Distinct … or Extinct: Design = Differentiator #1

Unilever/IDEO/TPC The Design Museum/28.11.2001

All Slides Available at …

tompeters.com

Note: Lavender text in this file is a link.

I. Welcome to the Age of “GAK!”

<1000A.D.: paradigm shift: 1000s of years 1000: 100 years for paradigm shift 1800s: > prior 900 years 1900s: 1 st 20 years > 1800s 2000: 10 years for paradigm shift

21 st

20 th century:

1000X

tech change than century (“the ‘Singularity,’ a merger between humans and computers that is so rapid and profound it represents a rupture in the fabric of human history”) Ray Kurzweil

“The corporation as we know it, which is now 120 years old, is

not likely to survive the next 25 years.

Legally and financially, yes, but not structurally and economically.” Peter Drucker, Business 2.0 (08.00)

Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 are in ’87 F100; the 18 F100 “survivors” underperformed the market by 20%; just 2

(2%)

, GE & Kodak, outperformed the market from 1917 to 1987.

S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were alive in ’97; 12

(2.4%)

of 500 outperformed the market from 1957 to 1997.

Source: Dick Foster & Sarah Kaplan,

Creative Destruction: Why Companies That Are Built to Last Underperform the Market

“Good management was the most powerful reason [leading firms] failed to stay atop their industries.

Precisely because these firms listened to their customers, invested aggressively in technologies that would provide their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that promised the best returns, they lost their positions of leadership.” Clayton Christensen,

The Innovator’s Dilemma

“A pattern emphasized in the case studies in this book is the degree to which powerful competitors not only resist innovative threats, but actually resist all efforts to understand them, preferring to further their positions in older products.

This results in a surge of productivity and performance that may take the old technology to unheard of heights. But in most cases this is a sign of impending death.” Jim Utterback, Mastering the Dynamics of Innovation

7 Rules for Leading/THRIVING in a Recession+ 1. It’s

ALREADY

too late.

2. Show up & tell the truth —

CREDIBILITY

rules.

3. Kill with

KINDNESS.

4. Sharp pencils are imperative —but don’t forget that the

CUSTOMER

& our

TALENT

&

RISKY INVESTMENTS

are still our long-term Bread & Butter. 5. Everything’s different, everything’s the same—it’s the

NEW ECONOMY

, more than ever, stupid!

6. “Use” the trauma to mount the bold initiatives you should have long before mounted: Flux =

OPPORTUNITY.

7. We’re in a War of Organizational Models—from retail to the Pentagon.

IDEAS MATTER MOST.

Message : Everybody’s scrambling. Nobody’s “got it right.”

II. The 3B Problem:Better But Boring!

Quality Not Enough!

“While everything may be better,

it is also increasingly the same.”

Paul Goldberger on retail, “The Sameness of Things,”

The New York Times

“We make over three new product announcements a day. Can you remember them?

Our customers can’t!”

Carly Fiorina

“The ‘surplus society’ has a surplus of

similar

companies, employing

similar

people, with

similar

educational backgrounds, working in

similar

jobs, coming up with

similar

ideas, producing

similar

things, with

similar

prices and

similar

quality.” Kjell Nordstrom and Jonas Ridderstrale,

Funky Business

Message: Find an edge. Or else.

III. We Must Lead: Different or Doomed!

“If you worship at the throne of the voice of the customer, you’ll get only incremental advances.”

Joseph Morone, President, Bentley College

“These days, you can’t succeed as a company if you’re consumer led – because in a world so full of so much constant change, consumers can’t anticipate the next big thing.

Companies should be idea-led and consumer informed.”

Doug Atkin, partner, Merkley Newman Harty

Saviors-in-Waiting

Disgruntled Customers Off-the-Scope Competitors Rogue Employees Fringe Suppliers

Wayne Burkan, Wide Angle Vision: Beat the Competition by Focusing on

Fringe Competitors, Lost Customers, and Rogue Employees

CUSTOMERS: “Future defining customers may account for only 2% to 3% of your total,

but they represent a crucial window on the future.”

Adrian Slywotzky, Mercer Consultants

COMPETITORS:

“The best swordsman in the world doesn’t need to fear the second best swordsman in the world

; no, the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to do, and so the expert isn’t prepared for him; he does the thing he ought not to do and often it catches the expert out and ends him on the spot.” Mark Twain

Employees: “Are there

enough weird people

in the lab these days?” V. Chmn., pharmaceutical house, to a lab director (06.01)

Suppliers:

There is an ominous downside to strategic supplier relationships.

An SSR supplier is not likely to function as any more than a mirror to your organization. Fringe suppliers that offer innovative business practices need not apply.” Wayne Burkan, Wide Angle Vision: Beat the Competition by

Focusing on Fringe Competitors, Lost Customers, and Rogue Employees

WEIRD IDEAS THAT WORK: (1) Hire slow learners (of the organizational code). (1.5) Hire people who make you uncomfortable, even those you dislike. (2) Hire people you (probably) don’t need. (3) Use job interviews to get ideas, not to screen candidates. (4) Encourage people to ignore and defy superiors and peers. (5) Find some happy people and get them to fight. (6) Reward success and failure, punish inaction. (7) Decide to do something that will probably fail, then convince yourself and everyone else that success is certain. (8) Think of some ridiculous, impractical things to do, then do them. (9) Avoid, distract, and bore customers, critics, and anyone who just wants to talk about money. (10) Don’t try to learn anything from people who seem to have solved the problems you face. (11) Forget the past, particularly your company’s success.

Bob Sutton,

Weird Ideas that Work: 11½ Ideas for Promoting, Managing and Sustaining Innovation

Message: You are paid to lead. So … lead!

IV. Design: The No.1 Source of Passionate Attachment!

(Or undying despair)

Design “is” … WHAT & WHY I LOVE.

LOVE.

I

LOVE

my ZYLISS Garlic Peeler!

Design “is” … WHY I GET MAD.

MAD.

Wanted: THE DESIGNER OF MY RADIO SHACK PHONE. Major Reward!

Design is

never

neutral.

Hypothesis:

DESIGN

is the principal difference between love and hate.

“We don’t have a good language to talk about this kind of thing. In most people’s vocabularies, design means veneer. … But to me, nothing could be further from the meaning of design.

Design is the fundamental soul

of a man made creation.” Steve Jobs

Philippe Starck

“Today the problem is not how to produce more to sell more.

The fundamental question is that of the product’s right to exist.

And it is the designer’s right and duty to question the legitimacy of the product.” Philippe Starck

“My main task when I was artistic director at Thompson for four years: to make the company virtuous.

Not because there was a desire to do evil, but because they had simply forgotten their purpose in life —to be of service.”

Philippe Starck

“I invented the slogan ‘Thompson: From Technology to Love.’ That completely repositioned the problem.

Because now we were saying that technology wasn’t an end in itself, but just a means —and that the real goal was what had always been there, the original priority, humanity, whose ultimate criterion is love.

That connects back to the idea of the friendly object, the good object.” Philippe Starck

“[At Thompson] I outlawed the word ‘consumer’ in all company meetings, and insisted it be replaced by the words ‘my friend,’ ‘my wife, ‘my daughter,’ ‘my mother,’ or ‘myself.’

It doesn’t sound the same at all, if you say: ‘It doesn’t matter, it’s shit, but the consumers will make do with it,’ or if you start over again and say, ‘It’s shit, but it doesn’t matter, my daughter will make do with it.’ All of a sudden, you can’t get away with it anymore. There is an enormous task to be done with this kind of symbolic repositioning.” Philippe Starck

Message: Engage your Client in an examination exploration of why we care about stuff.

Or don’t.

THE BASE CASE: I am a design fanatic. Personally, though not “artistic,” I love cool stuff. I love what I love and I hate what I hate. But it goes [much] further, far beyond the personal. Design has become a professional obsession.

I – SIMPLY – BELIEVE THAT DESIGN PER SE IS THE PRINCIPAL REASON FOR EMOTIONAL ATTACHMENT [or detachment] RELATIVE TO A PRODUCT OR SERVICE OR EXPERIENCE.

Design, as I see it, is arguably the #1 determinant of whether a product-service experience stands out … or doesn’t. Furthermore, it’s “one of those things” … that damn few companies put – consistently – on the front burner.

V. Design is a Great Story!

“A key – perhaps the key – to leadership is the effective communication of a story.” Howard Gardner

Leading Minds: An Anatomy of Leadership

“Car designers need to create a

story

. Every car provides an opportunity to create an …

adventure

“The Prowler makes you

smile

. . Why? Because it’s

focused

. It has a

plot

, a reason for being, a

passion

.” Freeman Thomas, co-designer VW Beetle; designer Audi TT

Hmmmm(?): “Only” Words …

Story Adventure Smile Focus

Plot

Passion

Plot Williams Sonoma = 6 [was 10] Crate & Barrel = 8 Sharper Image = 9+ Smith & Hawken = 8+ Garnet Hill = 9 L.L. Bean = 4 [was 9+] Land’s End = 7+

Colonial Williamsburg = ?

Message:

“What’s the plot?”

is a compelling exercise!

VI. Great Design is Respectful

“Sometimes I have episodes of wild fury in rental cars. It’s not road rage. It’s more like design rage.” Susan Casey, www.ecompany.com

User …

STOP BLAMING YOURSELF!

(Don Norman/Design of Everyday Things)

Paradox [?][!]

Great Design = WOW! +

GRACE

[usability writ large]

“My favorite word is

grace

– whether it’s amazing grace , saving

grace

,

grace

under fire,

Grace

Kelly. How we live contributes to beauty – whether it’s how we treat other people or the environment.” Celeste Cooper, designer

Rodale’s on “Grace” … elegance … charm … loveliness … poetry in motion … kindliness .. benevolence … benefaction … compassion … beauty

Message: Usability rules!

“Grace”

is a better word than usability.

VII. Caution!

Message : All the “cool stuff” looks

[exactly]

like all the other “cool stuff” in this , THE

BRIGHT NEW AGE OF DESIGN.

“Against Smoothness”

( Harper’s Magazine 07.2000)

Message: Buy a new CAD package. Or a set of pencils.

VIII. Design & Work: Down with Dilbert!

White Collar Revolution!

So what will be the

Basic Building

Block of the

New Org?

Answer: PSF!

[Professional Service Firm]

Department Head to …

Managing Partner, HR [IS, etc.] Inc.

“P.S.F.”: Summary H.V.A. Projects (100%) Pioneer Clients WOW Work (see below) Hot “Talent” (see below) “Adventurous” “culture” Proprietary Point of View (Methodology) W.W.P.F. (100%)/Outside Clients (25% ++ )

BMW’s Designworks/USA: >50% from outside work

“Reward excellent failures. Punish mediocre successes.”

Phil Daniels, Sydney exec

Language matters!

Wow! BHAG! “Takes your breath away!”

“Intimidate their

[users’]

imaginations”

… “Where’s the

revolution?”

–J Allard, on the Xbox

“Let’s make a dent in the universe.”

Steve Jobs

11Sept2000: HP bids

$18,000,000,000

for PricewaterhouseCoopers consulting business!

New Springs = Turnkey Collections.

Flexible sourcing.

Packaging.

Merchandising.

Promotion.

Systems & Site mgt.

“We are a ‘real estate facilities consulting’ organization, not just an ‘interior design’ firm.” Jean Bellas, founder, SPACE (from SMPS Marketer)

Who was the number one employer of architecture school grads in the U.S. last year?

Omnicom:

57%

(of $6B) from marketing services

“The move toward outsourced manufacturing represents an obvious opportunity for contract manufacturers [such as Flextronics: $93M to $15B, ’93-’00], but it’s also a potential boon to product innovation.

The future of gadget-making is not about making gadgets; it’s about imagining them. Someone else makes the imaginary real.

‘All that money that used to go to fund infrastructure is going into design and innovation,’ says Flex CEO Michael Marks.” Wired/11.2001

IX. Get Over It: ALL YOU NEED IS ONE!

Topic:

Boss-free

Implementation of

STM

/Stuff That MATTERS!

World’s Biggest Waste …

Selling “Up”

Heart of the Matter

F2F!/K2K!/ 1@T/R.F!A.*

*Freak to Freak/Kook to Kook/ One at a Time/ Ready.Fire!Aim.

The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.

Michelangelo

Joe T. Jones 1942 - 2000 HE WOULDA DONE SOME REALLY COOL STUFF BUT … HIS BOSS WOULDN’T LET HIM!

Characteristics of the “Also rans”* “Minimize risk” “Respect the chain of command” “Support the boss” “Make budget” *Fortune, article on “Most Admired Global Corporations”

Message: Find one freak. Find one offline project. Forget selling “up.”

Quit bitching about powerlessness.

X. The All-Out WAR FOR TALENT!

“The leaders of Great Groups

love talent

and know where to find it. They

revel in the talent of others

.” Warren Bennis & Patricia Ward Biederman,

Organizing Genius

The Cracked Ones Let in the Light “Our business needs a massive transfusion of talent, and talent, I believe, is most likely to be found among

non-conformists, dissenters and rebels.”

David Ogilvy

“Diversity defines the health and wealth of nations in a new century.

Mighty is the mongrel. … The hybrid is hip. The impure, the mélange, the adulterated, the blemished, the rough, the black-and-blue, the mix-and-match – these people are inheriting the earth. Mixing is the new norm. Mixing trumps isolation. It spawns creativity, nourishes the human spirit, spurs economic growth and empowers nations.” G. Pascal Zachary, The Global Me: New

Cosmopolitans and the Competitive Edge

Message: Design - writ large, as the Mother of Passion – dramatically affects the basic

“Great Place to Work”

value proposition.

XI. Design & Women: Opportunity No.1?

?????????

Home Furnishings … 94%

Vacations … 92%

Houses … 91%

Consumer Electronics … 51%

Cars … 60% (90%)

All consumer purchases

Bank Account … 89%

Health Care … 80% … 83%

????

Riding Lawnmowers

2/3rds 50+% working women/ working wives > 50% 80% checks 61% bills 53% stock (mutual fund boom) 43% > $500K 95% financial decisions/ 29% single handed

$4.8T > Japan 9M/27.5M/$3.6T > Germany

FemaleThink/ Popcorn “Men and women don’t think the same way, don’t communicate the same way, don’t buy for the same reasons.” “He simply wants the transaction to take place. She’s interested in creating a relationship. Every place women go, they make connections.”

“Men seem like loose cannons. Men always move faster through a store’s aisles. Men spend less time looking. They usually don’t like asking where things are. You’ll see a man move impatiently through a store to the section he wants, pick something up, and then, almost abruptly he’s ready to buy. … For a man, ignoring the price tag is almost a sign of virility.” Paco Underhill ,

Why We Buy* (*Buy this book!)

Read This: Barbara & Allan Pease’s

Why Men Don’t Listen & Women Can’t Read Maps

“It is obvious to a woman when another woman is upset, while a man generally has to physically witness tears or a temper tantrum or be slapped in the face before he even has a clue that anything is going on.

Like most female mammals, women are equipped with far more finely tuned sensory skills than men.”

Barbara & Allan Pease,

Why Men Don’t Listen & Women Can’t Read Maps

“Resting” State: 30%, 90%: “A woman knows her children’s friends, hopes, dreams, romances, secret fears, what they are thinking, how they are feeling.

Men are vaguely aware of some short people also living in the house.”

Barbara & Allan Pease,

Why Men Don’t Listen & Women Can’t Read Maps

“As a hunter, a man needed vision that would allow him to zero in on targets in the distance … whereas a woman needed eyes to allow a wide arc of vision so that she could monitor any predators sneaking up on the nest.

This is why modern men can find their way effortlessly to a distant pub, but can never find things in fridges, cupboards or drawers .”

Barbara & Allan Pease,

Why Men Don’t Listen & Women Can’t Read Maps

“Female hearing advantage contributes significantly to what is called ‘women’s intuition’ and is one of the reasons why a woman can read between the lines of what people say.

Men, however, shouldn’t despair. They are excellent at imitating animal sounds .”

Barbara & Allan Pease,

Why Men Don’t Listen & Women Can’t Read Maps

Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

EVEolution: Truth No. 1

Connecting Your Female Consumers to Each Other Connects Them to Your Brand

“The ‘Connection Proclivity’ in women starts early. When asked, ‘How was school today?’ a girl usually tells her mother every detail of what happened, while a boy might grunt, ‘Fine.’ ”

EVEolution

“Women don’t buy brands.

They join them.”

Faith Popcorn, EVEolution

“Today, 80 per cent of objects are unnecessarily macho.

Yet it is plain: The intelligence of a truly modern society must be feminine.

… Apart from a machine pistol, I can’t think of many objects which actually need to be extravagantly masculine.” Philippe Starck

STATEMENT OF PHILOSOPHY: I am a businessperson. An analyst. A pragmatist. The enormous social good of increased women’s power is clear to me; but it is not my bailiwick. My “game” is haranguing business leaders about my

fact-based conviction that women’s increasing power – leadership skills and purchasing power – is the strongest and most dynamic force at work in the American economy today.

Dare I say it as a long-time Palo Altan … THIS IS EVEN BIGGER THAN THE INTERNET!

Tom Peters

Stupid!

Ad from Furniture /Today (04.01): “MEET WITH THE EXPERTS!: How Retailing’s Most Successful Stay that Way” Presenting Experts: M =

16

; F = ?? (94% = 272)

The Furniture Industry …

doesn’t understand

BRANDING

doesn’t understand

FASHION

doesn’t understand

WOMEN

doesn’t understand

SPEED & RESPONSIVENESS & VALUE-ADDED SERVICES

doesn’t understand

EXCITING RETAIL PRESENTATION & “EXPERIENCE” MARKETING.

And is run by old, conservative white guys … who don’t even understand what they don’t understand.

Prescription …

SHE

is the Consumer.

(PERIOD.) 75% SHE

is the Brand.

(PERIOD.)

women designers*

(*Men CANNOT design for women. PERIOD.) 75%

women reps.

“Cool” retail spaces in high-rent districts ( à la Ethan Allen).

Match furniture with accessories … i.e., create an

“experience.” FOCUS ON “RELATIONSHIPS-FOR-LIFE”,

not “transactions.”

Message: Men cannot design for women’s needs??????

XII. Design & the Aging: Opportunity No. 1A?

Subject: Marketers & Stupidity

It’s 18-44, stupid!

Subject: Marketers & Stupidity

Or is it: 18-44 is stupid, stupid!

2000-2010 U.S. Stats

18-44: -1% 55+:

+21%

(55-64:

+47%)

“ ‘Age Power’

rule the 21

st

will century, and we are woefully unprepared.”

Ken Dychtwald, Age Power: How the 21

st Century Will Be Ruled by the New Old

Aging/“Elderly”

$$$$$$$$$$$$ “I’m in charge!”

50+ $7T wealth (70%)/$2T annual income 50% all discretionary spending 79% own homes/40M credit card users 41% new cars/48% luxury $610B healthcare spending/74% prescription drugs

5% of advertising targets

Ken Dychtwald, Age Power: How the 21

st Century Will Be Ruled by the New Old

Message: You wannabe relevant? This is a [VERY] Big Deal. Listen up.

XIII. Design = Cornerstone of the Age of the Brand

“WHO ARE YOU

[these days]

?”

TP to Client

Design =

Character

(which is why knock offs are so easy to see through) (Design = WHO ARE WE?!)

“Most companies tend to equate branding with the company’s marketing. Design a new marketing campaign and, voila, you’re on course. They are wrong. The task is much bigger. It is about fulfilling our potential … not about a new logo, no matter how clever.

WHAT IS MY MISSION IN LIFE? WHAT DO I WANT TO CONVEY TO PEOPLE? HOW DO I MAKE SURE THAT WHAT I HAVE TO OFFER THE WORLD IS ACTUALLY UNIQUE? The brand has to give of itself, the company has to give of itself, the management has to give of itself. To put it bluntly, it is a matter of whether – or not – you want to be … UNIQUE … NOW.”

Jesper Kunde , A Unique Moment

“We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion. Imagination, myth, ritual - the language of emotion will affect everything from our purchasing decisions to how we work with others.

Companies will thrive on the basis of their stories and myths.

Companies will need to understand that their products are less important than their stories.” Rolf Jensen, Copenhagen Institute for Future Studies

“Brand Promise” Exercise:

Are WE?

(1) Who (poem/novella/song, then 25 words.) (2) List three ways in which we are UNIQUE … to our Clients . (3) Who are THEY (competitors) ? (ID, 25 words.) (4) List 3 distinct “us”/“them” differences . (5) Try “results” on your teammates. (6) Try ’em on a friendly Client. (7) Big Enchilada: Try ’em on a skeptical Client!

1 st Law Mktg Physics: OVERT BENEFIT (Focus: 1 or 2 > 3 or 4/“One Great Thing.” Source #1: Personal Passion) 2 ND Law: REAL REASON TO BELIEVE (Stand & Deliver!) 3 RD Law:

DRAMATIC DIFFERENCE

(Execs Don’t Get It: See the next slide.) Source: Jump Start Your Business Brain, Doug Hall

2 Questions “How likely are you to purchase this new product or service?” (95% to 100% weighting by execs) “How unique is this new product or service?” (0% to 5%*) *No exceptions in 20 years – Doug Hall,

Jump Start Your Business Brain

The Heart of Branding …

“WHO ARE WE?”

WHAT’S OUR STORY?

“EXACTLY HOW ARE WE DRAMATICALLY DIFFERENT ?”

“ WHY DOES IT MATTER TO THE CLIENT?”

“EXACTLY HOW DO I PASSIONATELY CONVEY THAT DIFFERENCE TO THE CLIENT ”

Message: THIS IS THE BIG ENCHILADA. Case logic: (1) Brand is it. (2) Brand = Emotional reaction. (3) Design is THE KEY to emotional reaction.

(4) Designers are “the key” to the strategic success of the enterprise.

[If they’d only flick the chip off their collective shoulders.]

XIV. Design & Leadership: Passion Rules!

“Create a Cause, not a ‘business.’ ”

Gary Hamel, Fortune (06.00), on re inventing a company (Exemplar #1: Charles Schwab)

“I am a dispenser of enthusiasm.”

Ben Zander

Message: Designers – appropriately considered – are the script writers for The Compelling Story called

Our Company Matters Because …