So, let me tell you a story. We live in an age of convergence, disruption and rapid obsolescence. Thanks to information technology, hyper-connectivity, big data and artificial intelligence the dots seem easier to converge and connect than ever seen previously. Traditional silos between disciplines, industries, markets, economies, formats and systems are constantly blurred to make way for new disruptions and business models. Fast is not fast enough anymore because it is happening real time and simultaneously anywhere in the world rendering even recent ideas obsolete before harnessing their true potential. It is more difficult to fathom nuances between the 3 I’s of imitation, innovation and invention but perhaps safest to categorise most successful models as innovation. Growth seems hyper and on steroids for most of these successes while some form of redundancy is inevitable for those left behind. Recent industry reports say that capital is cheap and is no longer a real constraint to growth for corporations. Ideas and talent are the new black so as to speak.
For corporations, growth and innovation is now about constantly spurring and managing multiple S curves in every direction including the permutations from combining curves and testing them out with extreme agility to capture the market and its imagination. Agnostic on whether the corporation is an agency or a client; B2B or B2C; product or service based among others - there seems to be a shift in moving away from traditional forms of valuation, towards basing models on potential for the data they own and can monetise in the future. Not all industries have figured this out necessarily but those that have, seem to have put systems in place for a constant pipeline of data collection even though they may not know what to do with it yet. It is not surprising that some of these companies have been in the news recently owing to selling that data to those in unregulated formats causing for debate on privacy and fair-trade practices. In the European Union, law and regulation are evolving in the form of General Data Protection Regulation (GDPR) compliance broadly based on privacy of personalised data, combining it and using it under stipulated guidelines with rights given to users for their own data. Other large economies are considering similar regulation which will mandate compliance for all industries in the future.
From a corporation or business design standpoint, a lot may need to change to be (almost) present compliant and future ready, not to mention remain relevant in managing growth and innovation. Traditional boundaries and business verticals may not be relevant anymore. Convergent talent, disruptive thinking and connecting dots in the form of business horizontals to blur boundaries may be the need for the future. The emergence of Chief Design Officers or Chief Innovation Officers in Boardrooms is not surprising as a common pattern across this new breed of successful corporation. The intersection of business and creative thinking backed by insight from data, agile prototype testing and lean scaling via technology with a focus on immediate value and high experience for the end user seems very pertinent. Business results for shareholder returns and company valuation are self-explanatory in stock performance and trade reports for these companies.
However, the act of defining this convergent dot connector role tends to be an oxymoron in itself. The moment it is defined, boundaries seem harder to blur. Each individual, how the team is set up, the culture of the organization, nature of business, future of the industry, context of the market and a managerial mindset to back radical change are key factors in considering such roles for new adopters. It is perhaps an interesting anecdote that successful start-ups seem to do it well with a founder’s mentality where key personnel double hat across blurring boundaries. It is also not surprising to note that well known strategy consultants are in good business where they largely help connect the dots to leverage value for corporations that have not kept a keen eye on remaining relevant and future ready. Some of these corporations that also have internal strategy verticals have not necessarily seen much success for several reasons. It is the coexistence of a start-up innovation culture alongside a lean sustainable growth model, that most corporations struggle with, not to mention against a backdrop of what is relevant in today’s increasingly digital context.
Again, from evidence, truly design led corporations seem to be doing better in trying to keep with the balance. John Maeda’s report ‘Design in Tech 2018’ traces the evolution of design in the business enterprise. It shows GM’s elevation of design in the 1950s to IBM’s realization that design was important in 1966 through other key milestones for design thinking at Apple, IDEO, Institute of Design at Stanford, P&G, SAP to most recently a complete transformation for IBM as a design led company in 2018 when they have open sourced their Enterprise Design Thinking for all. Harvard Business Review sites a 228% growth of stock performance of design led companies over the S&P Index. The UK Design Council finds that 83% of design led companies saw market share increases at twice the average. Adobe says 50% of design led companies reported a relatively more loyal customer base. A report from Forrester commissioned by Adobe, provides four key recommendations to drive customer loyalty by:
Putting design at the core of their business:
- Include a variety of roles under the rubric of design.
- Foster design leadership across roles and seniority, from individual mentors to the C-suite.
- Establish cross functional design processes and champion them throughout the organisation.
- Allocate design capabilities across the full experience spectrum, from visioning to execution.
On the agency side:
An interesting evolution is underway. Maeda’s report sites that large consulting firms are the biggest M&A drivers for a spike in creative firm acquisitions. Rooted in Design Thinking from folks like IDEO who define themselves as a global design company committed to creating positive impact and FROG who say they design exceptional digital and physical customer experiences to transform businesses at scale -to- more recently the likes of Mckinsey, BCG and Bain who are following suit. ‘Mckinsey Design’ borne out of Mckinsey acquiring Lunar, a creative agency say that they believe in – ‘Taking a unique, multidisciplinary approach to helping clients drive growth, bringing 350 designers from award winning design studios – like LUNAR, Veryday, and McKinsey Digital Labs – together with McKinsey’s deep industry insights and expertise.
They add – ‘Our analytical rigor and breakthrough creativity helps clients innovate at scale and speed.’ BCG Digital Ventures has an interesting 10-point manifesto which describes themselves as innovators, inventors, pioneers and founders who are a ‘foundry creating the next wave of disruption, one corporate partnership at a time.’ They believe ‘corporations will own the next horizon of innovation’ and that ‘It is not about digital. It is about growth. Growth breaks all barriers – industry, function and regional.’ Bain Digital cleverly writes that ‘The goal is not being a digital business’ but rather’ Getting business results in a digital world’ where ‘the next digital trend isn’t technology, but it’s a new point of view.’
This new point of view is further corroborated in their report titled ‘The Firm of the Future’ which outlines-
5 key futures:
- The firm of the future will no longer need to choose between scale and intimacy, thanks to technology.
- The firm of the future will need to identify mission-critical roles and allocate the best people to fill them.
- Technology-based platform companies have earned huge values from relatively smaller employee and asset bases.
- New ownership and investment models are evolving to better match the time horizons of the firm with the risk needs of the investor.
- The firm of the future will manage two types of businesses—Engine 1 of its core and Engine 2 of its more innovative business.
Why is all this happening? Perhaps on the demand side there is a demographic shift in the way society is evolving. Much like the post war baby boomers in the U.S. and burgeoning middle class in large developing nations, the millennials world over seem to be defining (by numbers and attitudes) mega trends in a big way. By approximate definition, the oldest of this cohort would turn 40 in 2020 which would make them key decision makers both on the supply and demand sides.
There is plenty of literature emerging on various aspects of understanding their behaviour and impact on business, economy, workplace and consumption among other trends. Some of the key trends from these reports include their belief in shared services, connectivity, community, working towards a higher purpose, sustainability, authenticity, convenience, value based on research and transactions in an experience vs. ownership economy. For them, data is the new oil, technology the vehicle and central to their core is the authentic designed experience as a driver or passenger (in a likeminded car pool) to get to places they choose to be for fulfilling their higher purpose.
The idea of the ‘Experience Economy’ as a logical progression from the Service Economy was best articulated in the late nineties by consultants Pine and Gilmore. More recently in 2017, Mckinsey stated in one of their reports that ‘Experience is King’. Howard Schutlz of Starbucks has corroborated this idea telling his investors that any business who is “going to win in this new environment must become an experiential destination.” Not only are experiences important, their use as currency is rapidly fuelling the growth of this type of economy thanks to social media and hyper connectivity. According to Euromonitor, global expenditure on the Experience Economy is forecasted to reach $8.2 trillion by 2028.
To go back to Ridley Scott’s quote and our story, a new mission critical EDIT (Experience – Design – Insight – Technology) for the traditional corporation may be emerging less out of choice but more from necessity. Broadly speaking, what seems relevant for corporations from an overview of the above are dynamically blurring boundaries between:
Experience (how the customer interfaces with the brand, product, service and experience)
Design (how Innovation drives recurrent value, and, standardisation drives consistency and growth for scale)
Insight (responsible mining and monetisation of data for business purposes)
Technology (systems that help with speed, reliability, consistency, scale and provide a pipeline of big data)
Each of the above constitutes for virtuous cycles that would fuel the other. A C-Suite design thinker or an EDITor in this case normally orchestrates these cycles to drive value for business. The EDIT puts the customer (external and internal) at the heart of the enterprise. Externally for the customer, it is about experience and real time value, and, internally for the corporation it is about culture. Functionally, this may encompass (but may not be limited to) design, engineering, brand, PR, marketing, user experience, customer centricity, market research/insight, strategy, information technology and HR among other mission critical teams relevant to the context. The EDITor could be a CEO, COO, CDO, CIO, CTO, CMO, CCO or any such role. Various companies have chosen to reinvent themselves using Design Thinking to set up variants of this model within large corporations across industries. To name a few, these include Apple, IBM, Pepsico, Fidelity, Capital One, Airb&b, Dyson, Google, Amazon, Ikea, Nike, Starbucks, Tata, Infosys and Godrej among others.
As previously mentioned, common patterns of design thinking empowerment, selected leadership, mission critical team consolidation and as a result - consistent business returns are observed in all these companies. Others are catching on fast. To get with the program - scout the talent where possible as it is not easy to find given the way of thinking and the nature of the role. Call the role what you will and define teams how you choose to but the important thing is to allow for relevant convergence to happen and for the right people to lead the transformation with full empowerment. Necessity has long been defined as the mother of all invention and in this case perhaps reinvention. This is not about cutting roles or making new ones.
It is about a mission critical and tight edit to tell the story right for business tomorrow. It is an entirely different way of thinking and dot connecting for an entirely new customer – a new script for those who believe that a sea change to remain relevant and be future ready is currently underway. And simply put, the bottom line is - are you going to be EDITed in or edited out? Excal Design is one of the top digital marketing agencies in Chicago that will ensure you are not EDITed out.