Matthew visited India last week for a wedding in Goa. He took time to fly down to Hyderabad and shared his rich knowledge in design and leadership with a record audience of 130 participants at T-HUB. That he chose to do this talk on his wife’s birthday shows his commitment to giving it back to the society at large.
It is not design thinking but it is design doing. I started teaching at MIT twenty years ago. I went to a design school before that. I was entrepreneurial. Design school at that time felt business and marketing destroy design. I moved to entrepreneurship. I believe in Integration of design and technology in business is important for its success.
Product Design and Development is what I teach at Sloan Executive Education along with a professor from Harvard business school. Look at a guy like me with bachelor’s in fine arts and I am a teacher and founding director of a program at MIT. I am selecting students now for this program. At very young age, I believed what was right and I was true to that path. I chased the knowledge that is unique in value.
This talk is a brief version of what I teach at Sloan as a few day workshop.
I have a product design business. I make products in China. Starting from Design on napkins to manufacturing them in factory to finally selling. I do it end to end. I do this for clients. Spend money on tooling to get better quality product. I have two daughters and a wife and I live in a home that I self-designed and constructed on an island outside Boston. I also race cars and bicycles. I built my own home.
Make designs desirable. Business has to be viable as it shall yield good returns. Engineering feasibility is important. If you do bad engineering, you pollute the world as you through the one you extracted from earth.
Heart symbol at the center indicates the philosophy of being good with each other. How does design impact us? Does it make us closer or separates us? Is it going to make us feel better or crazy? A Bitcoin miner burns 13 kw energy. Why should we have a product like that?
Here design means design doing. Doing anything meaningful hurts and creates stress. That is design to me.
Doing something valuable for customers through design doing.
If you make something desirable at a cost, it is a viable business.
Reducing cost to improve profits is not sustainable. The reason: Opportunity is in increasing value to customer. This is done through design. Designers are not expensive. Designers are passionate and talented people who make beautiful products. This is huge opportunity around the world. Apple didn’t waste this opportunity. They made design as first thing in their company. Why doesn’t this happen in all the companies around the world? There shall be a chief design officer in every company.
Design Value Index shows that design-centric companies outperform the rest by 211%.
The following chair set is made at $500 but they are sold at $5500 in retail. The couch is sold at $30,000 and cost is not that high. People spend that kind of money, not because of just the functional values but also because of the emotional value. Design resonates emotionally. You buy with an emotional filter in your mind. Does it make me feel good?
Airbnb was co-founded by two of my students. They took the design process and applied it to marketing rental properties. They didn’t invent it. They used design process of the needs of the customers in motion. This is how they dominated. They are also ridiculously driven. They wouldn’t give up. Pixar isn’t a product but an experience. Steve Jobs added design and emotional feature to Pixar. Pixar created a program called renderman. Steve Jobs changed this company to a multi-billion dollar company.
Original iPhone was an innovative product. It needed a data plan that was far expensive. I couldn’t justify buying it but I just loved it. iPhone got introduced at a high price point and they sold 1.4 million units in the first year alone.
Elon Musk didn’t invent the electric car, Tesla is about design and totally different experience. A dashboard that is nothing but a screen is what he redefined that experience and made it emotional.
These brands have become ultra popular as they bring emotional value.
Ferrari 468 versus Corvette Z06
Why is Ferrari $270K and Corvette $79K? Both have the same features but prices are contracting. Why? Ferrari carries emotional value. If you drive Ferrari, onlookers think, you have cash muscles and you are a movie star!
Emotional stuff is real dollars. There is no reason we don’t do this.
Why are people buying this?
Premium price? Premium brand? Both. Ferrari used design (Sergio of Italy) to create iconic hand-made cars. This is how they developed the brand. When you develop a brand, brand has equity. You are in a great place. If you stay true to it, you can leverage that and continue to make more money. Ferrari is about iconic brand. A corporate culture that does the best product they can and drop everything else. They lost everything else doing this but so be it. Corvette is concerned about making a profitable product this month. Push the inventory kind of thinking.
Does the volume matter?
Yes. I don’t see a whole lot of Corvettes being made. They don’t cost that much. Ferrari got a lot of automated processes now. Yet they have the brand.
Apple margins are more than 50% of the price.
Why aren’t all products having great design?
Design is powerful.
Design generates emotion.
Design is the big opportunity.
Culture = people + Environment
What is good culture? Good culture means Great people. I picked 27 students to work 18 hours a day for three months. This is the most important thing I do. Selecting these 27 great people. They are super design stars and are all over the place in different MIT labs.
Selection criteria? First: Capacity for love and compassion. GPA and others are next things. We even picked some students with very less scores. They became super stars at MIT. The world is changed and academia hasn’t, I am trying to change that.
Great people love each other and work together. We are very connected. We make a point to socialize together and this is built into our schedule. I only pick passionate ones. HR typically looks for skills. This means they are building engines. We are not engines.
Characteristics of good people
-They put team first
-They put excellence first.
-They are compassionate and vibrant.
Hire people for these characteristics. Your new support structure around you.
Admission Criteria at IDM: Drive, Vision, independent Thinking, Process, innovation, Beauty and Capacity for Love and Compassion.
What is good culture? Good culture means great environment. You want to see mess like this and everyday you need to get this cleaned up. This is how innovative gets work done. We built bamboo bikes to get others to get around in campus.
Characteristics of good environment
-Is collaborative and open
-Is fun and you want to be there.
Leave the office to buy rivals product and meet people to know them. That is fun. You may not have to keep the office tidy.
Great Environment with Great People
-Creates loyalty and pride
-Makes work exciting and fun
-Change hiring practices
-Make “fun at work” a requirement
-Integrated teams as org structure
If you have control, do the above ones faster.
Integration = Collaboration + Diversity
Integration: Apple iPhone has captivating user experience, beautiful form and simplicity. It comes with iTunes, Apps and phone and data connection (AT&T). It addresses system complexity and its display built with gorilla glass by corning. Steve Jobs learnt that Corning got a glass that is durable. He convinced them many a times before they bought into him.
Now let us see the same features of iPhone from the below venn diagram.
Teams working in Silos
Marketing says they know the users and design team says they interview them and hence they know them better. There is tension
between these two teams. Here are the challenges we see among the teams that work in Silos.
Better way to do is to do SWOT teams of small size and do it all together. Now we have the scene of consensus on learning. When these teams go back to their respective silos, they speak their own language.
Integrated teams are more powerful.
-Have shared vision.
-Get stuff done.
Process = Customer + Design
What is a good process?
Implementation is expensive and hence we iterate before a lot. Implementation is the green box below.
What makes a good leader?
I make tough decisions. I represent my staff and students. It hurts but I do.
-Provides structure and strategy
-Makes tough decisions
Design process provides leadership.
If you know what they want, you can feel. Then you can express so others can feel. That makes you empathetic and powerful. Integrity is needed too. Develop concepts through creation and strategy starts to unfold. Beautiful culture and start doing things means implementation.
If you do what is right for users, you can build financially sustainable business model. When in fight with other teams, ask them what is right for the end user? Problem gets solved.
Good Leader + Integration = Great Leadership
Design process + Integration =
-Have shared vision.
-Get stuff done.
Design process + Integrated teams = Success
Good Leader + Integrated teams = Great Leadership
No point in arguing among yourselves if only users matter. Go and ask them.
Leadership role for Explore stage
If you practice storytelling, fear of doing it goes away.
NDS: I have designed a product for US military.
Purpose of Explore stage
-Understand intimately stakeholder needs, desires and problems.
-Identify all stakeholders.
-Understand and develop empathy.
-Discover latent needs.
-Interviews: great to known issues
-Observation: great for unknown issues
NDS Explotation Story
-The army was seeing an increase in heat casualties.
Ask: Design a device that helps personnel from dehydrating
In order to design the device for them, i told them I needed to know what it meant to be a soldier. I convinced the army it was important and they paid for it. I started training. I have literally put myself in their shoes. I told them I needed to be with the soldiers. They said no initially but the commanding officer got touched by what I said and he put me in the live fire training. I was there in forest. I learnt that the soldiers are brilliant genuine and talented people who cares about themselves.
These are nice and great people. These aren’t the Rambos. They are so sweet. They are reading comic books and drinking soda. They are real people. Making that connection allowed me to remind myself whom do I work for. It is about them. That sentiment is the key. Soldiers are unstructured. They keep M&Ms and skittles and they through the burgers away. Then I went to drink water. Then I discovered the water was chlorinated. This is like drinking swimming pool water under the sun. This was the problem.
-Soldiers spent the majority of their time hanging out.
-Soldiers are very young.
-Soldiers use a lot of tobacco products.
-Soldiers eat a lot of salt and sugar.
-Soldiers wear a lot of gear.
-if they don’t like their gear, they intentionally break it.
We customized the flavor so it masks the chlorine in the water they drink. You can adjust the masking flavor with the green knob so they drink the chlorinated water that we could make it tasty.
Explore stage has the following ingredients.
-The purpose of Expression
Role of leadership in Express stage
-Makes tough decision.
Entire journey of the customer. See the map that shows journey of a customer using yelp.
Persona: Here is a sample persona of a typical customer.
Purpose of Expression:
– Builds consensus.
– Provides a common vision.
– Keeps team moving in the same direction.
– Settles team arguments
– Reminds us of whom we are looking for.
Role of leadership in Create stage
-Makes tough decisions.
Creation stage is driven by the following.
– Needs Driven
– Design Driven
– Technology Driven
Some pointers for creation:
-Explore ergonomics (agile)
-Make it fun.
Purpose of Creation: Deliver value to the customer.
Remember your objectives:
1) Connect with your customer.
2) Capture both functional and emotional needs.
3) Become the voice of the customer.
Q) What is good vision for a designer?
Matthew) It shall come from your heart. We are not true to our heart. We like people to tell us and then it becomes polluted. You need to be passionate and your vision has to be natural and original and true to you and pure in its essence. Design in many ways is like doing a sculpture.
Q) Nike (design) versus Adidas (function)
Matthew) Eventually your technology will become a commodity. Design will be your USP like in the case of Nike.
Q) Design in B2B?
Think about the users of your client. Tell the factory that is buying your injection molding machine that it is safer and easier to use and makes their customers love it.
Q) Design in IT services?
Matthew) I am in such design services business by myself. I tend to sell the design process. I show them what I do. I let them fill in or plug in their own needs. Take Starbucks that moves the lines quickly with custom design lighting and mini-vacation mods they create. This is their value. I go to those vacations. They help us be on vacation while they have their coffee.
Q) Techniques to make designers appreciate engineers or the opposite?
Matthew) Put together an integrated team. Engineers are about the science and designers are about art. Most engineers are very concerned with doing things within the costs. They come to think lower costs means better profit. Tell them that kinematic mechanism such as something that is smooth with good feedback will help us get more revenues. If they hear from the customers, engineers oblige.
Q) How can you understand the needs of your quiet customer? How do we build this skill.
Matthew) Build it by practicing. The model I showed will work. Do it and repeat it. Just go and do it. You will realize this is easy and benefits all.
Q) What if users don’t always know what they want?
Matthew) Observational research. Ethnography. Apnography? Watch people use a given product. Watch people fumble using it. You will discover a latent need. Duck tape is an indication of a problem.
Q) Can you narrate how Airbnb happened?
Matthew) Joe and Brian of Airbnb lost all of their money before they started. Joe wanted money badly. They wanted to go to a design conference in San Francisco. Then needed tickets and they needed place to stay. All the hotels have been sold out. He got an idea to rent their own studio out. They brought three air mattresses on their floor. They posted availability of their studio for rent on website for design conference. They got three guys who booked. They did this for thee nights. They paid for it. Airbnb started. They continued doing this.
They realized they got the credibility problem in this industry. Big hotels bring consistency. Airbnb learnt this by taking to the users. They photograph the properties all round the world on their nickel. They created a way of establishing security. Registered hosts of Airbnb won’t mess up with the guests. They qualify the hosts and guests so they don’t mess with each other.
Hosts have a problem with shampoos and so on. They called accessory sellers
to do a market convention for Airbnb hosts. This is how they got the momentum. Now they are marketing these destinations as not individual properties but as an experience of local area. They addressed credibility and safety.
Matthew fought jet lag and hardly slept during his 6 days of stay in India. He has patiently answered every question and expressed intent listening skills and compassion when he answered the questions. Many said, “Matthew is modest, simple and communicated the design principles in easy terms”. Special thanks to Sanjay Anisetti, CEO of 50K Ventures, for bringing referring him to T-HUB.