THE office looks like a cross between a Starbucks and a youth club. Bicycles are piled high in racks; there is a ping-pong table in a corner. Young people sit at long pine benches, sipping coffee and poring over laptops, the males looking as if they are taking part in a beard-growing competition. But do not be deceived by the laid-back atmosphere: this is the London branch of one of the world’s most successful design consultancies, IDEO. When it started up in Silicon Valley in 1991 one of its founders, David Kelley, said he did not want to employ more people than could fit in a school bus. Today IDEO has more than 600 employees and offices in eight countries.

The firm made its name designing such successful products as Apple’s first mouse and the Palm V hand-held organiser. It continues to design things that you can touch: for example, a new beer can with a wider lid for the Samuel Adams brewery, intended to make swigging from a can more like drinking from a glass. More recently it has moved from product design to redesigning services, which now provides a large share of the company’s work. There is much demand for its skills in western Europe, where firms are seeking new processes that will make them both more efficient and more user-friendly. For instance, IDEO is working with Swiss Life to help the staid insurer do better at selling financial services to younger, “generation X” customers.

A growing proportion of IDEO’s work in re-engineering services is for NGOs and governments. Oxfam employed the firm to redesign its core product, gift-giving. Singapore asked it to revamp its system for handling applications for work permits. Often, it is not exactly rocket science: make forms easier to fill in, make each step in the process clearer and less prone to errors, and so on. But, as anyone who has ever applied for a United States visa (let alone an Indian one) will know, governments can be startlingly poor at designing their processes and serving their customers.

There are three main elements to IDEO’s “design thinking”. The first is “lots of different eyes”. It employs people from wildly different backgrounds—surgeons and anthropologists as well as engineers and designers—and lumps them into multidisciplinary teams. The second is to look at problems from the consumer’s point of view: for example, conducting detailed interviews with patients about their daily pill-taking routines and how they feel about them. IDEO likes to focus on the outliers rather than the typical customers—people who have demanding medical regimes or who constantly forget to take their tablets—on the assumption that this produces more useful results.

The third element is making everything tangible. The company produces mock-ups of its products and processes, to see how people react to them “in the wild”. The London office, in newly trendy Clerkenwell, contains an old-fashioned woodworking room and a newfangled 3D printer. There is much talk of “thinking with your hands” and “rapid prototyping”.

A good example of the latter is the firm’s work for Oxfam. The British government presented the charity with a challenge when it introduced tax relief on donated goods in 2006: how to persuade people dropping off items at charity shops to fill in bothersome tax forms? IDEO built a mock-up of an Oxfam shop and arrived at a simple process called “Tag your bag”, in which donors register just once and are given tags so that they can drop off subsequent donations without any fuss. Oxfam reckons the system has produced an additional £2.8m a year of revenue. It has also provided the charity with an invaluable new resource: a register of the 500,000 people who donate goods to its shops.

IDEO is the standard-bearer of a broader revolution. Designers are becoming much more ambitious—perhaps imperialistic—about design thinking. In the United States the Stanford University Institute of Design, or D-School, which Mr Kelley founded in 2006, acts as an intellectual centre for the movement. The school helps businesses improve innovation and reduce complexity. It also encourages students to apply their skills to solving social problems, such as designing an inexpensive incubator for premature babies. In Britain the Design Council and the Royal Society of the Arts are also strong advocates of design thinking.

Design for living

Public-sector bodies are also hoping that the redesign of services will help them cope with the twin pressures of limited resources and rising demand from an increasingly diverse population. The Design Council calculates that 80% of British local authorities have redesigned their services in the past couple of years. Britain’s National Health Service now has an Institute of Innovation and Improvement, which is rolling out something called “experience-based design”, in which patients and staff work together to rethink the way health care is delivered. Both IDEO and the Design Council have given seminars in Downing Street on how design can be applied to public policy.

It is easy to mock all of this as bearded nonsense (if you are on the political right) or a ruse to divert attention from cuts in essential services (if you are on the left). It is also true that design thinkers are as accident-prone as other types of consultant when advocating models for others to follow: a 2009 book by IDEO’s boss, Tim Brown, lavished praise on Hewlett-Packard and Nokia, neither of which now looks so admirable. Nevertheless, there are good reasons for giving the new fashion a chance. Rich countries’ welfare states were designed for a more homogeneous and deferential society in which most people accepted that the men in the ministry knew best. Now, the public rightly expect better, but governments constantly fail to live up to their demands. Since public agencies have generated so few good ideas of their own, a bit of outside help would appear to be worth trying.

Economist.com/blogs/schumpeter