Jeneanne Rae

Co-founder and President, Peer Insight

Back in 2005, Jeneanne Rae was tagged with an eccentric title by her friend, BusinessWeek editor Bruce Nussbaum: "Jeneanne Rae," Nussbaum wrote, "is the doyenne of service innovation."

"Frankly, it was a bit strange," says Rae. "It conjures up a picture of a little old lady, grey-haired and hunchbacked." (Doyenne, for those who don't have a dictionary on hand, means wise woman of a body of knowledge.)

An apt designation because Rae is one of a handful of people with extensive experience in both business and design. Her trajectory to innovation guru was anything but normal.

"I didn't grow up in a terribly creative family," she says. "Rather, there is something about how my brain works that has always fascinated me about the design process."

It was a job between undergraduate and graduate school that would have a profound effect on her professional life-Rae worked at the architectural firm CRS Sirrine—and discovered the world of design.

"CRS Sirrine literally wrote the book on architectural programming," says Rae. The book, Problem Seeking, lays out a simple, yet comprehensive process encompassing the entire range of factors that influence the design of buildings. "With my business training it was easy for me to take the programming concept and apply it to the business inputs required to produce breakthrough products and services," explains Rae.

But an architect, she was not. And Rae moved on to Harvard to earn her MBA. "I wanted to work around smart people all my life," she says. "And I put myself on a tried and true business path to get there."

But after a year of working on Wall Street, involved with everything from company valuations to IPOs, Rae found herself out of work—"my M&A group hadn't done a deal in 6 months"—and soul searching.

"Wall Street was a fantastic experience. But I knew I wasn't destined to be there," explains Rae. "It came to down to a simple question: what do I really love?" The answer came back to design.

Rae quickly began networking with design aficionados like Peter Lawrence and Bruce Nussbaum, eventually landing at a small design engineering firm in Silicon Valley. Her big break came when David Kelley called to recruit Rae to IDEO and his management team.

"I spent years at IDEO learning the business value of design," says Rae. "It led me to believe that the design process is central to innovation. I became very interested in figuring out how large, institutional corporate environments can systemically innovate—most were terrible at it."

According to Rae, for too many years, designers' full contributions to their clients' business results were obscured by a sole focus on qualitative rather than quantitative measures. "Classic left-brain, right-brain conundrum," she says, "but that is changing."

"Robust innovations that deliver true competitive advantage are generally built around macroeconomic trends, targeted customer lifestyles, emotional needs, and the efficient use of available technology," says Rae. "Design-based thinking leads to great innovation. The chief success factor is the integrative approach designers use."

Today, Rae is the co-founder and president of Peer Insight, a research and advisory firm focused on innovation and customer experience issues. She is also a member of BIF's Research Advisory Council.

"Services now account for over 80% of our U.S. economy," explains Rae. "Much of our focus is on studying service innovation, because honestly, the body of knowledge on this topic is relatively small."

There are currently 30 corporations in Peer's consortium and over 100 projects in their database. By analyzing these projects, the firm is building an empirical database of what's working (and not) in service innovation.

"This field is incredibly nascent and the peer to peer sharing that we provide is unique because members both learn together as a group and are also able to talk to each other independently," explains Rae.

Rae also serves as adjunct professor of Marketing at Georgetown University's McDonough School of Business. Her course on New Product and Service Development is one of the few MBA classes in the country that teaches design methods and thinking to business students.

"Students entering the workforce today are anxious to know how they can bring innovation to their organizations," she says. "We may still be 15 years off, but we're at the dawn of a new age, and it's an exciting place to be."