Better By Design CEO summit notes – Day 1

These are very very rough notes from the Better By Design CEO summit, being held as I write these on Wednesday and Thursday 2nd and 3rd of November.

Judith Thompson, who has lead the NZTE BBD team for five years kicked things off.

Design is important. Apple is a recurring theme, their products have opened customer eyes, and the revenues and profits have made investors and other CEOs take note.

Design is now on the business agenda and there is a critical mass of businesses and business people believe that prosperity depends on design thinking and design integration

Designed business means business cause, culture, experience of customers all align.

IceBreaker’s Jeremy Moon was next – is the chair of the BBD board and is the facilitator for the conference. He is doing a super job.

BBD has had 110 companies pass through, companies that represent $4 billion of the economy. All exporting, growing, hungry to learn.

“Purpose of design is to guide the user through artifacts towards certain behaviour called for by the program”
Masamichi Udagawa

Design is:

  • About the impact on human behaviour
  • Uses anything that has an impact (artifact). Ca be prototyped. Build to think.
  • Towards intentional not random behaviour

The conference is about Design Integration, which Jeremy defines as Integrating Design Thinking into all aspects of your business to create a powerful customer experience

Marty Neumeier
First speaker up was Marty Neumeier, author of the brand gap and the Designful Company, who claims Apple amongst a long list of former clients
He started with anecdote on how he almost ran over Steve Jobs when Steve was walking to work with ipod plugged in. Apparently he narrowly avoided destroying the future of US design. Jobs is famous for saying that to stay ahead and keep growing “We intend to keep innovating”, but you cannot just say that and expect margin to ensue. Marty says “to innovate you gotta design.”
He defines a designer as “anyone who devices ways to change existing situations to preferred ones.”

“There is a whole level of reflectiveness that is absent in traditional management that we can find in design. Richard Webster (Case university)

Traditionally you know something and then you do it. However business is speeding up. No longer good enough to pick two of Cheap, Good and Fast, it’s now Free, Perfect and Now.
The market is cluttered. Brands are fighting to be seen – 4 times the number of active trademarks than 1989, supermarket brands have tripled since 1993. Customers may not actually want this choice.

The real competition comes from clutter – Product Clutter: too many products, Feature Clutter – too many features per product, advertising clutter – too many ads, Message clutter – too many messages per ad, Media clutter – so many channels we don’t know where to look. Every blogger (and twitter) is now a channel.
Can’t make people think they way you want – you can encourage them but you cannot make them
A brand is not a logo, corporate identity or a product
A brand is a customers’s gut feeling about a product, service or organisation. It’s not what you say it is, it is what they say it is. You need to look at your products and services from the outside in.
Brands are built on being different. You have to exaggerate that difference because of all that clutter out there. Remember this is from the customer perspective, not the internal one. You need to force yourself into the discipline of being very different. Neumeier wrote about this in ‘Zag’.

A simple way to judge ideas is to plot them on two axes – Good and Different. Select the ideas that are both good and different. (I’d add another axis – easy versus hard, and select the biggest, easiest, good and different products.)

‘Different’ descriptors are pretty rough – wrong, interesting, weird, ugly, baffling and so forth.

Marty’s talk was stopped exactly on time by Jeremy Moon and we are now in question time – questions from pre selected product designers, including Equip’s Peter Haythornthwaite.
(I work with Peter, Ray Labone and Andrew Jones at Equip doing BBD assessments and plans)

Marty: Start with a big bold mission, such as Google’s make everything available to everyone. Choose something that seems like it cannot be done and attract fellow travellers to your cause. When transforming a bigger company start with product design and give them a seat at the table.

What’s gone on at Apple and Jonathon Ive – did Steve Jobs actually make this happen?
Marty: You don’t have to get a designer to be a CEO but you definitely have to have one that supports design. All Apple are doing is hiring the kinds of people that are being graduated from design schools. Most students don’t get to do the work they did at school and Steve has created a place where they can do it. Steve is the customer’s best friend, and loves his customers more than his people. Don’t stand in his way.

How do we know as a business that we are achieving that goal of differentiation?
Marty: Companies that are innovative challenge themselves all the time, always trying to improve. At innovative companies people internally are scared of the place you are going – scared of the new things the company rather than your own status on the company. Design forms live or die on their creativity – perhaps manufacturers need to be more like design firms.

Design thinking is becoming more important – CEOs can get help though. It enters a place where CEOs are not comfortable – how to make is easier? Try it, open yourself up, come to confernces, get courage and don’t be afraid to fail. Fail fast in safe ways – stage gate innovation.

Dick Powell – cofounder of SeymourPowell
Dick led in with an advertisement for a TV program called “better by design” in the UK – a show he was involved with creating.

SeymourPowell is a design shop that have a lengthy list of products.
Designing Innovation is good design good business – but this audience already gets this. Design Council in the UK compared share price (Should have been total return to shareholders) returns on FTSE for companies that embraced design and saw over 2x returns over 10 years than without.

The key for businesses is to be able to embrace change. The bigger they are the more they are like giant jellys, but they only wobble but then go back to how they were before. The jelly needs to be chopped up.

Dr. Martin’s (Doc Martin’s boots) was a business that could not change. They were given the Crocs concept 4 years before Crocs appeared, but they could not adapt to make it happen.

The best concepts come from push/pull between marketing and technical. Designers are the bridge between the two. Poor communication disables innovation. Technical engineers will deliver a cost effective products that nobody wants, marketers will deliver (unmanufacturable vapour). All focused on meeting social need or desire.
Why designers are good at creativity – we need design thinking as most companies only have a rough idea of what they want to do. (I dispute this). Designer help create a Vision.

There are plenty of great ideas, but the creative process falls over later. The design process means having great idea, then belief, then actually make it happen. Add the bandwidth of knowledge – designing the car of he future requires the knowledge of car design to make ideas relevant. These guys continuously look at new news in society (people), technology (science) and business/economy. It’s about the capacity to absorb – the bandwidth – all of that stuff.

Envisioning the endpoint the critical to getting there. Look (ahead) rather than see. Ethnographic research is about spinning of ideas that turn into products. Uncovering insights. It’s not a solution, just a tool. Example of a video of a user of a in house stair lift who fumbled with a key while extolling the virtues of the lock itself.
Anthropology comes before technology. The more you observe that you realise that political correctness goes away, Men and Women are different.

The holy grail is “the unexpected but relevant solution.” YouTube folding t-shirt problem.

They like drawing while working with clients. Have to design product for the middle man as well as the end user. For example they created for a client a shower product that takes half the time to install for plumbers. Example of remote control to fill bath to your desired temperature and level while you are in bed.

Innovations is rarely about a big idea, more usually to is a series of small ideas bought together in a new and unusual way.

New Tefal iron example.

johniewes

UK Better By Design TV programme: 34% of women wear the wrong size bra. Cups used to make bras were not actually shaped like bras. (Not sure he knows about zafu.com which helps women size and select bras and jeans.

As a business keep asking yourself “Why not?”. (This is something that Yale school of Management’s – Barry Nalebuff wrote about and there is a website.)

If you want to change the world you have to give yourself time to do it – slow is the new fast.

In summary: Think Differently. Embrace change. Invest in push of engineering and marketing pull. Bandwidth is critical. Look at customers, engage with people, don’t look at big idea but small ones, shift paradigms. Be courageous. You cannot discover new oceans without first losing sight of the shore.

More Q&A:
Killer of innovation is the inability to change. If you are outsourcing that knowledge bandwidth then how? Answer is a maverick withing the organisation. At Unilever one of the key guys there used to ‘fix’ the results to get work authorised through internal processes. Need to be able to receive the knowledge and help, and these guys spend a lot of time proving themselves and gaining trust.
If companies cannot change then you end up pissing in the wind. They do a lot of products that are better but not different – they don’t make the presentation.
Damian Camp: what about smaller organsaton that lack the bandwidth? Outsource to businesses that do this kind of research. (I say this is doable yourself – just get out there with your customers and get active online).

Cameo from Murray Higgs from Structurflex
The World Rowing championships (which clashes with this conference but goes on this weekend) embodies great design. It’s 50% bigger than the 1978 version, but the facilities are superb, and after much planning and prototyping. In every respect it ticks like clockwork, races start when the previous races are still on the water, scheduling and marshaling are designed in. Customers are treated superbly – e.g. On the shuttle bus from car park to course the CEO of championships rode the buses for 2 hours talking to passengers.  Most of the volunteers knew exactly what to tell everyone.

Adam Lowry – Method
Design for good.

Method – style and substance – 2 friends started it in San Francisco. Eric (the other guy) is a brand marketer.
Adam is an engineer, ex Carniagie institution doing climate change research. He made the charts that Al Gore used in his movies.

Decided to go after the cleaning products market – nothing green in there. Mixed products in their apartment. Pitched to grocery store managers and persisted, Feb 28th, 2001 – first sale. They had no product and scrambled to get some. 2006 – #7 on Inc magazine. Fastest growing in California. 1th most innovate by Fast Company.
Design is the most confusing word in the English language. Design is the first signal of human intention
20th century – great products, not necessarily green. Apple example. (A fallacy – Apple have continuously evolved their greenness – reducing packaging, increase greenness and so forth.)
Safety = Hazard x exposure. Traditional “safe if used as directed”, but better to reduce hazard to zero. Source responsibly, make it healthy at home, design for the health of the planet. Be transparent. They do real time open source sustainability reporting. Everyone must become a designer, every thing must be designed.
Example of biodegradable wipes – now the competitors are copying and the category is shifting.
How does design create massive change. Iceland example of geothermal power – change from coal to geothermal started in the small towns and gradually gained scale. Now seen as a place for high energy intensive industry such as smelters and server farms.
Evolution moves quickly when there is a rapidly changing environment.
Laundry detergent – was previously 80% water. Developed a 3x concentrate laundry detergent in 2003. Showed retailers how much they could save by compacting detergent. Walmart pushed other manufacturers to get into the space. @008 Wal*mart announced they would sell only concentrated products.

Doesn’t it piss you off that people copy you and take the credit? Doesn’t pis me off that they copy us – does that they take the credit. Now have a squirt pump detergent that is 8x concentrated. Design create change. Design creates stories.

Advertisement for the product – ‘for a jug-free America’. ‘Say no to jugs’ ‘are you a jug addict’. They used the word ‘Frickin’ which got lots of responses, including Jay Leno. They wrote this copy themselves.
Design is  culture, not a department. On the wall and on the slide in front. Can prototype and get a bottle on shelves in 30 days. They have a very collaborative environment. Started gathering plastic ion the ocean to see what they could do. Reground some to make into something, but not really usable yet.

Call themselves “people against dirty”, based on 5 values. Care, innovation, collaboration, Keep method weird, (every employee is required to give presentation on how to do so.) and What would McGyver do. Blur the lines between who they are and who they serve. We are idea whores – a good idea is a good idea.
Have to get the basics right, make hard decisions fast.

Sheryl from Trilogy. Where do you think average consumer is on making choices about sustainability. Answer is obvious – it’s a secondary driver for all but a small sliver of the population. For everyone its part of the quality – believes premium products require it. Premium will be green, but green won’t be premium.
A good summary here

Follow Adam on Twitter: @adam_lowry

Addendum: Afterward Ecostore’s Malcom Rands, who was sitting next to me, said that Ecostore launched a 3x detergent in NZ in 1993 and the mass market in 2003. They used the same advertising agency as Method. However he sees Method as a great company, and the pump as revolutionary. Malcolm was also sure that Germany was even earlier in this market. .

Facilitated Q&A session
The audience wrote questions in the break and the first one selected question was mine:

What happens when Steve Dies? (How do you maintain the advantage)

Marty: Someone calculated that they would lose $15 billion of value. A lot f people think their model is not sustainable, but they have 2000 creative people working inside Apple. Thinks they are building a culture, someone else needs to step in a keep leading b design. For other companies go directly to build a culture of innovation.

Adam: Thinks idea of maverick visionary business leader is overblown. Hear Steve is brash and directive and if he goes away it will be different – no more boom boom boom boom boom. Ada, as founder, has veto over everything at Method, but the most powerful thing he can do is to never use it. If the company is right then the results will be right. Has little to do with Adam, but all to do with the people that create idea.

Marty: thinks that Adam is wrong, it’s everything to do with Adam. Adam is the embodiment of the culture. There needs to be a strong and deep enough culture to continue after the founder goes.
What happens when the founder does not die?
What are the problems when the maverick is the CEO?

They cannot copy your culture, but they can buy you. How does that change things?

Adam: sticking to the dirty core – don’t want to get big by going wide. Big alone is not incompatible with great culture, and lets them do more and faster change.
Marty: Bigger you get, broader you get the more vulnerable you are to attack.
Marty: how much does design cost?
Adam Its free – you need to invest but it pays for itself. Hard to measure ROI but as founder he does not have to do justification – he just does it. It’s not an investment – it’s a thing that you do that gives you a competitive advantage.

Both different and good and different and bad look the same at launch – and it’s not good. How do you tell the difference?

It takes an experienced innovator to see the difference, and you get that through trying and failing. Some people just know. Steve just knows. (But even he gets it wrong sometimes)
Adam: put the onus on themselves to be the designers, rather tan asking the consumers. (Same as Apple). Do it according to a brief, then use research to determine how user feels versus the brief. Key is to have feeler up to new ideas, regardless of the source. The guy that came up with the idea for the pump bottle was a Kiwi, but a huge process after that to get to the result.
Dick: Briefed by companies to come up with something innovative and different. $16m later killed by poor testing plan. ‘Basis testing’. Dick says ‘ask someone that knows’ – the designers, creators are already working in the future.

What initiatives do you know about to get staff on board when this is new?

Marty: Lew Gerstner – transforming IBM from big blue. Booklet on every employees desk showing journey, roles. Took 18 months to launch. A lot of communications and training internally.

Adam: send people into stores, to customers.

Dick: get everyone involved, keep it open.

How do you best get big innovation into small companies from a cost perspective?

Adam: creative ideas come from within. (I think he built this in – the change was there at the start). He has built design in as an overhead.

Marty: how do we compete with big customers with big budgets? It’s a disadvantage – they have their silos and are sheltered. Working sma and having authority over what you do is cheap.  Design is cheap and often free as it pays for itself.

Dick: thinks process is scalable if you are a little company, find the right person, bring them in. Work with outside experts and work together. (This is exciting stuff – I want to go out and start a company)
Can you comment on extension from designing products to designing experiences?

Adam: experience a person has is what we design.

Marty: Starts with empathy – go out and live with them a bit. Tell stories about their lives to yourselves, how it is to use your product. Then prototype experiences. All helps you understand how to do that.

Dick: Adam talked about ‘our product’, which includes the packaging. The future is about the entire user experience, and you will not be in business if you do not encompass the complete experience from purchaser to end of life.

About Lance Wiggs

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