David Kelley is building a new "D-school" at Stanford University, where he teaches engineering. The "D" stands for design, and the co-founder of the world-famous design consultancy IDEO plans to make it a center for a new kind of design thinking. Kelley's brand of design is far removed from cool colors and shapes. It's all about using design methods, such as going out in the world and observing real people before, not after, you make something for them. It's about new ways of innovating.
Kelley is at the center of a small group working to formalize this design thinking to teach it in school -- and in corporations. He recently talked to BusinessWeek design guru Bruce Nussbaum. Here are excerpts:
Q: The business community is desperately seeking to learn how to be innovative today. Where should they go to learn how to be more creative?
A:It's not exactly where they go, but that they realize they're going to have to change their behavior -- they need to get involved. We don't have great success until designers actually commit to getting involved physically. Go out and hang with users, visit people that they wouldn't have normally visited. It's about physically going out there.
Q: Where do they learn to do that?
A:There are plenty of books. Jane Fulton Suri's Thoughtless Acts is really starting to take off. People are really trying to get their minds around this kind of human-centered approach to life. But in addition to reading the latest stuff, managers really need to get out there in the early phases of design. Go out and visit somebody in your marketplace.
Q: Are any B schools teaching this?
A:There's Roger Martin [dean of the Rotman School of Management, University of Toronto], and I think the London School of Business is good and Northwestern University. But it's so new.
Q: What about at your D-school?
A:Of course, at the D-school we're changing from a more conventional kind of design school to a school that actually takes companies out there, takes students out there, and makes them follow somebody for a day and observe. They need the visceral feel of the user experience rather than just sitting in their cubicle at their computer.
Q: The D-school is still in formation, right?
A:We've been running the program for three years, prototyping classes and working with companies. I can't say we've officially launched -- we're still waiting for our building to be renovated. But I have a core faculty, we're hiring people, we're spending money. And we've run classes with companies like Electronic Arts (ERTS ) and Motorola (MOT ).
The big difference is the faculty and students come from different departments: business, humanities, engineering, so forth. We all work on projects together. In the past, group projects would be done by a group of designers or a group of engineers. With engineers, whatever the problem is, a mechanism is probably the outcome. If it's all businesspeople, the answer is always a spreadsheet or a chart with 2 by 2 matrix. Now we have all these different disciplines, and it's not predictable where the innovation is going to go and that's what's exciting.
Q: Are you seeing any trends?
A:The solutions are more integrated, taking into account technology, business strategy, the user interface. I would say the solutions are more human. There's also an amazing discontinuity as far as what students are interested in. Ten years ago, most of my students wanted to be Bill Gates, do a startup, and become wealthy. They're still entrepreneurial, but they're in my office saying, "I want to do something that has social value."
Those student interests have driven our research agenda -- sustainability, superlow cost for the developing world, K-12 education, health and wellness, and medical stuff.
But the D-school is divided between those projects and projects from our industrial affiliates, so the students get access to both the social value stuff and to Corporate America.
Q: Can you explain the industrial sponsorship aspect?
A:We've been doing this for many years. Companies want to understand our innovation process and put that in a mix with their process. They pick a project that's of interest to them. Nothing evolutionary like make the headlights open up faster on a car. It's more like what's the future of the back seat of a car. Or the future of gaming or radical cell-phone interfaces.
So Electronic Arts or Motorola sends a group of people to give us the problem, critiques our work from time to time, and evaluates the outcome. From the company's side, you have 50 young brains working on the future of their product or service.
Q: What's your goal for the D-school?
A:It's very exciting. It's kind of revitalizing the faculty who've been teaching the same classes for years. And the students are turned on to the idea of learning other disciplines. By the time they graduate they have experience making the trade-offs between the business implementation, the viability of their ideas, and how human or usable they are. They've had that mix.
So the D-school approach is to put multiple professors in front of the class, rather than the normal academic setting of the sage standing up there lecturing. Instead, the students get three points of view on every subject. We're really trying to break down the disciplines and to teach design thinking. Do a little research, become an expert, go out, observe people, build some prototypes, see what the users think, and iterate. Design thinking is the glue that will hold the team together.
Q: It's still true that when you say the word design in the business community, a lot of people get nervous because they think of artsy-fartsy types.
Q: What do you think design means today? Why is it becoming more central to corporations?
A:Just as my program is changing, I think everybody's program will start to change. Design is shifting toward design thinking and design methodology, which is really tied to innovation. There's lots of ways to do innovation. Design thinking is just one of the possible methodologies. There's plenty of other ways to do it.
You can drive a technology hard, and that can lead to innovation. You can hire Steve Jobs [Apple Computer (AAPL ) co-founder] to be your marketing guy or some other brilliant guy. Design thinking is just one of the systematic ways you can build a kind of culture of routine innovation.
I hope that design in the old sense will continue, but the new way of thinking of design is really more about building on insights, building on human-centeredness. Raymond Loewe was probably the quintessential American designer, and he helped companies with their innovation.
Q: How about the word creativity?
A:Actually, I try to stay away from the word creativity. In the late '60s and early '70s, there was a big creative movement, especially in California after the Summer of Love  and the Vietnam War. Stanford was really big on that. We were somewhat driven by my mentor, Bob McKim, at Stanford and Jim Adams, and all these guys were writing books called "Creative Blockbusting."
It's a little tied to that movement -- like let's blindfold the students and take them out and let them feel the leaves on the trees being held by another person. So those of us who are old enough to remember that have that in our minds.
Jim Collins always said creativity plus implementation equals innovation. So if we can move people from saying, "You creative guys," to saying, "You innovative guys" -- meaning the guys who have big ideas but also have a methodology and are clever about how you make them viable in the world -- then I think you've got something.
Q: How will the D-school get its ideas out there?
A:We're thinking about all kinds of things like case studies, design-thinking case studies, in the same way that Harvard Business School does business case studies. We're thinking about summer institutes where we bring in faculty from wherever they're interested and take them through the kind of normal workshop stuff. Workshop is a funny word because people think they know what that is -- but it's the kind of deep dive stuff we do at IDEO and moving that to faculty.
Q: Can you describe what you mean by "deep dive?"
A:People didn't want to come and live at IDEO for six months, which is what we really wanted them to do to help them with their culture of innovation. But they'd come for a short period. So we developed these really intensive two-day, one-week kind of things.
I think you might see schools where design thinking is going to be a part of the curriculum. One of the things I teach young kids that I'm most excited about -- and I do this at my daughter's school -- is the whole iterative nature of design. Picture that you have them design something, let's say, their bedroom or their bed. They come in and they deliver it as a project, and then that's the end of it. We go on to something else.
But design methodology would say O.K., design your bed, make a prototype or a drawing, bring it in, see what all the other 25 kids in the class did. Then go back and do it again. And again, maybe. So that kind of iterative nature of project learning in K-12 schools is really resonating with the K-12 teachers.
There's another thing about design [is to take advantage] of as many brains as possible without any fear that they're going to steal your thunder. We run into that all the time, where the person in charge thinks it's all up to them to come up with the ideas. I wouldn't do that. I'd try to get as many people I know to help me. It's a team sport. But I think that some of these people who run these companies and universities, it's like it's an individual sport. But it's a team sport.