Do we care about making the pie bigger, or just our slice? Paul Bennett, IDEO
Paul Bennett is the Managing Partner and Chief Creative Officer of IDEO, a world leader in human-centred and design-led innovation. IDEO was nominated by business leaders globally as one of the world's most innovative companies.
Speaking to an audience at The Big Rethink in March 2010, Paul put forward the notion that the role of modern leadership is not about providing answers; but about asking the right questions. Questions like; how do we embody the purpose of our businesses and then articulate it in a meaningful way? How can we motivate, inspire, attract and retain talented employees? How can we make our customers loyal? And how can we turn hard times to our advantage by designing new business models?
Read the transcript below.
Paul Bennett, Managing Partner and Chief Creative Officer, IDEO
So, let’s press the down button for a second. Does anybody think that last year was just absolutely awesome and they just wished every year was like 2009? Right, so… it kind of sucked the big one, right? I mean, it really did. And we asked you guys what was keeping you awake at night and we’ve had some really good answers. I mean, it was a pretty shitty year, it was a pretty sleepless night for everybody, and for a multiplicity of reasons. I think we were all worried – and I feel the same way, I mean, I run a business just like many of you. We were worried that our businesses were going down the drain, worried that our staff were working on their resumés, worried that our consumers were abandoning us, and worried what all of that meant for us; were we going to keep our own jobs? What did it mean for us? Where were we going? What did this all mean?
And we’re all Brits, right? So, Dunkirk spirit and all that, kind of, good rallying together stuff. One thing that I think is actually really important to remember, and one thing that we say to a lot of our clients, is this: 'It’s actually a good time to think about what to do next.' It’s actually a really good moment to rethink, to redesign, and to actually look at how we got into this situation and understand how we can design forward using what we’ve learnt. So, I think the crisis is actually a really exciting time. It’s a fantastic disruption, anyway – whether or not we liked it, we had to deal with it. And the fact that now we have it, and we’re coming out of it, it’s a good time to reconsider what we do.
So, I want to start with one of the most inspiring things I’ve heard in the last year. I went to a breakfast called, I think, the Trust Barometer – some daft name – in April last year. It was a financial thing and everybody was standing about talking about incredibly complicated financial models, all of which were going right over my head, about why we were in the financial crisis that we were in and blah, blah, blah. And this one dude stood up and he said an absolutely profoundly brilliant thing, and he was a banker – and I thought that was kind of brave. I mean, he might as well have set fire to himself as the fact that anyone was going to give him any love, but I thought what he said was brilliant.
He said the following: 'We are not in the middle of an economic crisis, we are in the middle of a moral crisis. And our economic decline is merely a symptom of our moral decline. I know being angry at me feels easier, but it is ourselves that we are really angry at.' And there was – just as there is now – silence when he said that. And everybody looked down at their BlackBerrys and was really incredibly anxious. And I thought, 'Wow! That’s kind of crazy, but really interesting.' So, let’s collectively examine if we think that’s true.
Until about 24 months ago, we all had pretty good reasons to feel proud. We were definitely living the dream, or if we weren’t living the dream I think collectively we all felt like we were at least on the road to it. We were living in London, one of the most important financial hubs in the world. We had good employment, good opportunities, good public services, and our economy was definitely growing. Culture and creativity, two of the strongest exports that we had. Consumption was booming. Bond Street, Rodeo Drive, Faubourg Saint-Honoré in Paris, Omotesando Hills in Tokyo; they all had waiting lists for retail space. So retail was on a big curve. Second house and sports car sales were at an all-time high, vacation destinations were full, and the shops in them were booming. We were spending and we were borrowing like there was no tomorrow.
But then tomorrow came. And the shit hit the fan, big time. So, with little warning, we ploughed head-first into a global financial crisis. Lehman Brothers, Merrill Lynch, Northern Rock, AIG, RBS, all kind of cascade-effected down. The LSE, Dow Jones, Hang Seng, Nikkei and NYSE plummeted in a matter of hours. And then this snowballed into an economic crisis with no liquidity, no credit, currency devaluation, falling house prices – Christ, it was just awful. And we never seemed to know where it was coming from; it just seemed to be bombarding us, kind of one thing after another. And hot on the heels of that came a political crisis with MPs’ expenses, European elections, Iraq, and every CEO was being questioned about some form of wrongdoing.
Entire countries collapsed – Iceland. I mean, we’ve actually been working in Iceland. We’ve been out there talking to the Icelandic government about helping them create economic regeneration, and it’s really bad. And the people of Iceland cannot understand how they are in the situation they’re in, there’s such bewilderment there. It’s pretty upsetting to be around it. We’ve described them many times as the canary in the coal mine, and how that must feel for them. So it’s extreme, it’s apocalyptic; it really became quite apocalyptic for a while there.
So was our banker right? And is it possible that, in our hysterical drive towards a more meritocratic, a more pluralistic, progressive society, did we somehow precipitate our own moral decline? And in our own rabid pursuit of a shiny, new modern world, did we somehow weaken our own moral fibre? Or, put more bluntly, did we throw the morality baby out with the bathwater?
So it’s very interesting. I think we’re about to enter... and we are seeing this because IDEO was in a very advantageous position – we had multiple clients in multiple industries in multiple geographies, so it’s quite interesting – we have a sort of interesting dashboard. And it’s quite interesting to watch the conversations that we see. And one of the words that keeps coming up again and again – and it’s come up again this morning – is the word Purpose. The word Meaning. The word Morality. Where are we coming from? What do we care about? What is our passion?
I think we’re at an interesting moral juncture in the world at the moment, and I think we’re going to start to see the ramifications of that in the world of consumerism and in the world of businesses that support that. So, as we collectively crawl out of the bunker – fingers crossed – and back into the light, I’m quite interested in conjecturing collectively. And this is one of the things we’re going to ask you to go on the journey with this afternoon. I think it’s quite interesting to examine what got us into this hole in the first place.
A lot of words here but we need a fundamental reboot. We need to reboot our values; I think we need to reboot our choices; I think we are rebooting our morality, and I think we are in the collective process of rebooting ourselves. And as I said, I think the consequences of this is that the businesses – businesses that we’re all part of in this room – as well as the people and the ideas contained within them, will have to be redesigned as well. So, let’s begin in the middle.
People seem to be evaluating the morality of their choices. I think they’re starting to dissect what they need, why they need it, and – very importantly – if they even need it at all. And I think that in itself has massive ramifications for the conversations we’re going to have this afternoon. We threw a question up – as we always do. We threw some stuff up on Facebook: where’s consumption going? We had a variety of answers, and pretty wild debate went on through the ether.
Some answers included: Icelandic film-maker Arnie said, 'A roof over my head is a real luxury right now.' He had to sell his Land Rover to pay his house mortgage. Rags to riches to rags.
'The reduction in credit availability may have the impact of directing consumer attention from pure tangible, materialistic consumption to a greater appreciation for experience and sensory generation.' 'Big diamond rings will always be desirable, but perhaps their perceived value will decrease in favour of health, learning, and knowledge.' 'From experience of living in India, it’s about fresh air, drinking water, electricity and trust – no offense please.' The sad thing is that it’s not an understatement for most of the modern world.
'Consumption is part of any society as it enables the individual to show everybody else that they are successful. Has any society ever existed without consuming? Consumption evolves and right now the emphasis is about ownership, quantity and materials to sharing, quality and experiences.' That is a view from London. Somebody from Beijing, Sao Paolo or Mumbai might tell you different, and they’re the ones who will increasingly shape this debate.
And then, finally and actually I thought quite interestingly, from Dubai: 'I’m tired of everybody thinking that all we care about in Dubai are obvious symbols of status. We’ve had the same wakeup call as everybody else. Moving forward for us is increasingly going to be about infrastructure and permanence; education, healthcare and equality for all.'
Hmm. So, one thing – and again, I think we’ve heard it many times on the stage already today, I think we’re all, sort of, violently agreeing that – for a lot of business I think this means getting back to our knitting; it means getting back to basics. And I think the values we’re looking for at the sort of societal level are the same values that I think it’s interesting to start to build your businesses or your organisations around. People, authenticity, service, simplicity – and we’re going to talk about some of these values. As we go through I want to show you some examples. Some things which meant something then, and I think mean a hell of a lot more now, as we’ve all had this huge collective wakeup call. Interesting, lots of nodding heads in the audience, that’s always a good sign.
So I think today’s business building – and I think this is one of the things we’re going to talk about this afternoon – is about designing with these new needs in mind, in new ways. And I think, like everything else we value now, businesses have to have meaning. I was lucky enough – horrible name-dropping moment, bear with me, my IDEO colleagues are all going to snicker – but I was lucky enough to have been invited to go to Bangladesh last year, where I met Muhammad Yunus, who was the founder of Grameen organisation, and a very, very smart, cool guy. And he told me a very fantastic anecdote. He said, the businesses of the future are going to have the people with the burning eyes. He said, it’s the passion behind the eyes that you’re going to look for; that’s how we make decisions, that’s how we understand who we’re going to partner with; those are the people that I want to work with; it’s the burning eyes.
And I think there’s something about the idea of passion as manifest through somebody that is really important. And we heard it this morning and many of the presenters’ conversations this morning – it was the idea of meaning and purpose and passion. And I think that’s a really interesting thing, this idea of, what does your business mean? So that’s one of the things. I saw a lot of you have signed up for the Higher Purpose session this afternoon, which is great.
So, I’m going to show you some stuff to inspire you, hopefully. Some principles, some businesses, some questions. So, first one – obvious one – is this idea of having higher purpose and meaning. IKEA. Anybody here from IKEA, by the way? Anybody here from IKEA? Does anybody here have furniture from IKEA? Everybody. Right. Kamprad – founder – decided a very long time ago to take a political stance about what it is that they produce. He said 'we have decided once and for all to side with the many.' So they’re definitely saying, it’s the people’s brand. I don’t know if you guys have seen this commercial that they’ve been running recently? To me this is absolutely amazing. It doesn’t show a single piece of furniture, which is, in itself, kind of fantastic. So I wanted to share this with you. Guys, if you… I hope the sound’s going to be okay here.
That’s pretty lovely, right, for a mass brand that sells, you know, not expensive furniture, to communicate something that’s extremely meaningful; the value of Home. So I thought that was a lovely example. You know, with Muji, same thing. Muji’s just produced a philosophical discussion about what it is it’s producing: 'Muji’s not a brand. Muji does not make products of it individuality or fashion, nor does Muji reflect the popularity of its name in its prices. Muji creates products with a view towards global consumption of the future. This means that we do not create products that lure our customers into believing that "this is best," or "I must have this." We would like our customers to feel the rational sense of satisfaction that comes not with, "this is best," but with, "this is enough." Best becomes Enough.' Very, very nice.
And I don’t think this is just supposed to be about big companies feeling this way; I think this is equally applicable to the small company. This is Bi-Rite. If anybody has ever lived in San Francisco, Bi-Rite is an institution. It’s a small grocery store that bats way above its weight. Very, very, very popular. People queue there every day. And it’s community – again, it’s back to community. 'Our consumers support us because they know that we support them and their community,' says Sam, the founder. So, question, do we have a meaningful philosophy? Do we believe in it? Do we live by it?
Number two – heard this already several times on the stage today – transparency. Here we are, in the White House. Whether or not we agree with President Obama’s policies is not necessarily the point. The fact that we can have a window into them through multiple points of view is itself, a first. And I love this quote from Huffington Post: 'The last administration was clearly not interested in feedback, and look where that got them.' So, you know, again, the whole idea of, can you be as transparent as possible about what it is that you’re doing.
Again, a well-known brand in the retail space in the States; Zappos, a little, tiny shoe brand, online shoe brand, that gets a lot of press, simply because it is so completely transparent about its culture, its staff, its belief system. With the internet connecting everybody together, companies are becoming more and more transparent whether they like it or not. An unhappy customer or a disgruntled employee can blog about a bad experience with a company and the story can spread like wildfire by email or with tools like Twitter. The good news is that the reverse is true as well – so this is the Kevin Smith story from this morning – a great experience with a company can be read by millions of people almost instantaneously as well. So, good question to ask yourself, are we walking the walk as well as talking the talk? By the way, I see quite a few people are writing, don’t worry about this, I’m going to post this presentation onto Slideshow at the end so don’t feel like you have to encapsulate all of this.
Third one around the idea of collaboration. For us this is kind of cost-of-entry for everything we do. I’m really interested in the idea of brands acting in coalition ways. I think bringing together best-in-breed and creating alliances is very important anyway. This is the only piece of IDEO work that I’m going to share with you today. This is a project we did with the Gates Foundation, trying to help create a human-centred design toolkit for how to help teach innovation in a social enterprise space. And the entire deliverable is free and downloadable, so the competition can download it and use it as well. I think this quote from Larry Brilliant is fantastic: 'The next generation of true innovation is going to be achieved by the collective, not by the lone genius.'
So in the space like somewhere like fashion, I think collaboration is very, very popular. I mean, lots of designer brands kind of connecting with other brands and doing, sort of, you know, the Bill Amberg Bugaboo; and the fragrance by two designers mixed together. But then you look at a brand like J Crew in the States, which is very interesting. Mickey Drexler, the CEO, has donated 25… 20% – I beg your pardon – 20% of his inventory to other brands. And he said – and I love this quote – 'We don’t lose anything by sharing our stage with these brands. In fact, we massively benefit.' So, minus 20% profit but plus 20% authenticity and customers; customer experience. I think it's a very interesting theory to think about. Do we care about making the pie bigger, or just our slice?
Next, the whole idea of service. I’m not going to drone on about Apple. We all know Apple are fantastic at customer service; so the fact that I can go into a store and get my stuff fixed for free, and the guy genuinely wants to do it, and I can connect with people – we know this. Apple is establishing a new benchmark for service and has done so for quite a while, that’s not new news to any of us. We actually took A G Lafley, who is the CEO of Proctor and Gamble, to this store here. This is Amoeba Records, in Berkeley – because it’s an authentic, grungy, punk-rock record store. We sent him in with a brief to buy a piece of music that his kids would think made him look cool. And, twenty minutes later, he came back having had some fantastic conversation with a chick with the nose-ring, and blah, and he said, 'Wow, this is what customer service should feel like. It’s delivered by somebody that actually understands and cares about what it is that they’re doing.' So our staff deeply love music; most of them are musicians; we want them to make an authentic connection.
Then you look at a brand like Starbucks that’s actually lost the way because it hasn’t done that. It’s actually mechanised its entire process, and now these small little coffee shops that you see across the top here are all regaining market share. And this very famously leaked – who knows by who – Howard Schultz’ memo: 'We blocked the visual sightline the customer previously had to watch the drink being made, and their intimate experience with the barista.' So by over-mechanising everything they kind of missed a beat. So again, question to ask yourself; are you actually showcasing great people, and are they at the centre of your experience?
Next, very important one: Create the theatre, not the play. You’re going to think I’m totally nuts for this one. Beck – musician Beck – created an online portal called The Record Club, where in a week he recorded an album and he asked people to vote on the songs that he was going to make, and he made them with other artists, and he put the whole thing out there for free, and everybody thought that he was absolutely nuts. This chart, here, is the important piece. These two red circles are the big idea. Every time he releases a track for free, Odelay, which is his first album, and which is available to be paid for on iTunes, its sales spike. So, every time he gives stuff away, he gets something else back. Some people rediscover Beck in a way that they never had before. So, Mr Hanson has said – Beck Hanson has said – he conceived of Record Club to inject spontaneity and collaboration into the recording process, and by the way, selling more because of it.
So, the era of the brand that’s centrally constructed is over, that notion is really dead, says Grant McCracken. Brands like Nike, like Lego, like Life 365, avidly co-creating with their consumers. Again, not new news to this room; I know everybody knows this. So we firmly believe that co-creation is the only way forward. But it’s hard, because this is a control issue. Are you okay with relinquishing control and having others not just create your brand with you, but actually for you, in many cases? This is a tough one. People love to control, or to orchestrate.
Next one – last two – this big idea of selling versus informing. You look at a brand like TED – Veejay and I are both part of the TED world – fantastic. All of its content, ideas worth spreading, stuff out there for free, multiple platforms, multiple channels; very, very successful. One much-loved aspect of TED, and the TED talks, is the concept of immersion; the idea of devoting your attention to one thing for 18 minutes. And these things are growing in popularity. The whole business model around this, which is one of the things that the guys at the back are going to talk about later, is this whole idea of generosity. How do you start to disrupt yourself through generosity? Which is itself a very interesting idea. Giving stuff away, what can you get back?
Or Monocle, where they’ve actually created a really interesting media brand. They’re actually selling products through that, they’re actually selling information, it’s highly curated. Tyler Brûlé, the founder, says getting information first is becoming one of the biggest luxuries of all. We’ve heard this morning, we’re in the information era firmly. So, how do we start to play into that space? So, do you create monologue or dialogue with your consumers?
And then, the last one, and one of my favourites of all time, is this idea of trust. This is a really important one. This is one of the best examples I’ve ever come across. Flickr – as in, the download your images site – decided that they were going to trust their consumers to not put huge amounts of pornography on Flickr. Because, why would you? So, their community guidelines say, 'Don’t be creepy. You know the guy. Don’t be that guy.' Period. Don’t. Doesn’t need to give you some huge paragraph about blah, because they assume you’re intelligent and that you want to do the right thing, which I think’s really fantastic.
I mean, Wikipedia, the whole assume-good-faith principle that they have. They say Wikipedia wouldn’t exist if people were out to, sort of, kill it. People want to build. Jonathan’s a trainer and if anybody has ever seen this guy’s TED talk, it’s awesome; you should really download it. He’s an internet lawyer, and he said he was hired into the internet legal space thinking he was going to spend his entire life legislating. He said, 'I actually have one of the most boring jobs in the world. I do nothing, because most people just want to do the right thing.' And he said, 'The internet has single-handedly restored my faith in the power of human kindness.' Which I thought was great.
Five, seven more minutes. Good timing. So, can we assume that people are fundamentally good and that they want to do the right thing?
So, I can see the speech bubble over the room: 'We’re just out of recession, we need to stay alive, blah blah blah. This guy’s shown me Beck, he’s completely mad, he’s missed the plot, right? This is nuts. This isn’t me, this doesn’t affect me.' I actually think this is a really good time to – again, we’ve heard this many times – this is a time for bravery, and this is a time for disruption. This is not the time to look down the tunnel. This is the time where peripheral vision actually is really exciting to explore, and to really explore where the new ideas are coming from.
One of my clients actually came up with this – I wish this was my idea but it isn’t – it was one of our clients said, 'I have these two businesses in my head. I have the Now business, and I have the Now What? business.' I’ll go through and explain what both of those mean in a second. I’m not suggesting that you throw your entire business model out of the window and suddenly do everything else differently on Monday morning. I still think you need to keep that, but this is about looking to the future. This is about looking, about building upon, about framing, and about, sort of, focusing the Now What?
If I had to categorise what these two, sort of, modes are, I think the Now business is about having the right answers for today, and I think the Now What? business is about asking the right questions for tomorrow. And I think that we firmly believe that future growth comes from bringing these two things together; about having a sort of dynamic loop between the Now and the Now What? – bringing the Now What? into the Now, and vice versa.
So what we’re going to do for the rest of the afternoon – and I’m going to take you through the logistics in a second – is, we’re going to discuss the sort of Now, Now What? implications of four questions. Question one is the one of purpose: how do we give our organisation purpose and meaning, first to us and then to our consumers? Number two: talent. How do we motivate, inspire, attract, and, most critically, retain, our best talent? Number three: loyalty. How do we shift people’s behaviours and motivations, retain advocacy, and create loyalty? And number four: new business models. How can we be inspired by industry disrupters?
I think many of you signed up for a lot of these, so I’m going to ask you in a second to go to those four rooms, and 12 of my very esteemed colleagues are going to take you through a series of exercises that are going to help generate some ideas around that. And then, it is apparently my job to synthesise the entire day in 20 minutes at the end of the day, which I’m absolutely shitting myself at the idea of having to do, to be honest with you, but I’m going to try. But I will come back and we will hopefully share some best learnings.
Great quote here, just to end on. This is an Inuit proverb: The storm is the time to fish. Which I think is really interesting for today. So when the ocean is churning, all the fish are there on the surface.