November 14, 2010

Design is how it works by Jay Greene

How the smartest companies turn products into icon.

[There has been two types of designs - Industrial design and service design; this book brings up the third dimension - design for passion]

Design companies - few examples:

Bang & Olufsen:
The (O&B) gives the designer complete control in order to keep them entirely removed from corp. politics and bureaucracy. The company goes a step further giving designers complete control even allowing them to kill a product if it does not meet their design objectives. " We don't design for manufacturing, but we manufacture for design".

Design is an argument; you can't prove it. There are no metrics to it" says David Merkoski , executive director at frog design. He continues, " There is not a McKinney-type guy you can bring in". Doing consistently great design requires a commitment to it.

Apple is believe in keeping simple for users.
"iPhone is not just a product, it is a manifestation of a culture", says John Barrat CEO of Teague a design firm.

IDEO uses anthropology sociology and psychology to help all sorts of companies learn how they can make experience better for customers.

It would be wrong to blame a lack of ingenuity on finance-bred executives alone. Designers themselves often speak in a language only they understand, rather than make it easy for uninitiated to learn how to work. They use words like 'empathy, authenticity, ideation, singularity and simplicity' words that outside the design world echo chamber are broad to the point of meaninglessness.

Design is not just alone about style and form; these are important; but design is really about the way products and services come to life.

Porsche: Delighting customer with quality, design and performance:

When Ferry Porsche was asked about the design of the 356, he said, "In the beginning, I looked around but could not find the car I dreamt of, so I decided to build it myself". The son of a car designer - his father Ferdinand created the original Volkswagen Beetle at the request of Adolf Hitler- Porsche infused his company with a passion for creating dream-worthy vehicles that continues to this day.

So what does design authenticity mean? As per the book written by James H. Gilmore & B. Joseph Pine II's 'Authenticity: what consumers really want' says, consumers respond to products and services that are 'real'. Consumers are willing to shell out money for goods that engage them, good to which they have personal connection. That is one of the reason Porsche's have evolved from modes of transportation to mythic symbols. It has used design to create a feel an intangible emotion about its cars that allows it to charge a significant premium.

Porsche starts the design process on new models and refreshes existing ones with a competition. As many as five designers where each with five different ideas for a car, sketched out in detail. The head of the design team guides them, picking the best of the bunch from each designer making sure that each car is different enough from the version he is selected from the other designers to ensure variety. The designers then refine their ideas and build models, roughly three feet long. From there, Porsche's six member executive team pick the two best designs to turn into full-scale models. The rest of the team will work together on the two selected models as no one designer can manage all the details of creating new model. 'When it comes to design, it is not a democratic process. You can't do market research on design' says head of the Porsche's design team.

In its earliest days, Nike did not care that much about fashion, music or food. It got its start in 1964 doing one thing really very well - making the best running shoes available to hard-core runners who could not afford the dominant brand of the day Adidas. the idea came to Knight when he was working toward his MBA at Stanford and his thesis " Can Japanese sports shoes do to German sports shoes what Japanese cameras did to German cameras'. He argues that a low-prices running show from a Japanese company could challenge Adidas's monopoly of the US market. He put his thesis into action and rest is history.

The company needed a name for its shoes and a logo so runners could identify them. Blue Ribbon's first employee a runner Knight met at Stanford named Jeff Johnson came up with the name - Nike after the Greek goddess of victory . And Carolyn Davidson a graphic designer student at Portland State University came up with something of a rounded check-mark for a logo earning $35 dollars for her work. (Company 's name became Nike in 1978 )

Hatfield - VP of creative design at Nike says, "Many of us have had a passion for sports long before we came here". Nike's culture at its best, is the best of sports the best of what makes athletes great. May be the most important quality from a design standpoint is that great athletes aren't averse to risk. "We love taking risks. We don't mind where we pursue something and it does not pan out" says Parker the new CEO. "Be a sponge - curiosity is life and assumption is death".

It would be easy to dismiss this success as great marketing. And there is no question that Nike is among the best at the game. Parker says, "The most powerful marketing tool is the product itself".

Like many great design companies, LEGO was born from a craftsman's hands. In 1932 carpenter Ole Kirk Kristiansen struggled to make ends meet. It was during global depression. To make ends meet, he turned into toys, handcrafted wooden ones, figuring that the one area where families would not cut back so drastically was gifts for their children. he went to village to village selling such playthings as carved ducks with wheels on the bottom and strings attached to the necks that could be dragged across the floor, trucks, airplanes. As it grew, Kristiansen settled with LEGO as name which means 'play well' in Danish and later he learned that in Latin, it means, I assemble'.

After the World War II, that LEGO evolved into a construction toy company. But then high quality wood was increasingly hard to get and hence Kristiansen tried with plastic. The biggest moment came when Kristiansen's son Godfred submitted the application to the Danish Patent and trademark office in Copenhagen to patent the LEGO building brick system.

Company created LEGO innovation model a detailed methodology for product development. The formalized design has four steps. The first phas e- known as P0- is the stage where LEGO designers, marketers finance staff and others look broadly at potential business opportunities, study consumer trends and come up with ideas for their business groups. P1 is the stage that the designers refer to as the ideation phase. It is when the product group start brainstorming concepts that might address the opportunities outlines in the previous phase.

In P2, the best concepts from the previous phase are developed, business cases are prepared and prototypes are created. In the final phase P3, LEGO executives look at account development and manufacturing costs and decide which products to take to market. The company flies in top executives from around the globe to help assess the products prospects in each region and to establish marketing commitments. They'd pick and choose among the models they thought would do best in their region.

"Children are ruthless in that they are very demanding about what they want to buy" says Nipper CEO of LEGO. " If your offer does not stack up, they will go somewhere else. Brand is important but as LEGO learned, design is crucial. If LEGO is the Catholic Church, then design is the Sistine Chapel. It is the holiest of the holy"

At OXO the renowned maker of design-centric kitchenware, the food seems to come nonstop. OXO is full of foodies. And as with other firms OXO began when its founder Sam Farber grew frustrated with existing products and decided to create something better. Back in the late 1980s, Farber was vacationing in the south of France when he noticed his wife Betsey's mild arthritis causing pain while she peeled apples for a tart. The thin metal peeler was hard to hold. The image gnawed at Farber into the night and he called up his buddy at 1:30 am and mentioned his idea of solving his wife's problem. Its the idea of creating products that are easy to use for the wildest possible spectrum of customers - young and old; make and female left and right handed; European, Asian and American; people with physical challenges like arthritis.

Universal design remains at the heart of OXO to this day. While kitchen tools are still company's core offerings, it has applied the ideas of Universal design to gardening tools, cleaning gadgets and office supplies. OXO has learned that outliers - arthritic cooks who have trouble gripping utensils for example - are sensitive enough to spot design flaws that the rest of us unthinkingly accept.

OXO employees who have that the company on average for five years understand that the company's success depends on coming up with novel concepts rather than iterative products. "Our process is finding a pet peeve" Lee - president of OXO- says. "if there is no pet peeve, there is no product. The pet peeve that launched the company was the discomfort of using a standard vegetable peeler. Like that vegetable peeler, many pet peeves are aggravations that consumers put up with without ever really knowing it. Design gurus often refer to these as unspoken needs.

OXO follows a formal design process very similar to LEGO uses. It begins with Phase 0 - it is an exploratory stage in which the company puts together a design brief anywhere from four to fifteen pages, laying out the problem it wants solved, potential product features and target price points. Then it hands the brief over to Smart design , form, or one of seven other design firms with which it works. The phase often concludes with a brainstorming session where OXO and the design firm conjure up product concepts. Phase 1 is the conception stage, in which OXO and its design partner start refining their work. Designers start sketching product ideas. They consider different materials and build basic models. Those basic models help OXO answer the question of whether the product will address the unspoken need.

If it does, the company moves to phase 2 in which it designs and develops the product. When an idea moves to Phase 3, OXO and its designers refine the concept even more, ultimately creating a tooling mold that its manufactures will use to build first samples.

REI may be one of the best companies at turning shopping into an experience and turning customers into devoted patrons. It is a store where consumers can go to learn how to use GPS device on a trial, figure out which local waterways offer the best kayaking for beginners and discover what to pack for a summit attempt on a fourteen thousand-foot peak. It is a place where outdoor enthusiasts go to be inspired.

When it came time for REI to ponder what future stores should look like is, it started with a whiteboard exercises, jotting down words that represent REI's brand. Entertainment was a word that came up but it was dispatched pretty quickly. The words that resonated most ever were community and interaction, words that reflect approach that Lloyd Anderson and Jim Whittaker took with the first customers.

But this cooperative is bigger than the kind you might find at a community organic market. In fact, it is the biggest consumer cooperative in the country with 3.7 million active members, folks who have spent ten dollars or more in the previous year. The dividend induces members to join. But it gives them a piece of the business. REI has done what most retailers can only dream of. "They created a cult" says frog design president Doreen Lorenzo.

The fact that Anderson created a cooperative - one that distributes more than half of the profits generated by member merchandise purchases as dividends more than $750 million over the years - says much about the customer-experience design of REI that lives to this day.

Clif develops products that improve its customers athletic performance - energy bars for athletes to provide instant energy needed for their athletic needs - cycling, running etc. Clif does not merely develop products; it design them and the experience of using them. And it is an example of how the lessons of design can be applied to industries where aesthetics don't matter.

Ace Hotels:
Since 1999 the company Calderwood runs with three friends has opened three of the most talked about new hotels in the travel press. The first was Ace hotel Seattle. The roots of the company stretch back to Seattle in the early 1990 when Calderwood joined his friend Wade Weigel to launch Rudy's Barbershop, a place where tattooed and pierced hair cutters will you a ten-dollar buzz cut.

Rudy's found fans in Seattle's alternative rock music scene in part by selling concert tickets and CDs - Calderwood ran a show promotion company at the time called Tasty Shows. It built following with the city's young art scene by doing things like commissioning a mural by Shepard Fairey who gained his greatest recognition years later for his iconic Barrack Obama 'HOPE' poster during 2008 presidential campaign. The group took out no loans, funding the company from savings and plowing profits into opening new shops in the chain which now has more than a dozen location in Seattle, Portland and Los Angeles. They group realized they'd stumbled upon something of a formula, a way to use design to tap into a young hip demographic that marketers take such pains to reach.

With limited budget, the pair kept costs low by shopping for furniture and fixtures at consignment shops and surplus outlets. Ace hotels rooms evoke the kind of apartment you might have had right after college. Or at least the apartment you wish you had. The Ace is all about functional design.

It is not trying to create a bland experience that is palatable for everyone but loved by no one.
We designed a place where we wanted to stay" Herrick says. Like other founders mentioned in the previous cases, Ace guys created their business for themselves.

Virgin Atlantic:
Virgin Atlantic was born from that sort of frustration. the company's iconic leader, Sir Richard Branson had been running the Virgin record label for several years and traveling the globe in the process. Like just about every frequent flier, he loathed air travel. In the early 1980s American Airlines cancelled his flight from the Virgin Islands o Puerto Rico. Fed up, Branson called a charter company and arranged to get a plane to fly the route for two thousand dollars. Then he divided the cost by number of folks left stranded, jotted the number down on a borrowed blackboard and walked through the terminal selling tickets for thirty nine dollars a pop. He recalls, "Jokingly writing "Virgin Airlines" on the blackboard. Like genesis of so many great business idea, Virgin Atlantic came from a simple revelation.

"We decided to create the kind of airline that myself and my friends would like to fly on" says Branson. There is again, that idea of designing a business to meet the needs of the founder because nothing else like existed.

Even in the early days, Branson focused on designing an experience that kept customers coming back. They came out with first flat-bed design for upper class passengers. They are the first one bringing new experience for air travelers and excel in consistently providing them throughout their fleets.

"The only reason the Virgin brand has survived so long is that people trust that the actual end products that they are getting from Virgin are good ones" says Branson. Virgin Atlantic is outlasting rivals because it is not afraid to take chances in designing a superior customer experience. "if you ignore the accountants and you introduce stand-up bars and talk to other people, if you do things like introduce masseuses onboard, if you do things like introduce seat-back videos on economy class, yes, in the short term, it costs more money. But in the long term, the best always survive" says Branson.

The Intersection of Business and design:
The focus on the intersection of business and design is not just happening at design schools. Bz schools are adapting to train tomorrow's executives to think like designers. That is because the most forward thinking schools saw a change sweeping through the economy in the early days of the millennium when all sorts of jobs shifted to India and Asia facing commoditization on a grand scale. the smartest Bz schools adapted, creating curriculums focused less on number crunching and more on abstract thinking. Instead of nurturing the cold calculations of the left brain, they developed courses to cultivate the creativity of the right brain. Instead of teaching students how to reach to market disruptions, they developed classes in how to create those disruptions.

Roger Martin - dean of Rotman School of Management wrote 'The opposable Mind' in 2007 is one of the most important business books on this subject. he says, "Bz education to a great extents, has been about analyzing existing models. the people who has succeeded so brilliantly don't chose from models. They are creators and builders of new models. Bz schools simply don't teach that".

"One of the great things that Apple has done is getting industrial design out of the way and letting the experience take over" says Tim Brown of IDEO. Experience matter and design can guide companies to create the ones consumers want most.

IDEO, Ziba and a handful of others firms have turned the design world on its head, changing the definition of the word. In their hands, design is much more than just making things aesthetically attractive. The most creative companies develop methods to do consistently innovative work. They apply the lessons of design to all sorts of bz. even ones in industries that don't lend themselves to creating works of beauty.

Use it to find some inspiration. There are lessons to be learned from Nike's appreciation of pop culture, Porsche's workshop of performance, OXO's embrace of Universal Design, and Ace Hotel's ability to create hipness on the cheap.

As Rotman's Roger Martin would say, don't copy some else's model; come up with your own. Think like a designer as you map out company strategy. Many of the companies that are stumbling today are the ones that haven't addresses the challenges of the economy creatively.

Books recommended: The opposable Mind by Roger Martin.

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