It has been already two weeks since the Design Management Institute´s conference wrapped up in Madrid, and some of you were able to follow the key thoughts discussed there through the twitter hashtag #dmimadrid. Nevertheless, I always find useful to structure my thoughts on a piece of paper (or pixels, in this case) and share them for further discussion with the 93% of the world not using Twitter.
The DMI conference in Madrid was titled “Designing the next economy” and, in essence, it focused on our changing economy and how design contributes to it. Such a title choice is not irrelevant; it points to the growing relationship of design with the business world and, particularly, to the role of designers or design-thinkers as business leaders (increasing but yet controversial, as this article describes) No wonder then that the main take-aways of the conference were directly drawn from these two elements: an exploration of the new economy features and business models thriving in it, and the role of design as an engine and contributor to it.
To set the scene, Michael Wescott (brand-new president of the DMI) described at the introduction evening this "new economy", which he named as V.U.C.A: volatile, uncertain, complex, and ambiguous. Volatile, as the pace of things is faster than ever; uncertain, as old models do not help us predict the world anymore; complex, as the challenges presented are high and the world is a much more interconnected, globalized scenario than before; ambiguous, as there is not yet a proven one way forward, but many to be discovered.
The conference then moved into explaining and presenting some of the business models and management attitudes that will thrive in this next economy. Andy Goodman from Fjord kicked off the first day with a talk on service design; very relevant as the move from products to services has been increasingly present and successful. In a world in which the digitalized economy is turning mainly to mobile, he argues than mobile is forcing an atomization of services. This fact gives companies an excellent opportunity to monetize new arising insights, driven by data analytics and an expanding sensorial network, by delivering true consumer experiences. Experiences enabled by technology but closer to human activity, moving away from the alienation that had occurred often in the past.
The focus on user experience, very well in line with the rise of UX-design professionals, was also portrayed by Dee Cooper, former Virgin Design Director, and Carole Favart, from Toyota. They both talked about how design can infuse transportation propositions with emotional qualities and an integrative approach - something to what Toyota has even given a name, Kansei design.
"Ownership is being rethought; it is not about property any more, but about product and brand engagement" Bas van Abel at #dmimadrid— Cristina Ferraz (@cristinaferraz) 25 de abril de 2013
Two of the characteristics of this new economy, openness and ethical value, were referred to by Bas van Abel in his talk about his project Fairphone. A phone based on ethical-sourced materials and cradle-to-cradle lifecycles, it was born from a personal reaction of the designer when he could not find a screwdriver to open up his son´s Nintendo to fix it, as Nintendo used non-standard screws on purpose. A follower of the Makezine statement, "If you don´t open it you don´t own it", Bas talked about how consumers are rethinking ownership, not as property anymore, but as product and brand engagement. Openness here means a shift of power, from brands to consumers, that he sees along with honesty and accountability: the fact that his phone is not yet 100% ethically-sourced is openly communicated and social values are clear, from using conflict-free raw materials to a recycling service that helps diminish its ecological footprint.
"Shareholder value is the dumbest idea in the world" Jack Welch's quote on Ideo's Sue Sidall for a purpose-driven economy— Cristina Ferraz (@cristinaferraz) 25 de abril de 2013
Social values and the shift from economical profit to meaning was the topic of IDEO´s Sue Sidall talk. A plea for purpose-driven design and an argument for why design thinking can help social enterprises thrive, she summarized this shift beautifully with a very revealing quote by Jack Welch, former CEO of General Electric: "shareholder value is the dumbest idea in the world". A radical but concise way to portray how the world and consumers are losing interest in a purely economy-driven world in favour of a society driven by purpose. Facts? According to Havas Media Meaningful Brand Index, 52% of consumers would reward responsible companies with their loyalty; 53% of them would even pay a premium.
The new economy is an informal economy, as well, understood in terms of flexibility of business models and flexibility of orientation. Javier Goyeneche and its top-class recycled clothing, Ecoalf, were a good example: a glocal approach for processing the clothing fibres and a business model born from failure and learning. Their production strategy is quite impressive: they find a material they want to recycle, then they find an expert in processing such material, and they work locally with the producer to develop the method until the recycled fibres reach the extremely high quality required.
An informal economy is also the cause why just pumping money into R&D programs is not working. "We spent 2 billion in R&D and all I got was this lousy T-shirt": a clever joke that underlines the somewhat paradoxical situation of companies that are not just getting all the innovation they hoped back from their investments in R&D programs: in this new economy, to stay relevant you have to be flexible, fast and effective on your research, and sometimes the old way of doing corporate R&D is just not enough. An alternative to this is frugal innovation, which in plain words means getting the most out of the minimum resources. If you get your innovation inspiration from processes, methodologies and insights from developing countries like India, in which people has been frugally innovating within constrained resources for quite long, you get Jugaad innovation - a plea for true creativity and cleverness by Simone Ahuja, author of the homonymous book.
New economy' challenges: big telco competitors are not other telcos but start ups, according to Pamela Mead from Telefónica @ #dmimadrid— Cristina Ferraz (@cristinaferraz) 25 de abril de 2013
A new economy conference wouldn't be such if the topics of entrepreneurship, start-up and ventures were mentioned. Wayra, an initiative funded by Telefónica to find out and accelerate the best digital proposals in its markets, narrated its venture spirit at the hands of its CEO, Gonzalo Martín. Is not in vain that Telefónica has funded such initiative, given that, as Pamela Mead explained later in her lecture, its biggest competitors are not other telco giants, but startups.
As a side-line to this, I believe that, even though entrepreneurship values are indeed relevant to the next economy, in the case of innovation management at big corporations, those values must be translated and conveyed in the figure of the intrapreneur. The objective may be similar for both figures, as it is to innovate contextually, but the environment present at corporations call for a different methodology of execution (see this article for more). Within the corporate environment there are indeed many obstacles to be overcome when setting up an innovation organization: a literal translation of user-centred design is only one of those, and its perils, explained with a humorous tone in this video shared by Maria José Jordá from BBVA Innovation Center:
If anything, it was clear that the next economy is to be clearly digital, alongside open, social and informal. Although Big Data was not in any of the talks’ titles, the concept was present in a few of them: from the MacDonald´s example brought by Andy Goodman (with their Car Database, they can analyse the car you drive to predict with 80% of accuracy what you will order in their Drive Thru and speed up their service), to the paradigm shift presented by Claro Partners, who indicated the next step in Big Data is actually Small Data - thinking big, but acting small, by just improving consumer experiences one chunk of data at the time.
And how can design contribute in this new landscape of services, openness, purpose and flexibility? There is a great deal from design to contribute to, as the business world seems to know already: the best MBAs in the world now include some form of education for design thinking. The term, although controversial as any buzzword, clearly points to two inherent skills of design professionals: the ability to explore and decide through informed intuition in challenging environments (design for uncertainty, I like to call it), and the ability to infer the emotional and intangible in whichever proposition, by means of tools like semiotics, human-centred processes or user experience. Innovation in the next economy will happen only if these two traits are present in the methodology and content of business, creating a specific mindset and company culture.
Design is clearly evolving: the industrial revolution gave birth to the designer figure as the evolution of the craftsman, with redefined skills that matched the new way of manufacturing goods, mass scale. Now another paradigm shift is emerging as we move from the industrial time to the digital time, and that is bringing design to a new era: an era in which its role broadens scope, from products to experiences, and gets involved earlier, from product concepts to business ideas. A role that is a hybrid of foresighter, researcher, marketer, and designer, a liaison between New Business, Strategy, Marketing and Design disciplines. A role allowing designers to work with manufacturers, but also with governments, to design products, services, stories and ideas. A role for which we, design professionals, need to define through a model or framework of what design can do that will help thrive the profession as a contributor to the new economy. As Ingo Rauth said in the closing conference, we need to design design.
Clearly the fantastic atmosphere at DMI Madrid, full of eager colleagues avid to share ideas and think along, was the best starting point for doing so.