Better By Design CEO summit notes – Day 2

Day 2 from the BBD CEO summit.
Jeremy Moon  restarts. Reminds that the purpose of design is to guide the user to a certain behaviour.

Reintroduces Stefan’s model from yesterday

Cause→ culture→ Customer experience:→Sum(Comms, Brand, Channels, People, Physical environments, Service, Product) Where customer could be consumer, trade or team.

Peter Senge from MIT (via video conference)
author of the book The Fifth Discipline: The art and practice of the learning organization

Involved with how to develop organisations that tap the creative potential of people. From normative to generative way of operating. Collective creativity.

Last 10 years shifting from individual organisations to supply chains – food system, industries, collaboration between business, civil society and government, including primary and secondary education.

Common theme is what are the fundamental changes? Very different world with profound imbalances.

Created sustainability forum in 1999 – big companies first. In 2002 started the Global sustainable food laboratory – governments and NGOs. Lousy food, poor distribution, emerging problem. Move to collate all the most innovate systems.

Vision, systems thinking, creating an environment where people can thrive

A family, team, organisation is a system. Never fully understand such a system. Can the members operate together to create the futures they want to create?

Most organisations start with a cause.

What is it to think of design inside a living system – a non trivial question. Systems are being continuously generated by the participants. Culture is the most obvious embodiment.
Key to be reflective – for example after a meeting (a client did this after every management meeting, even leaving their self-assessment score on the meeting room wall – to stunning improvement)
Problem is not that the organisation has a cause, the problem is that the cause is vast.
Beauty of the (Stefan) model is its simplicity. The danger of the model is the simplicity. A picture is one thing, but making it alive is much more difficult. It’s only when we reflect (e.g. After meetings) on the cause when we determine what we really want to happen. When you reflect though you make yourself vulnerable – perhaps you have lost touch with the cause, lost touch with reality.

Culture we have grown up with is one of hierarchical control, which is quite different from a cause driven business.
Theory/Paradigm of the business is part of the system. Need to find ways to disentangle this. Easy to fix the tangible system, but the deeper human system assumptions and habits may not change. Habits are thoughts, actions, projections, assumptions. We react to the short term problem with tweaks rather than actually change the fundamental issue. Doing marketing promotions while your products stay lousy (Telecom in the mid 2000’s) doesn’t help in the long run. The power shifts to the people that are good at the short term fixes (marketing) and away from the core issue (product and technology). Once you realise the root of the problem then you need to change the people – elevate the ones that will address the issue (they need positional and informal cultural power)

Q: As CEOs is it our role to create change or to deal with it?

Answer: Yes. (both) You can’t not react, but if that is all that is happening then there will be deep holes. Danger is not quick fixes or reacting, but only doing this. Organisations over time spend 90% of their time reacting, which sucks life out. CEOs need to be always moving balance between reactive and generating.

Peter Drucker called it the Discipline of Abandonment – sometimes you need to abandon something while it is still working as it takes up too much resource.
If there is only one person who is the visionary for the organisation then you are in big trouble. There are pockets of visionaries, and (as CEO) you had better have some people close to you that are pushing you personally. It’s not one person – thats a formula for disaster – you become a limit of what is possible in the organisation.

Q: Rick Wells (Formway): To what extent does the culture derive from the values of the CEO versus the behaviour of the employees?

A: usually founders, even way after they are gone, are the ones that are the key influencers. But culture is shifting and changing with each day, each interaction. Key question to keep asking is what do we intend to conserve? Asking a question about the future, but you are holding the past in a way that conects you to the future. The key is a future orientation, grounded in the past. Big belief that culture is distributed, and ind crazy if it comes from the top – if it does you are describing a disempowered organisation.

Q: Mark Templeton: What are the behaviors of CEOs who have companies with great cultures that is different?
A: Really good listeners. Listening to what the organisation was trying to say, and then forcefully articulate that. (Motorola’s Bob Galvin) Organisations are more creative than anyone realises. Also listen to customers, to markets and so on.
Hates the “CEOs who drive change” phrase – means that people are sitting around waiting for change to happen to them.

Q: On culture versus Politics
A: Organisations are dominated by game playing. Surface conversations and subtext conversations. Private conversations. The culture becomes very political when this happens. Turn it around – what does healthy politics looks like? Is there such a thing as healthy politics? Yes – politics is about power, everyone does not have equal power. If you equate power with influence then you want the power to be distributed in a fashion that suports health and well-being of organisaton. If everyone knows that some people, not in hierarchy, have earned trust and right to be influential then that’s a meritocracy, and is consistent with the goal. This is not common – organisations are dominated by pockets of power that exist because people have gathered that over time. (I agree – the informal networks are what make companies work)

Evolutionary versus revolutionary change – distrustful of people in positions of authority who state they want a revolution – but can guarantee they have no intention of them selves falling out of power. Real systemic change is quite gradual. Can make instant changes by fiat, but not embedded, nothing really changes. (I agree – the best change comes from both the top and the bottom).

Lesson from an organization dealing with impoverished kids: Systemic change is the process of incremental shift in habits.

Q: Maximise shareholder value – one purpose of a company – what are others?
A: First off – if you are a business you have to make a profit. Drucker- profit for a company is like oxygen for a person – you gotta have enough of it. But if you think your purpose is breathing then you have got it wrong.
Warren Buffet – my favorite timeline for assessing a business is forever.

Profit over the long term is great, but managing in the short term will drive the wrong behaviour (Apple and Berkshire Hathaway versus the rest of Wall St). Gotta have a cause. No more insidious, destructive idea than the idea that the purpose of the business is the maximisation of return on invested capital. Nobody wakes up in the morning and dreams of maximising profit. Longer time period have to have passion, imagination, reason for being. That’s the only way to have something that generates profit over decades. The sin is that without the cause employees have nothing to drive to.

Ingrid  Fetall IDEO
Design and Culture – always been a link, they mirror and influence each other. Design emanates from culture. The society on products. Design impacts culture. e.g. the car on cities.
Most of the things that we use and consume are made by people from other cultures. Many will be designed there as well. Asia is going crazy building design schools. Every thing we consume and make has a multicultural story. McAlooTikki, Burka Barbie,

Design is about more than things, artifacts. Design is a verb – a process. Design process is like a universal language that enables cross cultural relations/activity.

Why care about culture – growth, export. Productivity when offshore, innovation sources. Harness the dissonance, pull together the disparate ideas.

IDEO love the “How might we?” questions.
How might we – facilitate collaboration, express what we stand for, create respectful exchange,

12 approaches they use at IDEO
1: We begin with empathy. (listen, immerse themselves in end users)
2: We use culture to inform our process. E.g. In Brasil an idea doesn’t come from the brain, it comes from the body, so got people playing and working with material to generate concepts.
3:  We stay flexible in our process e.g. Used a worksheet in china to generate ideas for snack food, but it failed in Thailand. Discovered that Buddhists prefer the freedom of blank sheets of paper and changes the exercise.
4: We study cultural analogues e.g. For Cisco project took inspiration from places in India that they visited – what places bring together people naturally, means change the design of informal gathering spaces for Cisco building there. Adding things to draw people out and rally around.
5: We identify assumptions e.g. Icebreaker – working on a project to translate Icebreaker success into the USA. What do we know, what do we think we know, what do we know we do not know. Assumption about NZ. What comes to mind when you thing of NZ? (Hobbits, funny accent, beautiful, long way away). Then they showed the Ram with ’no shrinkage’ tagline and there was a connection.
6: Use design to translate culture: e.g. Be naked, wear Icebreaker. Campaign. ‘Make friends with benefits’ tag inside shirt.
7: We visualise the journey. E.g. Icebreaker: Awareness, Orientation, Visit/browse, Try on, Trial. Beginning engage with culture, later on talk about the product details.
8: We use design to share stories : Icebreaker uses Baacode to send story back to the farm. Cisco planet – video screens across different office. What did you observe, hear, what stories did you hear? Greek economy example – 52 stories of success over 52 weeks on website.
9: We look for ways to go with the grain. When working with another culture, try to build from behaviour already existing in another culture. Dubai starting a business (so bad people used to hire people to do it for them – which is common elsewhere too). In Emerati culture -’service is for servants’, but they have  strong idea of hosting visitors. So IDEO designed the offices to take people out from behind desks to make them hosts. Created intimate areas where they can be hosts. Can let some people self-serve, freeing hosts up to be better hosts.
10:  We make the abstract concrete: e.g. Democracia Activia (Peru) – used invitations, actually handed them out. Invitation to a cause. Ofrecete papa una causa. Actua ya. Wrote campaign promises on the sife of municipal buildings and checked them off when done.
11: We get tangible quickly. Days or weeks. Peru – put things out in markets and fairs and got engaged. Icebreaker – turning paper concepts into foam models, trying them in stores. Dubai – 4 months from rendering to building an office.
12: We create forums for collaboration – Open IDEO. Live and online – involve people from the world in refining ideas for big challenges. http://openideo.com/

A cultural design consciousness fosters growth.

Designing with culture in mind is not optional, especially for NZ companies (whether market is here or offshore)
It’s about the impact you can have in a global society – what kind of impact do you want to have?
Icebreaker have the story – ‘Born and Worn in the mountains’ – Ingrid said to Jeremy ‘convince me about the worn first before you tell the story about the born’. Icebreaker will be opening a big store in Soho.

Stephen Tindall asks questions: How did you interpret the understanding of NZs into the Icebreaker pitch?
Answer is different depending on category: Tourism – beauty of place. Otherwise look wht is around you in the USA market already. Be different and good, in a way that is still authentic to you. Tone and humour works really well, and we have  native kiwi quality.

Americans do tend to take themselves too seriously, more inward looking. More Europeans hav visited NZ, closer proximity to UK culture which is similar to ours. Europe is ahead of the USA with consumers making decisions on sustainability. Leading with a sustainability message has less resonance in the USA, so lea with another message.
Lindsay Faithful: Beer swilling blokey company – dealing with designers is tough. How would you build empathy?

A: Gotta sell the maleness of design – historically a male territory (industrial design). Power tools involved. Many of the most famous designers were men. Hard to have empathy for a process, a lot easier to build empathy for the people. Start with the consumer. Put photos up on their stories. Take video. That can be the inspiration for why people want to embark on a new way of doing things.

Jeremy – what did you do for Icebreaker?
Ingrid: Spent a week going into people’s homes, pull out all of their active wear, talk about it, how they use it. Window into the way they use the products, need to do it in an ethical way.

Jeremy: we had a good system, needed to know how to get our system into the wardrobe.
Jeremy – what are your communication principles for Icebreaker?
A: Design principles – tactility. Try tactility first. How could you make every moment of the journey try on? Enter the store there is a sign called Touch lab – encourages you to try.

Embrace the quirk

Be complementary not competitive – don’t seek to replace the homegrown brand, but complement it. Patagonia owners do not want to give it up. (I called them Patagucci in the USA due to the prices. Good stuff though and I had this issue with Icebreaker as well). Will show a window display – ‘Hey Patagonia how do we get into your pants?’. Store is directly across the street from Patagonia.