Design Thinking + 1

If you are not a designer and you don't have any knowledge of what “design thinking” is in problem solving and business methodologies, what do you imagine the term means?

A. It’s trying to make things “look good”.

B. It’s being more creative.

C. It’s to think and plan visually, to use sketches.

D. I have no idea.

That’s probably what the average businessman or administrator would think (since I’ve asked)... and it’s far from the real meaning of the term and how it can be used to benefit a company and its innovations.

Many times the term “design” is only related to graphic design in cultures where this discipline is not as valued and encouraged as it should be. At least for what I’ve experienced in Latin America, when a company needs a designer it’s because they need a logo, poster, company sign, brochure, business card or a web page. I’ve never heard a Latin American business owner saying something like, “I need a designer to create new service experiences for our clients”… and they should! Companies in Mexico post jobs that should be for Industrial Designers, asking for Product Engineers and seeking people who have studied manufacture or mechanics. People often ask me "what is Industrial Design?" Besides, design in general is not considered as an investment, it’s a cost. Desginers are seen as artistic creatives and not exactly focused in business and profits.

My B.S. in Industrial Design helped me to be able to work as a business consultant for my entire professional life, understanding and communicating effectively with different departments, from Marketing to Production, and working for a wide variety of clients, from commerce to banks. I sometimes feel as a “translator” between areas in order to achieve results through synergy. It has also helped me to develop creative ideas or to open up to other’s ideas, without discarding them too early in the process, and most importantly, to think as the costumers, to have empathy in order to synthesize and satisfy their needs.

“Design Thinking”, as a problem solving approach and business methodology, is exactly that: being able to first diverge in different options, being creative, thinking differently, breaking conventional ideas or paradigms , and THEN being able to converge the new ideas into a real effective solution that added new forms of value. It differs from analytical thinking since you don’t logically “improve” upon a given idea, creating most of the time incremental innovations; it’s starting from the basics, almost ignorant of the subject, without pre-conceived paradigms, allowing radical innovations. “Design Thinking” also becomes important in our times since it includes researching and detecting real human (and consumer) needs and taking them into consideration throughout the entire process as a main focus (User Centered Design ) even though it could imply important product or process changes and flexibility.

Some bibliographies state that the stages for “Design Thinking” are: define, research, ideate, prototype, choose, implement, and learn. But I don’t like thinking about “stages” since we go back to an algorithmic way of thinking that breaks the whole point. I prefer to define Design Thinking as IDEOS' Tim Brown does (1),as a series of activities that create products and services that are:

- Desirable (people needs)

- Feasible (technologically)

- Viable (business)

Part of my job as a consultant in ChromaticWorks is to positively impact my client’s profits through Design Thinking applied to creating new products, services and process.

There is one element, not considered by Tim Brown (or considered inside Desirability without special mention), that I think would be important as a separate role in Design Thinking. Designers, as the natural creative employees inside multidisciplinary teams, are often the ones pushing far-out ideas to be adopted by the company. Many times I’ve seen how production engineers are so worried about productivity, quality and time metrics that they are the first ones to resist any radical change. Project managers are also always concerned for out-of-the-budget investments or uncontrolled resource needs. If designers are the ugly-duckling of business stability, this gives designers a very important role for new business’ needs in a changing environment i.e. SUSTAINABILITY. Although being “greener” is a practice every single job position in the company must embrace, designers should be the first ones fighting for new products and services to take environmental and social concerns into consideration.

In small or medium size companies in Latin America that do not have a department in charge of environmental or social issues and where productivity and efficiency is valued higher than innovation and long term results, someone has to take the lead on sustainability, especially if it involves massive production as manufacturers. Being sustainable could go against what people or costumers understands as needed, not affecting desirability; against the company’s actual technology, making it less feasible; and against an un-planned investment, making it less viable. That’s why I would add sustainability as a separate and vital element inside our role as designers.

“Design Thinking + 1”: desirable, feasible, viable AND sustainable. This is a graph I used for ChromaticWorks where I reflect my poing of view of Design Thinking in Innovation Management:

I recommend watching Tim Brown's video following the next link:

(1) TED Talks: Tim Brown urges designers to think big

http://www.ted.com/talks/lang/eng/tim_brown_urges_designers_to_think_big.html

Magic Realism

"It is life, more than death, that has no limits."
— Gabriel García Márquez

Since August 5^th, 33 miners are trapped inside a mine in San José, Chile, at 688 meters below the ground. All miners are alive, waiting for their rescue that will take about 4 months. The wife of a trapped miner said for a CNN report today that poverty forced her husband into being a miner, that he doesn’t like darkness or closed spaces, but after talking to him, what worried him the most about being trapped were “the souls of death miners” around them.

Gabriel García Márquez, the Nobel Prize winner Colombian writer, is known for his “magic realism”, a literature genre where abnormal events are taken as normal by the characters in a crude or harsh realistic atmosphere. For example, one of my favorite short stories “Un Señor Muy Viejo Con Unas Alas Enormes” tells the story of a fallen angel who is placed inside a hen house, mistreated and taken advantage of by the town’s people.

In his book with Plinio Apuleyo “El Olor de la Guayaba” , García Márquez says he’s never seen the “magic” part of “magic realism”, that everything is based in day to day reality in Latin America. He tells the story about how a flood once hit a circus and how all the floating wild animals could be considered a fantasy scene, but in fact was normal local news.

I always remember Magic Realism and García Márquez’s statement when I hear or experience the “usual-unusual news”. I remember a few years ago reading in a Dominican Republic newspaper about how a family stole a corps from a hospital to avoid paying the services. The thing was, they stole the corps in a “pasola” which is like a Vespa motorcycle, and they had a picture of the body placed horizontally on the motorcycle’s seat. It is really not that unusual when you have seen people transport huge gas tanks, washing-machines or an entire 4 person family in the pasolas.

What does this have to do with innovation? I like thinking innovation happens in a world where anything can occur, either that you can create that world or that you act upon the unbelievable… while still being realistic about it. Literature can be part of the creative Latin cultural heritage I once commented in an earlier post. To truly believe, as I quoted García Márquez: "It is life, more than death, that has no limits."

As I write this article, an entire organization and government is working to help the trapped miners in Chile, planning and executing the best ways to get them out as fast as possible without causing any mayor risk. They are concerned about the trapped miner’s nutrition and keeping them in the best health conditions possible. The technological challenge of the rescue is complex and problems like this push organizations and government to cooperate and to innovate. Innovation or not, let’s hope everything turns out all right.

I just wonder, has anyone thought how to solve the miner’s biggest mental concern about “the souls of death miners” around him? Why not? Innovation for magic realism.

Sales David vs. Goliath

After the Monopolies and Expropriation post, I started thinking about my own experience against larger competitors. While working as a consultant for a medium-size local soda company in the Caribbean, I remember the sale's entry barriers we had against large soda corporations.

With their economic power, large soda companies were able to place cooler machines in small stores where, even without an exclusiveness contract, store owners were told that if they introduced other sodas like ours, the cooler machines and their well-known products would be taken away. They would also sign exclusiveness contracts with schools in exchange of painting their basketball courts or installations with the brand name. When a new product was introduced in larger retail stores, their older products would not reduce their shelving space for the new inclusion, but our assigned shelving space would be the one affected and products would be taken away and arranged by their own merchandisers. We were constantly talking to store’s employees in order to respect our space and had to make greater merchandising efforts.

When we hired some sales supervisors that worked earlier for one of the large soda corporations they admitted to us: “We used to break your returnable soda bottles.” Soda bottles are the company’s property, not the stores, and have to rotate at least 3 times in order to pay for its own materials. If you break them before that, you are affecting the company’s costs directly. Large-corporation’s sales workforces would have instructions to exchange their own brand bottles instead of ours to the small retail stores and then break the bottles. This meant having to create detailed inventory controls and having to constantly produce new bottles.

Here are some tips for small but rough-fighting in sales:

1. Do not fall for a dirty game, play tough but without illegal or unethical practices. If consumers find out you are playing dirty your brand will suffer more than a well-position brand. On the contrary, if you are small and being treated unfairly, your brand can have the “David vs. Goliath” effect where everyone roots for the weaker.

2. Show your product’s own advantages without talking bad about the competition. Our sales force would have to convince retail stores to introduce the products even though they were not well known and gave no additional bonuses such as coolers or POP material. You won't get sales just by saying you are better than international brands, client's won't buy the idea because perceptions are strong. Give store owners and even their costumers a taste of your products so they gain trust in your brand and let them build their own appreciations. At the end, some small stores even used the competition’s coolers and stands to place our products.

3. Always show why having variety is important. Tell store owners how they can’t always stick to the usual brands and how they will give a better service if they have a wide variety of products, especially in price or quantity variations in SKUs.

4. Customer attention and personalization is essential. Larger corporations may have better products, quality perception, advertisement, etc. but as a small company you have to offer a better personalized attention to your clients, even if it includes more frequent sales visits or longer taking sales.

5. Have at least one clearly differentiated product. For example, the medium-size company had a Coconut taste soda, which none of the large international corporations managed and became a flag product.

6. Have good relationships with Merchandisers and all store’s employees. Remember these are the people that are going to help you have a better shelving , product arrangement, presentation and even advertisement materials. It can be the difference between having your product infront of a brand or being in the back of another brand. They are sometimes even the ones that tell the owner what sells and what is stuck in inventory. Never underestimate their power and influence.

7. Act local. Work along with society and create close connections, sometimes large international corporations can’t detect and satisfy local needs.

The picture for this post was taken from a special event we held for “Chubby” an imported soda brand for kids, commercialized (but not produced) by the local soda company. This is what I mean with point 7.

Monopolies and Expropriations

In open national TV, Argentina's President Cristina Fernández de Kirchner, addressed the nation with proofs of the illegal appropriation of the paper company "Papel Prensa" during the military dictatorship in 1976 done by owners of local newspapers Clarín, La Nación y La Razón (now part of Clarín). The government accuses them of illegally forcing the company to sale at lower prices and controlling the materials by which written press is distributed, which represent severe accusations towards stock holders of the important local newspapers. In the other hand, Clarín and La Nación have expressed Kirchner's "steps against media" as well as government interests in controlling free press themselves.

In Clarin's webpage on Kirchner's news, a reader commented: "I want to live in Argentina, not in Caracas." This refers of course to Venezuela's President Hugo Chavez who has taken several actions in order to control free press and has done expropriations, such as recently Molinos Nacionales, a subsidiary of Mexican Company Gruma, which in fact, controls 2/3 of Mexico's corn-flour market. A monopoly itself.

Where does innovation stand in developing countries with monopolies/oligopolies/government-controlled activities?

Let's look at the bright side first. Monopolies cause larger, stronger companies that have an international reach, that a business-segmented national market with several medium-size companies probably wouldn't, bringing employment and attracting international capitals to the country. It is also important to difference monopolies and oligopolies with markets that, due to the magnitude or scale of operations, concentrate in only a few companies. Stronger an larger companies also have the power to invest in R&D and make international negotiations that also open national markets for new imports or world-class products. Probably many innovations we know, use and even love come from world monopolies. For government controlled products and services, its intentions (if good) is to guarantee that these products and services are distributed evenly to markets that might not be attractive to private sectors, for example, bringing light or education to poor sectors, and having the entire citizens’ interests in mind and in coordination with other government strategies, operations and security. There are also growth opportunities and innovation opportunities for small and medium size companies that do not compete but colaborate with either monopolies or in government licitations.

Now for the bad effects on innovation. Monopolies, oligopolies or government controlled products and services, block competition. Competition as we know, benefits consumers since companies have to "fight over clients" becoming more efficient, adapting prices and creating new products and services to attract them. Monopolies as well as government controlled products and services DO innovate, and some are really good in doing so in order to increase profits, but when there are no other market options but theirs, innovation is not prioritized as when competition pressures exist. Innovation is also "guided" towards their own interests. This means they might not venture into an innovation that harms their own products or services,or that won't represent a profit according to their own profitability standards or expectations, even though it adds value to customers. This type of practices also affects wealth distribution and creative disruption, blocking new ventures, business and entrepreneurships that could bring their own innovations into the game.

So, it's a negative balance. As small entrepreneurs we have little economic and even political power compared to large corporations in order to fight back. In Mexico, for starters, penalties for monopolies are calculated by a fixed number of salaries, when as in many developed countries, it is based on a sale's percentage. According to a TV discussion panel called Espiral (1) in Europe, a fine can add up to 1,000,000,000 of Euros, while in Mexico they are only as high as 82,000,000 Pesos (4,800,000 Euros, that's 0.48%), not to mention the low law enforcement environment that favors the rich. Entrepreneurs have found ways to colaborate with monopolies adding value in any stage of their supply chain or creating products that do not attack directly large corporation's interests. Creativity and innovation is needed even for avoiding or colaborating with monopolies.

As consumers, we should fight for adequate market policies as well as government efficiency, being open for new forms of innovation that benefit us with their value propositions as well as with their fair prices. A company can be large, strong and dominant and have strategies according to those qualities, but not in expense of others.

This applies to all sectors, especially in sensible ones such as information access control that affects free press. As I finish writing this post, Clarin and El Nacional Web Page have already removed their previously published news about Krichner’s confrenece and the screenshot I publish for this article has been taken away along with the comments.

(1) Monopolios En Mexico Y El Problema De La No Competencia ESPIRAL Oncetv http://www.youtube.com/watch?v=3d9A4QVuoLw