working with him, in order to transform his company, which he asked us to do, that was his ask, was to make him a more innovative company. We built a thing called La Victoria Labs, which was his people and our people together in a facility in Peru. And in there, Carlos and then came up with the notion to make Peru the very best place in Latin America to raise a family.

• 41:50Speaker 01

  So if you can get to the point where you've got an innovation engine and you've got people who care and you have a driving force, like, I want to make this country the best place in Latin America to have a family, then the projects just kind of fall out of that, right? So the one that I'm most involved with is the school system. So Peru sadly is consistently rated one of the worst educational systems in the world, unfortunately. And so Carlos gave us and this innovation facility that we built together, staffed by both of us, to design a new school system.

• 42:35Speaker 01

  And so we designed every aspect of the school system, the curriculum, the physical buildings, the business models. And I'm happy to say today, you know, we have 63 schools up and running, 51,000 students, and, you know, 99% of those kids end up going to higher education. But for me, it's more personal because when we started this, we didn't know we were doing it all. And we built this school system, which is just beautiful. Now, it's been 10 years. We're now to the point where people are graduating from that school system in Peru and getting admitted to Stanford. Wow. It's amazing. And so that just feels so good to have those kids in my office hours

• 43:18Speaker 01

  and talking to them about their experience at Enova Schools, which is what this is called.

• 43:25Guy Raz?

  So David, is the process that you recommend, right? This sort of design thinking process about consensus or not?

• 43:35Speaker 01

  No, it's not about consensus. It's about how excited you can get the people, what we call the central persona. What's going to be meaningful to them? So the boss can say, this is the right way to go. And I can say, this is the right way to go. And I do can say, this is the way to go. But it's pretty clear when you start going out and showing the vision that you have for the future with the people that you've been, hopefully been working with them all along, that you can see that that's really what's resonating with them. So, you know, the process is not linear. It's just really a set of tools. People get enthusiastic, you know?

• 44:11Guy Raz?

  Yeah. David, how important is conflict to designing a better process, or a better product, or a better culture? Does conflict have to be part of that process?

• 44:25Speaker 01

  Yeah, I'm afraid it does. I mean, it's not, I wouldn't call it conflict, but a meritocracy of critiquing each other. Meaning that when I say, I think that this idea doesn't work because of this and this and this, the person receiving that critique has to think, oh, he cares about me, that's why he's saying that, rather than to be mad that I'm saying their idea is bad. So there's a way to do constructive critique in a meritocracy kind of organization. But the conflict has to be there. I mean, if the conflict's not there, you're not working at the edge.

• 45:05Speaker 01

  We're working at the edge of what's going to be the best possible solution to things. And you just can't come up with that off the top of one person's head. There has to be a bunch of different brains and minds and diverse thinkers working on that. And so by definition, they're going to butt heads, they're going to have some, you know, conflict. But it's more a question of, does the conflict feel like it's on the direction? Of having the best possible outcome, or is it just a personal thing? You're actually in conflict with the person, not in conflict with their ideas.

• 45:42Guy Raz?

  Right.

• 45:43Speaker 01

  So as long as it's about idea meritocracy, then conflict is helpful, useful, and inevitable.

• 45:50Guy Raz?

  If design thinking is about things like empathy and observation and, you know, optimism and creativity and collaboration, does that still apply to the future of design thinking? I mean, the workplace is changing so much today. Younger people are, you know, obviously entering the workforce now and have a different view of work. They don't think of work in the same way. In many cases, work is what you do to earn money so you can live your life, which is a much more European way of thinking about life. And we're seeing more and more of that, particularly among Gen Zers and so on. So is this idea of creating a design mindset and building a culture around the design mindset,

• 46:34Guy Raz?

  does that still apply now? Or you, you know, when you sort of see the corporate landscape today, are you thinking that maybe the future of design, design thinking will be different?

• 46:45Speaker 01

  I've always think it'll be different. We're always evolving. But, you know, I spent my life hanging around 20-year-olds, young people at Stanford, and, you know, they are different. I couldn't be more enthusiastic about the future, mostly because young people care so much about social practice and doing social good that by the time those people are in charge of the world, I'm very excited about it. But the world's never been more polarized or challenging and complex. And so, yes, the future needs to be designed in the way I look at it. And so I do see it as one of the things that can really contribute to this,

• 47:28Speaker 01

  all this difficulty and complexity that we see out there. And design is just optimistic. I mean, if you're a designer and you were not optimistic, you wouldn't, you wouldn't bother making the next thing because the world was going to end or whatever. But in my students, I see that having the tools and the capabilities to come up with this possible solutions to complex problems, and we're trying to give them those tools, you know, and so I see my role as building capabilities and giving young people tools that they can use on these very complex problems.

• 48:05Guy Raz?

  Yeah. David, as you know, many people listen to the show have their small startups and some big startups, but you know, I think of like, somebody who's got an Etsy store, or a little brick and mortar business, or somebody who's making something in a shared kitchen and selling at a farmer's market, that that's a lot of people listen to How I Built This. And if somebody's listening and thinking, all right, how do I become a design thinker? How do I become that? How do I apply that to what I do? What's your advice?

• 48:34Speaker 01

  Well, if you want to change from where you are, or you want to improve your situation, or you want to come up with a bigger idea, then I really believe you have to bring in more brains, more thoughts. The problem is the isolation of not having a person who has had a different experience, or from a different country, or a different culture. And so, the notion of getting more diverse ideas, you talk to a bunch of people who are quite different from you, they're going to have ideas that you would have never dreamed of because of their different experience. And so, it's the diverse thinking, it's the, it's, you know what it is?

• 49:14Speaker 01

  It's really being positive that I can adopt a mindset that will spawn new ideas and new innovations.

• 49:22Guy Raz?

  That's David Kelly, founder of IDEO and Stanford's Design School. David Kelly, thanks so much for joining me on the show.

• 49:29Speaker 01

  Thank you.

• 49:31Guy Raz?

  Hey, thanks so much for listening to How I Built This Lab. Please do follow us on your podcast app so you always have the latest episode downloaded. If you want to follow us on Twitter, our account is at How I Built This, and mine is at Guy Raz, and on Instagram, I'm at Guy dot Raz. If you want to contact the team, our email address is H I B T at I D dot Wond. This episode was produced by Carla Estevez with editing by John Isabella and research help from Catherine Seifer. Our music was composed by Rameen Arablouei. Our audio engineer was Neil Rouch. Our production team at How I Built This includes Alex Chung, Chris Messini, Elaine Coats, J.C. Howard, Liz Metzger, Josh Lash, Sam Paulson, and

• 50:16Guy Raz?

  Kerry Thompson. Neva Grant is our supervising editor. Beth Donovan is our executive producer. I'm Guy Raz, and you've been listening to How I Built This.