June 2, 2005--Craig Vogel directs the Center for Design Research and Innovation at the University of Cincinnati's College of Design, Architecture, Art and Planning. As co-author of The Design of Things to Come: How Ordinary People Create Extraordinary Products, just published Wednesday, he worked with Carnegie Mellon professors Jonathan Cagan and Peter Boatwright to reveal how companies create products that change lives. Following is a discussion with Vogel about the ideas in his book.

Why is innovation such a buzzword in business today?

Quality is no longer enough to make your company distinguishable from others. Every class of consumer wants nicely designed things now. Even in the poorest nations, movies, TV, and other media make consumers aware of design too. Turning out a safe, decent product won't make you money automatically, so we have an emphasis on innovation.

What is the result of global demand for well-designed products and brands?

Variation in the marketplace...There's more opportunity to sell and do wonderful things when customers actually seek more than "does it work." The danger is that customers will go to where they see value. Brand loyalty is harder-won. It is no longer handed down generation to generation. Bob Lutz at GM is questioning the value of the older brands, like Buick and Chevy, for that very reason.

Is this globalization of industry good or bad for the U.S.?

Most people see China and India as threats to the U.S. economy. But they are tremendous new markets with a growing middle class and massive populations living at a lower-income. If you look at it in the right light, you have 2 billion people stretched around the world in the middle-to-upper class, who companies design for already. But there are 4 billion people in lower-income, poverty and extreme poverty. They have real needs, and different design preferences.

Who should American businesses design for today?

There is a huge population that is aging and aged out there - not the 15-35 year olds that most companies focus on and that marketing schools focus on. The shift in economic power is moving to people over 55. It will be within the next decade as big as any sector out there. I have wanted businesses to learn that bodies can't sit in the same sports car they did at the age of 35 when they are 75. OXO was brilliant when they changed a 100-year-old vegetable peeler design, and created GoodGrips kitchenware. That company sold for $275 million eventually. But that was just a beginning.

How can business leaders avoid pitfalls of innovation, like spending too much on research and development, or missing out on big trends?

Innovation is not just something to add into your company. You have to ask from the start: Am I just putting my toe in the water, or am I committed to thinking about how to shift the business constantly? You don't send a few key employees to a design firm for a seminar. It isn't effective.

You also have to ask is the innovation coordinated in my business? It goes beyond marketing and product development - IT, finance, everyone needs to get involved and be supportive.

Companies need to think about stakeholders more than customers - every person touched by your company's brand and products. That's a more complete picture that can sharpen innovations, and turn them into really useful, in-demand products.

Finally, if you want your business to innovate, grow, and make a meaningful profit and impact, you need to be prepared to change the way you behave, and to incorporate new ideas. If you can't change, neither can your company.

What's the key to being a successful, innovative company?

If you have a product that's successful, and understand why, what made it unique, and how it worked for every stakeholder, then you can extend it and grow your business into a world-renowned brand.

Apple has done that from the very start - understood that they were the cool-factor tech company. When people try to copy the iPod, they don't realize how much of the iPod's success comes from Apple's identity and relationship with their stakeholders that existed well before MP3s.