Design thinking and radical innovation: enter the smartwatch

Purpose This paper aims to expand the understanding of the design thinking (DT) field and provides evidence that DT as an innovation mindset centered on user/human needs is able to lead enterprises to the development of radical product innovation. Design/methodology/approach The study is based on an illustrative case analysis of four eras of radical innovations in the watch industry, from the mechanical wristwatches to smartwatches. Findings The findings from the watch industry substantiate the developed DT triangle framework for designers, managers and executives, enabling the development of radical product innovation. Originality/value The study provides evidence for the claim that human-centered approach (rather than design-driven, meaning-changing approach) in DT can successfully lead to radical product innovations. For this, this paper distinguishes between “need” and “meaning” in the DT field and reemphasize the role of creating empathy with users to be able to identify their newly shaped needs. Fulfilling these newly shaped needs would ultimately result in the development of radically new products.

Technology Reemergence: Creating New Value for Old Technologies in Swiss Mechanical Watchmaking, 1970–2008

This article uses a study of the Swiss mechanical watch industry to build theory about how a legacy technology, instead of being supplanted by a new dominant design as current theory would predict, is able to reemerge and achieve new market growth. The introduction of the battery-powered quartz watch in the 1970s made mechanical watches largely obsolete, but by 2008 the Swiss mechanical watchmaking industry had rematerialized to become the world’s leading exporter (in monetary value) of watches. This study uncovers the process and mechanisms associated with technology reemergence: the resurgence of substantive and sustained demand for a legacy technology following the introduction of a new dominant design. It reveals that technology reemergence involves a cognitive process of redefining both the meanings and values associated with the legacy technology and the boundaries of the market for that technology. Watchmakers redefined and combined values of craftsmanship, luxury, and precision to create new meanings and values for mechanical watch technology; repositioned the mechanical watch as an identity and status marker; temporally distanced themselves from the period of the discontinuous quartz technology by recalling their founding and more successful past and connecting it to the future; and used conceptual bridges such as analogies and metaphors to help employees and consumers understand the new meanings. They redefined market boundaries by reclaiming the competitive set, rebuilding the community of mechanical watchmakers, and mobilizing groups of enthusiast consumers who valued the mechanical watch. For mechanical watchmakers, reemergence culminated in competitive and consumer differentiation that ushered in reinvestment in innovation and substantive and sustained demand growth for the legacy technology.

The Swiss Watch Industry

The Swiss watch industry has enjoyed uncontested domination of the global market for more than two decades. Despite high costs and high wages, Switzerland is the home of most of the largest companies in this industry. Scholars in business history, economics, management studies, and other social sciences focused on four major issues to explain such success. The first is product innovation, which has been viewed as one of the key determinants of competitiveness in the watch industry. Considerable attention has been focused on the development of electronic watches during the 1970s, as well as the emergence of new players in Japan and Hong Kong. Yet the rebirth of mechanical watches during the early 1990s as luxury accessories also can be characterized as a product innovation (in this case, linked to marketing strategy rather than pure technological innovation). Second, brand management has been a key instrument in changing the identity of Swiss watches, repositioning them as a luxury business. Various strategies have been adopted since the early 1990s to add value to brands by using culture as a marketing resource. Third, the evolution of the industry’s structure emphasizes a deep transformation during the 1980s, characterized by a shift from classical industrial districts to multinational enterprises. Concentration in Switzerland, as well as the relocation abroad of some production units through foreign direct investment (FDI) and independent suppliers, have enabled Swiss watch companies to control manufacturing costs and regain competitiveness against Japanese firms.Fourth, studying the institutional framework of the Swiss watch industry helps to explain why this activity was not fully relocated abroad, unlike most sectors in low-tech industries. The cartel that was in force from the 1920s to the early 1960s, and then the Swiss Made law of 1971, are two major institutions that shaped the watch industry.