Software - hard learning

I have always believed that software industry is few miles ahead of other sizable service industries in terms of structuring and delivery. They have another advantage- of being at the forefront of the technology as well. Everytime I interact with a software company as a client, I get things to learn. The eternal student inside me feels happy taking up strategy assignments with these companies. Here are the leanings from a recent one-

1. MOST OF SOFTWARE COMPANIES ARE TURNING PLATFORM AGNOSTIC
There was a time where being married to Microsoft or Oracle or similar ones, would make you a specialist. Over a period companies have realized that everyone has options and it makes sense to support them.

2. SAS- Software as a service is the next game
Products don’t exist any more; there are only services. In physical realm, it is increasingly becoming true and software industry sure is leading the way.

3. CLOUD COMPUTING AND VIRTUAL MACHINES
Concept of optimization of resources through virtual structuring and leveraging the power of distributed intelligence is another learning for other domains, what this industry is able to do with the concept of cloud computing.

4. NLP – Natural Language Processing
It was mentioned to me in a strange example. How ‘Soccer Mom and Soccer Dad’ in USA need to plan their schedule better using intelligence of NLP-programmes which pick-up sentences off the emails like ‘take Jack to the class same time next week’, and automatically update the calendar with appointment, after understanding the meaning of ‘next week, same time’.

5. HYBRID OPERATOR
‘Let me hand it over to my manager’- this could be possibly the machine-speak. Single person manages 4-5 calls at a given point of time in a high-tech call center, by intelligently responding
to the inquiries through pre-drafted ‘voice snippets’. Wow, there is more space between ‘human’ and ‘digital’.

6. iPod apps is passé, Facebook apps is in vogue
When it comes to eye-balls, new levers are emerging. Social networking sites, offer multitudes of avenues to engage the onlookers into a meaningful sale.

7. WATERFALL v/s AGILE MODE OF WORKING
Chopping the large deliverables into smaller concurrent pieces make the programme handlable in smaller team lots. Linear ‘waterfall’ models are outdated now. Manufacturing industry had a name for it ‘concurrent engineering’.
8. DRIP in EMAILs
Email based promotions have reached a new level of understanding as far as automated mailers is concerned. Drip irrigation is closest I can think of, in capturing the essence.

Well, this is something which was my learning with one client in one hour. This is a common place knowledge for an ‘techy’. For me, these are nuggets of knowledge paradigms, which when applied to other domains, can bring transformations. I am at my job…watch out!!

Year End Insights 2009

It’s been long, since I last visited this space. Many things have happened including the swing back of the economy and renewed interest of the companies in the innovation business.

I changed my mobile phone from Sony P1i to Samsung Jet (only to find that Samsung is still miles away in usability and product maturity, from Sony, as far as mobile phones are concerned). With P1i as a phone (I don’t know why Sony discontinued this wonderful platform), and Sony Vaio Tx series laptop, I am an ardent fan of Sony over Nokia, Apple or Samsung.

Insight India 2009 was held in Delhi, with all fanfare, allaying my fears that people may not participate as the economy was still just warming up. NIFT (National Institute of Fashion Technology) was a surprise partner to this event, strengthening the connect of TRENDS in Fashion to use of Trend Research in Business Strategy. From jewelry brands like Trendsmith, to consumer electronics brands like Whirlpool, LG and luxury accessory brands like Tanishque were present in the event.

I spoke at a conference in Delhi on Italian Fashion industry and India connect, only to find that the ‘cluster approach’ is still very much a phenomenon restricted to crafts, and just about walking up to fashion industry. While we were talking power of cluster-visibility for Pune Design Foundation, it was rather ahead of time. No wonders that Pune Design Foundation has to give way to ‘India Design Foundation’.

We successfully worked on the brand integration strategy for an Indian mid-size conglomerte with interests in Europe and India. While corporate ethnography was a new learning, another realisation (new to me) was that you cann;t GIVE a strategy. You can only HELP it take shape like a MIDWIFE. Great stories around it.

My trips to malls have become less frequent. One of the malls, ‘Central’ which in the beginning had a promising experience of retail in India, appears quite ‘tiring’ to me now. Highly compacted space, with people falling over each other (who says its recession?) and repetition of product categories become visually overwhelming. Do customers come thinking ‘brands’ in mind in India? It is true when we talk of refrigerator or washing machine or camcorder. But while buying shirt or a shoe, there are dime a dozen brands in mass range. As a consumer I want a good quality shirt and I don’t care which brand is it. So while walking through the men’s apparel section if I see blazers hung at 20 places (because they belong to different brands), I get lost. Why can’t they put all the blazers at one place? The time to rethink better navigation has come in Indian retail. One of our 2010-11 trend, Drive Easy, also points to this.

I want to get a side-rail-drain fitted in the bathroom (Insight- People are getting exposed to high end interior hardware). It has been a while and can’t get the right person to do it. The plumber or a mason next door does not have the skill or quality to do such things and the guy who knows it, is actually busy attending to the bigger projects at hand (Insight- potential market opportunity). So the retrofitting, refurbishing and minor repairs at homes are one potential area where a branded service can enter. Mr. Biyani, after ‘Chamosa’, this could be a good idea for India.

More updates to follow...

COPORATE ETHNOGRAPHY: My Experiences

We have been working on Design Research field for almost 4 years now. What started as my personal interest in Trend Research resulted in a full-fledged practice of Design Research that encompasses Ethnography, User/Usability Research, Product Analysis, Brand Research, Competition Mapping, Brand Messaging, Strategic Scenarios and Design/Brand Directions. Coming from the womb of a Product Design company, we did have more assignments from the companies that dealt in Automobiles, Consumer Durables, Accessories etc. Microsoft was a different case altogether, where we worked on viability studies for e-learning in the current schooling system in India. But our recent foray into Corporate Ethnography was fully focused on Brand Research and Change Management.

It was about studying the effects of acquisition and product brand name and company name change for a few companies in Western Europe, which were acquired by an Indian business group. This group primarily deals in engineering products.

While rules of ethnography don’t change, but it does have some tweaks when it comes to applying to such situations. We choose the ‘attic’ way of Ethnography- i.e. open ended conversations (the applied ethnographic method is ‘fly on the wall’ or –‘amic’). Here the interviewer has a rough scenario of questions in mind but does not put them out like a laundry list. However the interactions can become quite ‘straight jacketed’ if enough care is not taken to unroll the perspective. Means people need to feel the comfort of being ‘heard’. Here are my observations and tips-

While this is ‘open ended’ discussion method- if it only ends up being a discussion, respondents start losing interest in about 25-30 minutes of talking. Some, who are quite verbal, can go on for hours but I am talking of the average respondents across the hierarchy.
The fact that they are mandated by senior management to interact with the research team, puts them on a slightly ‘defiant’ or at least ‘reserved’ mode। It takes intitial 10 minutes to dawn on the perspective of the research.

We did create some PERSPECTIVE BUILDER tools, which were essentially some pictures pasted on foam board, to create the SCENARIOS for the future for the business। Basic skills of STORY TELLING in corporate paradigm go a long way in building rapport with the respondents.

REFER TO THE LAST DISCUSSION: As we move on with the interactions through the day, we build-on the conversations referring to what the last few people have said (without naming them)। So the direction and quality of responses start improving after a first few interactions that are not so precise or structured.

EYE-2-EYE contact is tiring after a point। Hence we had another set of ETHNOGRAPHIC tool to evolve the ‘brand values’ from these discussions. Eye to eye contact is no broken and people become busy responding to the placards on the table bearing different ‘brand values’. This brings a PAUSE for SYNTHESIS in the discussion. Here the interviewing team’s as well as the respondant’s mind is synthesizing the overall discussion. Hence we did get some very important feedbacks after this stage.

LOCATION: On the hindsight, we had better off keeping the interview location in as neutral place rather than conducting them in the conference rooms in the offices। Even within the office, instead of calling the respondents to the conference rooms where our team is sitting, it was better to GO DOWN TO THE respondent’s cabin or seat. This gives them psychological comfort of being the BOSS.

EXTERNAL INPUTS: As a part of the brand research we also met scores of dealers, distributors and channel partners for the company’s products। And we think that those interactions are the most precious inputs for the brand’s current position in the market. The TRADE usually has a pretty good idea of what everyone else (competitors) are doing in product planning and promotion. More than the end user or end customers, I value these inputs more.

In many of the interactions, the discussions get clouded by some underlying HR issues, which could be person or department specific। Only way out of that is to genuinely listen, but no need to respond on that. We even marked the issues to the top management later.

Like HR issues, there are many side learnings of this exercise as there is someone to ‘deeply listen’ to the employees। We realized that there were GEMs hidden in the organizational hierarchy.

One of things helped us synthesize thoughts is some car journeys with some of the employees. That was primarily to go and meet the dealers/partners etc. But these journeys provided us with rich insights on work culture of the company. People become companions in a journey and discussion are far more natural than they every can be.

Why SMEs have not yet woken up to Innovation?

There has been a continuous rant by the government, chambers of commerce, design and innovation thinkers and the SME consultants alike- INNOVATE. The voice has only grown louder in the troubled times. Yet, we don’t see much activity on the SME front as far as innovation goes. Medium scale enterprises are still okay, but the down below- the small and the micro enterprises have not even blinked at the call of innovation to emerge as winner in these times. They are still trying the old ways of ‘optimisation’, ‘collaborations’ and trying the get a safe bet in the game.

Recently we were talking to a small manufacturer of home-plastic products. He has a factory where he has a few injection moulding machines capable of making the small plastic tumblers as well as big buckets of 100 lt size. He is doing decent amount of business (i.e. 30 Cr). He had never employed a designer till now.

The man who owns the company is the CEO and also the chief designer, who sits with his engineers and some reference products (could be some foreign products or some competition products picked up from the market) and gets the design which he thinks is the winner. This one man team accomplishes much for his size as of now. When we bring a portfolio of a design company of our size to him, he is at first scared of the big brands we have worked with. It straight away implies to him that our services are costly and he won’t be able to afford us. He verbalizes as much. However, on convincing him that no, we are talking to him with a different model of engagement in mind, we get a hearing. He wants to do great products and has collected a lot of insights. We understand his next product plan and give him a quote that barely takes care of one man’s salary for a month+ a small royalty amount. He does not bite the bullet. Later we came to know that he actually went with a CAD company (posing as a design studio). ‘Design’ is a confused definition for him, like many others.

This is small instance which is replicated in many ways during our conversations with the small manufacturing companies. There was a time when one could establish a direct relation between the ad-spend and the ROI i.e. sale of the product went up by a few times the very next week the ad is launched on TV/Newspaper combo. Of late, this correlation ceases to exist. But incase of product design and new product development, the correlation never occoured at the first place. Never was a time where people knew that if they spend x percentage of their turnover in product innovation then the top line is to grow by y percent. The rougest of the calculation is also not a common knowledge. It is a privy of the few for-runners and ‘test by fire’ companies who have gone big by doing it first. For the rest, any R& D effort is an affront cost which needs to be optimized (or a t times, just done away with the best alternative solution available). This is a startling but true realization that occurred to me after spending more than a decade in Design and Innovation consulting industry in India. I have seen by now two cycles of economy boom and sink. I have seen the buzzing alleys of MIDC (the industrial area in Pune), with flurry of material handling trucks. I have also seen, the same places silent and desolate. Every time, I thought that the industry is learning a tough lesson and investing in innovation is the only way they will go ahead. But I was wrong. Indian mind would shy away from taking any cathartic steps. It will always rely on time tested and the frugal advice. Innovation does no figure there.

There is a news that government of India has set up an auto-cluster facility in Pune. The common facility center for this cluster would now also house a design consulting office. Nearly Rs. 500 Million would be spent on design education and facilitation for SMEs connected to this auto cluster. This is one of the very first impetus to Design inclusion in the SME space though government intervention. This kind of efforts will go a long way in making the ROI (Returns on Innovation) to the industries.

to be continued...

A quick checklist for companies looking at Umbrella Branding/ Single Brand/ Brand Integration Strategy

1. House of Brands v/s A Branded House: choose the approach
Most consumer product conglomerates, such as Procter & Gamble, Johnson & Johnson, and Colgate-Palmolive, use the “house of brands” strategy. In other words, the product has the main brand name: Listerine, Head & Shoulders, Tylenol, and so forth. Very few consumers could accurately say which brand is owned by which company.’

On the contrary companies like Samsung and Sony still put their name on everything, but iPod and Zune are the dominant brands, leaving Apple and Microsoft to a lower-level brand. This is because people can only associate one brand with a product. A ‘branded house’ approach suits the companies where product life is expected to be longer. The ‘reliability over a time’ becomes the guiding principle for brand value.

2. B2B umbrella brand promotion in consumer space creates inexplicable demand pullAccenture sells nothing to consumers. But its ‘Performance Delivered’ campaign, backed by the advertising presence of Tiger Woods, has created a positive awareness of the brand among hundreds of thousands of people who may be working for the enterprises to which Accenture consults (or is seeking to consult). And the motivational value of inviting top customers, prospects and employees to golf events involving Tiger cannot be underestimated.
Intel is the ultimate ingredient brand. Zero sales to end consumers yet Intel built a consumer demand pull for its chips that required every PC manufacturer to incorporate them and to advertise Intel Inside on their products and in their ads.

3. Brand is an idea, Branding is a mindset
While assimilating an umbrella brand, it is important to step aside for a while from the existing brand portfolio. In the B2B enterprises, the brand portfolio is usually consisting of the existing company names/legal entities. While consolidating or creating a new umbrella brand, one can choose to create/architect a totally new name which makes lot of future sense but has little connection to the existing entity names. Equally important is to create a ‘brand thinking’ mindset in the company and the stakeholder, who may be too used to thinking ‘products’, ‘technologies’ and ‘business verticals’.


4. Create a unique character, written down and passionately curetted
Al and Laura Ries, in their book The 22 Immutable Laws of Branding, say that successful brands associate a ‘target concept’ (or a core character) with their brand, and that sub brands and super brands are recipes for disaster. Witness the lack of success with brands that try to be everything to everyone: Yahoo, GM, Ford, and to a lesser extent Hyundai, Yamaha, and Mitsubishi have not established a dominant foothold in their spaces because consumers have not associated a ‘key concept’ to their brand.

Samsung believes that their brand has four essential values- First one is technology value because they are a manufacturing company. The second is the product value. The third is marketing value and the fourth one is reputation value.

5. Architect the brand to be driven by Customer Centric World (and not Technology)
Organise your portfolio in a customer-centric way — for instance, ensure that the portfolio strategy drives your R&D strategy rather than allowing R&D to determine how your company goes to market. Both AT&T and IBM saw strong business growth as a result of this shift in mentality. Vertical wise split helps internal organization but not the brand penetration and recall.

6. Create clarity of offerings through architecture
Make sure that your product/service offering is clear to both your customers and your employees. If they are not able to understand what you are offering, it is a signal that the current architecture is not working. Organic expansion of enterprises usually results into an obfuscated and overlapping view of the business offerings, which needs an overhaul at the time of rebranding.

7. Differentiate and Cater to both- Product Buyers v/s Solution Buyers
· “Product Buyers” look for specific product sets and sophisticated components and thus require a wide variety of distinct products.
• “Solutions buyers” are less expert and seek holistic business solutions that are all-inclusive and off-the shelf.
Future is about dynamic companies who can sense the consumer needs faster and can bring solutions to the table, the fastest. A brand stitched around this core thought will generate internal energy to be more efficient through the value chain.

8. With Single brand, the measurement indices related to ROI on marketing becomes more tangible
Typical engineer’s mind usually distastes the grand marketing strategies and expenditures thereof. They understand the language of ‘selling’ much better. In a growing B2B enterprise, unifying the brand brings better indices of measurement of ROI on marketing spends and consumer satisfaction thereof.

9. Use the slow-down to promote the renewed brand
Samsung invested in product innovation way back in 1997 when Asian Crisis was on. Samsung also took up the Olympic Sponsorship when the company was almost bankrupt. All this paid off.

-----------------------------------------------------------------------------------------------

Author: Manoj Kothari, Founder Director and Principal Strategist at Onio Design Pvt. Ltd., Pune, India

-----------------------------------------------------------------------------------------------

Lessons from slow-down and Trends for Innovation 2010-2011

IMF projects India as the next boom place as the recession seems to be closing shop now on. While the new government in India is upbeat and heading for 9% growth, IMF has been moderate in the response and pegs it at 5.4%. The new budget just presented, focuses decidedly on infrastructure development and boosting rural economy. 55% of India’s FMCG consumption is in rural areas and 60% of population lives in the rural areas. Whatever strength Indian economy has shown till now is thanks to the robust banking system and the unwavering rural economy. There are some lessons hidden in the entire episode of slow-down that we are passing by. As a trend reader, it would be worth a look for deciding the future course of strategy for any organisation keen on India.

1. What worked till now, will not work!
Time for applying the formula is over. Swings in the economy, has never been so frantic and severe in pitch earlier. All that is learnt through case-studies is going to be useless. Time for mindless collaborations, copycat proliferations, riding on established brands and taking the consumer for granted is over. It is going to be the time of entrepreneurs and cautious adventurers. Being ‘visionary’and ‘pragmatic’ are not mutually exclusive anymore.

2. What is costly, will have to have a damn good reason for it!
Brand alone will not sell a product. Superficial motifs and bloated ego mongering products and services will have to come to terms with a wiser world. It started becoming clear even before the recession set in, when companies were looking for ‘real differentiators’ through design rather than from a propped up branding campaign. But signals now are loud and clear in the favour of the same.

3. There is wisdom in ancient wisdom!
Grandma says, “Simple Living, High thinking” is the best policy. We never heard. India was never ‘styling friendly’ as a culture. We believed in ‘inner substance’ all the way. ‘Life beyond material life’ has always been the motto. Somewhere in the whole consumerism zeal, we started losing that. Slow down will act as a corrective booster and will bring back this thought big time.

4. Small living
Another rejoinder to the wisdom from the ancient- Small Living is all about Ver 2.0 of bottom of the pyramid. The sachet revolution really brought forth the power of numbers in India. Propelled by the new economic reality, from Nano cars to Nano housing, a lot more is going to go small. New luxury would be ‘Compact , Efficient and Earth-friendly’, and not ‘Big, Indulging and Phantasmagoric’.

5. Only naked electric wire is untouchable!
As the government pushes more and more reforms, mobility and communication for all, borders of mind will be overpowered by the borderless mind. Brackets that worked in the yesteryears, in terms of caste, regionalism and insipid culture, will be replaced by rationale and inclusivity.

6. Longevity, the new virtue!
Use, Use, Reuse is the new mantra that will supersede the hollow calls of ‘sustainability’. Recycling consumes a lot of energy. Reuse is easy. It is immediate. It puts creative energies to use. It saves money. What else could a consumer want? Companies need to make products that last long…very long. Warranty has to go, Guarantee has to come in.

7. Don’t design for ‘avatars’, it is the ‘attitude’ back in vouge
Booming economy and downloadable ‘skins’ made consumers believe that they are a part of the global ‘personality orgy’. It is time to give it a break at look at the basic ‘attitudes’; the DNA of individual consumers. ‘Sporty’ is for sportsmen, and ‘feminine’ is for females. Don’t mix the things that don’t.

8. DIY (DO IT YOURSELF) is equally for India
It eluded India till now. IKEA back-tracked for different reasons, one of them could have been also a possible impression that ‘Indians don’t like to do things themselves’. It is time now. Time to wash own utensils and iron the clothes. Superfluous luxury has to give way to healthy practices of self-help. Host of products and services are waiting to tap this arena.

9. Twittering gives way to Meeting
Social Networks were good for a pass time and as a date with the new technology. Inside became outside in the years of Social Networking; almost a voyeuristic utopia.
Is this phenomenon only going to head straight in the same alley, or take a turn? Well, more rationale is going to dawn in the conversations and probably the “Meetups” would help getting ‘real’ about networking. Blog and not Tweets, evolving into a natural community, would be one of the great tools for the next version of social networking.

10. Culture Farming
Cocooning is a global phenomenon. Too much exposure, tires. People recede into ‘familiar’ or ‘loneliness’. A society pushed into modernity and consumption too fast, has its backlash coming. People want to hold on to something in the torrent. Culture and traditions would be rediscovered. Forgotten rituals would be back with a modernist zing. However, this time the cocooning would give way to full-fledged organized farming of ‘culture’. They are selling tickets online to the next event of ‘Karwa-chouth’ Workshop for First timers; any takers?

What’s in a Trend?

Fashion Industry made the word ‘Trend’ popular apart from the share market. ‘Trend Forecasting’ is almost synonymous with ‘Seasons’ as you rightly pointed out. Designers and Architects being aware of the ‘international trends’ is another side of the story, which again is another name for ‘imitation’, in the current reality where consumer knows what is ‘in’.

Onio uses trends in the wider socio-economic perspective where ‘trends’ are not seasonal changes, but they are the responses of the society to the changing scenarios (they are also called 'mega-trends') i.e. when consumers are bombarded with mindless products and options, initially they like it, then slowly the ‘option fatigue’ sets in. This results in a trend for ‘simplified product forms’ and ‘products& experiences with easy navigation’. With this kind of pattern reading, Onio expects a ‘trend’ to last for a few years and not change every season.

Yet, there may be micro-loops of ‘fads’ which can change with any major event i.e. a big brand launching a particular colour. Even these micro-loops still follow the ‘mega-trend’ that we just talked about. For example, ‘Remixing’ is a trend that Onio has talked two years back, and named it as ‘Twin World’. Since people have more options, they want to mix and match. Indian food with Thai food, Indian traditions with modernity, past with present….and you see a whole lot of ‘retro-movies’ that have hit the Bollywood. This trend is at peak in clothing, but it will slowly come down to consumer goods, furniture and architecture (in that order).

IndianNess

In the entire rigmarole of trends, international look, forecasts etc. there is an underlying argument of ‘Indian-ness’ or ‘Indian Needs’. At Onio, we follow our own proprietary methodology for applying trends on the target consumers, called ‘Intentiability’. This process first identifies consumer segments based on their level of ‘root connect’ or connect with ‘Indian-ness’ and then looks at relative sensitivity to the prevailing trends. Higher the ‘root connect’ of a consumer segment, lower will be their sensitivity to ‘upcoming trends’. For example, we identified a group called ‘Desi-Dynamos’ primarily consisting of factory managers, politicians, senior level bureaucrats, and rural big-wigs. These people show high level of awareness yet when it comes to choosing furniture, they go by a) More solid looks, thicker materials b) Touch of glitter c) established brands and prevalent styles d) no drastic changes in shapes e) more ornamental and saturated palette rather than European pastels. Even if they follow the European pastels, it would be only if suggested by a high-end architect. They do not have a mind of their own. It is the mind of the community.

So trends alone mean nothing in the Indian scenario, unless the target segment is mapped for a) sensitivity to the trend b) their connect to the ‘roots’, as an attitude. This applies to almost all emerging countries (BRICs). While mapping a trend, it does not exclude the elements of ‘good design’. If a trend is suggesting use of ‘slim handles’ does not mean that uncomfortable handles would get a preference.

Onio’s Views on Trends

Trends deal with Future view, which takes a lot of effort to explain to the management.
We believe trends do three things for the innovation strategy-
1. Clues:
If the organisation wants to find some new leads to toe on the innovation frontier, Trends can point to some available niche. Niche emerge due to changing life-style. A trend-spotter’s eye catches it fastest.

2. Connections:
They throw up connections in the parallel fields where similar events are expected/happening. This helps the strategy articulation to the top management.

3. Conviction:
If certain direction has already been taken on innovation front, Trend study can substantiate the direction.

Thus Onio works on products, services and brand innovation through the first filter of trends, supported by user needs, technology changes and market statistics. We call this model MUST (Market, User, Society and Technology) as the four pillars of innovation in the current reality.

Onio considers ‘Trend thinking’ as a tool for business managers to think beyond the constraints and make invisible connection to leap ahead of the market.