Today, I spoke to Jay Greene, who served as BusinessWeek’s Seattle bureau chief till 2009, and is now the author of Design Is How It Works. In this interview, Jay talks about design thinking, how important design is for brands, examples of design companies that have succeeded, and more.
Jay, what is “design thinking”?
It’s really the practice of applying the skills designers use to create products to solve all sorts of business challenges, even ones that don’t require a focus on aesthetics. Designers intuitively use creativity and empathy to help them create something that has an emotional connection with customers. They prototype concepts and collaborate with colleagues to test theories and come up with novel approaches to new products. Design thinking, whose greatest champions may be the folks at the Palo Alto design firm IDEO, apply those concepts to businesses that people don’t typically think of as being design-savvy. Design thinkers use anthropology, sociology and psychology to study customers in order to understand their unstated and unmet needs. It’s pushed design consulting into all sorts of unexpected areas. IDEO, for example, has worked with the Transportation Security Administration to improve the process of going through airport security.
If you can’t measure design, how do you know it can have an impact on how a company is perceived?
That’s really one of the great debates companies wrestle with as they consider spending money on design. CEOs, who often rise up the corporate ranks through finance departments, are challenged to increase spending on design when there’s no easy metric to measure the return.
But the companies that do design best don’t often try. They understand the value of design because their businesses have flourished from of it. Apple is perhaps the design poster child of the day. The company has produced a series of products – starting with the iPod and moving to the iPhone and now the iPad – that lean heavily on design to avoid commoditization and even extract a premium over rival products. Apple’s financial results and stock performance have soared as a result. Executives there certainly know design has an impact on perception, even if there’s no easy way to measure it.
Which design companies have really succeeded in the past few years?
Take Virgin Atlantic, which is in one of the toughest industries in the world these days. Airlines have been hammered by the double-whammy of a global recession and soaring oil prices. Most airlines decided to deal with that financial challenge by cutting back services, charging travelers for pillows and serving up the least expensive and least tasty meals possible. Virgin Atlantic isn’t immune to those financial challenges. But it realized that if it could design a great experience, one that makes flying pleasurable, even fun, it could take share from rivals. It pays attention to everything from the fourteen lighting settings onboard that create the proper mood to lie-flat seats in first class that won several design awards. Its service is cheeky and fun. All of that helped Virgin grow both revenue and profits in 2009, a rarity among air carriers.
LEGO is another interesting case. Just six years ago, the toy company was hemorrhaging money, a victim of management disengagement from design. The top brass focused on expanding the brand instead, moving into such unfamiliar businesses TV show production. They let the designers who created the plastic brick models go wild. And those designers did, creating increasingly complex models that looked cool but didn’t resonate with kids. Worse still, the complexity drove up supply costs. LEGO got out of unfamiliar businesses and refocused on innovation, establishing a detailed process to guide design decisions that helped it reconnect with its core customers, kids. It turned the business around and today, LEGO is posting huge profit gains and adding workers.
Can you name a company that would benefit from design thinking?
Really, it’d be hard to name a company that couldn’t benefit from design thinking. One of the key points of my book is to show that design isn’t just for companies making products that may someday hang in the Museum of Modern Art. I focus on companies such as Porsche and Nike, well known in the design world. But I look at other companies too, such as energy food-maker Clif Bar, whose executives aren’t widely thought of as design mavens. And yet they are. Clif Bar’s founder, Gary Erickson, created his company for the same reason that Ferry Porsche launched the German carmaker – he wanted a product that didn’t exist anywhere else. Erickson, a baker who raced bikes, wanted an energy bar that tasted good and was easy to chew and swallow. It was a hit with other athletes who had the same desire. Now, Erickson and his colleagues at Clif Bar use the tools of designers – a deep understanding of customers, detailed focus on the experience of using the products – to create new business. Clif Bar shows how design thinking can be applied to businesses where aesthetics don’t much matter.
What does design have to do with customer loyalty?
I think it’s easy to make the case that design is at the core of customer loyalty. When companies create products and experiences that customers crave, those customers keep coming back for more. Porsche is a terrific example. Its 911 is one of the most successful car models of all time, dating back to its debut in 1963. It’s a beautiful car that performs exceptionally well. That’s really created a cult around Porsche. There are Porsche clubs around the world, everywhere from New Zealand to Lebanon. When it’s time to get a new car, trust me, the first place those folks look is at a Porsche dealership. That’s allowed Porsche to move beyond sports cars to SUVs, with its Cayenne, and sedans, with its Panamera, as its customers seek out different car types. The Cayenne has actually sold better than every other Porsche model since its 2003 introduction and the Panamera, which debuted last year, is by all accounts off to a good start.
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Jay Greene has written about some of the most important companies, business trends and to
p executives in the world for over two decades. From 2000 to 2009, he served as BusinessWeek’s Seattle bureau chief, overseeing the magazine’s coverage in the Pacific Northwest. Greene’s primary reporting responsibility was Microsoft. He frequently spoke with Bill Gates and Steve Ballmer, covering the company’s battles with antitrust regulators both domestically and abroad and chronicling the company’s transition from scrappy upstart to bureaucratic giant. Writing about technology at BusinessWeek gave Greene the opportunity to cover design just as it was emerging as a one of the key business strategies of the 21st Century, a way for businesses to differentiate themselves from increasingly commoditized rivals. He traveled to Europe to learn about the creative process at the high-end consumer electronics firm, Bang & Olufsen, and visited Nike’s Innovation Kitchen to learn the recipe for making its much sought-after shoes. That reporting led Greene to write his first book, Design Is How It Works, a look at the innovation process at such companies as Virgin Atlantic, Nike and Lego.
