iPlot

India: Urgent Emergence

This was India’s year. Obama visited, as did Sarkozy, and many other statesmen of lesser political weight or star appeal. With an annual growth rate of close to 8.9% and foreign direct investments projected to exceed $100 billion, the booming Indian economy defied the global recession. For the first time ever, eight Indian companies made it onto the Fortune 500 global list. And even PR crises like the ill-organized Commonwealth Games and political corporate scandals that were an easy target for India’s cynical media did not eclipse the nation's staggering rise – in fact, these events just seemed to magnify the spotlight. Without a doubt, the sub-continent became ready for primetime in 2010, and to many outside observers a new confidence appeared to take hold of India’s economic and intellectual elite.

This year also marked my first visit to India. I had the privilege of assuming leadership for a team in Gurgaon (New Delhi), Bangalore, and Chennai, and to immerse myself in a country I had never been to before. I vividly remember the first five minutes after my arrival at Indira Gandhi International Airport in Delhi in September, the dusty air, the thick fog, the vanilla scented perfume tree in the car, and the calm driver whom I, for lack of any alternative, decided to wholeheartedly trust as he was racing me to my hotel amidst the polyphony of honks. Other countries are in your face or slowly creep into your soul with their mores, oddities, and sensations. India is around you, all the time. It is simple as the tourist cliché of itself (especially when you live in the airport-lounge-and-luxury-hotel bubble of the global business traveler) and yet complex as a vertical staggering of infinite parallel worlds which make sense each by themselves but fail to strike a consonant chord – like in the movie Inception.

When I attended the India Economic Summit in Delhi in November a few weeks after my first trip, jointly hosted (for the 26th time) by the World Economic Forum and the Confederation of Indian Industry (CII), President Obama had just passed through India, leaving an indelible mark on the Indian collective psyche with his now famous line that “India is not emerging, it has emerged.” The mood was bullish, if not exuberant, and many considered the visit a breakthrough moment for India. The economic reality had not changed but the awareness of the sheer scale of the opportunity ahead and the self-assurance that it might indeed be feasible to accomplish it, had moved to a whole new level, seemingly overnight. No wonder the optimism was palpable at the Summit.

The official theme was “Implementing India” but the actual theme that emerged during the three conference days was “Inclusive Growth” – how can India sustain its tremendous growth and at the same time narrow the social divide? While India’s growth numbers are impressive, many of the speakers acknowledged that its so-called “demographic dividend” (a term coined by Harvard demograph David Bloom) is a double-edged sword. By 2020 half of India’s population will be below 25, and it will account for 25% of the global workforce. But this demographic trend is unevenly distributed. India’s northern states, with their high fertility rates, are the main contributors to population growth (by 2025, the median age will be 26) whereas the south faces rapid aging (a median age of 34 by 2025). This means that “India’s demographic dividend is actually a double hump, one of which is already nearly exhausted,” Infosys co-founder Nandan Nilekan writes in his seminal book Imagining India.

This “double hump” makes capitalizing on the remaining, “unexpensed” demographic dividend rather urgent. Experts foresee a demographic disaster unless India’s young workforce is properly skilled and employable by global standards. Unfortunately this is far from being the case today: For starters, 300 million people live in extreme poverty, that is, they live on less than one dollar per day, and 90% work in the informal economy. 70% of India’s 509 million-strong working population has not received a primary education, and only 11% of those aged 17-23 receive a higher education. India has the lowest education indicators among the G20 economies and the world’s highest number of illiterate people. One of the main challenges for India will be to create jobs for the 270 million people expected to enter the working-age population over the next 20 years. Will these people become the world’s workforce, as some predict, or the world’s worry?

Sustainable growth, many argue, will come from frugal (or reverse) social innovation, through public-private partnerships that scale at the base of the pyramid. It is well known that IBM has more employees in India than in any other country, and many of India’s big IT outsourcing companies (e.g. Wipro, Infosys, Tata Consultancy Services etc.) have long been competing with multinationals. But no longer is India just the development center of excellence of the world or an emerging consumer market of massive scale; it is increasingly home to bottom-up innovations in areas such as energy, healthcare, and automotive, spurred by the urgency of structural change. Crisis has always proven to be a hotbed of innovation, and the need to improve the livelihood of a society is a powerful driver for entrepreneurship.

India is already the front of some radical product and service innovations such as the $3,000 car or the two cents per minute nationwide cell phone service. Moreover, with the deep penetration of low-cost telephony, the country’s emerging middle class could be a testing ground for the burgeoning mobile health (mHealth) technology market, in particular telemedicine and rapid diagnostic services. Globally, mHealth revenues are projected to grow by 25% annually, from $1.5 billion in 2010 to $4.6 billion by 2014. India is seeing many of its pioneering efforts, for example start-ups such as mDhil and eHealthpoints. The Indian healthcare industry, in general, is one of the fastest growing sectors of the economy, growing at 23% per annum.

A basic enabler of “inclusive growth” is to provide the rural population with access to information- and communication technologies and financial services. Although India is the second largest telecom market in the world and tele-density has increased to 56.6% in 2010, 44% of rural Indian households are still unwired, and of India’s 6,000,000 rural villages less than ten percent have a local bank branch. Microfinance, long heralded as an able solution to this shortcoming, has recently suffered a serious setback. The rapidly growing private microcredit industry faced imminent collapse when almost all borrowers in Andhra Pradesh, one of India’s largest states, stopped repaying their loans. Critics accused microfinance institutions of making “hyperprofits off the poor” by extending loans to poor villagers at exorbitant interest rates and without enough regard for their ability to repay. It will take some time for the industry to restore trust (and some more regulatory oversight from the state will help, too). But again, this crisis may spur much needed innovation in the Mobile Money space.

India’s villages are increasingly becoming a breeding ground for innovation, as its rural poor develop inventions out of necessity. Mansukhbhai Jagani, Mansukhbhai Patel, Mansukhbhai Prajapati, and Madanlal Kumawat, and three others are on a recent Forbes list of rural Indian entrepreneurs (compiled by IIM-Ahmedabad professor Anil K. Gupta) “whose inventions are changing lives” of the people across the country. Jagani developed a motorcycle-based tractor for India's poor farmers, which is both cost effective – costing roughly $318 – and fuel efficient. A farmer, Patel invented a cotton stripping machine that significantly cut the cost of cotton farming and revolutionized India’s cotton industry. Prajapati, a potter, invented a clay non-stick pan that costs Rs 100 and a clay refrigerator that runs without electricity for those who cannot afford a fridge or their electricity and maintenance costs. Madanlal Kumawat, a grassroots innovator with no more than a fourth-grade education, developed a fuel-efficient, multi-crop thresher that yields cleaner grains, which can be bagged directly and eliminates the cost of cleaning.

Design and design-driven innovation are quickly entering the business vocabulary here, too, and when I met with editors of business publications in Delhi a few weeks ago, their interest in design was as keen as their conviction that India will soon become a powerful innovation engine with global impact, propelled by a distinct national design style and a throng of young, ambitious, and fearless entrepreneurs. It will require a mix of national policy and education providing the economic framework, global design and innovation firms bringing quality standards and best practices to India, and – perhaps most importantly – Indian companies embracing design as a key differentiator and value-driver, with some quick and visible market successes.

Whether you’re strolling through Old Delhi or driving along the campuses of Bangalore’s IT firms, you can’t help but marvel at the tremendous pace with which the country and its people are happening. The whole country is on the move, which offers plenty of opportunities for upward social mobility but also disrupts traditional lifestyles and cultures. New high-rise developments for the burgeoning middle class (91 million urban households are projected to be part of it by 2030, up from 22 million today) stand in stark contrast to the poor villages right next to them, which are in the progress of upending their local identities and cultural roots. According to the United Nations Development program, it is expected that 41% of India’s population will live in cities by 2020, compared to less than 30% in 2010. That is 590 million people, nearly twice the population of the US today. A recent McKinsey report (“India’s Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth”) estimates that 70% of net new employment will be generated in cities by 2030 and that 85% of total tax revenue will come from the urban economy.

Needless to say, that this migration will further contribute to stresses on the already insufficient infrastructure. McKinsey expects 68 Indian cities to have a population of more than one million by 2030 (up from 42 today vs. 35 in Europe). It warns that the current urban policy framework will lead to urban decay and gridlock. Today, India is investing eight percent of its GDP in infrastructure, which is a high number by international standards. And as much as $300 billion are forecast to be devoted to urban infrastructure over the next 20 years, a twofold increase in per capita spending of $17 today. But McKinsey believes that $1.2 trillion capital investments are necessary to meet the projected demand in Indian cities. The firm proposes fundamental city governance reforms to ensure these funds are not only raised but put to work efficiently. Unlike China, India cannot issue sharp policy shifts to appease a young population that may not be satisfied with the living standards of their parents. If urban policies fail, social upheaval, fuelled by underlying religious and ethnic divides, will likely be the result. Or as Nandan Nilekan puts it: “This is our biggest, but also our last chance.”

India is aware of its “moment” and understands that the window of opportunity for inclusive growth is limited. The government is seeking to balance the hustle, the frenzy, and the urgency with calm and confidence. It is the only possible attitude when you have to govern what seems to be genuinely ungovernable. I thought of a line from a song by Thom Yorke: “You have all the time in the world. Don’t squander it.”

[picture: painting by Vangobot. Vangobot is "a robot who paints with the soul of the human artists who taught him how to see."]

Disrupt and Disrupted - Notes from The Great Indian B2B Marketing Summit

I had the great pleasure of speaking at The Great Indian B2B Marketing Summit in Bangalore yesterday, organized by Jessie Paul, the former CMO of Indian outsourcing juggernaut Wipro, author of the book “No Money Marketing,” and founder of Paul Writer, a marketing consultancy cum hub that runs an influential online CMO Roundtable and other formidable programs to facilitate the exchange amongst the Indian marketing community. The program was quite an eclectic mix of topics, ranging from social media and digital marketing trends, to market development, to marketing leadership, to personal branding.

The two latter topics appeared to be the most popular, based on the audience’s response. Jessie herself provided a good overview of the main tenets of personal branding, and her session was a great reminder of the importance of creating a “personal brand map” to identify (following models by Geert Hofstede and Jim Collins) one’s “values, heroes, symbols, and rituals,” and derive one’s unique brand promise at the intersection of “passion, excellence, and profitability.” In addition to establishing personal thought leadership platforms tailored to the respective career level (entry-level execs may want to focus on processes, best practices, and creation; mid-level execs on opinions, forward-looking statements, HR issues, and organizational vision; whereas CXO execs typically address industry frameworks as well as macro-economic and policy issues), Rajeev Suri, CEO of Liqwid Krystal, offered some helpful advice for aspiring marketing leaders: 1. Stay close to the leadership; 2. Stay close to the money; 3. Never get into cruise control.

None of those are easy, and I can certainly empathize with Sangeeta Sundaram, head of marketing and communications at Capgemini India, who remarked that “marketing is notoriously over-stretched and under-resourced.” But then again, as Kiran Mani, head of industry sales for Google India, pointed out in his presentation: “Effective marketing does not have to cost much.” Jessie, with her penchant for “No Money Marketing," would agree, and ad agency executive Jon Bond goes even one step further, as quoted in a recent Fast Company article: "Marketing in the future is like sex. Only the losers will have to pay for it."

While that is a perfectly viral line from a Twitter and SEO viewpoint and might cheer up some CMOs in light of dwindling marketing budgets, it of course posits an existential threat for advertisers and other marketing services firms. "Creating more work for less money is the big paradox," says Matt Howell, president of the Boston agency Modernista, in the same Fast Company piece that depicted a rather gloomy scenario for today’s Mad Men (“Mayhem on Madison Avenue”). Both client and agency side are facing a more and more strenuous battle for attention and engagement in the light of fragmented media usage, always-on connectivity, and social media: "The irony is that while there have never been more ways to reach consumers, it's never been harder to connect with consumers," explains Brad Jakeman, now chief creative officer at Activision, the gaming company.

No wonder new models are popping up left and right. Forrester calls for “Adaptive Marketing,” and the Harvard Business Review (HBR) recently ran a comprehensive report on “Social Media and the New Rules of Branding." In one of the report’s articles, McKinsey’s David C. Edelman suggests that marketers need to respond to today’s more nuanced customer journeys. Far from systematically narrowing their choices, Edelman argues, today’s consumers take a much more iterative journey of the three traditional customer journey stages: consider, evaluate, buy, and spend more time in the additional stages of enjoy, advocate, and bond. Edelman’s main revelation: If the bond becomes strong enough, consumers enter an enjoy-advocate-buy loop that skips the consider and evaluate stages entirely.

That all makes sense, but it strikes me as unlikely that tomorrow’s marketing innovation will come from reading a McKinsey piece in HBR. These days, domain expertise ages quickly, and doing is replacing saying. Marketers increasingly have to develop added-value ancillary products, services, and apps in order to sell their core offering. Traditional marketing is disrupted by disruptive marketing, which itself is disrupting interruptive advertising. Yet - in the best tradition of Clayton Christensen’s “innovation dilemma" - yesterday’s win can become tomorrow’s burden as disruptive viral campaigns are quickly absorbed by an army of me-too’s. Benchmarking, best practices, and new theoretical frameworks often just eclipse a lack of imagination, a lack of customer empathy, and a lack of courage to be creative: “There is no one to copy, no one to follow,” says Richard Branson.

And yet here I was at a marketing conference sharing my own playbook. Jessie had invited me to present on “What B2B Marketers Can Learn from Design-Driven Innovation for B2B,” and I definitely enjoyed my role as the somewhat eccentric outlier in the line-up. I was surprised how many people in the audience knew frog when I conducted a mini brand audit at the outset of my presentation, and I was flattered by their interest in frog. I took the attendees through a quick overview of frog’s history, philosophy, and approach, before elaborating on the seven design principles that I thought might be applicable for B2B marketers. The subsequent Q&A yielded some incisive questions, although, as usual, I wasn’t able to answer the “ROI of design” one satisfactorily. If anyone can, drop me a note. Oh well. Sometimes you just need to believe (or have a stellar sales team).

Here are the slides from my presentation:

What B2B Marketers Can Learn from Design-Driven Innovation

 

 

 

Openness or How Do You Design for the Loss of Control?

 

Openness is the mega-trend for innovation in the 21st century, and it remains the topic du jour for businesses of all kinds. Granted, it has been on the agenda of every executive ever since Henry Chesbrough’s seminal Open Innovation came out in 2003. However, as several new books elaborate upon the concept from different perspectives, and a growing number of organizations have recently launched ambitious initiatives to expand the paradigm to other areas of business, I thought it might be a good time to reframe “Open” from a design point of view.

What sparked my interest in particular was the Dachis Group’s list of Six Social Business Trends to Watch which referenced the phrase JP Rangaswami coined at this year’s Enterprise 2.0 conference: “Design for the loss of control.” His point was more IT-specific, arguing that the combination of pervasive digital infrastructure, software-as-a-service, cloud computing, social software, and smart phones have enabled employee- and customer-driven solutions to a degree that renders top-down IT systems obsolete. As Dion Hinchcliffe of the Dachis Group writes: “Enterprises currently expend considerable resources trying to impose control on a situation that increasingly appears like it not only can’t be controlled, but almost certainly doesn’t need to be.”

No longer in control

The new paradigm Hinchcliffe describes has implications far beyond just IT. For one thing, employees, who are facing an increasingly hybridized work/life proposition, are eager to do what they are passionate about, and they will increasingly find the digital spaces and tools that allow them to do this most effectively without having to ask anyone for permission. Companies have to come to terms with the fact that the traditional model of managerial resource allocation and coordination (mainly coerced through extrinsic motivation in the form of rewards and punishments, such as payments, promotions, demotions, etc.) has become outdated and no longer reflects the social fabric of today’s workforce.

Moreover, customers, too, seek out relationships with brands that go beyond the merely transactional. Empowered through ubiquitous access to information and therefore radical transparency, through an abundance of choices on the web, as well as the ability to contribute and tap into social networks (and thus social capital) in real-time and on-the-go, they expect brands to offer engagement and collaboration models that match the more distributed and multi-layered mechanisms of value creation through social media.

Commitment is fickle, reputation volatile, and loyalty scarce. In short: Companies have lost control – over their workforce, their customers, and as a result, their brands. Or, more precisely, as Charlene Li points out in her book Open Leadership, they have never really been in control – what they are actually forced to give up now is their need for control.

The power of pull

So what can they do besides just bemoaning this loss and passively observing how the new centrifugal forces of the Social, Real-Time Web are disrupting their traditional business and engagement models? Li lays out how business leaders can and (must!) embrace the new rules of openness. John Hagel, John Seely Brown, and Lang Davison, in the The Power of Pull, provide an actionable framework for how these new forces can be leveraged through “shaping strategies” on the individual, institutional, and societal level.

These “shaping strategies,” as the term suggests, present an exciting challenge for design. If designers embrace the insight that influence is replacing authority as the new currency in the “pull economy” and that the best way to gain influence is to give up control, they will have significant impact on how this new economy is shaping up. In fact, they are uniquely positioned to develop what Hagel, Seely Brown, and Davison call levers of “access, attraction, and achievement” that provide the “creation spaces” and tools for employees and customers alike to design their own destiny, create their own meaning, and thus convert their very own skills and passions into productivity and loyalty.

In essence, businesses can use “shaping strategies” to amplify and accelerate the inevitable loss of control in order to avoid employees and customers abandon them. This may sound counter-intuitive but the upside is considerable. A deliberately designed loss of control grants companies the only remaining and arguably most critical competitive advantage – access. As long as they enable and facilitate knowledge flows, ideas, passions, skills, and experiences, they have access to them. In fact, if they fully leverage the “powers of pull,” these assets will gravitate towards them.

X-problems and social networks

Openness is no longer just a nice stunt but a fundamental requirement for any business that wants to thrive in the new “pull economy.” Because we’re increasingly dealing with "X-Problems," as my colleague Adam Richardson reckons in his book Innovation X, we need approaches that allow us to come up with creative solutions to problems we may not even know yet. In other words: Solutions that help define the problem. Or as Hagel, Seely Brown, and Davison put it: “If you want to find out what it is you don’t know that you don’t know, you need to hang out with other people who might already know it.”

The loss of control enables the creation of more weak ties in a company’s network (inside and outside of the organization), and, as social network research has shown, weak ties are more conducive to transporting foreign ideas, knowledge, and skills – because they move faster from one node to the other as the network becomes more accessible and nimble on its fringes. The further you get away from the core of your network, the less control you (may want to) have.

You could argue that designers have been designing creation spaces, feedback mechanisms, and other participatory experiences for some time now. They certainly have, but perhaps without fully recognizing or deliberately orchestrating the amount of loss of control that their designs represented. It seems like the time is ripe to understand these efforts as part of a broader shift and consolidate them into a series of formats that, going forward, shall serve as blueprints for “design for the loss of control,” across different corporate functions and disciplines.

Frequently, these solutions will involve de-institutionalizing decision-making by removing the intermediary. In many cases, this may imply an act of democratization, but it is also important not to see this as a zero-sum game. Control is not just shifting from one hand to many; rather, it is dissolving and defragmenting and along the way diminishing – or turning into something else, far more valuable: social capital that resides in the public domain and is no longer controlled by anyone. The formats that propel this new mode of collaboration and value creation are emergent and informal, and they typically carry a significant amount of tacit knowledge.

Here are some recent examples:

Open ideation/crowdsourcing: Open ideation (or crowdsourcing) is based on the assumption that the best ideas for new products, services, and business models may come from outside of your organization or from those people inside your organization who are typically (by function or hierarchy) excluded from the ideation process. Like all open innovation efforts, crowdsourcing redistributes control from an elite group of thinkers and doers to a broader group of self-selected participants. By broadening the funnel, companies can harness the accumulated or aggregated knowledge of these voices. Crowdsourcing is usually focused on ideas and insights but can also cover a wider array of collaborations with external parties throughout all stages of the innovation cycle. Dell, Starbucks, P&G, and many other organizations use crowdsourcing. Nike partners with Creative Commons and Best Buy for GreenXchange, a platform that promotes “the creation and adoption of technologies that have the potential to solve important global or industry-wide sustainability challenges.” TED is expanding its reach through TEDx, “independently organized TED events," without compromising the exclusivity of its brand. Furthermore, Victors & Spoils brought crowdsourcing to the world of advertising; and IDEO recently launched its crowdsourcing platform, OpenIDEO, inviting the public to join “creative challenges” that tackle social issues through design. And there are firms such as InnoCentive that specialize in crowdsourcing services for other companies. All these companies not only make ideas accessible to more or less open publics (to some extent, giving up control over IP) but also commit to making the follow-up on these ideas (at least partially) transparent (giving up some control over agenda-setting and strategic planning).

Open design research: frogMob, developed by frog design, is a tool for crowdsourced design research, based on the idea that everyone can be a researcher for a day, just by paying a little more attention to the world around them. frogMob uses guerilla photography and stories to take a quick pulse on global trends, behaviors, and artifacts. Launched internally first – tapping into frog’s eight global studios – we are now expanding frogMob to a broader public. Through frogMob, we are able to “mobilize” not only our internal network around a specific assignment but also external contributors on an ad hoc basis, in a short amount of time (like a Flash Mob). frogMob allows us to provide lightweight, rapid design research for clients who ask for a “trend scrape” that identifies patterns and offers unexpected inspiration. The key here is to tap into existing knowledge flows - in a nimble way that does not require too much commitment from the participants and eliminates bureaucratic hurdles.

Open strategy: Crowdsourcing can also take place as a combination of online and offline collaboration, as demonstrated by NPR and its Think-In on the future of digital media. Supported and facilitated by frog, NPR hosted an open strategy session, bringing together 60 thought leaders at the intersection of media and technology to explore new approaches to content creation, distribution, and funding for NPR and NPR member stations. The Think-In harnessed the collective expertise and creativity of an exceptional group of entrepreneurs, executives, and innovators, and it developed concepts that NPR incorporated into its organizational roadmap. The event was augmented through live-commentary and streaming via various social media channels. This social augmentation made the workshop accessible for a broader audience, which – like the on-site participants – felt so genuinely passionate about NPR that they committed some serious time to this collective brainstorming. Such passion for brands could also be put to work through a more radical version of a Think-In: a “brand hijack” that convenes customers and other interested parties to explore new directions for a brand – yet with the twist that the brand itself would not participate (but may have the option to co-opt the results of the session afterwards).

Open-source humanitarian software: In the software space, open-source projects have long been an established form of open innovation, see IBM’s Eclipse platform. Random Hacks of Kindness (RHoK), founded by teams from Google, Microsoft, Yahoo!, NASA and the World Bank, uses open-source methods to “hack for humanity.” It describes itself as a community of “developers, geeks and tech-savvy do-gooders around the world, working to develop software solutions that respond to the challenges facing humanity today.” The group runs “Hackathons,” inviting the best and the brightest hackers from around the world, who volunteer their time to tackle disaster relief issues with through software applications. The Hackathons are designed as so-called “codejams,” fast-paced competitions that give the participants a set amount of time to solve the challenges they are given. At the end of a two-day marathon of hacking, a panel will review each hack, and the winners will walk away with prizes, as well as the right to call themselves “RHoKstars” ever after. Another example of open-source humanitarian software is Ushahidi’s CrowdMap which displays crowdsourced crisis data on maps as a free cloud-based service.

Open-(source) social networks: Lockheed Martin, the giant defense contractor, built its own networking site called Eureka Streams and released it open-source for the public to use. As Fast Company writes in a recent blog post, “The company's management had recognized that an internal social networking tool could have all sorts of procedural benefits for a large, and geographically disjointed organization. Essentially it lets ‘knowledge workers’ inside the company find and talk with other experts who may have valid input to particular projects, but who would otherwise have zero oversight or input.” Dow Chemical is another example of a company setting up its own social network, in this case to help managers identify the talent they need to execute projects across different business units and functions. Dow has even extended the network to include former employees – a smart move. Closed networks are of diminishing value. A recent McKinsey Quarterly report argues, “In the longer term, networked organizations will focus on the orchestration of tasks rather than the ‘ownership’ of workers’ and advises executives to ‘make the network the organization.’”

Open branding: In the spirit of transparency, design firm Continuum is partly revealing to the public its creative process. The specific challenge is to create a brand identity for the Design Museum Boston, a nomadic institution that exhibits mainly in the virtual space. For six weeks, Continuum is partnering with Core77 on a blog series that will reveal the firm’s process and progress as it takes on the challenge. Readers are invited to comment but it is not quite clear to what degree they can influence the creative work. It’s a non-commercial client and a low-risk project but in any case, making a creative project transparent – even somewhat haphazardly – is an interesting experiment that is worth following. The more radical experiment would of course be to put the creative control over a project fully in the hands of the “smart crowd” and have the creative team steered by a disperse group of “remote creative directors”- beyond just input comprising of insights and ideas. Other, more radical formats are imaginable: For example, sharing a company’s entire communications (some, more or less tightly managed corporate Twitter accounts are in a way a precursor to this) with the public. This would be radical transparency indeed, and an experiment with unpredictable outcome – will the benefit of enabling reciprocal, collaborative relationships outweigh the risk of reputational landmines and IP violations? Is it IP, in the end, as proprietary “knowledge stocks” (The Power of Pull), that serves as a company’s greatest asset or isn’t it rather the ability to attract talent and grant access to knowledge and skills? There’s another, softer benefit to it: Brand personality comes from being personal. The more transparent and the more vulnerable brands are, the more personal, they more authentic they will appear. Transparency is a prerequisite for authenticity – an unmasked and immediate act of communication.

Open social-capital enablers: Small, ad-hoc, start-ups are popping up that leverage the principles of self-organization, which Clay Shirky so aptly described in Here Comes Everybody, to rethink “capital” and reinvent human resources allocation in order to tackle global issues. Originated from the Sandbox network, an exclusive network of young innovators and entrepreneurs under 30, this movement calls itself “Emergent Transformation,” and Max Marmer, one of its masterminds, writes on its group blog: “Lately we have been observing an accelerated movement of ventures that are revolutionizing how we take initiative on a global scale. They can be mostly found in the areas of education, innovation, collaboration, networks, entrepreneurship, and human development: spaces that most likely will dominate the future of value creation in our society. These ventures are leveling the global resource play, unleashing unused & undeveloped human capital and leading to a socioeconomic transformation.” For example, there is Supercool School, an online school platform that strives to give people worldwide access to education by building a new global infrastructure of live online schools. Or Assetmap, an online platform that helps individuals discover and leverage resources directly from the community around them, using the methodology of Asset Based Community Development (ABCD). Max Marmer believes “One huge differentiator that sets these projects apart from almost all other organizations is their emphasis on ‘human potential’ or ‘social capital,’ rather than economic capital. The hope is that by creating a clearly defined space for these organizations to work in, there will be more opportunity to share this social capital, allowing them to achieve complimentary aspects of mutually shared visions. Their aspirations are tied to value creation, based on co-operative contribution, and will allow them to fulfill personal passions. Giving new meaning to their work, it’s helping people lead happier lives.”

Open conferences: Un-conferences are facilitated, face-to-face, participant-driven conferences centered on a specific theme or purpose. They are the antidote to the conventional conference format, radically disrupting the delineation between curator and attendees, speaker and audience. The attendees are the experts. Many organizations and groups have begun to use un-conferences to capture and externalize the full breadth of expertise assembled at conferences. Some conferences prefer to incorporate only some un-conference formats into their program – participant-driven sessions that are developed on site in real time.

Open conversations: Modernista did it. Skittles did it. And ad shop Crispin Porter + Bogusky did it. All of them use their corporate web sites as social hubs that curate what is being said about their brand rather than staging what their brand has to say. These efforts are attempts to at least co-opt the conversation on the Social Web before brand-specific aggregators could benefit from being parasites of the brand's social universe. In other words, what if a brand faced unexpected competition from a third-party site that provided a much more comprehensive and easier-to-access curation of Skittles conversations than the brand itself? Or if McDonalds suddenly saw itself confronted with a site aggregating blogs, videos, news, and tweets, all about but not by McDonalds? Think of this as the logical extension of the company profiles that already exist on LinkedIn and Glassdoor.com, which aggregate individual member data into a fairly transparent view of companies, including employee information, salary information, and recent news. Indeed, third-party brand curators might realize that brands live in the ‘social commons,’ and that whoever builds the right aggregation mechanism and establishes the most popular channels to reach a mass audience will “own” the branded conversation on the web. Take a look at how Get Satisfaction’s “community-empowered customer support” plays this – it is not an uncontroversial model, but it is “designed for the loss of control (of brands),” enabling customer-to-customer service. You could also spin the idea of a “social homepage” a bit further and not only curate the social web conversation about your brand but actually give away your whole homepage to third parties and to public service announcements, stories, or art. Give up control – gain social currency.

Open HR: Of all critical business functions, HR might be the one with the greatest potential for innovation. With dynamic, quickly accessible expertise replacing static piles of proprietary knowledge, and companies moving from organization-centric to network-centric modi operandi, HR becomes a key enabler of assets through the nurturing of relationships, developing talent, and fostering a culture of openness and participation. This is not just pep talk but includes new tools and methodologies that radically alter the relationship between employee and firm. A recent study by Birkman International that surveyed nearly 20,000 HR professionals found that 83 percent of respondents see great potential in social media-based HR solutions, particularly when it comes to improving communication, learning, and knowledge sharing. Here at frog design, we have launched frogForward, an open-ended, conversational, and social performance management app that allows our employees to provide 360-degree feedback any time throughout the year (not just during review cycles). Goal-setting is entered as a stream, and the feedback – peer, managerial, and employee feedback – can be shared openly or privately. This new approach reflects the changing realities of work performance, from a task-driven control and coordination approach with quantifiable goals to a holistic view that is more situation-and context-aware, gives the employee significantly more control of the process, and considers intangibles such as tacit knowledge, social intelligence, and relationship-building. frogForward shares this approach with Rypple, an ad-hoc social network that provides simple, direct, anonymous, and ongoing customer and employee feedback.

All of these initiatives, whether they apply to brand, CRM, product development, R&D, customer service, or HR, exhibit some similar characteristics:

- easy access;

- open platforms that harness the creativity and expertise from people outside of the organization or untapped sources inside;

- open-ended formats that can evolve as the problem statement changes;

- ample room for participation and emergent self-organization;

- easy mechanisms for tinkering and hacking (e.g. through open-source formats);

- small formats that can be easily shared

- strong incentives (ideally intrinsic motivation or social currency);

- real-time visibility (through sharable content);

- tie-ins to dormant or active social networks;

- and distributed decision-making.

Openness as permanent crisis

There is another aspect to this: The most imminent and urgent manifestation of “loss of control” is of course a crisis. And in times where terrorism, financial downturns, natural disasters, as well as catastrophic events on the individual level are a steady companion to our societies and personal lives, designing for crisis has become a default skill, forcing designers to make contingency planning an integral part of the experiences they create. Often, this means developing exit scenarios that are flexible enough to provide a structure for emergent solutions in response to emergencies. (The notion that architects design spaces so they can be escaped from has been thoroughly examined by Stephan Trueby in his book Exit-Architecture - Design Between War and Peace). In other words: an easy way out. And in. Because exits are entry points as well. If you design ways out of the system, they might as well serve as ways into the system.

If you think about it, this insight may provoke a different notion of openness – understanding it as a system where exit and entry are identical. In this line of thinking, an ecosystem on the Social Web could be seen as a system in permanent crisis – it is always in flux, and its composition and value are constantly threatened by a multitude of forces, from the inside and the outside. What if we understood “designing for the loss of control” as designing for structures that are in a permanent crisis? Crises are essentially disruptions that shock the system. They are deviations from routines, and the very variance that the advocates of planning and programs (the “Push” model) so despise. At their own peril, because they fail to realize that variance is the mother of all meaning; it is variance that challenges the status quo, pulls people and their passions towards you, and propels innovation. “Designing for the loss of control” means designing for variance.

One system in permanent crisis that contains a high level of variance is WikiLeaks. The most remarkable thing about the site appears to be the dichotomy between the uncompromised transparency it aims at and the radical secrecy it requires to do so. The same organization that depends on the loss of control for its content very much depends on a highly controlled environment to protect itself and keep operating effectively. But not just that: Ironically, secrecy is also a fundamental prerequisite for the appeal of WikiLeaks’ “there are no secrets” claim. Simply put: there is no light without darkness. And there is no WikiLeaks without secrets.

Applied to systems and solutions design, this means that total openness is the antidote to openness. When everything is open, nothing is open. In order to design openness, one of the first decisions designers have to make is therefore to determine what needs to remain closed. This is a strategic task: making negative choices for positive effects. You need to build enough variance into a system to make it “flow” and yet retain some control over the underlying parameters (access, boundaries, authorship, participants, agenda, process, conversation, collaboration, documentation, etc.). Only if you maintain the fundamental ability to at least manage (and modify) the conditions for openness, will you be able to create it. To design for the loss of control, control the parameters that enable it.

These are just some initial thoughts. What other formats and business models can you think of that “design for the loss of control” to everyone’s benefit and increased social value? What other variances can be created and effectively shaped? What design principles must be applied?

Over to you.

Re:Publica 2010: "Innovation By 10"

My talk from the Re:Publica 2010 conference in Berlin is now live. Titled "Innovation By 10," it presented 10 observations, provocations, insights, and questions on the elusive topic of innovation, based on 40 years of frog design and my 4 years with frog design. Note: it's in German.

London Design Festival Celebrates the Art and Business of Design

Several of my colleagues are in London this week to unveil the special TEDGlobal issue of our design mind magazine in a very special TED Salon on Monday, with the title "More Substance of Things Not Seen." The event will be co-hosted by frog design and TED, and moderated by Sam Martin, editor-in-chief of design mind, and Bruno Giussani, European director of TED. More about that soon.

It comes in handy for the frog delegation that this is also the first week of the magnanimous London Design Festival, an eclectic assembly of design-related programs, exhibitions, and parties all over town.

You can watch an introduction by Festival Director Ben Evans here.

Yesterday Jaime Hayón unveiled The Tournament, his chess board installation that will be used to play chess today for the first time by the lucky applicants who signed up to pit their wits against English Chess Federation guests and world champion players.

Possibly the world’s tallest paper tower, Paper Monument, by Shigeru Ban has been completed alongside Marc Newson’s Supercell structure.

Much of the Festival program starts this weekend, including the opening of exhibitions at the festival hub, the V&A. There is a flurry of activity around the Oxo Tower Wharf, which opens its doors to coincide with the Festival, London Fashion Week, and London Open House. Brunswick House on Wandsworth Road in Vauxhall is the setting for Super-Squat - a design invasion. RE-made (in Britain) at A-Z studios on Hardwidge Street in London Bridge is also open.

A 6 minute train ride from London Bridge is South London's creative hotspot, Deptford, which witnesses the re-launch of Committee's Gallop Complex, accommodating Committee’s design studio, a coffee bar and a one-seat cinema. Across the river at Somerset House, The Sorrell Foundation's exhibition What’s Next for Schools? is open. Just round the corner the London Transport Museum hosts The Outer Limits – Beyond Zone One poster exhibition depicting the glories of suburbia.

In the West End, Ligne Roset opens a show called Urban Nature and Armani / Cassa launch their new collection of furniture, accessories, limited editions and exclusive textiles by Rubelli in New Bond Street. Not far from there La Maison de la Région Languedoc–Roussillon host their first exhibition of contemporary regional French design entitled Sud de France Design 2009 in Cavendish Square.

In the West, Young Creative Poland showcases emerging Polish talent in the Brompton Design District whilst SCP West in Westbourne Grove launches a new range of decorative bone china by Donna Wilson. On the Kings Road Designers Guild store hosts an exhibition called The Chair.

In the East, there is even more than usual to see, including, for fans of graphic design, Made in YCN on Rivington Street in Shoreditch. Emerge open their first graduate showcase at Rich Mix, and Magma in Clerkenwell open their exhibition called Russian Doll. If you're in the area you can go on a stroll with Studio PH on a guided walk of the area entitled MetaboliCity.

Back to frog design: On Monday morning, frog president Doreen Lorenzo will be one of the panelists in the Financial Times’ "Business of Design" Talks at the V&A’s Sackler Center. The "Responses to the Recession" panel will explore how design-led companies are coping with the current economic crisis. Are tight-spending consumers now in charge or can big brands still drive buying behavior? Will the market polarize into a world of ultra-luxury products for the “haves” and super-inexpensive ones for the “have-nots”? What strategies – back to basics, diffusion lines, etc. – work best in a downturn? Doreen will be joined by Miguel Fluxà Ortí, the Vice President of Camper; Rolf Sachs, Designer; and Geoffroy de La Bourdonnaye, Chief Executive Officer of Liberty.

Sharing Feelings By Feet: Déjà Sole

In the digital age we can send texts and pics to anyone, anywhere, instantly. But how might we share feelings? Through our feet, obviously. For GOOD Magazine's Inventions video series, frog's VP of Creative Robert Fabricant, imagines a new kind of shoe that can take you anywhere.

Frog Design, the Book: How Design Strategies Are Shaping the Future of Business

Frog Design founder and former CEO Hartmut Esslinger has written his first book, and it is available in stores now: A Fine Line – How Design Strategies Are Shaping the Future of Business. Part autobiography, part how-to innovation guide, part outlook to the future of design, A Fine Line is "a must-read for designers and business people alike" (Satjiv Chahil, senior vice president, Hewlett-Packard).

A Fine Line offers a step-by-step overview of the innovation process — from targeting goals to shepherding new products and services to the marketplace — in order to reveal how to arrive at an authentic human design that connects strongly with consumers. With a unique perspective, rich stories, and a global mindset, Esslinger explores business solutions that are environmentally sustainable and contribute to an enduring global economy.

Michael Moritz from Sequoia Capital, in his foreword, said it all: "Hartmut's book contains the ruminations of a man who has devoted his life to the challenge of marrying the aesthetic with the functional while standing firm against the deadening forces of mediocrity. His work shows that taste can triumph, design and production can be soul-mates, and the eye of an individual can shape a product and a company. The idea that finely designed products can change the fate of companies while also becoming our indispensable companions is a message that millions of us owe to Hartmut."

You can find the table of contents, sample chapters, testimonials, and videos on http://www.afinelinebook.com

And here are some excerpts from a video interview with Esslinger:

next09: Video of "Chief Meaning Officer" Talk

Here's the video of my talk at next09. Note that I changed the title last minute...

LIFT09: The Future in Permanent Beta

Getting there

I've been conference-hopping through Europe for the past two weeks. In Berlin, I discussed new "quality of life" concepts for Germany, and in Geneva I listened to speakers who held utopian visions from an earlier era accountable for what could have been but wasn't. My own personal well-being was more mundane. I schlepped two big suitcases with me and saw the sun shine only twice. When you travel so much, you start to feel like Tyler Brule: Quality of life is defined by the quality of the airports you pass through, the quality of the WiFi connections, the quality of the hotel room showers, the quality of the food in the random restaurant next to your hotel, and the quality of the casual human interactions along the way. Really, it's that simple. Travel, as we know, makes the human all too human, bringing to the forefront the five basic human desires that David Rose described in his LIFT09 talk: the desire to know, the desire to protect, the desire to heal, the desire to communicate, and the desire to travel.

Indeed, life is basic when you travel, yet I am frustrated with my inability to process the complexity of everything I hear and see on the road. I know I should blog about all the panels I've attended but I can't even decipher my notes anymore because they're a week old and life has changed. "We must write the story before we forget," as CERN's James Gillies noted in his LIFT09 talk about the origins of the Internet. We live in the now and here, and there is no there there.

Not impressed

Mindful of this preamble, the LIFT09 conference, dedicated to discussing the social implications of technology, came with a special twist this year. Bypassing the here and now, it attempted to directly link yesterday and tomorrow: "Where did the future go?" was the big question during the two days in Geneva, and the program was carefully designed to draw lessons from "a history of the future" in order to develop more enlightened concepts for tomorrow. Re-booting the future, so to speak.

In keeping with the current grim economic mood, the conference bemoaned the shallow glory of sci-fi future visions that, to date, haven't lived up to their promise. What is worse though? Dystopian visions that have become real or utopian visions that haven't? For Patrick J. Gyger, a Swiss historian, curator, and writer, it is clearly the latter. He revisited former notions of the future and investigated what became of them: "What happened to the flying car?" Well, it actually made it to market, like many other product aspirations, yet without much fanfare. Or as Gyger dryly remarked: "The future is here and we're not impressed." Instead, a profound disillusionment with technology-driven visions of a better life has kicked in (space travel, end of poverty, the smart Internet, anyone?), and free-market capitalism has betrayed the idea of sustainable prosperity.

Nicolas Nova applied this retro-skeptical view to the world of business, walking the audience through "the recurring failure of holy grails." He presented a nonchalant history of product flops (from the picture phone to the smart fridge to location-based services), which were in his judgment all hampered by "over-optimism," "lack of knowledge," and "blind faith in the Zeitgeist." Yet I found his definition of product success flawed as it was obviously based on the principle of mass adoption – a questionable proposition in times of increasingly fragmented audiences and micro-markets. Which new product – besides maybe the iPod and the iPhone – has really gone mainstream in the past ten years? Many of the products and technologies Nova stigmatized as "failures" have found their audience in some form and created significant value both for their inventors and consumers. Yet we simply fail to recognize their success since it occurs in market niches and communities.

Both Nova and Gyger heralded a more pragmatic model of future-oriented thinking. But I'm not sure if I share their skepticism towards grand visions. What if the future has arrived, however – to paraphrase William Gibson – it is so widely distributed (that is, buried in fragmented micro-markets) that we don't notice it?

Lives in the open

In any case, for a no-show, the future was still suspiciously present at LIFT09. Matt Webb (co-author of "Mind Hacks") described "the pleasure of watching things unfold" and recommended a "narrative" process for invention and creation (of which his Olinda radio prototype is a brilliant example), highlighting in particular the role of writing in the context of design: "Design is a way of walking over the landscape of possible worlds."

Clive van Heerden, senior director of design-led innovation at Philips Design, showed some of Phillips' PROBES videos that explore 'emotional sensing' – from electronic tattoos to skin dresses to food creation.

Fabio Sergio, creative director at frog design's Milan studio, laid out the power of "design thinking for the future." He used the case study of Project Masiluleke (a large-scale initiative that leverages mobile technologies to combat HIV/AIDS in South Africa) to illustrate a model of design that "is not about creating compelling visions of perfect futures but rather shaping betas of presents of a future we want to live in." Quoting an Italian bus customer ("In the past you had to stamp the ticket. Now you simply have to caress the machine."), he spanned the arch from 'form follows function' to 'form follows emotion' to 'form follows meaning' (design that resonates with people's value systems). Empathy, technology as "material to sketch with," people-centered user experiences, and social impact – these are, according to Sergio, the characteristics of "meaningful design."

Empathy, in particular, is not only the foundation for meaningful social innovation projects (pro-bono or for-profit), it is also the very prerequisite for every act of human cooperation. Sympathy creates compassion, empathy breeds solidarity. However, solidarity does not always mean consensus, as UCLA's Ramesh Srinivasan pointed out. He suggested the indigenous use of digital objects and called for systems that "celebrate difference" instead of eradicating it.

Finally, Bill Thompson's vision of the future was optimistically fatalistic or pessimistically upbeat, depending on your point of view. He rocked the house with a provocative obituary. "Privacy is dead," he argued passionately, "get over it!" Instead of complaining about this, Thompson pledged we should embrace the new freedom that comes with radical transparency. The abstract of his talk is so succinct that I simply want to repost it here verbatim:

"The enlightenment idea of privacy is breaking apart under the strain of new technologies, social tools and the emergence of the database state. We cannot hold back the tide, but we can use it as an opportunity to rethink what we understand by 'personality', how we engage and interact with others and where the boundaries can be put between the public and private. Those of us who are ahead of the curve when it comes to the adoption and use of technologies that undermine the old model of privacy have much to teach those who will come after us, and can offer advice and support to those who might be unhappy to have their movements, eating habits, friendships and patterns of media consumption made available to all. But every Twitterer, Tumblr, Dopplr or Brightkite user at Lift is sharing more data with more people than even the FBI under Hoover or the Stasi at the height of its powers could have dreamed of. And we do so willingly, hoping to benefit in unquantifiable ways from this unwarranted - in all senses - disclosure. I'll argue that we are in the vanguard of creating not just new forms of social organisation but new ways of being human."

This new post-privacy era is not without risks: Thompson conceded that "some will suffer, some will even suffer imprisonment." But that wouldn't release us, the digital avant-garde, from our responsibilities. His mandate for the creative tech community assembled at LIFT09 was in fact a moral obligation: "You need to act as mentors for everyone living their life in the open."

I have, I do, I will.

It's the Product, Stupid: Branding Firms and Industrial Design

In a great essay for Core 77 ("Stepmothers of Invention: Branding Firms Enter the Industrial Design Fray"), Carl Alviani describes a trend that's been emerging for a while now: Not only do digital firms like R/GA enter the branding domain, branding, marcom, and advertising firms also round out their services portfolio by adding product design capabilities. Alviani expects that "a lot more branding firms will be hiring product designers over the next few years, just as ID firms hired lots of media and identity specialists a decade back (and continue to do)." John Winsor director of strategy in product innovation at Crispin Porter + Bogusky, an ad agency which now bills itself as a "factory," reckons that "Product is the ultimate communication tool. To me, branding and ID are different sides of the same coin. We're both satisfying the needs of the customer."

And indeed, Alviani observes that "In the last few decades, 'product' has become a word that can describe a toothbrush, a piece of software, or an advertising campaign with equal justification, and this trend of metaphor-as-synonym shows no signs of slowing."

But he does not just simply buy into the song of creative discipline convergence. His view is much more nuanced. While he acknowledges that "branding agencies are just as good candidates for performing product design explorations as design firms at this point," Alviani questions whether real break-through innovation will ever originate from branding firms: "When we look for examples of 'authentic,' 'innovative' design, (…) we're almost always looking at a different sort of team. The current poster children of innovation-spawned market success--the Wii, the iPhone, the Flip video camera--emerged from large groups of researchers, designers, engineers, programmers and manufacturing specialists who worked together for a long time, and knew both their brand and the applicable technologies intimately. This type of work cannot be emulated by assembling a team or hiring an agency and handing them a brand bible, no matter how good they are at their jobs."

For the most part I would agree with his conviction that it's one thing to tell the story (even across different technologies and consumer touch points), but a very different thing to create it. Branding firms may consider product design simply as a means of brand extension. But then again, what is chicken, what is egg? I remember how Eric Feng, Chief Technical Officer at Hulu, emphasized in a presentation at the Milken Conference that it was critical for them to start with a clear understanding of what the Hulu brand should stand for -- long before they drafted even a rough concept of the actual product.