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- Does your company have a blind spot?
In their new book called "Blind Spot" Nathan Shedroff and
his co-author's say that many companies are missing
huge business opportunities because they focus too much
on the quantitative side.
You know, the numbers.
But the qualitative side is equally, if not more, important.
The doorway to understanding and developing qualitative
value is called design thinking.
- Can you tell us a little bit about why design is
so important for organizations?
- Yeah, I'm certainly one to say that all of business people
should be creative and all parts of business
should be creative, but obviously design is commonly
recognized as sort of a creative discipline.
And I think it's that way because design employs certain
kind of processes and accentuates certain kinds of
perspectives in it's arc of development that leads
participants, whether they're classic designers or not,
leads people to new opportunities.
So at it's core, design is a process to see new things,
see new opportunities, understand the context that our
customers are in or our stakeholders are in and then
take that new perspective and make new things out of them.
- Who do you think is doing design well these days?
- Well there's the usual suspects,
you know Apple, Target, Nike, etc.
And I rattle them off because design isn't just a
department, design is core to the strategy
of the entire company.
It's part of their corporate strategy to make design
important, in terms of the implementation, but to use
design tools to understand their markets, their competition,
their customers, etc.
I think that really if you look at any successful company
that has a big brand, well known brand, or is able to charge
a lot more than their competitors for some reason,
usually design is one of the reasons, if not the reason
why they're in the position to do so.
Because design is a set of processes that accentuate
qualitative value.
You pair that with traditional business tools that are
really good at measuring quantitative value and you put
those two together then you have a complete picture of
opportunity, of customer need and of how you can approach
the market and build better products and services.
The last 50 years of business education and business
practice has sort of relegated anything that's qualitative
off to the side because it's messy and it's hard to deal
with and you can't attribute numbers to it and therefore
if you can't measure it you can't manage it.
Right? That's the old phrase.
And what we've done in the process of that is design out
everything that's important about a brand, about a
relationship with customers and truly the best value
that's out there.
If you go to a board meeting and you look through the
financials of the company design isn't anywhere there.
Right?
Design is sort of this nice thing that's been
added at the end.
And design-
The companies that you mentioned they don't
approach design that way.
Design is an intrical part of the strategy and a partner
in this strategy.
It's not just this sort of thing that's off to the side.
And I think that what that does for a company is it allows
them to create better relationships with their customers,
with their partners, with other stakeholders, even with
their employees.
And relationships are where all the value is, if you don't
have good relationships you don't get good value,
end of story.
- I love that you talk about design as a discipline, as
something that cascades throughout the entire organization.
That a designer is not tasked with making things beautiful,
necessarily, or even creating something that they want,
but they have a responsibility for understanding who is
using the product or service.
Which is a much wider definition than I think we think of.
- There's really two kinds of things that we mean when we
say design.
One are the design disciplines; fashion design, interaction
design, graphic design, industrial design.
There's disciplines around the implementation
of good design.
And then there's this thing called design thinking, which of
course we've heard a lot about in the last decade, design
thinking is about process.
And anyone can be a design thinker.
So the design thinking process is about
understanding others needs.
So I think of design as a designer more as a conductor.
You're conducting all of these many choices,
all of these notes, you're trying to build a symphony,
not for yourself, you're trying to build it for some
audience, that you care deeply has the experience you want
them to have.
- Absolutely and that that in and of itself is the
driver of growth.
- Yeah
And so when we think about innovations so often we go to,
well how can technology fuel my innovation strategy?
- And technology is an incredible enabler and we're
literally in the center of Silicon Valley right this moment.
But the dirty little secret of Silicon Valley is that
probably 90%, or more of every start-up has failed.
And it's usually not because it's poorly engineered,
it's usually because it's cool but nobody really needs it
or wants it.
If you want to be successful in business, yeah you have to
be, you pay attention to the technology and what it enables
you to do, but you also have to do it in the service of
some sort of customer or market need.
Or else you better be a non-profit.
- I want to go back to this notion of design being a
discipline that we can learn.
So you, about 10 years ago, had an idea to start a very new
kind of graduate school, this MBA in design strategy housed
in a 100-year old art school in San Francisco.
Can you talk a little bit about how you got this idea, that
A we needed a different kind of business education and that
business education needed to have more tenace of an arts
and crafts model of learning, rather than how we typically
think about business, leadership and business education.
- Quite frankly having been to business school, I feel like
I can be a little bit critical here.
I think business schools are stuck in the '80's in terms
of their curriculum and their pedagogy, how they teach, but
especially what they teach.
And it all needs to be updated for the 21st century,
here we are 17 years into the 21st century, we're still
teaching, in a surprising number of MBA programs, if not
the tools from two and three decades ago,
certainly the philosophies from two or three decades ago.
And I got an opportunity that none of my colleagues
got to do, we got to make an MBA program from scratch for
the 21st century, and it was easy to integrate, at the core,
things like sustainability in systems thinking, design
thinking and innovation strategies, new approaches to
leadership, new understandings of what the role of business
should be in the first place in a society in the
21st century.
- It's more like mastering business ambiguity than mastering
business administration.
Which really speaks to what you were saying,
the kinds of business problems that we're facing these days
are much more about solving novel problems that are filled
with ambiguity, complexity and uncertainty, very
different than, as you said, the old models of just applying
some tools that help you analyze the problem.
- Part of the fact that this MBA program lives in a art and
design school, and part of the reason why it's called an
MBA in design strategy, is that we take a designer-ly
approach to business and one of the things that comes out
of a design studio is that you learn by doing.
So we have very few cases, we don't read a lot of books,
we throw our students into situations over and over in
design processes.
So it's just second nature to use these processes and these
tools to apply to different kinds of opportunities.
That learning by doing is really important.
- I want to build on that a little bit, can you tell us
about some specific skills that designers might have or even
that the students learn?
So, for example, they're not looking for questions that are
just trying to converge to an answer, but they're willing to
ask the open-ended, more purpose driven questions that try
to get to a different place.
- So you're talking about qualitative research right?
- Yes
- And that's critical because if you don't look at things in
new ways, there's no way that you're going to come up with
new opportunities.
So that kind of expansive divergent thinking and research,
inquiry into the world, is where a lot of the raw materials
come for the next phase that's so important,
which is reframing.
This is the hardest thing for traditional business people
to do.
Reframing is all about saying "wow when we were out in the
field, we didn't see what we though we would see, we saw all
this other stuff."
And that causes you necessarily to question whether the
frame you have, the understanding of the market you have, is
the right one, and chances are there's a better one that
leads you to new opportunities.
That's where the ambiguity is, if you're not comfortable
with that ambiguity, if you're not comfortable going back to
your boss and saying "I know you asked us to do this, but we
found that that's not really a good question, but we found a
better question that we think will lead us in other places."
Takes a certain amount of courage.
So that shift, that reframing is what designs all about.
Designer's tend to be fairly comfortable doing that.
- Well I wonder if you could maybe give us an example of it
in action?
- I'll give you a semi-hypothetical example, let's say Ford
automobile company, car and truck company, their frame is
we're a car and truck company, that's what we make, that's
what we sell.
But we know now a days that that model is changing
drastically because of services like, well certainly rental
cars for decades, but now we have car-share, now we have
ride-share.
People aren't buying as many cars, so if they stick to that
frame they're in trouble.
The opportunity here is to reframe themselves and say we'll
maybe we're not just a car and truck company, maybe we're a
transportation company and that affords us different kinds
of opportunities, new opportunities.
That may mean that they get into new businesses, they
redesign their products to be appropriate to those uses,
they create new services, and maybe they start investing in
ride-sharing companies and car-share companies and autonomy
and other kinds of things that aren't maybe about just
selling more cars and trucks.
Then you have a company like Tesla come along and say "Well
we're not a car company at all, even though we make cars,
we're a transportation experience company and the software
is as important, if not more important than the hardware
is." Right?
And now they can do things that no car company in the
world's ever been able to do, update your car while you
sleep, right?
They can do things because they have a different frame of
what their intersection with the market is.
Some day maybe they'll have to reframe too.
So does qualitative research that allows you to reframe
from that on in it's prototype and iterate until you feel
like you're close enough to maybe launch something.
- So we talk a lot about learning by doing, rapid cycles of
iteration, feedback and design but actually learning how to
give and receive constructive critique is a skill in and of
itself.
Can you talk a little bit about what you've seen work well
when it comes to productive critique?
- Well I don't think unfortunately, even for designers,
we're never taught how to critique well.
We just go through enough critiques that we sort of get used
to it, and you kind of feel your way around.
But it's certainly a learnable skill,
it's a teachable skill.
Part of the importance of critique is to learn to
disassociate yourself from the work.
I made this work, or we made this work, but any reflection,
any critique or criticism about the work isn't necessarily
a reflection of me, it's a reflection of where the work is
in this moment.
I want input from all over because there are people who
understand and see the world in ways that I just can't
and they're going to see things that aren't there, and
that's a good thing, not a criticism of me, it's a good
thing because they're here to make this thing that I care
about better in some way that I can't do myself.
Why wouldn't you want that, right?
But you have to reframe it for yourself that this isn't
about my worth as a human or my skills as a professional and
my responsibility isn't to do it all by myself.
- I think people don't realize it takes time to learn how to
work with other people that are different than you-
- Yeah.
- That have different skills, different background, and to
use what they can give you, in essence, as a gift.
- Well and to recognize that your skills are needed in some
of these parts, but where you're particularly strong isn't
necessarily needed at all times, right?
- Alright. I want to turn a little bit-
- Okay.
- ... To your latest book that you wrote called Blind Spot.
Which zeros in on those qualitative qualities that you
talked about earlier.
And you talk about it as premium value.
- Yeah.
- That there are some organizations, like Disney for example
that have really understood and built into their way of
operating, of innovating, to focus on the customer
relationship.
So tell us a little bit about Blind Spot, and how you even
came up with the term blind spot to describe this thing
that is often invisible to many, but so critical to driving
innovation and growth.
- Well I think this is the logical outcome of my personal
experience in design and business and Steve and Sean's
experience in their professional lives where we work with
companies as consultants or inside companies and we're not
having the right conversations.
The numbers are never the story, the really important parts
of the story, they back up the story, but the story is
elsewhere.
And if all you do is looking and measuring at the numbers,
the functional value and the financial value, you miss the
rest of the story.
There's all the stuff you can't measure like emotions and
identity and meaning that gets ignored, that we don't see
because it's literally not in the books of the company.
When you have a financial report that qualitative stuff,
the rest of the story, it's not being told at all.
So it's really easy for business people to be blind to it,
or to just ignore it all together.
Even though they have a little voice in the back of their
head that says "I think there's something else here."
- Yes.
- It's those people that listen to that voice that are able
to see new opportunities.
- And to your point of how designers see the world, if you
make visible those things like identity, meaning and emotion
then they become a different part of the equation of how you
think about your organization.
- As anyone in business should know, you're creating a story
with your customers.
It's not unlike a screen play, right?
Your audience is going on a journey and you want them to
feel certain things and then you want to surprise them, it's
okay if they maybe are a little confused, 'cause then the
elation of understanding what's going on
and being filled in.
That's a journey that is emotional.
And when you do that really well it's very satisfying.
Music is the same way, like symphonic music, you're taking
people on a musical journey but it plays to them at the
level of emotions and a couple other qualitative values.
Well if you can design that relationship that's it, that's
everything you're doing, that's what every company in the
world should be doing, design the relationship.
You're not designing the product, you're not designing the
service flow, it's not like a user journey.
You're designing a relationship for whatever period of time,
including a lifetime relationship.
- Yes.
- Which Disney sits and thinks about how are we engaging
people from three all the way up to 90, that's part of
their strategy.
- Absolutely, and I just love how you bring Disney into the
book, as a kid I was fascinated with Disney and I read as
much as I could about it.
And one of the most amazing, small things I remember
learning was how they don't let their characters in their
theme parks be visible out of costume-
- Yeah.
- ... To the guests.
And that attention to detail that once you break that
narrative, once you break that wave line, where as a child
you see a character that might have their mask off it takes
away the magic, and Disney is all about magic.
- And there's only one in the park at once, like they time
the replacement Mickey Mouse to come up right as the current
Mickey Mouse goes away, so there's never more than one
Mickey Mouse, right?
And Disney's incredible at this.
They train all of their park personnel, everyone in the park
from a character, someone playing a character, to a waitress
or a server, to the janitor has what they call character
training, and this does a really powerful thing.
It means that any Disney employee is empowered to reset the
relationship.
Someone drops their ice cream cone there are people around,
they're off the wave line now, right?
They're out of the narrative, so there are people empowered
to get that child back on the narrative.
Something bad happens, somethings not quite right, everyone
in the park is empowered to help people get back on the wave
line, get back on the relationship that they've designed.
That's incredibly powerful.
One of the biggest misnomers in business is that they think
that they're in a certain kind of class, we're a product
company, we're a service company, those companies over there
like Disney or whatever, they're an experience company.
What they don't realize is all there is are experience
companies.
Every company, every organization creates experiences, you
don't think you're an experience company means you're
probably creating really crappy experiences 'cause you're
not paying attention to it.
The qualitative value is probably more important than the
quantitative value, we certainly see that in cases of
start ups being sold, like Instagram being sold to Facebook
for this ridiculous extra billion dollars at the time,
seemed ridiculous, now it looks like a bargain, right?
Or when companies go public and they have this huge amount
of value, that's the qualitative value that's doing that,
it's not the quantitative value.
But that value only gets exchanged in the context of a
relationship.
No relationships, no value, period.
So everyone's in the relationship business whether they
think they are or not, whether they're paying attention to
their relationships or not.
And then lastly there's the experience, because you can't
have a relationship without some kind of experience.
So every business is in the relationship business and the
experience business.
It's not just special categories of companies.
(Whoosh)
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