Once upon a time, design was a coat of paint on the locomotive of the real economy. Today, value depends less on oil, steel and sweat, and more on how a product looks, runs and, most importantly, makes the consumer feel. In this series, we look first at the factors that have made design a prime economic force; next, at how executives have learned to create value by training the entire company to think like designers; then at ways in which cities are seeking competitive advantage with design; and finally, at how design itself is changing—and what those changes will mean to the way we work and live.
Developments in technology have always led to changes in management practices. Papyrus and writing made the first empires possible, and the telegraph and telephone later gave the modern corporation its central nervous system. As digitalization changes the nature of our work, it’s not so wild to imagine management will change too. One answer may be Holacracy, a trademarked management system designed by former programmer Brian J. Robertson. Using what he describes as “a new social technology”, Robertson hopes to remove what he sees as a key defect in the modern enterprise: the inability to incorporate the insights of individuals into the actions of the group.
Many family businesses don’t last beyond the third generation. As someone wisely put it: “Of shirt sleeves to shirt sleeves in three generations”, or wealth gained in one generation will be lost by the third. Yet the Pitcairn family business stands out in sharp contrast to this morose trend. The business has been going strong for more than 100 years and spans five generations and 650 family members. How has the Pitcairn family managed to keep business and ownership separate? How do they keep the family happy and the business well run? Pitcairn Company Chairman Dirk Junge shares some valuable lessons from the Pitcairn experience.
In China a healthy gaming culture centered around PC games, and more recently, mobile games, is thriving. Despite a historic decision by China’s Ministry of Culture in January 2014 to lift its 14-year ban on video game consoles, foreign console companies Sony and Microsoft have largely failed to woo China’s 517 million gamers. In July 2015, Niko Partners estimated that fewer than 550,000 of Sony Playstation 4 and Microsoft Xbox One, combined, will be sold in China by the end of the year, a pittance compared to the profits made by both PC and mobile gaming. Both companies are trying to make headway in this potentially fruitful market.
In every country, there are vast populations that need to be educated about something, like say personal health or hygiene, but it’s hard to do that because they are too poor, too busy, too old or just plain shy. The challenge then becomes: how do you reach out to them and achieve the desired outcomes. A concept called ‘embedded education’ can help here. Embedded education, or the practice of educating people through encounters that they already have with existing delivery systems, might just prove to be more effective than traditional mechanisms. So don’t be surprised if your barber starts educating you on hypertension the next time you get a haircut.
Are you among those who worry about where their products come from? So you prefer to shell out an extra buck for fair trade coffee instead of a regular cup of joe. You look for the Fairtrade certification when you buy clothes. But what about your phone? Fairphone, an Amsterdam-headquartered company, is selling phones on the premise that they are made from conflict-free minerals. Is that a compelling proposition for customers? Will they pick an ethically produced phone over an iPhone which has greater functionality, more aspiration value and a style quotient?
We make assumptions all the time. Think of the time when you met someone new. Or when you had to negotiate a deal with a company. That’s just how our mind works. We only have a certain amount of hours in a day, but we more crucial decisions to make, with more unknowns. And so we start using assumptions as short-cuts in decision making. Andy Cohen, propagator of the ‘Assumpt! Strategy’, believes that assumptions are neither good nor bad. We must acknowledge their existence and learn how to leverage them.
Over the past 30 years Haier CEO Zhang Ruimin has led the company through several path-breaking business model changes, which have helped the company build a strong brand, grow both organically and through acquisitions, globalize and “get close to the customer”. Zhang is now leading the company through yet another transformation to make it what he calls an “internet-based platform company” made up of extremely responsive micro-enterprises. For the closest parallel, think of a Silicon Valley within a company. In this rare interview, he talks about his management philosophy.
White goods manufacturer Haier is turning itself into an internet-based ‘platform company’ made up of several micro-enterprises. The idea is to create an organization that is extremely responsive to customer needs, constantly cultivates new ideas and innovates quickly. To do that it needs to discard the traditional organizational structure where ideas flow top-down and execution is done bottom-up. The company is now a flat organization which is a marketplace of ideas, talent and resources. The plan sounds good in theory but will the execution be easy?
Can China become a global leader in the Internet of Things?