25 April 2006

Resource allocation

As a businessperson and former business major, I often talk about the allocation of resources. I like the ideology that in a pure supply and demand economy, resources will find the best opportunities. I believe this. But, I do not believe we live in a world where the consumer (demand) and the supplier (supply) effectively meet to find equilibrium (optimal value or price). Unfortunately most of our distribution and delivery systems are convoluted. This allows opportunity for manipulation, and we have a harder time reaching that optimal cost, value, price point. Some markets (commodities, stocks, etc) do reach equilibrium very quickly, but the majority, healthcare for instance, does not.

So what constitutes a resource? I believe that it is a combination of elements that fall into these five categories: money, time, materials, energy and passion. Notice that energy and passion are separate… this is significant. A careful evaluation of the combination and proportions of these resources can tell you a lot about the motivations and goals of those investing.

Why is this important? The design, marketing and strategic efforts within an organization are highly dependent upon the allocation of resources. More does not always make for a better outcome. Many times it is the proportional composition of those resources that impacts the quality of solutions and the success of a project. I think that this is an important observation for the astute designer.

24 April 2006

Is my equity working?

I paid off my car this month. The irony of it being the last thirty days of my three-year adventure back to graduate school is not lost on me. I am stuck between the benefits of no longer having a car payment, and the silliness of having an equity stake in a dwindling asset. People have written books about what a poor investment vehicle the family home is. And, although a much smaller amount of money, my car is loosing value at a ridiculous rate. And yet it is still a relief that I own it.

But what does this have to do with design, innovation or business. Everyday business people make an investment in themselves, in process, in knowledge and in relationships. These – are true investments. These skills and experiences that some once said to me “they can never take away from you” are in fact enormous assets.

My three years in school has been both exhausting and exhilarating. I don’t think I had really taken stock in how much there is to know. Richard Saul Wurman talks about (Information Anxiety, 1989) the reconciliation we must have with the limits of time and our brains. That is it not important to know everything, but to know where to find out everything. Certainly he did not foresee the immediacy of google and wikipedia. There comes a point where skills, knowledge, experience and process will fail. At that point, progress will rely upon relationships – the dynamics of leadership, the challenges of motivation, inspiration, convictions and determination. And while I am determined to never let this learning process slow, I am looking forward to reaching that “point.”

18 April 2006

Indicators (more)...

While on the subject, one of my strongest held observations is that sales and marketing must be steered from two different minds. It is probably the first thing I look for when talking to a prospective client. Yes, even before measuring the scale of the company, its web site, competitors, or the color of the carpet. Is the head of marketing really the sales manager?

This may seem obvious to many, but sales is short term, very measurable and immediately accountable. Marketing is a relatively long-term project, with consistency and agility – and metrics are difficult (but not impossible). Unless you have employed Sybil as VP of Sales and Marketing, I can almost guarantee your group is struggling.

This does not mean that your VP of Sales cannot be well qualified as a marketer, or that your head of Marketing is a former sales person. In fact, cross-pollination is great, it leads to mutual respect and the kind of cooperative glove in hand relationship you want. There will likely always be a small speck of adversarial attitude between sales and marketing, but I think this can be healthy if kept in check and civil.

Brand as an option?

I have been working with corporate identity and branding for many years. Much of that time is as a consultant. In introductory meetings I am usually looking for indicators that I will not be wasting my time and a customer’s money. I love a challenge, but I am looking for the potential for an eventual win-win scenario. There are a couple of indicators that tell me a company is either a lost cause (no client potential) or are a perfect fit (great prospect as someone I can help). Some times, however, these two indicators are difficult to distinguish as lacking potential. Here they are:

Number 1) “Management doesn’t like it when we talk about brand.” Version 2 is “we really don’t believe in branding here.” Honestly, I have actually heard this from marketing professionals in publicly traded and fortune 500 companies on multiple occasions. Please listen carefully if you have said this yourself. You have a brand, but you are likely not remotely influencing it to your advantage. It does exist, unless you are invisible (you may in fact be hoping for this right now), so be conscious of it, measure it, and deal with it. Head in sand has never, nor will ever be a good strategy for branding?

Number 2) “Our brand is described in detail, right here in the manual.” Ok, this is important… your actual brand is not any book! It is probably not even a part of your vision. It is in your customer’s and your non-customer’s heads. And, you will have to work very hard, and very smart to shape that brand. If you have not measured your brand from a customer centric perspective, it will be very difficult to move it to a favorable position. You cannot will a brand favorable.

17 April 2006

Kevin Keller in Kansas

Few things are as compelling to me as brand and the branding process. For a handful of business students and their professors at Kansas University in Lawrence, Friday was a particularly inspiring day. Kevin Lane Keller, one of the foremost experts in brand strategy paid a visit and for a couple of hours shared his thoughts.

Dr. Keller drew from a series of recent publications, and a few not yet published. He told stories of consulting experiences, how companies have implemented his strategy, and explained the stories behind the ads that most of us only experience as consumers. Two striking observations come to mind in recalling his talk, both from the fast food industry.

First, he asked, "could you ask for a better competitor than Burger King?" I know it has been a few years since I understood what Burger King was trying to do with their brand or who their target market is. Is random chaos really a viable plan?

Next – he voiced an observation regarding Wendy’s. During Dave Thomas’ stint as the spokesperson for the company he was not exactly a spring chicken. But even had he been 18, did they not have a back up plan? It certainly does seem that Wendy’s has been a drift for quite some time.

While these observations are far from demonstrating the depth of the talk, they were certainly entertaining. Thanks Kevin, hope you come back to Kansas sometime soon.

12 April 2006

Economics, savings, taxation and trouble ahead

In a departure from this blog's main topics, I needed to get this off my chest...

Late last year I read a paper written by Kevin Lansing, Senior Economist at the Federal Reserve Bank of San Francisco regarding the negative implications of American’s savings and spending habits on the economy. I could not agree more with Mr. Lansing (admittedly lacking anything close to his credentials.) I, in fact am a prime example of poor spending and savings habits in my personal life. I will, however, take full advantage of a lack of gross earnings that result from being in graduate school for the last three years as my excuse.

Mr. Lansing makes some seriously credible recommendations in his reports that include a governmental shift away from an increasing federal deficit. I could not agree more. When did the Republican regime become the arbiters of non-tax and still spend?

His second recommendation is one of a shift in (I assume federal) taxation from earnings to spending. This would presumably increase our tendencies to spend and increase savings - though I am not convinced this is a logical decision but one of spontaneous emotional gratification needs. Most Americans tend to be lazy savers. The use of home equity and whole life insurance policies are about as far as most of us go. For the majority of us, neither of these even come close to providing an above average rate of return on investment, much less an optimal return - but they are easy no brainer lemming like efforts. With a shift in the housing economy that seems inevitable, returns in these investments will be reduced to that of the equity in your new car purchase. Like sand through your fingers, a dwindling asset.

After a bit of mulling over Mr. Lansing’s second recommendation, my biggest concerns are focused here - on the shift to a spending tax. I have this vision of a new more robust barter economy. Call it grey market or black market, the undocumented trade of goods and services will rise (minimally) in direct correlation to this taxation shift. Personally, I don’t have much of a problem with this, but given further thought as to the implications… it struck me as a very dangerous proposition. The revenue service is already looking to gain access to Pay Pal data. Imagine what they will need to track growing barter and trade trends.

I am still a proponent of a radically simplified taxations system (with apologies to all of my accountant friends). Maybe the flat escalating tax system is the way to go. The more you prosper, the more you contribute. I think I could be OK with that no matter how many millions I was earning. Is that the alarm clock I hear?

11 April 2006

Mac on windows, windows on Mac, blah blah

Yes, yes we are all very excited about being able to increase our available desk space and hardware hassles by booting windows on our Macs. Not having to buy another junky generic PC will be great. I now have an even more delightful doorstop. But enough! Specifically enough from you obnoxious windows pundits who seem to be smirking like cats from the tree.

Nobody, and I repeat, NOBODY, craves Windows running on their Mac. But nearly every Mac user has at least one application that they would like to run - that is not available to them. Yes, I know the gamers are all out in force, but I am talking about professionals at work, striving for more productivity. IT departments that have begrudgingly allowed the graphikers to connect to the network – or worse made them attempt graphic productivity with a windows machine now have a better conduit. But do not for one minute think you will convert any of us. We have experienced the superior solution and are not about to give it up.

Personally, I hope that Apple never makes the Mac OS available for generic intel boxes. What brings reliability to the Mac is a tightly controlled OS and manufacturing standards. A closed system that prevents unwanted incompatabilities. The plethora of poorly engineered hardware and unusable software installers, to say nothing of a green acres approach to user interface renders the windows platform nearly intolerable for those of us who know better.

I like my bliss (and can tolerate my own arrogance on this issue.) I like my Macs. And if every once in a while I have to reboot or hot swap to get the most current SPSS or some other non-Mac application, I will be a happy and very productive person.

PS – Dear SPSS, I really resent being several versions behind in capabilities, just because I prefer an elegant interface!

03 April 2006

Will designers determine the fate of design?

I think not. Granted I am in the Midwest and not San Francisco, New York or that great meca of design, Chicago, but I would estimate that 95% of the designers that I have known or worked with could not define ‘design thinking.’ In schools, in studios and in the minds of most design faculty, design is a trade and a craft. It is visual styling in the studio tradition – and a rote process of styling at that.

The business magazines, Daniel Pink and even Time Magazine have spouted about the virtue of design. They show design as a worthy discipline as yet untapped by most businesses. And for that I am very grateful. They hold up Apple Computer, Proctor and Gamble and others as companies with the vision to use design as an effective weapon in an increasingly competitive marketplace. True enough, these are examples of companies that have embraced the power of design and made a difference, either in process or in positioning. They have not only differentiated themselves in the press, business world and consumer mindset, but likely increased profitability as well.

Here is where the difficulty lies. Most designers I know (granted most are graphikers, web, print or both) are caught up in visual styling. They miss the structure and are only partly aware of how their process is different from that of marketers, accountants and others. Further, most designers (like myself for many years) utilize what Richard J. Borland and Fred Collopy (Managing as Designing, 2004) refer to as a decision attitude rather than a design attitude. They do not push to optimal or potentially risky solutions. They defer to safe and acceptable standards that meet expectations.

Most of the engineers and business professors I know are more attuned to design thinking than the designers that I know. Have you noticed how many MBA programs have formed alliances with university design departments in the last few years? Though it has been pointed out to me that ‘we do not own’ our process or the design domain, as designers we are in position to bring it to the executive level and optimize the obvious potential.

My real fear is not that designers will be left in the dust, or that we will lose credit, it is that design will be the latest amongst many business fads to follow TQM and Six Sigma. Those credible applications are so often reduced to weak applications or ‘programs’ that lack the systemic embrace that can render them so powerful. Using design to merely position (I did not say SuperTarget) will only lesson the long-term significance of design thinking in the business world.

The charge for the practicing studio or trade minded designer is this – get out of your staid process and grow. Learn to think and talk like business people. Go to conferences and read the published papers - even take classes or study at the graduate level. Understand how to talk the executive language. Apply research, metrics and statistics to your work. Spend time with people who are not designers within your organization. Be aggressive, be expansive and work cross culturally.

My hope is that we can keep design from becoming the latest business version of the atkins diet.