Sunday, 26 June 2011

Design Council Summit – 10 Design Lessons for Attaining Business Success

The Design Council Design Summit
discussion of design best practice
Last week the Design Council’s ‘Design Summit’ brought together by former Chairman, Lord Michael Bichard and Chief Executive, David Kester, outlined some of the lessons of good design cultures. 

Figures such as Jonathan Ive, Senior VP Industrial Design, Apple, referred to as 'the most successful designer on the planet'; Dr Ralph Speth, CEO luxury car producer, Jaguar Land Rover; author, broadcaster and designer, Kevin McCloud; together with design gurus Ian Callum, Design Director Jaguar, and Gerry McGovern Design Director Land Rover; formed part of a line up assembling world-leading figures from architecture and design.

Minister for Universities and Science, David Willetts MP, and Minister for Business and Enterprise, Mark Prisk MP, provided insights on government thinking around design and its contribution to competitiveness. 

Mark Prisk’s intention to highlight great British design during the Olympics next year through showcasing design excellence was warmly received.  Especially so, when the Minister signalled his intention that other parts of the country, and not simply London, would benefit from this investment.

This is a summary of the 10 top design lessons for business success which I took from the day.

1)      Design underpins everything in the value creation process. This can be summarised as people, processes, products, services and sustainable approaches through R&D, production, training, recruitment, marketing, sales and after-care, all making up a design-led culture. Design is integral, not applied. It is not about ‘flower arranging’, or some form of styling at the end of the process – it is central to corporate growth and success. 

2)      Culture and values really do make a difference.  It was stressed through the day that the best businesses thought deeply about their goals.  For these businesses it seems their core goals are not about making money, but are rather more assertions about reaching clearly stated aims – such as ‘producing the best products they can’.  Clarity of focus is essential to ensure that resources are devoted to areas that really matter.  Pride in what they do leads to a culture valuing this activity.  Making money flows from teams doing what they believe in and doing it to the best of their ability.  

FT journalist, John Kay, has attached the label, ‘Obliquity’, to this phenomenon.  He states, “the most profitable companies are not the most targets are the type of goals often best achieved when pursued indirectly....Oblique approaches are most effective in difficult terrain, or where outcomes depend on interactions with other people. (It) is characteristic of systems that are complex, imperfectly understood, and change their nature as we engage with them..... Outstanding success is the product of obliquity.

3)      Manufacturing really matters.  Even the most advanced businesses in the world continue to generate great value from the way their products are made.  This is a core part of the value creation process, not something remote or commodity-based.  Grappling with new processes, technologies, materials and service integration are a key part of what these businesses are doing. The way things are made is at the heart of their design processes.

4)      Working in creative cultures is critical. Creative cultures remain curious.  They are keen to learn. They value innovation, but innovation doesn’t come about without some failures, so they recognise that failure is part of the process.  Hand-in-hand with this they recognise the need to end projects which may be acceptable, may even have some merit, but may simply not be great.  Creative cultures demand courage and commitment to developing the very best products and services they can.    

5)      Leadership of creative companies flows from working in an integrated team. Time and again during the day leaders stressed the relevance of bringing together teams with different skills and keeping them together throughout projects, whether within design disciplines or across engineering, technology and business.   Multi-disciplinary skills and approaches were adding new value and required a steady stream of high quality people trained appropriately with new skills and an appreciation of how to work together with other disciplines. As Paola Antonelli, Senior Curator, New York Museum of Modern Art, has said, “In (future) designers will be at the nexus of things. They will not be divvied up according to their reductive specialty (graphic, product, furniture...). Theoretical designers will be exquisite generalists, but ready to roll up their sleeves.”

6)      Design’s contribution to leadership is not always obvious or tangible.  There are some important contributions that design can make to the leadership of a company, but they are not always obvious.  You have to be comfortable with attributes which are not tangible.  People are much more comfortable talking about attributes which they can evaluate with a number.  These ‘easy conversations’ can take up oxygen and simply not be that important.  It is important, however, to realise that there is an aspect to design that is centred around intangibles that needs to be taken seriously. 

This feature was recognised in Design Council's report, 'Design in the Knowledge Economy 2020', produced in partnership with Will Hutton of  the Work Foundation.  The report acknowledges   the 'amazing inversion' that has taken place in company investment. "Economists differentiate between investment in tangible assets – plant, machinery and buildings – and intangible assets. Researching new products; building up a company’s reputation; investing in human skills; design; computer software and even investment in management and leadership all count as intangibles. Back in 1970 companies’ investment in intangibles was 40% of their investment in tangibles. Today it has trebled."

7)      Ideas can be fiercely powerful but driving development can be fragile.  Creative cultures recognise the disruptive and creative potential of ideas and support their development.  They recognise that new ideas can be difficult to evaluate simply because there are no precedents, making business models difficult to define and create, but they are prepared to support the unseen depth in invention sitting behind successful ideas.   

8)      Great design education is a prerequisite to industrial and commercial success.  The very best business people have a genuine familiarity with the design process, either through some form of formal education or learned by working with the design process over years.  For educators the challenge looking ahead is about training designers who can embrace business, finance, engineering and technology with confidence and fluency.

9)      The world is changing rapidly and designers are having to take on board substantial paradigm shifts.  These include the need for sustainable solutions, healthy living and ageing populations in developed economies together with population growth more generally.  In auto markets, where previously the field of players had been contracting, they are now proliferating; multiple technological solutions are opening up where formerly one had been the accepted norm; changing consumer habits, for example resulting from ‘connectivity’ are now the catchword for a whole generation.

10)   Design is about delivering great experience. Designing emotional connection, supported by technologies, processes, innovations, ultimately delivering great experience, requires a more in-depth understanding of users around the world and their different cultures, values and ethos.   David Willetts highlighted the growing importance of design-sensitive consumers coming out of higher education and their enhanced expectations from products and services. Ideas of luxury differ in different places and personal time is a luxury commodity with experiences, not possessions, increasingly enhancing quality of life. 

The views expressed are those of the author alone. 
Beverley Nielsen is Director Employer Engagement, Birmingham City University.
Jonathan Ive:
Ian Callum, 2011 New York Auto Show:
Gerry McGovern and Land Rover Range Rover Evoque:

Monday, 20 June 2011

Birmingham - Developing our Design ID

Morgan's new three wheeler 
"Just think what we might have achieved if we'd put just a fraction of the £850bn required to bail out the banks into manufacturing?" asks Mike Whitby.

The Conservative Councillor and Leader of Birmingham City Council, the largest local authority in Europe, is in discussion with both Charles Morgan and myself at the Morgan factory in Malvern.

The idea is unthinkable. Yet this is the official cost of the bank bailout, revealed by the National Audit Office last year. But then Mike Whitby is a Conservative politician who thinks the unthinkable. Or perhaps you'd call it thinking out of the box. 

Mike listens with enthusiasm as Charles Morgan recounts their extraordinary story spanning over 100 years. "The three-wheeler was the start-up of the business when launched by my grandfather, 'HFS' Morgan. It still holds many speed records. In 1935 Morgan produced its first 4-wheeler and the Four Four remains a classic to this day providing people with a sports car for £26,000 that does 50 miles to the gallon."

The new three-wheeler is the personification of Morgan's brand values and already the business has taken 450 orders from all over the world. "We're incredibly proud of being the largest car maker still in British hands," says Charles."We turn over £40m, producing around 1000 cars a year and exporting 70% of these."
Morgan Motor Company launches its new three wheeler
Manufacturing is a passion for Mike, as Chairman and Managing Director of Smethwick-based Skeldings, the engineering business he's owned for over 20 years.
He's genuinely delighted by the turnaround taking place in the region's best-known luxury brand-led businesses, including JLR, which has just posted record profits of over £1bn.
Mike refers to their Operations Director, Alan Volkaerts, appointed to the newly formed Greater Birmingham and Solihull Local Enterprise Partnership (LEP) and naturally then to Andy Street, MD of John Lewis Partnership, who's become LEP Chairman and whose business is due to open a new flagship store at the re-developed New Street Station.
"It's taken over three years of intense negotiation to bring this major achievement about," says Mike, "and it's tremendous that they'll be opening their largest store outside London there - 250,000 square feet - forming the centrepiece of this landmark transport hub."

"The LEP is critical to our on-going development as the influence of Birmingham on the rest of the region is like a river delta on its alluvial flood plain," says Mike. "It's about using this influence to promote us to investors and talent - here and abroad. Promoting us, not only as 'open for business', but a city with 'a passion for makingthings'."

Morgan Motor Company new design development
Charles asks if he's considered using the 'Made in Birmingham' mark again. "What is particularly striking about Birmingham, when compared with many other European cities," says Charles, "is that things are made right in the heart of the city, not only in outlying areas - for example in the jewellery quarter or in our countless engineering businesses. Innovation and design go to the roots of our identity as a City"

Mike speaks about the revival taking place at MG, owned by SAIC Motor Corp, China's largest domestic automotive producer. He's been a frequent visitor to China and Hong Kong since 2004, developing links with this and other valuable export markets and trading partners, with a visit to Shanghai planned in a few weeks time.
JLR and Morgan, together with SAIC, are targeting elements of the buoyant emerging BRIC markets (Brazil, Russia, India and China) currently demonstrating a huge appetite for luxury brands.
"JLR has realised that in trying to service demand in these new markets the traditional lowest cost-based international procurement model is out of date," says Mike. "By strengthening their local supply chains they can build in efficiencies in terms of green miles, distance travelled to assembly and rapid response rates needed to meet unexpected sales surges.
"The question for the region is whether we have enough equity and the leverage to finance this supply chain expansion. For this reason," he says, "it was so important to have the new national equity investment fund, the Business Growth Fund chaired by Sir Nigel Rudd, headquartered in Birmingham."
"For us at Morgan," adds Charles, "as a productive business with a strong heritage, innovation and design remain integral to our brand. At the moment we're being funded by the Technology Strategy Board to develop lightweight applications for the composite, magalloy, and we've also been developing a fuel cell electric car - quite an ambition for us as a small company in automotive terms.
Mike Whitby, Leader Birmingham City Council with
Charles Morgan in the Morgan Heritage Centre
"Our new models, such as the AeroMax, generating £9m in sales and £2m in profits, have succeeded in combining good design with innovative manufacturing techniques. This includes super-forming aluminium, based on a technology transfer from Alcan, to produce 'big curves'. Adhesive bonding has doubled stiffness in the structural integrity of the chassis, with bonded bodywork coming to us from our Birmingham supplier, Radshape.
"More generally, in spite of Britain producing some of the best designers in the world we still seem to have a challenge in defining our British identity. With British designers such as Tom Dixon and Jonathan Ive, Ian Callum, Design Director at Jaguar, his colleague, Julian Thomson, formerly of Lotus, heading up the Jaguar Design Studio, Gerry McGovern at Land Rover and Marek Reichman at Aston Martin, we have a wealth of internationally respected talent, much of it located here in the West Midlands."
Both men recognise the importance of design and just what it can achieve in terms of driving sales and adding serious value. "Why is the 1963 Ferrari 250 GTO worth £20m?" asks Charles. "It's got to do with people associating it with the romance and culture of this period, also symbolised by the E-Type Jag. These products have so much enduring appeal - full of charm, character, sophistication and status."
Both men query why so many great British brands are no longer British-run. Perhaps it takes an outsider's eyes to recognise value in what we take for granted or to prompt the next big leap of faith. Alberto Alessi, for example, works with over 90 designers from all over the world.
Charles notes that Church's, Tod's and Brooks England, are all run by Italians, who're very consciously using the heritage associated with the brands to generate value, with Mike commenting on the Burberry revival under the American, Angela Ahrendts as a great achievement.
Professor Roberto Verganti of Politechnico di Milano, has spoken about the need to move outside the accepted thinking and perspectives when visiting Birmingham. "The danger for strong brands is that they become conservative making too many incremental changes rather than working to create their future."

Charles Morgan and Councillor Whitby view
the new Morgan three wheeler
"As the birthplace of the industrial revolution," says Councillor Whitby, "we changed the quality of life for people around the world. The creation of luxury, specialist, high-end lifestyle products says something exciting about Birmingham, our character, culture and values. But we need to keep innovating and challenging ourselves.
"I'm focussing on moving Birmingham up the Mercer Quality of Living Index where we're currently ranked 55th, occupying the second position for any English City in comparison to London, ranked 39th. I'm targeting moving us into the top 20 Cities. To achieve this we need to transform ourselves economically and environmentally by becoming a 'smart' city. We'll need to deliver on our CO2 emissions targets where we're looking for 60% reductions by 2026, and to deliver strong economic growth."

The Big City Plan is the driver, targeting the redevelopment of 2,000 acres of City centre land to dramatically improve the look and feel of Birmingham as part of our long range planning.

"Key to this," says Mike, "will be improving our physical environment to attract people and improve the city's image through well designed buildings, streets and spaces. We need to offer attractive homes, schools, public transport, health and social facilities. All this is challenging given the likely 10% population uplift.
"The most 'liveable cities' are desirable places. People want to live there; they attract highly qualified people and hence investment. They promote social inclusion."
This design challenge places the user - business and the public - at its heart.
"I'm focussing on key developments in the city around quality of life - the £600m re-development of New Street Station and the £188m being invested in our new Library as a cultural resource and the largest to be built in Europe, together with green spaces and even new forests planned for the city centre and outlying areas."
He regrets that so many of our traditional brands have been lost to the region, suggesting these really need to be captured in digital records before this social and intellectual capital disappears forever.
However, Mike adds that with so many great brands still being produced here - Jaguar, Land Rover, MG, Morgan, AGA, Rangemaster, Triumph motorcycles, Emma Bridgewater - there's a real need to communicate these achievements more effectively as saying something really distinctive about our 'can-do' character.
Morgan three wheeler
"Broader design thinking could play an important role in how we develop more inclusive business models and provide assistance to business start-ups and entrepreneurship," adds Mike. "I am keen to encourage local supply chains in farming with smaller farmers having the opportunity to sell their produce into more local markets," he says with emphasis.
"How can we inspire and give hope to the many small businesses with 97% of VAT registered businesses employing 20 or under? If we're going to rebalance the economy we need to look at health & safety and other compliance costs, where possible reducing national insurance costs.
"Social capital is very important. I want more people living here to be motivated to give something back. We need a greater sense of philanthropy, or 'verbindung' as the Germans call it. I'm a fan of business models favouring wider ownership amongst employees and I am worried about the widening gap between high and low earners."
So after 7 years as the City's Leader how does the scorecard look?
There have been certainly some impressive achievements. But, set against the demanding national and international backdrop, it's clear that if ever there was a time for vision, leadership and yes, thinking out of the box, it's now.
Beverley Nielsen is Director Employer Engagement at Birmingham City University.