Posts Tagged ‘innovation’

Shopping for Innovation: What you need to know before hiring a design firm

This guide was written for Core77 in late 2006, co-authored with Steve Portigal. I was looking for it today, as I wanted to share the distinction between a Vendor of innovation and design services and a Partner who goes beyond the requested task to discern and perceive the real challenge to be solved. I couldn’t find it online, Core77 having redesigned their site from the ground up, so I’ve reposted it here from the Wayback Machine.

Getting Started
You’ve read all the articles and can’t possibly stomach one more column on the iPod. It’s clear that design+innovation is the hot topic for business—with businesspeople taking more active notice of the design scene, and designers focusing more on strategy. (It’s not like business and design were so far apart to begin with, of course.) But what about those new to the conversation? If everyone is telling you that design is the differentiator, how do you get started? What are the considerations when bringing on strategic design services?

There are many things you need to consider before hiring a design firm, but we’re going to start with three: The Problem (defining your needs), the People (who the players are), and the Partnership (the nature of the engagement). Design firms are businesses, but with unique perspectives and unique work processes. Understanding a bit of the industry culture will go a long way in helping you to establish a successful engagement.

The Problem: Defining your goals
As with any initiative, you first need to define your problem and your goals. Having these goals well-articulated and written down on paper as a starting point for the discussion is crucial. You may find that your reasons for bringing in design services differ from others in your organization, so you need to get your story straight before you begin talking to creatives. You should also understand that that story is likely to be pushed and pulled.

Design can be brought in as a service, but it’s important to remember that it’s a creative service. Designers are smart and talented people who typically do “think out of the box” (a phrase more derided inside the design community than outside, yet still requested in more initial meetings than you can imagine). So although your desired outcome may be very specific, the designer’s process to delivering your outcome will inevitably involve challenging its very foundations. Here’s an illustration:

Q: How many designers does it take to change a light bulb?
A: Does it have to be a light bulb?

In real terms, this can be the difference between asking a designer to create a new vase, versus asking for a new way to display flowers in the home. The first problem statement already converges on a solution—perhaps prematurely. The second opens up new design opportunities, new target markets, and ultimately potential new revenue streams.

So though you’ll want to define your problem as clearly as possible to begin with, you should also be willing to engage in discussions with designers in order to craft a more open-ended, innovative, and ultimately actionable problem statement. This is the way designers think, but being prepared for this potential frame shift can be a tremendous challenge. You are likely to learn things that you didn’t want to know, that you aren’t even prepared to know, and that challenge your closely-held beliefs. (On the flip side, you should be aware that designers have a healthy skepticism about just how much “paradigm-busting innovation” a given company is prepared to make. The design consulting bar-tale of the client who proclaims, “I want something completely innovative, but I want to keep making my stuff exactly the same way I do now” is legendary, but it’s also true.)

Nevertheless, it is often difficult for clients to think like the designers they hire, and to not see them as threats. This is something you need to consider when you’re bringing in a design consultant: you’re hiring someone to tell you something you don’t know; to provide you with something that you don’t have. But will you be ready to take their advice?

Read On…

Implications of Mobile Money Interoperability in Kenya?

Mobile money pioneer Kenya, has finally gone live this month with account to account interoperability between mobile money services. Neighbouring Tanzania pioneered interoperability between the mobile money services offered by local telcos with a soft launch back in 2014. Fears of cannibalization and zero sum scenarios were unfounded, as documented in an early evaluation report by the GSMA. On the other hand, perhaps that assessment of impact was far too early as little else is mentioned in the rather thin report. Fellow East African Community member Rwanda too has had interoperability for a couple of years now. Now, its Kenya’s turn.

In a market where mPesa services posted a market share of 80.8%, what, if any, will be the impact of this newfound ability to send money directly from wallet to wallet without cashing out?

Talking points in news media articles and various interested non profit bodies point to “increase in financial inclusion” and “increase in competitiveness” with lower transaction costs as the benefits to end users, but these seem to be just that, talking points.

Safaricom, the telco behind mPesa, has long maintained a stranglehold on the market, and even now continues raising barriers to frictionless payments. In the decade since mPesa’s launch and unchallenged dominance, the vast majority of Kenyans have had no choice but to set up their own account even if it means using a separate SIM*.

In a different market, such a move would be cause for a celebration- the potential benefits clearly outweighing any drawbacks to individual service operators, and the future potential for digital commerce and trade enabled by a frictionless payments platform to be realized in time. In fact, mobile money usage is only growing in both Tanzania and Rwanda, though in each the numbers of subscribers is less unevenly distributed across the telcos.

But in Kenya, beyond providing ~20% of mobile subscribers with the ability to send money to mPesa (more or less) seamlessly, the overall impact on platform and service innovation within the local economy is likely to remain limited. Providing the service takes the edge off Safaricom’s issues with monopolization of the market but will in no way change much of the daily transactional reality on the ground. Habits are hard to break. And mPesa has become a Kenyan habit.

 

*  mPesa has a penetration rate of ~81% as compared to Safaricom subscriber penetration of ~72%, as of January 2018

 

How do we make a business case for an innovative concept given the data scarcity for the African mass market?

Anzetse Were writes some thoughtful points on the challenges facing private sector innovation in Kenya, and Africa. Two of her points caught my attention, in particular:

With regards to the private sector, an interesting point raised is that innovation targeting it must have a business case for adoption otherwise the innovation won’t be absorbed. Innovation must demonstrate that the short-term inconvenience of adoption will pay off in the long term.
[…]
We have a real problem with information asymmetry and data bias. [… ] strategies for market penetration and sharing cannot be rolled out since the lack of data means the private sector doesn’t know where the market sits.

While Anzetse has specifically focused on the interface between the private and the public sector with regards to innovation, the points she brings up are nevertheless a challenge for either or both parties.

Size and value of the market opportunity for an innovation when data is scarce

Investors in innovation for new and untapped markets need the numbers to make sense of the opportunity. A dollar value and estimated size of the market are among the conventional metrics used to provide evidence of a return on their investment. How substantial is it?

In the African context, the mass market where the volumes can be found tends to be heavily biased towards the informal sectors, and still for the most part based on cash transactions. Textbook approaches to sizing and valuing the market space fall short without accessible and relevant data.

A few years ago, we were faced with a similar challenge for Village Telco, a social enterprise launching an innovative ICT device for low cost voice and data communication. They had developed the Mesh Potato,  a device for providing low-cost telephony and Internet in areas where alternative access either doesn’t exist or is too expensive. It is a marriage of a low-cost wireless access point capable of running a mesh networking protocol with an Analog Telephony Adapter.

They were looking to enter the Kenyan market, with the notion that the cyber cafe industry would make the best target audience for their device. Their investors wanted to know the size and value of the market opportunity prior to launching the product in Kenya. Although this happened just over 6 years ago, Kenya had already made a name for itself as a forward looking mobile phone market unafraid of experimentation.

Our challenge was two-fold: We were to look at 2nd and 3rd tier towns, not just Nairobi and Mombasa. Village Telco was looking to connect the unconnected. And we had to estimate the size and value of the market opportunity for a sector – internet cafes – that was primarily cash based and informal, particularly given the rural and small town geography we were considering. There was little or no data available to even get a handle on the number of cyber cafes operating in Kenya.

Secondly, we had to get an idea of the price point at which the product would be acceptable to this target audience. Keep in mind that the device was wholly unknown – an innovation – and there was nothing comparable on the market.

A qualitative approach to quantitative estimation

Given that this was not a conventional research project, and time and resources were constrained to a market analysis, we designed a minimal viable market discovery phase that would permit us to gather enough insights directly from the cyber cafe operators in order to estimate the size and value, as well as recommendations for pricing and market entry.

In late 2011, Kenya’s administrative divisions were still the original provinces.

Based on population density and relative income demographics, as well as an ICT gap analysis of voice and data services – reports available through Kenyan government institutions – we planned an optimal route that maximized exposure to the types of locations Village Telco had specified whilst sampling cyber cafes across a range of infrastructure access and regional income. This coverage was completed in less than 3 weeks.

Surfacing trends through indepth open ended interviews

Where we invested our time and effort was in identifying entrepreneurial and innovative cyber cafe operators in the smaller towns and villages we visited. The vast majority of internet cafes are run as side businesses by the owners who might be white collar employees or civil servants, and often managed by employees. It was the cyber cafe owner operator who saw their business as a growth opportunity that we were seeking.They not only knew their market but had seen the opportunities to grow and expand their services.

They were able to give us an idea of the future of the cyber cafe business in their region, a rough estimate (few businesspeople are willing to openly share revenue data) of the scale of their business, and the trends in decline or growth of the types of services they offered.

Through the data gathered, we were able to estimate the high growth regions for internet cafe services – Nakuru town for instance had seen the number of cybers grow from 10 or 15 in 2007 to upwards of 50, primarily due the increase in tertiary education institutions. Kilifi, on the Coast, had seen a doubling when a local university campus opened.

At the same time, we were able to gauge the value of the opportunity space by using the proxy of the proportion of owner/operators to manager/employees – the former were more likely to be interested in the Mesh Potato than the latter.

Our route planning also provided evidence of the pathways for innovation diffusion, outwards in a hub and spoke model from the central hub of Nairobi’s business district where new electronic products landed from the manufacturing centers of Asia.

Sitting down face to face with the cafe owners and showing them the product and what it could do gave us the insight on pricing and market entry strategy. By the end of 5 weeks from start to finish, we were able to make a business case for innovation meant for a data scarce environment.

Innovation means breaking new ground

While the effort on the ground was very different from a conventional market analysis exercise due to the need to elicit information directly on the market and the product, the time and resources invested by the client were no different from an analysis based on secondary sources and accessible data flows.

The nature of the African mass market is such that pioneers entering the market will have to break new ground, not only with their products and services, but also their approach to analyzing and evaluating the business case for investment. It is not an impossible task and should not be considered a barrier to entry.

How the African movable assets bill can unleash innovation opportunities for the rural economy

Somewhere in Kenya, 4th June 2012 (Photo: Niti Bhan)

As Kenya joins Zambia and Zimbabwe in ratifying a Movable Property Security Rights Act, there’s a sense that the floodgates to innovation in access to finance might be taking place in rural Africa, south of the Sahara and north of South Africa.

Kenya’s law also goes beyond the cows and goats and allows a borrower to collateralise future receivables arising from contractual relationships.

How it ends up being implemented will set the stage for the next big disruption in financial inclusion. In the meantime, let’s take a closer look at the opportunity space for innovation in the informal and rural economy that dominates these operating environments.

 

1. A whole new bank, designed to meet the needs of rural Africa

Last night, a tweet by Charles Onyango-Obbo struck me forcibly, and reminded me of our Banking the Unbanked proposal crafted for ICICI back in January of 2007.

The very fact that contemporary thoughtleaders in the Kenyan banking industry are unable to take the concept of livestock as collateral for loans seriously, taken together with the deeply embedded assumptions of the formal economy’s financial structure leaves the door wide open to disruption.

It would not be too difficult to conceptualize a rural, co-operative bank custom designed for the local operating environment. In Kenya, where the mobile platform provides clear evidence of the viability, feasibility, and desirability of innovative financial tools and services that work for irregular income streams and provide the flexibility, reciprocity, and negotiability inherent in the cooperative local economies, such a bank could change the social and economic development landscape overnight.

In fact, one could conceivably foresee this “bank for rural Africa” scaling far beyond Kenya’s borders.

 

2. Insurance sector must respond to banking disruption

The domino effect of disruption in the banking sector should kickstart the stagnant insurance industry that has been ineffectually attempting to scale outside of the formal economy’s neatly defined boundaries. Bankers willing to take livestock as collateral for loans will therefore require insurance on their movable asset as a surety against the risk of disease, or drought.

Current products tend to emerge from the international aid industry, seeking to insure smallholder farmers against the shock of losing their livestock to climate related disasters such as prolonged drought, or an epidemic of illness. There is a dearth of relevant and appropriately designed insurance products from the private sector targeting the needs of the rural economy. For all the talk of African urbanization, even the most optimistic projections show that East Africa’s rural population will continue to dominate.

Thus, this an opportunity ripe for the plucking, given the right mix of product, pricing, and promotional messaging.

 

3. Disrupting assumptions of Poverty and Purchasing Power

Whether it is Kenya’s significant non profit sector or the nascent consumer oriented markets, the redrawn lines defining assets, collateral, and the floodgates of access to finance will require a complete overhaul in the way the population is segmented and measured.

Once these hundreds of movable assets have been valued, insured, and registered officially, even the most reluctant banker must now count the pastoralist among his wealthiest local clientele, able to draw a line of credit against his true wealth to the tune of thousands of dollars without feeling the pinch.

 

4. Triggering a rural investment and consumption boom

From mabati for a new roof and simti for the backyard wall, to the latest model smartphone or pickup truck, the concurrent boom in investments and consumption provides an ample playing ground for new products and services tailored for the contextual needs upcountry. Finally, Farmer Joe can install that solar powered irrigation pump for his orange groves in time to reap the next big harvest. And Mama Mercy can think of building up a nest egg of investments faster from the income provided by her farmyard animals.

Kagio Produce Market, Kenya, April 2013 (photo: Niti Bhan)

This might turn out to mean upgrading to a breed of high yield milch cows or being able to provide them with better quality feeds and medicines, but the financial bridge that a well designed strategy leveraging this movable assets bill and it’s timely implementation could mean the difference between the brass ring or treading water.

 

5. Trade and Commerce will open new markets

Given that the Kenyan Movable Property Security Rights Act 2017 goes beyond livestock to include other stores of wealth and value creation, there will be an undeniable impact on regional and cross border trade. No trader will give up the opportunity to leverage their existing inventory if it qualifies for additional credit that can be plowed back into the business.

On the road to Bungoma, Western Kenya, February 2016 (Photo: Niti Bhan)

Trader’s mindset and the documented biashara growth strategies already in evidence point clearly to the productive economic use of this access to finance rather than passive consumption alone. As their business grows, they will require a whole slew of tools and services tailored to their needs. This could be as simple as a basic book keeping app or as complex as customized commodity (assets, livestock, non perishable foodstuffs, grains and cereals) exchange platforms that integrate the disruptive new services percolating through the entire ecosystem.

 

In conclusion

These few steps outlined above are only the beginning of laying the foundation for disrupting the current social and economic development trajectory of small town and rural Kenya. I see immense potential for both direct to consumer as well as business to business segments for forward looking organizations seeking a foothold in the burgeoning East African markets.

We, at Emerging Futures Lab, would be pleased to offer you customized white papers on the opportunities for new products, services, and even business models, based on this emerging financial environment recently signed into law by President Kenyatta. Contact us for an exploratory conversation on the scope and scale of your particular industry’s needs. Our experienced team can help you maximize these opportunities from concept design and prototyping all the way through to path to market strategies.

Innovation, Ingenuity and Opportunity under Conditions of Scarcity (Download PDF)

coverIn July 2009, I was inspired by working in the Research wing of the Aalto University’s Design Factory in Espoo, Finland, to launch a group blog called REculture: Exploring the post-consumption economy of repair, reuse, repurpose and recycle by informal businesses at the Base of the Pyramid*.

Within a year, this research interest evolved into a multidisciplinary look at the culture of innovation and invention under conditions of scarcity and it’s lessons for sustainable manufacturing and industry for us in the context of more industrialized nations.

reculture research bed

Emerging Futures Lab, July 2010 (Aalto Design Factory)

As a preliminary exploration, my research associate Mikko Koskinen and I timed our visit to Kenya to coincide with the Maker Faire Africa to be held on the grounds of the University of Nairobi in August 2010.

This photographic record of our discoveries (PDF 6MB) among the jua kali artisans and workshops of Nairobi, Nakuru, Thika, and Kithengela, guided by biogas inventor and innovator Dominic Wanjihia captures the essence of the creativity and ingenuity it takes to create without ample resources and adequate infrastructure.

A synopsis of our analysis is available here.

 

* The publishing platform, Posterous, died a short while later and we lost years of work. I’m looking into reincarnating REculture on Tumblr soon.

 

5 examples of the breadth of African led human-centered design and thinking and planning

The other day I was searching for news on design from the African continent and noted on Twitter that it seemed as though only the South Africans were consistently talking about their various creative outputs. Having long been part of the crowd that believed in the indigenous creativity and innovation in the less visible parts of the world, I went digging to see if maybe it wasn’t the words that were important but the intent of the action.

Was there, in fact, evidence of people centred thinking and planning, and solution crafting, that was innovative or transformative? This is what I’ve found with just a couple of days of desk research, I expect there’s much more out there and this is only the tip of the iceberg.

South Africa: What was designed to exclude can be redesigned to include

johnnymiller_04

Papwa Sewgolum Golf Course © Johnny Miller / Millefoto

During apartheid, barriers were both constructed and modified to segregate urban spaces—roads, rivers, and large stretches of open land separating rich neighborhoods from the poor. Twenty-two years later these barriers still exist, large homes with lush lawns just a few yards away from tightly-packed communities organized with dirt roads rather than tree-lined streets. Photographer Johnny Miller wanted to capture the dramatic divide from a new perspective, and decided to shoot many areas in South Africa from several hundred feet in the air for a series titled “Unequal Scenes.”

Miller’s photographs went viral as evidence of the inequality inherently embedded in the design of the landscape. Now, the City of Johannesburg is talking about redesigning apartheid’s spatial design:

The city is trying to achieve this through its spatial development strategy dubbed the ‘Corridors of Freedom’ to eliminate sprawling low-density areas without practical public transport networks.

The City of Johannesburg’s executive director for development and planning, Yondela Silimela, says suburban living is not efficient, as leisure amenities are shared by few people. The proposal by the city is urban mixed-use areas that promote shared public spaces such as swimming pools and tennis courts between the rich and poor, to close the widening inequality gap.

 

Government of Rwanda’s political will to enhance citizen-centered governance

In Rwanda, however, the people centric policy design has entered the realm of the intangible – pushing the envelope of design thinking as far as any Nordic city. Taxation policy is to be reconsidered after a User Perception Survey, and an ambitious plan for leadership commitment has been launched by the president for people-centered development. We have hopes of a design policy lab being pioneered in Kigali.

 

Namibian invention disrupts mobile technology

petrus-simon

Petrus Simon with his invention

More pragmatically, a young Namibian figured out how to make mobile phone calls without the need for a SIM card. Luckily, this achievement of his captured the media’s imagination, catapulting him into the limelight and garnering him a scholarship in technology at any university of his choice from the local telco. If every young African inventor received the same, the landscape of STEM would change across the continent.

Ekandjo revealed that the company does not usually fund learners from grade 12, but MTC  is proud to make an exception.

Last year Petrus won a gold medal at the NamPower national schools’ competition, after he invented a machine that serves as a seed drier and cooler.

 

Kenyan Andrew Kio saw the unmet need for African sizes in clothing

 “There are no standard sizes for Africans like the way people walk into shops abroad and you are asked whether you are a size 12 or 14 and such like things.”

Kio did basic market research to help him carve out a niche for himself in the market given that most people then still had a preference for imported jeans, despite the fact that they did not fit properly. He learnt that women have the most problems. He had found his entry point. Kio then went and bought some pairs of women’s jeans, ripped them apart and studied their designs carefully.

Blacjack now has six full-time employees and Kio has recently bought new machines to keep up with demand. Blacjack dresses KFC and Kengeles staff and recently signed a deal with French retailer Carrefour, which has debuted in Kenya. He also imports Woodin designer African prints from Ghana for uniquely African jeans. Source

 

Which segues nicely into the recently launched initiative by the AfDB called Fashionomics – complete with a B2B platform for pan African SMEs. We keep our fingers crossed that creative entrepreneurs like Andrew see the fruits of all this hard work.

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@Prepaid Africa Connecting Dots – October 2015

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October was a busy month for us – The African Development Bank hosted their first Innovation Weekend in Abidjan from the 9th to the 11th of October. Our contribution was thinking about the problems we face as the starting point for new venture design.

CQ5PpPzWcAANLNP

Emerging Futures Lab’s Niti Bhan, collating everyone’s problem statements. Abidjan, 9th October 2015

Savvy young people from across Francophone West Africa gathered to conceptualize startups over the course of the weekend, culminating in grand prizes and the opportunity to grow into viable businesses. Much excitement.

The startups; PayFree, a multiplex platform for payments; La Ruche, a marketplace for artisans to sell their wares; Coliba, a mobile platform for managing urban waste; and BioPRO, an intervention seeking to help rural people get access to energy and electricity will each receive an AfDB fellowship with Ampion to accelerate these projects to become viable companies.

 

Continuing with the Francophone flavour, our next big news is introducing our Beninese collaboration – Ms. Yacine Bio-Tchane, who has been blogging in French on the emerging consumer markets in the region. Emerging Futures Lab now has a Francophone West African footprint.

Portrait robot du nouveau consommateur africain
La ruée vers la Côte d’Ivoire des marques internationales
Les taxi-motos, potentiels livreurs en Afrique de l’Ouest
Où se trouvent les plus grands consommateurs en Afrique?

 

 

tumblr_nwsbz0ytDw1qghc1jo1_500Finally, Senegal hit the headlines with the launch of indigenous wine from the shade of the baobabs.

 

 

 

ColdhubsNigerian innovators have become a hot trend – Coldhubs is an outdoor solar powered fridge, developed by Nnaemeka Ikegwuonu as a sustainable solution for minimizing post harvest losses faced by farmers. Meanwhile, a team of students from Nnamdi Azikwe University (UNIZIK), Awka, have built a made-in-Nigeria mini bus, which they say is the first of its kind.

tumblr_nx7cu51yEp1qghc1jo1_500And finally, from the Nigerian diaspora, Dr. Samuel Achilefu, has won the prestigious St. Louis Award for 2014 for creating cancer-visualizing glasses.

 

 

And to round up this exciting month, we cover the just concluded India  Africa Forum Summit, held in New Delhi 26th to 28th October.

16BYAThe hype

India-Africa summit is meant to strengthen trade ties
India is trying to match China’s engagement in the continent
China is accused of exploiting Africa’s natural resources

Reality check

India isn’t really doing any better than China
It exports 67% consumer goods, 2% raw materials
Imports are mostly raw materials – salt, ores, oil, metals

Tsunami of change – design, brands, marketing and the mobile phone

In the 10 short months since I wrote on the market forces influencing the global mobile phone market, and the implications of the democratization of innovation whose early, weak signals I could already foresee, matters have come to a head. I had written:

The locus of innovation in handset design, product planning and market strategy has moved its center away from the erstwhile first world to the former developing world i.e. India and China.

And along with this re-centering, ideas on business models and profit margins have changed to reflect those prevalent and appropriate for these new operating environments. Just look at this statement from Xiaomi’s Hugo Barra from an interview last week:

“Innovation is not a luxury item. Innovation is for everyone.”

The implications of this positioning are enormous, particularly given the conventional wisdom currently prevalent in the industry that the latest, greatest, cutting edge technology is a much sought after premium piece of hardware.

What are the current manifestations of this seismic shift in the source and diffusion patterns of innovation?

The era of the Apple product/pricepoint strategy is over for everyone, including Apple. Big ticket flagship devices released to much fanfare and  the lining up around corners by fanbois may still continue to work for Apple but even for them the size of this target market has reached its limit. That is, they’ve captured all they could of the share of the market  likely to rush out to buy the latest, greatest shiny at whatever price.

IDC’s latest forecast for smartphone sales until 2019 has this little snippet tucked in:

Markets with the biggest growth opportunity are extremely price sensitive, which IDC believes will not change, and this is the main reason Apple will be challenged to take Android share throughout the forecast. Even if Apple were to introduce another low-cost iPhone (e.g., C version), IDC believes the price will struggle to compete with Android OEMs that are focused on portfolios aimed at price points of $200 and less. This isn’t to suggest that Apple’s success with the iPhone won’t continue, and IDC believes its efforts to maintain significantly higher margins compared to its competitors are much more valuable than chasing share.

The implication is that new entrants should focus on the “cheap smartphone for poor Africans or Indians” shtick. But this would be the biggest mistake any self respecting brand could make. The entry level segment is completely saturated with Shenzen makes, refurbs, grey market boxes, and a hodge podge of low end models from all and sundry. This is the commodification we saw coming 6 years ago.

Here is where I see an opportunity for a maverick like Xiaomi to capitalize on Hugo Barra’s statement that innovation is not a luxury but for everyone.

The growth markets might be price sensitive but they’re neither stupid nor resigned to their fate. Whether it was the poor man’s car – the Tata Nano, or the slew of wellmeaning first worlder’s introducing frugal low cost technology for the social and economic wellbeing of the downtrodden, the downtrodden have turned up their noses to it all.

Not since Nokia’s heydays has any brand succeeded by flaunting its low cost solution as its USP – and Nokia never flaunted their affordability, they just ran a truck over their phones and let you make a call after. You couldn’t help but realize it was worth the price, offering the biggest bang for your buck. Many of us still reminisce over teh good old days of long lasting battery power and rugged Finnish engineering.

In the past 10 years, everything has been changed by the rise of the internet and proliferation of social media. The connected consumer’s aspirations have found their own level, like water, on a global scale.

People have learned that affordable phones don’t feel necessarily cheap

There is no tradeoff to be made if you’re in the market for a new smartphone. This is the result of the democratization of design, exemplified by Xiaomi, and the result of the race to the bottom of the pyramid. Growth markets are part of the prepaid economy, and the considerations around brand positioning, price point and marketing strategy are not what you have been led to expect.

Here are most demanding customers on earth, operating in the most challenging environment. The mass majority for mobile phones isn’t localized anymore, not even on a regional or continental level – its global. And this is tailor made for affordable innovation, a customer experience that makes you feel as special and as unique as any fanboi without the accompanying price tag.

Only two to three years ago, Xiaomi was just a copycat. Ignoring Xiaomi’s ambitions is a big reason why Samsung is now facing a crisis.

Now, we have to ask serious questions: “Who are you, Xiaomi?” and “Where are you going?” Only when we figure out the answers will we know where we will be heading, too.

JoongAng Ilbo, July 27, Page 32

Just a quick search to see where they’re going offers up such tidbits as ordering a new Xiaomi phone online to be delivered by Uber. Who they are is what their competition isn’t – an opportunity seeking conglomerate leveraging gaps in the innovation ecosystem. Business models, marketing, distribution, design planning – they are re-inventing the conventional to suit the flexible, social, frugal world of the prepaid economy’s connected consumers. Its a whole new ballgame. As I said 10 months ago, the era of big brand cellphones manufacturers is over.

 

The Big Shift for Device Design

  • The market is global, local, social
  • Aspirations will drive purchase decisions
  • Innovation is not a luxury
  • Experience has a price tag

10 years later: Will buying Lunar Design make McKinsey more nimble?

project1Around 10 years ago, I’d made this rough sketch of the innovation consulting landscape as I saw it at the time. The overlap of business and design was the topic du jour, and IDEO had just begun seeding the media with stories of the Empathy Economy and the magic of “design thinking”.

Today*, peterme’s blogpost woke me up with the news that McKinsey had purchased Lunar Design. If you’re not familiar with the ID landscape in the US, particularly on the West Coast, then a few words on Lunar will help with context. Afaik, they’ve always been a most respected medium sized industrial design studio – I have a vague recollection of meeting John Edson in some social gathering related to my work with Core77. Besides, back in the day, before social media came along to completely fragment what was left of the interwebs, the design world was a much smaller place.

Once I’d released my first impressions on Twitter (one of the reasons there’s a lot less blogging these days is how much of our pondering ends up being diffused through those addictive 140 character bursts), I recalled the diagram I’d created in September 2005. That was the period when I’d immersed myself wholly and completely in exploring the interstitial spaces between “Business” and “Design”, developing much of the foundation of my consulting practice.  You can see the seeds of today’s hybrid research driven consumer-centric strategies and the evolution of the traditional methods and frameworks to suit the needs of the informal sector in the explorations of a decade ago.

Ten years to respond to changes in the environment

Enough indulgence in the circumlocutions of yore, lets take a step back and look at the diagram again, this time with today’s news layered on top (as crudely drawn as the original).

project10That red box marks the spot of the combined Lunar+ McKinsey offer. Does this acquisition stretch McKinsey in a continuum (heh) across the entire bottom half of this position map? Or will Lunar Design hold that space for them while they keep their corner on the bottom right?

Given they’ve had a digital design department in some affordable corner of the universe, I’m assuming they’d managed to stretch their service offering and client deliverable capabilities as far they could without actually stepping fully fledged into the hard core world of industrial design. Their lack of strategic design planning was obvious.

FANcase

You’ll note that their earlier attempts to discuss product design tend to emphasize the B-School approach of conjoint analysis and elements from industrial engineering such as value analysis. Having debated the pros and cons of conjoint analysis vociferously in product development as taught in an MBA program as well as taken electives in value engineering during my engineering undergrad, I can recognize the clumsiness of the design strategy for competitive advantage approach in this case study. Its incremental.

Design catapulted itself into the boardroom in the meantime

This is not to say that the gurus at McKinsey were wrong. Business has, since the beginning of organizational management of mass production and practice, considered industrial design as a line item. Its place in the hierarchy of business was clear – marketing and finance and sales would inform the designers and the engineers what they had to do and how to do it.

Business schools emphasize analytical thinking while strategy teaches us frameworks and methods for analysis, after the fact. NPV will let you forecast returns but the method requires you to know exactly what you plan to do, in order to cost it, at the outset. There is no room built into the system for either experimentation or iteration. Brainstorming is a carefully curated meeting and free association or wild guesses frowned upon by middle management. The bottomline is a numbers game. And that’s a game that McKinsey’s designed to win.

The ‘magic’ of design

Yet as Steve Jobs would have shown you, there’s an intuitive leap in vision and innovation that happens (by magic) for which there’s no careful step by step replicable process to follow. Synthesizing the vast variety of data and distilling it down into a visualized whole – a concept to be manifested in the form of a prototype or rendering – is often a post it covered version of a pub brawl. Sure, there are a 101 Methods, as Vijay will remind you but the reality is one of scribbles, sketches, whiteboards, foolscap sheets and Lego.

The eureka moment is in the conversations – brainstorming – a phase built into the design process at least once if not more. This space in time is critical to the design (and of course, innovation yada yada) process. Business processes don’t really have this space built in – brainstorming and discussions become management by walking around and watercooler discussions – moments to be captured in the interstitial spaces between powerpoints and presentations and slidesets of excel spreadsheets.

And so you have design case studies which inform you that the removal of half an inch of spindle will save you 0.7% of your cost.

Can the black turtlenecks help the suits be nimble?

Much has already been said in the past 10 years about the value of design’s approach to problem solving and the insights it can bring to bear on business strategy and decision making. Very quickly, some key points that come to mind, are:

Comfort with ambiguity and chaos – we don’t know what we’ll find or what we’re going to make and we’re okay with this not knowing long enough to figure out what to do.

Experimental & Iterative – “Let’s see what works” is the unspoken yet universally understood mantra when there are enough design enthusiasts in the room. You don’t have to be guy who makes it to understand we might have to break it a few times to see what happens. Ask Dyson.

Flexible, Responsive, Nimble – The very nature of the design process, with its multiple iterations and lack of attachment to the one right answer implies that design teams tend to be flexible, nimble and responsive to results, data or shifts in the environment.

Willing to leap first and look later – which brings us to this last point since innovation, or even a new toothbrush design, often means there aren’t any citations or numbers available to point the way. The much maligned inarticulate concept sketches that emerge from the gut of an industrial designer (and especially award winning ones, like Lunar) often can’t justify their existence with metrics, measurements and excel forecast sheets though they could probably craft a well reasoned argument for a particular design direction.

Will this chaotic creativity be integrated into McKinsey’s offering and deliverables or will it be one more service to be discretely sold?

This is the make or break question. McKinsey’s current state of mind can be inferred from this snippet taken from their new book:

Our intuition has been formed by a set of experiences and ideas about how things worked during a time when changes were incremental and somewhat predictable. Globalization benefited the well established and well connected, opening up new markets with relative ease. Labor markets functioned quite reliably. Resource prices fell. But that’s not how things are working now—and it’s not how they are likely to work in the future. If we look at the world through a rearview mirror and make decisions on the basis of the intuition built on our experience, we could well be wrong. In the new world, executives, policy makers, and individuals all need to scrutinize their intuitions from first principles and boldly reset them if necessary. This is especially true for organizations that have enjoyed great success.

Does this questioning of the underpinnings of their traditional methods and conventional frameworks imply greater integration, in an effort to catch up with the leapfrogging of innovation as peterme would have it?

There is an urgent imperative to adjust to these new realities. Yet, for all the ingenuity, inventiveness, and imagination of the human race, we tend to be slow to adapt to change. There is a powerful human tendency to want the future to look much like the recent past. On these shoals, huge corporate vessels have repeatedly foundered. Revisiting our assumptions about the world we live in—and doing nothing—will leave many of us highly vulnerable. Gaining a clear-eyed perspective on how to negotiate the changing landscape will help us prepare to succeed.

Or, is this just an attempt to buy ‘cool’ more than a decade after the fact? Only time will tell.

 

Postscript: There’s another post here which needs to look at what this means for the design industry.

Labour saving African kitchen appliances: Market opportunity for product design and social innovation

Mama making ugali (nsima) over a 3 stone fire in Kisii, Kenya (Photo Credit: Niti Bhan)

After watching their Mamas spending hours over an open fire, sweating over the daily dish of ugali or nsima or fufu – the African kitchen’s favourite carbohydrate – inventors and innovators across the continent are taking the initiative to ease her burden with nifty, new kitchen appliances.

While culinary details differ from region to region – West Africa’s fufu is cassava based, while East Africa’s ugali is made of maize – the essential element in common is the time and effort involved in cooking the stiff, sticky, starchy staple.

The latest is from a young man in Malawi, who, after 3 years of tinkering that’s reminiscent of Dyson’s obsessive iteration, has successfully prototyped an nsima (or ugali) cooker. It makes the perfect maize porridge of the type you see Mama stirring in the photograph in just 36 unsupervised minutes.

Opening-the-nsima-cooker-600x450And that’s where he’s at with the product, which can also be started remotely by the ubiquitous mobile phone.

On the other end of the continent, however, Togolese electronics engineer Logou Minsob has gone much further with his award winning invention, the FouFouMix. It converts pre-cooked cassava into fufu in less than 10 minutes.

Fufu or foufou is made from pounded yam also known as cassava. The tuber is cooked and then pounded into a particular sticky consistency. This article from Ghana, whose myths claim it as a food for the gods, describes the entire back-breaking process taking many hours and many hands to get just right.

youmomentumslideThis visualization of the process is his older model – there’s already a new model in production and the factory is in full swing. Why I find it interesting however is due to its similarity with this visual of yet another indigenous invention, the idli maker – the idli is a South Indian steamed rice cake.

2As you can see, those wheels are made of granite – considered the only way to grind the soaked and fermented rice into the right consistency to be steamed in specially designed pans.

There’s a pattern of arduous consistency being translated into convenient time saving mechanisms.  Backbreaking labour is inspiring invention.

vintage-ad-kenmore-washing-machine This is exactly how the giants of home appliances began their global brands, through the invention of washing machines and dishwashers and vacuum cleaners – all the things that made life easier for the industrial era’s housewives. Domestic appliances revolutionized daily life, minimized the need for servants and opened up a world of learning and leisure for women in the industrialized world.

Yet, neither of these appliances are commonly found in superstores anywhere in the world, nor are they products that any of the big name brands would think to develop. While the Indian product is certainly meant for a regional niche, unlike a pressure cooker, say, the African devices newly being invented are not. Each have potential across their entire regions.

Indigenous product innovation and opportunity

And this potential new market opportunity goes beyond product innovation or category creation. Just like the labour saving devices of the previous century, these have the potential to truly liberate women from the hours spent on the most basic household chore – cooking the daily meal.

Unlike the social enterprise attempts to focus on health benefits of smokeless stoves or solar lamps, these have emerged organically from local inventors spotting an opportunity for genuine innovation. The demand certainly exists, and its one that is independent of the household’s income range.

There’s a whole new market opportunity to be tapped, by these and other such similar inventions, if only consumer brands would take a moment to notice.