good design is good business

7/29/2019 Good Design is Good Business

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P S T ^ M P A N Y

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I l l u s t r a t i o n b y C o h e r e n t l i n a g e s

LEGENDARYIBM CEO THOMASWATSON JR. SAIDTHESE WORDSALMOST 40 YEARSA G O . IN 2012,THEY'RE EINALLYTHE GUIDINGSPIRIT OE OURINNOVATION AGE.

By Cliff K uangOCTOBER 2012 FASTC0MPAN Y.COM 81


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I H ED E S I G NI S S U EP h o o g r a p f i s D y A d a m F e d d e r l y

D E S I G ND I L E M M A # 1

Success c a n be abitch. Design m adeAppie a behemoth,but its products areshowing signs ofstrain: OSX is gettingbloated; iOSfeeislike a jail cell; iTunesneeds to be cleanedu p . Worse , rivaisare raiding Apple'stalent a n d custom-e rs expect a Jesusproduct biannually.C an the companyfind new productpaths for innovation?And wiil its productdesign chops trans-late to managing asprawiing ecosystem?

When Thomas W atson J r. told Wharton students in 1973 that go od design is goo d b usinessthe idea seemed quixotic, silly even. T o man y people, design still me ant the superficial polish of nicer hom es and cleangraphic s. But Watson had earned the righ t to his beliefs. The recently retired IBM C EO was a business oracle, havingrown the company tenfold durin g his tenure by transform ing its signatur e product line from cash registers to comp utemainfram es. Along the way the perception of IB M had changed irrevocably Once rooted in the grim e of cogs and sprin gBig Blue had becom e the face of a new comp uter age.

Watson had always b een a pionee ring advocate for design, going back to 1954 when he recruited Eliot Noyes to rinvent the street-level showroom at IBM's Manhattan headquarters. And as IBM transformed, it became synonymouwith the rise of mode rnism . Watson and Noyes com miss ioned Paul Rand to create its logo; Mies van der Rohe and EerSaarinen to build its offices and factories; and Charles and Ray Eames to craft its legendary 1964 World's Fair exhibiBut from our cu rrent distance w e can see the cracks in W atson's logic: Logos and bu ildings, nice as they w ere, werencentral to how IBM actually made moneynot compared with the engineers who were figuring out how to build evemore powerful m ainframes. Back then, design was m arketing by another nam e. The design and busin ess symbiosthat Watson was advocating at the time was more prophecy than reality

Only n o w , 1 9 years after his death in 1 9 9 3 , i s Watson being proved right. Innovation today is inextricably linked w itdesignand design has become a decisive advan tage in countles s indu stries, not to mentio n a crucial tool to ward ocommoditization. Cofnpanies singing the design gospel range from Comcast to Pinterest to Starbucks. You will sedozens of them in the pages that follow. But why now? What m akes th is mo me nt different?Apple's rise offers a few imp ortan t lessons ab out today's connection between design and bu siness . The easiest is thadesign allows you to stoke consumer lustand d ema nd higher prices as a result. Whirlpool's V P of design, Pat Schiavonerecently told me, "We're chang ing from being a manufacturin g-based comp any to being a product comp any It's not juabout cost cutting." Schiavone was hired three years ago from Ford, where he most famously rebooted the Mustang'design. "Why change? Because good design is very profitable."

That shouldn't be a surprise to anyone who ow ns a $600 iPhone, but Apple's model sug gests som e h arder-to-digeslessons. O n e i s the value of thinldn g of product system s rather than solely products. A n instructive example com es from Frogthe design consu ltancy that fashioned the case for the legendary Apple l i e . Today, one of its m arquee clients i s G E . Y o u migwonder wha t design can possibly have to do with the success of a jet engine or an M R I mac hine. But hospitals and pow eplants are now linking their machines into ecosystems. And well-designed iPad apps are the simplest way to manage them

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P O W E RT O T H E P I X E L

P U S H E R S

F E R N A N D A V I E G A SG o o g l e

The search giantacquired her startup.Flowing Media, andcreated its Big Picturegroup for her (and part-ner Martin W attenberg)to research the futureof data visualization.They're creating sucheye-popping projects asGoogle+ Ripples, wh ichshows how links spreadin a social netw ork.


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"If we don't do it, som eon e else will," says GregPetroff, general man ager of user experience anddesign at G E . For the company, the threat is that ifsomeone else designs those linkages, "G E could berelegated to not having the top relationship withthe cu stomer," Petroff says. "Our hypothesis is thatwe can build a better solution."

Designers are the ones best situated to figureout how a kit of parts can becom e som ething morethey're the ones who can f igure out the humaninterface for a vast ch ain. If they do th eir jo b right,the resulta w orking ecosystemis a far betterplatform for innovation th an an isolated product.Just thin k abou t Apple and how its products haveexpan ded from iMacs to iPods, iTunes, iPhones,and iPads, all linked via its iCloud. Or Nike, whosebody-com puting foray began with Nike- and hasevolved into the Fuelband, which aim s to rebrandthe calorie, for an age filledwith netwo rked devices.

CommoditizationPushes Designersto the ForeInnovation usually cycles between periodsof raw, technical inventiven ess and the finer taskof packag ing it for mass ad option. In personal tech,for example, we're in an integration phase thatcomes on the heels of fundamen tal advances suchas the Internet and mobile computing . With back-end magic becoming a cheap utility user interfacesare now a startup's best chance to break out.

Consider Bump, an app that lets users swap databetween phones simply by bumping them together.Its cofounder, Dave Iieb, notes that in thefirstdotcomrush, online enterprises had to build their infra-structures from scratch, so engineers were para-mo un t In our app economy everything h a s changed.Bump had 1 million us ers before it spen t $4,000. Itdidn't need infrastructure, than ks to Amazon's server-hosting service; it didn't need ad vertising becauseof social media ; and the App Store solved any d is-

tribution prob lem. Development w as a breeze, too,beca use of Apple's software developer's ldt. "Theseare all things th at used to cost millions," Lieb says.

Although these dy namic s seem specific to thetech business, they're analogous to what happensin any maturing industry The back-end nuts andbolts eventually fade as a competitive ad vantage:Your manufactur ing prowess , once a re l iablebulwark, mov es to China; your distribution chan-

S H A R O N H W A N G A N DM I K E M A T A SF a c e b o o k

N o designers are more indeman d than Apple alumsand no company has hiredthem m ore aggressivelythan Facebook. Hwang(once a senior art director)and M atas (he designedthe map and photo inter-faces for the Phone a ndiPad) are at Facebook t ohelp it invent a mobileexperience th at's delight-ful and keep the w ebsitefrom becoming utilitarian.

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S BD E S I G ND I L E M M A # 2

As the search gian tbattles Facebookand Apple, i t 's h ir ingdesigners at a rapidclip. Results havebeen mix ed. Google'sNexus 7 tab let is awinner, but the Qmedia-streamingdevice was DOA. Canit sh if t i ts data-dr ivenmind-set to a design-oriented one? Wiiidesign at Googiealways feei lii


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T H ED E S I G NI S S U E

Microsoft in the 2000s and ho w only now is it try-ing to redefine itself by building a more design-driven culture. That culture spawned Window s 8,whose design intent has remained remart


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i S G ND I L E M M A 1 3

What began a s asimple experiment inhyperfast informa-tion sharing is nowinfo overload to the10th power. Twitter isalready both newsfeed a n d watercoolerfor many folks, but tokeep g rowing, I t s d e -sign m ust evolvefrom a n exhaustingexperience to o n e ofsmarter filtering andorganization. Inshort. Twitter needsmore user experi-ence wizards.

road ma p in place, aimed squarely at the evolvingfuture of mobile compu ting. The central plank ofthat strategy is a radical redesign of Windows 8,built for the touch-screen revolution and ready topower Microsoft's first major foray into hardware,the Surface tablet. For Microsoft, th e que stion is,how intuitive will use rs find Windows 8? Naturalenough that it won't suffer the disastrous fate ofVista? Strong enough to withstan d the c rit iquesthat inevitably follow from r ethink ing on e of themost heavily used products on the planet?

A hot startup such as Pinterest has different d e -sign challenges (see page 9 0 ) . Ben Silbermann, EvanSharp, and their team have built one of the mostaddictive websites on the planet, which lets userscurate and show off their tastes like an art collection.Can they evolve that user e xperience in a way th atwill make the m m oneywhether retail, advertising,or some othe r novel formwhile keeping the ir us-ers rabidly engaged? But notice wh at unites Pinter-est and M icrosoft Ultimately, each company's successhinges upon how well i t intuits what users wantand how muc h each pleases them w ith products.Only design has th at power to seduce and delight.

Design isn't being looked at a s a solution to onlybusiness problems. It s practitioners are now takingup roles that used to be dominated by not-for-prof-its and governments, seeking new ways to raise thefortunes of the developing world. Brazilian architectMarcelo Rosenbaum is using his expertise to repairthe fractured bonds in favelas (see page 1 3 8 ) . Else-where, in our first Innovation by Design Awards(starting on page l O O ) , projects su ch a s the EmbraceInfant Warm er, a low-cost incubator, a nd th e BioLiteCampstove, a hyper-fuel-efficient cooking device,aim to significantly improve and even save the livesof people in poor countries with little mode rn in-fiastructure. You'll see these projects alongside otherimpressive finalists such a s the Boeing 7 8 7 Dream-liner, wh ich dramatically improves the economicsof long-hau lflights,and the Nest Thermostat, whichtakes an often clumsy, hard-to-use produc t andgives it a complete makeover.

What eve rything in this issue shares is a moti-vating ethos that Watson also hinted at during hisWh arton speech , just before the quote that every-one knows. " W e are convinced," he said, "that gooddesign can m aterially help make a good productreach its full pote ntial." Replace product with busi-ness. Or even person. In every instance, the wisdomrings true. [email protected]


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