Designing strategy
Posted by Grant Brewer on 01 Apr 2005
That approach to strategy epitomised by Gary Hamel and CK Prahalad has often been referred to in this column. Their approach encourages organisations to reinvent their future rather than build their strategy purely as a response to the industry circumstances that they find themselves in. Sometimes this is easier said than done, but an interesting trend has emerged over recent years that links innovative strategy with innovative product or service design.
Apple Computer, Inc is one company that demonstrates this trend more than most: its innovative product design has assisted it to carve out a new set of markets for portable music players, computers and software. And they did this from a position of weakness since although Apple has always enjoyed a strong brand, they have very low market share. Sony is another example. They pioneered a design oriented strategy when they launched the Walkman in the early eighties, creating a new market that has grown significantly since then. In the service industry Virgin has embedded the design and position of their brand into every service they deliver. Boutique hotel chains provide another example of design oriented service delivery.
Designing simple, easy to use businesses
Product or service design cannot be the only part of the strategy – quality standards need to be met; branding and business alignment need consideration. However, it is growing common to see the design of such things as functionality, branding, image, ease of use or business processes reflecting the lifestyle or message of the product.
For example, Apple launched the iMac as a low cost, easy to use computer that needed to demonstrate that is was easier to use than competing Windows machines. The bright colours and teardrop shape of the computer added to the sense of fun, friendliness and familiarity. But the design detail went all the through to the computer packaging. The first thing visible inside the box when it was opened was the handle on the top of the machine that enabled you to lift it out of the box. This was followed by almost no configuration requirements – one cable to plug in the power and a second to plug in the keyboard. So a new customer could really get the computer up and running in ten or fifteen minutes. This attention to design detail all reinforce the idea that the computer is easy to use and helps build a consumer experience that is an important part of the strategy execution.
Google is another example. It is very rare to find a person that doesn't know what do when they go to Google's home page. The minimalist design reinforces the actions that the user must take, making it easier for the consumer to find the information they are looking for.
Good design that reinforces strategy often aims to put a human face on complex or routine products or processes. It makes a complex world easier to understand and to navigate. There is no use in your mission statement describing your organisation as customer centric if, like Apple or Google, your products, services and customer-facing business processes don't reflect the same customer friendliness. Making it easier for customers to do business with you must be an important part of strategy execution. For example, a hotel that claims in concerned with pampering you from the moment that you arrive, yet has a tortuous check in process that keeps you waiting at reception isn't designing their strategy ethos into their services and processes.
Aligning design and business strategy
It is however, possible to get carried away with product design. Organisations shouldn't let technology or product design lead their business – usually the strategy should be enabled by technology or design. Occasionally, this rule of thumb is broken but it tends to be an exception to the rule. Nokia are a good example of over-design. Although they seem to be recovering recently, their financial performance took a dip in the last few years. The complex product line they released to the market was at least a contributing factor to the lack of performance. Too many products, with a confusing array of features which were not easy enough to understand or to use made their product line confusing to potential customers. Compounding that was other competitors having more relevant designs, such as clam-shell phones, that were in demand in the market.
Should all companies integrate design and strategy?
It may seem that the idea of escalating the strategic important of product and service design only applies in consumer oriented industries. This is isn't always true. Hitachi make hard drives that power Apple iPods – their design expertise enables low power usage and miniaturisation making large capacity iPods a reality and enable Apple to gain a 65% market share in music players. So product design excellence can lead to strategic competitive advantages even in industries that are not making consumer products – the focus of the design just shifts.
Business strategy can use product or service design to reinvent the future – frequently enabling the design features to become a differentiator resulting in premium pricing or increased market share. The other components of good strategy, such as quality programs, leadership or having a clear purpose, can't be ignored though. It is clear that in 2005 design is no longer just the packaging that is added to the product by the marketing department as an afterthought. Design is becoming an integral part of strategy and it is becoming more commonly understood that design decisions belong in the boardroom.
Designing strategy was published as Strategym #25 in April 2005
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